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Annual Financial Results for the Year ended 30 June 2019
METROFILE HOLDINGS LIMITED
Incorporated in the Republic of South Africa
(Registration number 1983/012697/06)
Share code: MFL ISIN: ZAE000061727
("Metrofile" or "the Company" or "the Group")
ANNUAL FINANCIAL RESULTS
FOR THE YEAR ENDED 30 JUNE 2019
SALIENT FEATURES
REVENUE UP TO R913M - INCREASED BY 5%
EBITDA MAINTAINED AT R271M
EPS DOWN TO 1.8c - DECREASED BY 94%
HEPS DOWN TO 20.5c - DECREASED BY 29%
NHEPS DOWN TO 27.2c - DECREASED BY 14%
DPS DOWN TO 10c - DECREASED BY 52%
NET DEBT IMPROVED TO R588M - INCREASED BY 4%
RESULTS OVERVIEW
- Revenue from continuing operations increased
by 5% to R913 million as a result of net box
volume growth of 5% and the inclusion of prior
year acquisitions for the full 12 months. Closing
box volumes for the Group at year-end was
11.1 million (FY18: 10.6 million).
- EBITDA from continuing operations was
maintained at R271 million. A significant
improvement of 16% was achieved in 2HFY19
compared to 1HFY19 due to improved cost
control and trading performance.
- Group HEPS decreased 29% to 20.5 cents
mainly as a result of once-off restructuring
costs as well as a higher effective tax rate.
- Group NHEPS was down 14% to 27.2 cents
mainly due to increased net finance costs
following acquisitions concluded in FY2018.
- Free cash flow increased 38% to R119 million
resulting in a 4% reduction in net debt to
R588 million. The improved cash position
was as a result of improved working capital
management.
- Group debt was successfully restructured and
refinanced, resulting in a new efficient debt
structure that is expected to improve the
Group's effective cost of debt.
- Following the strategic review undertaken late
in the financial year, CSX was sold effective
30 June 2019 for R14 million and resulted in a
loss on disposal of R3 million and impairment
of goodwill of R30 million.
- The Group is in the process of exiting other
operations ie Dexterity, Metrofile Nigeria
and Lexie Legal Services. The digital strategy
remains unaffected.
- Impairments included goodwill of R18 million
relating to the Middle East, R8 million of
investments in Lexie Legal Services and Al Bidda
Metrofile, and R29 million of plant and equipment.
REVENUE
Secure storage contributed 62% to group
revenue and was up 9% year-on-year mainly as
a result of increased box volumes, as well as the
inclusion of the prior year acquisitions for the full
12 months. Closing box volumes for the Group
at year-end was 11.1 million (FY18: 10.6 million)
as net box volume growth of 5% was achieved.
Geographical performance in terms of box
volume growth resulted in net box volume growth
in South Africa of 4%, Rest of Africa of 7% and the
Middle East of 16%.
Digital services contributed 15% to group
revenue and was down 1% year-on-year mainly
as a result of a reduction in image processing
of 5% year-on-year. This was a consequence of
delays experienced due to the elections and
the postponement of projects by Government
departments that impacted Metrofile's customers
and also affected the performance of the Group.
These projects are, however, expected to be
executed and operationalised in the new financial
year and form part of the improved pipeline and
additional focus on and strategy in this line of
business within the Group.
Products and solutions and business support
services contributed 17% and 6% respectively
to group revenue. These revenue streams
decreased 4% and 1% respectively following
similar delays to those experienced in digital
services, in projects and spending by customers,
as well as the overall impact of the challenging
economic conditions.
CASH AND DEBT
Net finance costs increased by 50% to R69 million
(FY18: R46 million) following increased levels of
debt as a result of prior year acquisitions. Net
debt, however, reduced by 4% to R588 million
(FY18: R615 million) following improved cash-
generation and free cash flow ("FCF"). FCF
improved 38% to R119 million (FY18: R86 million)
mainly as a result of improvement in working
capital management. The second half of
the financial year also recorded a significant
reduction in net debt as a 7% reduction from
R636 million at 31 December 2018 was achieved.
During June 2019, Group debt was refinanced
and restructured; and in line with Metrofile's
intensified focus on improving cash management,
the new efficient debt structure will result in an
improvement in the Group's effective cost of
debt. Net debt to EBITDA also improved by 4%
to 2.17x (FY18: 2.26x).
SUMMARISED FINANCIALS (R'000)
12 months 12 months
ended ended
30 June 30 June
2019 2018
Revenue* 913 415 873 531
EBITDA* 271 173 271 689
Operating profit* 223 734 230 463
EPS (cents) 1.8 30.6
HEPS (cents) 20.5 28.9
NHEPS (cents) 27.2 31.8
DPS (cents) 10.0 21.0
Net debt# 588 136 614 809
* From continuing operations.
# Net debt is calculated net of interest-bearing receivables
and borrowings, cash and overdraft.
DIVIDEND
Notice is given that the Board has elected to
declare a final scrip distribution of Metrofile
ordinary shares (the "Scrip Distribution") to
Shareholders in respect of the year ended
30 June 2019 to the holders of ordinary shares
recorded in the books of the Company on Friday,
11 October 2019. Shareholders will, however, be
entitled to elect to receive a gross cash dividend
of 5 cents per share held in respect of all or part
of their ordinary shareholding, instead of the
Scrip Distribution (the "Cash Dividend"), payable
out of the Company's distributable retained
profits. The finalisation of information, including
the ratio applicable to the Scrip Distribution is
expected to be released on SENS on Tuesday,
1 October 2019. A further announcement setting
out the full terms and salient dates of the Scrip
Distribution and Cash Dividend alternative will be
published separately in due course.
DIGITAL SERVICES
While the physical management of records and
information remains core, the provision of digital
services is proving to be equally important as
businesses continue to leverage breakthrough
technologies like AI and Internet of Things (IOT)
to transform customer experience, improve
productivity and gain competitive advantage.
Digital services currently accounts for approximately
15% of the Group's revenue and we expect to see
growth in the future as more customers adopt
technology in running their processes.
We will continue to engage our customers and
work closely with our innovation partners to offer
valuable solutions. Our continued investment in
this area will continuously see us bringing to the
market standardised solutions across multiple
industries.
OUTLOOK
The positive effects of the strategic review
and restructuring were evident especially in
the second half of the year and are expected
to continue to impact the performance of
the Group in the new financial year. While
challenging trading conditions are expected to
persist, the Group remains optimistic as net box
volume growth is anticipated throughout the
various regions. Growth is further expected from
our digital offerings driven primarily by existing
and new solutions we will bring to the market.
This short-form announcement is extracted from
audited results but itself not audited.
Metrofile will host a results presentation, audio webcast and conference call on the financial
results at 10:30 on Tuesday, 10 September 2019.
Registration for the webcast and conference call: webcast: https://themediaframe.net/metrofile190910.
Conference call: www.diamondpass.net/6028103. The presentation will also be available on the
Group's website (www.metrofilegroup.com). This short-form announcement is the responsibility of the
directors and is only a summary of the information in the full audited announcement and does not contain
full or complete details. The full audited announcement is published on the company's website:
www.metrofilegroup.com and is also accessible via the JSE link:
https://senspdf.jse.co.za/documents/2019/jse/isse/mfl/MFLFY19.pdf
Any investment decisions by investors and/or shareholders should be based on consideration of the full
audited announcement.
The full audited announcement is also available at our registered offices for inspection, at no charge,
during office hours. Electronic copies of the full audited announcement may be requested by contacting
Paige Atkins: paige@rspconsulting.co.za.
5 September 2019
DIRECTORS
CS Seabrooke (Chairman)^*, MS Bomela* (Deputy Chairman), PG Serima (CEO), S Mansingh (CFO),
MZ Abdulla*, P Langeni#*, LE Mthimunye^*, GD Wackrill*, SV Zilwa^*, L Rood^* (Alternate)
^Independent *Non-executive #Lead independent
COMPANY SECRETARY
P Atkins
REGISTERED OFFICE
41 Wordsworth Avenue, Senderwood, Gauteng, 2007
www.metrofilegroup.com
SPONSOR
The Standard Bank of South Africa Limited
TRANSFER SECRETARIES
Computershare Investor Services (Pty) Ltd
Rosebank Towers, 15 Biermann Avenue, Rosebank, Gauteng, 2196
INVESTOR RELATIONS
Anne Dunn: Anne Dunn Communications
082 448 2684
anne@annedunn.co.za
Date: 05/09/2019 04:38:00
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