AltX logistics group OneLogix maintained its growth curve with exceptional results for the six months to November 2010 – revenue grew by 51% and headline earnings per share (“HEPS”) by 47%. Internal streamlining of efficiencies and fine tuning of strategy contributed to the strong results, while ongoing customer retention affirmed the group’s quality service. An improvement in market conditions on the back of a slow recovery in the economy further supported performance, particularly in the group’s automotive operations.
Increased revenue boosted EBITDA from R41,6 million to R58,6 million and operating profit rose by 52% from R26,2 million to R39,8 million. Operating cash flows generated by continuing operations was up more than three times - at 152% - raising cash on hand to R60 million. The group declared an interim dividend of 4 cents a share, up from 3 cents at the same time last year.
The interim results cap a period of achievement which saw OneLogix ranked the AltX’s top performer for 2010. Over the course of the last calendar year the share price leapt 166%, outstripping the JSE All Share (up by 16,1%) and the AltX (up by 8,6% ) indices.
CEO Ian Lourens points to management efficiencies and effective business processes as central to the group’s success. He adds that operating in growth markets is a further boon for performance. “The resilience of the group can be attributed to recovered demand in its niche markets, especially the automotive sector.”
Vehicle Delivery Services (“VDS”) and Commercial Vehicle Delivery (“CVDS”) both capitalised on this revitalised demand to perform well, the latter significantly growing its customer base. Lourens says that IT systems, built up over the past few years, are a competitive advantage offering a superior “customer-responsive” service. VDS also benefitted from infrastructure upgrades while going forward the opening of new premises in Cape Town will further improve efficiencies. He adds: “In this sector customers rate service on a continuous basis, which gives us an objective benchmark of our performance and future goals.”
RFB Logistics (“RFB”), in the freight and abnormal load markets, met expectations of ongoing profitability despite being a relatively new acquisition. Recent initiatives such as fleet upgrades and overhauled back-office administration supported growth at the company, with its existing strong focus on customer service bringing RFB into line with the group’s high service bar. Taking its success a step further, OneLogix set up OneLogix Projex during the period to work with RFB, but focussed more exclusively on project logistics.
In the same vein the most recent acquisition, Atlas Panelbeaters, beat all expectations. Lourens says the enhancements planned at the time of the acquisition, such as improved infrastructure and development of management, are paying off. Highlighting the successful exploitation of group synergies he says: “Atlas further leveraged the group’s established relationships with manufacturers of heavy vehicles to expand and diversify its customer base.”
PostNet, the group’s dependable performer, continued to reap the advantages in the growing SMME sector to maintain excellent results. “The SMME sector must go on spending on services to keep afloat even in tougher economic conditions,” says Lourens. PostNet’s annuity-based revenue makes it a strong defensive asset for the group. Looking ahead he says there is pleasing growth potential as existing stores shore-up revenue organically and the roll-out of the franchise continues. Finally, Magscene came to the fore with a performance that reversed its prior poor showing, reflecting the remedial action by the group.
Lourens is confident of a respectable performance for OneLogix in the next six months despite the traditional weighting of revenue to the first half of the year. He says the outlook for the economy, particularly within the group’s markets, is reasonably favourable. OneLogix’s robust cash resources and manageable debt will also enable the group to continue looking at acquisitive opportunities in complementary market niches.
The share closed Friday at 128 cents, putting the company on a current PE of 9,84.
Issued by: Envisage Communications
(011) 325 5944/082 497 9827
On behalf of: OneLogix Group Limited
Ian Lourens, CEO
(011) 396 9040/ 082 440 9683
Share code: OLG
Issue date: 21 February 2010