AltX logistics group OneLogix reaffirmed the resilience of its business model with good organic growth in all niche businesses for the six months to November 2009 despite a recessionary environment. In light of this the group declared its maiden capital distribution since listing on AltX of 3 cents a share for the interim period.
CEO Ian Lourens explains that although key financial markers were slightly down overall on the comparative period in 2008, the group’s defensive businesses, product offering and loyal customers again ensured growth in market share across the board. Revenue from continuing operations of R260,6 million reduced marginally by 6% from the comparative period while EBITDA declined 7% to R46,8 million. Notably net asset value per share was up 12% to 80 cents from 71,6 cents a year earlier. OneLogix ended the period with 30% more cash in hand of R32,6 million.
Commenting on the group’s first ever capital distribution totalling a payout to shareholders of R6,3 million, Lourens says: “We believe that the ability of our businesses to overcome the harsh economic conditions last year and post healthy performances warrants confidence in future prospects. This prompted us to declare our milestone distribution.”
Vehicle Delivery Services (“VDS”) put in another strong performance in the depressed auto-logistics industry, taking advantage of consolidation to boost market share. Lourens says a bigger slice of the pie and aggressively proactive management position the business to benefit from a market recovery down the line. In the same vein Commercial Vehicle Delivery Services (“CVDS”) weathered a depleted market place to continue securing new customers.
Stellar performer PostNet sustained its track record of consistent profit growth and kept up its commendable margins. Lourens says “PostNet typifies the defensive nature of our specialist operations that continue to cement the group’s foundation for future growth.”
All three printed media distribution businesses countered negative market conditions to deliver pleasing performances. In particular positive cash flows at Magscene saw a return to profitability and operating margins at Media Express were up.
On the acquisition front OneLogix continued to prove its mettle. The recent acquisition of RFB Logistics beat all expectations to set a positive precedent. (The business contributed to earnings for the first time in June 2009.) OneLogix went on to acquire Atlas Panelbeaters during the period, an industry leader specialising in the niche larger commercial vehicles market. “The acquisition is another revenue booster for the group,” says Lourens, adding that horizontal integration with VDS and CVDS will promote cost-savings and open cross-selling opportunities to the respective customers.
OneLogix exited the rail logistics market with the sale of its stake in 4Logix and Gijima, preferring to focus on its higher margin businesses.
During the period the group continued to invest in infrastructure at a total cost of R15,3 million financed with cash from operations. The bulk went towards fleet with the balance allocated to group IT infrastructure and workshop facilities. Further investment for the next six months will be assessed on an operational requirement basis.
Looking ahead Lourens is wary of the slow economic recovery expected in the next six months, and all the more cautious in light of the traditional weighting of revenue to the first half of the year. Nonetheless he is optimistic that OneLogix’s highly competitive businesses operating in less hard-hit markets should ensure that market share is maintained in the second half of the year. Of future distributions, he says the intention is to keep on declaring them so long as commercially viable.
OneLogix’s robust balance sheet with manageable external debt will enable the group to continue looking at acquisitive opportunities in well-performing niche markets.
The share closed Friday at 50 cents a share, putting the company on a current PE of 4,90.
Issued by: Envisage Communications
Nicole Katz/Michèle Mackey
(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: 22 February 2010