AltX-listed OneLogix demonstrated the strength of its diversified logistics services with a strong performance for the year to May 2011 that saw revenue and profits up over 40%. Substantial market share and sustainable client bases for the underlying businesses, supported by improved efficiencies under the keen eye of management, helped to continue the group’s record of credible results irrespective of the macroeconomic environment.
Revenue grew 41% to R701 million generating operating profit of R74,1 million - 43% more than in the previous year. Finance costs were slashed by more than half to R4,4 million on the back of lower interest rates and higher cash generation from operations totalling R81,7 million. Headline earnings per share grew 46% from 13 cents to 19,0 cents. In view of the results OneLogix returned 8 cents a share to shareholders by way of a capital distribution compared to 6 cents for FY2010.
CEO Ian Lourens says the economy was not all bad news for the group, with certain sectors picking up especially towards the end of the year, for instance the automotive and abnormal load markets. “Efficient management teams mean that we were able to capitalise on an economic upswing where evident and at the same time counter the still challenging conditions in other sectors.” He points out that growth was driven this way both organically, and by newly acquired and established businesses.
Vehicle Delivery Services (“VDS”) remained the major contributor to group results with another healthy performance in a recovering market. Commercial Vehicle Delivery Services (“CVDS”) successfully seized greater market share by bringing on board new clients. Lourens points out the advantage of a trading backbone stretching from Durban and Johannesburg, through Beitbridge to Harare, and finally Lusaka. “A substantial footprint across Southern Africa with offices, warehousing, workshops and storage yards positions VDS and CVDS to lead the autologistics market.”
RFB Logistics (“RFB”), in the freight and abnormal load markets, outperformed budget. Fleet upgrades and improved administration helped grow the client base despite the tight, intensely competitive market.
Both new businesses performed well. OneLogix Projex was set up during the year to partner RFB in project logistics. The young start-up hit the ground running and contributed nicely to earnings by year-end. Recent acquisition Atlas Panelbeaters was overhauled for improved results. Lourens says these two successes reflect the group’s proven ability to incorporate new businesses quickly and effectively to boost the bottom line.
Group veteran PostNet felt the brunt of the economic slowdown, operating in the retail segment susceptible to economic vagaries. Nonetheless the network of 236 franchisees sustained annuity income. Lourens is not concerned and says the business remains a defensive asset in the OneLogix group as the SMME market is resilient with ongoing spending even in a downcycle. Finally, Magscene made the most of its newfound stability and Lourens is confident the company can be relied on for better results in the future.
In the previous year OneLogix sold media distribution companies Media Express and Press Support to Media24. The sales were finalised during the year and OneLogix took in the last outstanding payment of R5,5 million.
Looking ahead Lourens is positive. “Our current cash pile is both a comforting shock absorber should economic conditions continue to wane as well as a driver of acquisitive and start-up growth.” He adds though that the trading environment of many of the group’s operations seems to reflect recovery and reasonably favourable prospects.
“In most of our divisions the founders of the businesses are still running them, and their deep intuitive knowledge of the industry and entrepreneurial insight are a competitive advantage when it comes to exploiting growth opportunities.” He concludes that the group has attained a healthy balance of experienced corporate monitoring at group level and innovative entrepreneurial management in each business, with the decentralised structure empowering and incentivising management.
The share closed yesterday at 128 cents, putting the company on a current PE of 7,95.
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: 23 August 2011