OneLogix, the AltX-listed logistics and transport group, continued to report double digit growth in a number of key financial markers for the six months to November 2012 (“the period”). Revenue was up by 15% to R499 million and headline earnings per share (HEPS) by 13% to 13,6 cents, driven entirely by organic growth for the sixth consecutive period.
Skilled management has been attributed the credit for the good performance. A number of group companies exceeded targets despite general margin squeeze from rising input costs, intense competition and prolonged transport strikes. Further, the group successfully concluded two new acquisitions that will lessen its dependence on its auto-logistics operations going forward.
The group’s consistent growth trajectory over the last years has been spurred by strict cost management, ongoing re-investment in operations, strategic acquisitions and recognised service excellence.
Operating profit increased by 7% to R50,7 million. Operating margins were down slightly from 10,9 to 10,2%, due almost entirely to rising fuel costs.
Net finance costs increased by 25% to R5,2 million as a result of the group’s growing property portfolio. After taking into account the repayment of R27,6 million of bank finance, OneLogix raised further net interest-bearing borrowings of R12,5 million. Group CEO Ian Lourens points out that interest cover of 9,8 times gives OneLogix the opportunity to access further borrowings for new growth opportunities.
OneLogix declared a dividend of 4,5 cents a share, equal to the interim dividend last year.
Lourens says: “The group operates on a decentralised and entrepreneurial management model, which makes the most of the individual management team’s strengths, networks and expertise. This is the reason the business is hardy even in challenging times.”
The auto-logistics businesses performed well, as expected from their track record. The younger Commercial Vehicle Delivery Services seized more market share and brought on board new contracts, while Vehicle Delivery Services (VDS) maintained its foothold. Lourens says the group continued investing in VDS despite a shrinking market as there remain significant growth opportunities.
RFB Logistics and OneLogix Projex, in the freight and abnormal load market, exceeded expectations and are due to merge later this year in light of their similar client bases and market. Lourens highlights that infrastructure is currently offering promising growth potential with its growing call for project logistics.
PostNet also fared positively. OneLogix sold its stake in its other communications company – Magscene - to JSE group Caxtons for R8,5 million, confirming its exit from non-core businesses.
The majority stake in United Bulk, and a minority interest in Drive Report, were bought for R55 million and R20 million, respectively. United Bulk is a leading specialist bulk transporter of liquid products and Drive Report is a driver behaviour management company addressing cost and safety concerns.
According to Lourens the acquisitions complement and diversify the group’s focus. “The acquisitions fit with our strategy of diversifying revenue streams from our car-related logistics companies, to release ourselves from the cyclicality of the car market which is interest rate sensitive. At the same time, they leverage existing logistics expertise within the group and expand our offering to clients,” he says.
He adds that the objective of vertical integration is also met by the acquisitions. Like QSA, which provides accounting software for OneLogix and other transport operators, Drive Report will now help optimise the group’s and customers’ driver-dependent businesses. He says QSA’s current consumption of capital is to be expected in this start-up phase.
Looking ahead he is upbeat, hoping that industrial action is behind them for now. “The outlook for the year remains positive. Our businesses are well positioned to address challenges and take advantage of growth opportunities in their markets. The acquisitions should start to contribute to results in the period ahead,” Lourens concludes.
The share closed yesterday at R2,23.
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: 26 February 2013