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Driven by thriving niche markets and strong performances across all subsidiaries, AltX-listed logistics group OneLogix Limited reported a 57% increase in revenue to R263 million and a 74% jump in operating profit to R34,8 million for the year to May 2007. Similar increases in all key performance indicators reinforced the group’s positive growth cycle.
Operating profit represented approximately 13% of revenue. Notwithstanding an increase in working capital, cash from operations increased 92% to R40, 5 million, supporting growth in headline earnings per share of 23% to 9,6 cents per share.
CEO Ian Lourens attributes the group’s strong profitability to increasing demand in its target niche markets, particularly the auto-logistics market where subsidiary Vehicle Delivery Services (VDS) is a significant player. “VDS has focussed in recent years on a growth strategy to expand its existing business base, achieving a high level of efficiency and enabling it to seize a greater share of the R550 million auto-logistics market,” says Lourens. He adds that OneLogix has invested R72,2 million in the company. “Approximately R12,8 million has been allocated to vehicle storage facilities, R3,7 million to IT infrastructure, R54,6 million to fleet expansion and
R1,1 million to other assets.” He points out that the investment was funded partly through organic reserves with the balance through borrowings.
Franchise chain PostNet continued to perform well, with the 218 business service outlets offering a range of new products and services to the SME market. “The recent revitalisation of the brand has built a solid platform for future growth,” says Lourens. In addition synergies within the group were exploited, with Media Express executing its excess baggage and same-day courier services through PostNet.
Media Express also benefited from increased activity in its regional network due to greater demand for services in Durban and Cape Town. “Express media delivery is a highly competitive market and Media Express has performed well to retain a substantial market share,” says Lourens. The acquisition of Press Support, a micro-level newspaper and magazine distribution company, will extend OneLogix’s footprint in the printed media distribution market and enable the group to provide a complete solution for printed media distribution. “We have identified the distribution of printed material as a niche market with strong growth prospects and believe expansion will prove earnings-enhancing for the group.”
He says skilled management at 4Logix and black-empowered subsidiary, Gijima, achieved solid performances in both businesses. “High growth in these businesses is driven by long-term contracts with a high revenue nature to offset low margins.” The businesses provide logistics solutions for the rail of bulk commodities to ports nationwide.
Commenting on the group’s focus on management Lourens says the strong management team is well-equipped to steer the group in generating further growth. “The management team has ensured the implementation of our customer-centric approach and the strong execution of operational and business processes.”
He remains upbeat on the group’s prospects, highlighting VDS as a key revenue driver with a number of major local market contracts coming on stream in the year ahead. In addition, newly-acquired Press Support is expected to help boost growth with full year’s earnings for the division reflecting on the group’s balance sheet from June 2007.
He concludes: “We intend to further capitalise on our strategic positioning in lucrative niche markets and will also continue to investigate earnings-enhancing acquisition opportunities.”
OneLogix shares closed yesterday at R1,02.
Issued by: Envisage Communications
(011) 325 5944/083 287 2771
On behalf of: OneLogix Group Limited
Ian Lourens, CEO
(011) 396 9040/ 082 440 9683
Issue date: 21 August 2007
OneLogix owns the niche business solutions supplier PostNet. The group further includes auto-logistics specialist Vehicle Delivery Services, an established leader in cross-border transportation of vehicles into Africa which also recently debuted successfully onto the local auto-logistics market. Media Express is responsible for the overnight distribution of many of SA’s major business newspapers and magazines. Press Support incorporating Magscene is the latest addition to the group and provides newspaper and magazine distribution solutions. 4Logix operates in the local and international bulk commodities rail logistics market. The group has also acted as an incubator for suppliers in its business areas and has an effective 25,1% shareholding in Gijima Supply Chain Management Services (Pty) Ltd. Gijima’s primary focus on the rail bulk commodity market complements the core business of 4Logix.