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JSE logistics and transport group OneLogix continued to record double digit growth in key financial markers for the year to May 2013 (“the year”), driving the group over the R1 billion revenue threshold. For the 3rd consecutive year growth was mainly organic, which reflects the underlying businesses’ strong footholds in robust logistics niches. The recent acquisitions of United Bulk and Drive Report helped boost earnings in the latter few months of the year. Onelogix continued honing its focus on core logistics businesses in high performing sectors when it disposed of its last remaining media interest for R10 million.
In another milestone OneLogix transitioned to the main board of the JSE just after year-end and set the stage for the group’s next phase of growth.
Revenue for the year was up 20% to R1 040.3 billion. Operating income (excluding once-off profits on the sale of a property in the prior year) rose 10% to R92.5 million. Headline earnings per share grew 14% to 25,1 cents on the back of thriving performances from the auto logistics operations and PostNet. Profit on the sale of Magscene to CTP Limited boosted earnings per share by 18% year-on-year to 29 cents.
The board declared a final gross dividend of 5 cents per share (2012: Capital distribution of 4.5 cents per share).
Notwithstanding the growth, the year brought some challenges for the group. Cost increases above inflation, for instance fuel and labour, depressed operating margins to 8,9% from 9,8% last year. Operating cash flows still remained strong at R97,4 million (2012: R119,1 million). CEO Ian Lourens attributes this resilience to the strict cash flow management throughout the group.
Lourens says good organic growth despite tough economic and trading conditions is quite an achievement. He points to the group’s strategic spread of businesses and strong management as the key reasons for this.
OneLogix invested R86,9 million in infrastructure to achieve the growth, of which the lion’s share went into the group’s top performer Vehicle Delivery Services (VDS).
While VDS and Commercial VDS continued to lead the cross-border and local auto logistics markets, PostNet remained steadfast with continued high margins and reliable annuity income.
During the year OneLogix Projex wasrevitalised through the successful amalgamation of two existing group companies and their combined relocation to Durban Harbour. Lourens explains that the strengthened Projex has quickly become a significant player in the Durban Harbour freight logistics market. “The enlarged business now has the distinct capability to manage the movement of large shipments of abnormal or general freight in tight deadlines.”
Within the logistics services businesses the corrective action at Atlas Panelbeaters saw the performance improve in the second half of the year to beat expectations. Lourens adds that QSA’s performance was as expected given that the business is in an investment and development phase. He is positive that both companies will up their earnings contribution in the future.
He is equally optimistic regarding the acquisitions of 60% of specialist liquids transporter United Bulk, and 40% of driver management company Drive Report. “The sellers remain firmly invested in line with our model of nurturing an entrepreneurial spirit within a corporate structure. This should incentivise earnings growth, especially given the group’s support to help these companies realise their inherent potential and expand.”
The acquisitions have strategic impact for the group beyond earnings enhancement. “Diversification is a key strategy to continually reduce our reliance on VDS as the major growth driver for the group. Drive Report is a strategically well-positioned product offering focused on driver behaviour management, a market segment that offers us huge opportunities,” says Lourens. “Most importantly, the new businesses are essentially non-cyclical and provide a revenue buffer.”
Looking ahead he says realistically that no let-up is anticipated in the difficult trading landscape in the medium term. “We constantly evaluate the changing strategic environment such as the impact increased investment in rail for freight logistics will have on the group, and strategise early to minimise or reverse their possible adverse effect on our positioning.” He concludes: “We are confident that each company in the group is well positioned to take advantage of growth opportunities in its respective niche.”
The share closed Friday at R2, 81.
Issued by: Envisage Communications
Nicci Katz/Michèle Mackey
(011) 325 5944/083 287 2771/082 497 9827
On behalf of: OneLogix Group Limited
Ian Lourens, CEO
(011) 396 9040/ 082 440 9683
Share code: OLG
Issue date: 26 August 2013