Despite the slowdown in the local economy, Metrofile has reported that unaudited results for the six months ended 31 December were satisfactory with revenue increasing by 9,8% to R197,3-million, EBITDA was up by 7,3% to R62,3-million, and Headline earnings per share (HEPS) also increased by 42,5% to 6,3 cents. Although the more relevant measure is normalised HEPS, which itself increased by 15,9% to 7,2 cents.
“Notwithstanding the economic slowdown I believe we have produced satisfactory results,” says Graham Wackrill, CEO of Metrofile. “While we always said that the global slowdown would not have any material impact on our business, and to this end it hasn’t, we did feel a minor ripple effect from the market.”
The company is also pleased to announce that cash generated by the business remains strong and continues to be applied to investing in capital items required for growth and reduction of the group’s legacy debts.
Richard Buttle, CFO at Metrofile, comments: “Within the income statement there is a once off interest cost that relates to a SARS liability which arose out of the degrouping that occurred post the Section 311 restructure in 2004. This relates to timing differences of recoupments as well as deemed capital gains. Consequently the taxation charge for the period includes a charge relating to the aforementioned capital gains, the amount of which is R0,8-million. The tax bases of the Metrofile property companies has increased by R16,2-million as a result.”
In the period of the results Metrofile also made a number of strategic acquisitions to support its ongoing growth strategy. These included the acquisition of 100% of Innovative Document Management, 100% of Infovault, and 55% of Cleardata. The acquisitions were made by way of vendor placements that resulted in a further 14,1 million shares being issued by the company. The acquisitions have had little impact to the overall revenues of the company, due to the timing thereof.
Africa continues to be a growth market for the company with the Mozambique business achieving beyond expectations. That said, while the company continues to work with new clients throughout the regions, the Nigeria business is taking longer than expected to set up. Looking locally, Metrofile Nelspruit is scheduled to open its doors in the next quarter.
“In the last six months we have started seeing our investments into additional capacity yield benefits, our African strategy is paying off, and we are proud to have been awarded our accreditation as a value adding level 4 B-BBEE contributor. In addition to which our commitment to transformation can further be evidenced in the increased stake taken in our business by BEE partner, the Mineworkers Investment Company (MIC), which now holds 32,4%,” states Wackrill.
Looking ahead Metrofile is confident that the recent acquisitions made by the company will support its goals to grow and expand its offerings to customers, the company will also continue to focus efforts in cross-selling its diverse range of services to customers, identify opportunities in smaller cities in South Africa, and continue to drive its government business.
“While the economy isn’t expected to swing back as quickly as the market would like, we believe that the current economic environment shouldn’t create any foreseeable problems and we look forward to steady growth in revenue, EBITDA and normalised HEPS in the future. We continue to concentrate on working capital management, cost savings and cash flow, as key drivers going forward,” Wackrill says.