Metrofile, the JSE listed information and records storage management business, which released its interim results for the period ending 31 December 2010, has declared its maiden dividend of 2 cents per share.
According to Metrofile CEO, Graham Wackrill, the improvements in the financial structure and cash flows of the group have enabled it to introduce a policy of paying an interim and final dividend for the first time. These will be calculated on a minimum of four times cover, with an ultimate target of three times cover.
“Our shareholders have been waiting some time for this and we are confident that it is something we will be able to deliver on a sustainable basis.”
The group announced a 31,7% increase in headline earnings per share (HEPS) for the period to 8,3 cents from 6,3 cents in the previous year, while normalised HEPS rose 15,3% to 8,3 cents from 7,2 cents.
Revenue increased by 11,5% to R220-million and EBITDA by 9,6% to R68,3-million, whilst a new debt package and more favourable interest rates resulted in lower finance costs. Cash generated by the group remained high and gearing continued to improve.
Wackrill says the interim results were boosted as a result of the group increasing its range of service offerings in the information management sector, cross selling the group’s diverse range of services to both new and existing customers, inclusive of government.
“We have been extremely successful in leveraging off our brand to cross sell other services. Many of these are supplied by companies we have acquired over the years, such as Rainbow Paper Management, Infovault, IDM and more recently, Cleardata. We will continue to look for opportunities to acquire businesses that are aligned to and will complement our strategy.”
Commenting on the group’s Africa strategy, Wackrill says Metrofile’s expansion into the continent will be driven by the demand of existing customers that have a need for similar services to those received in South Africa.
“In addition to our existing business in Mozambique, Metrofile has finalised terms with an international partner with respect to a Nigerian operation and expansion into other African countries will commence once the Nigerian business is fully operational.”
He says the group’s latest financial results reflect Metrofile’s positioning to deliver steady, rather than spectacular performance over time, with low downside risks. “This was evident even through the recent recession, during which we showed consistent growth. The business is extremely lean and is structured to deliver annuity income.”
As a result, he says Metrofile expects to continue to grow revenue, EBITDA and HEPS in the period ahead. “We anticipate similar growth to the first half for the year as a whole, with the recovery in the economy providing enhanced opportunities for the group.”