Roy Cokayne
The protracted strike in the second half of last year in the motor manufacturing, auto component supply and retail motor industries failed to dent the financial performance of listed logistics group OneLogix in the six months to November.
Vehicle delivery services (VDS) is the group’s largest business and, together with commercial delivery services, is a major operator in the auto logistics arena within South Africa and the southern African region.
Ian Lourens, the chief executive of OneLogix, said yesterday VDS continued to deliver solid growth and maintain its market leading position in the reporting period despite a difficult market that exhibited below average inflation.
Lourens said growth was further inhibited in the reporting period by lower consumer demand and labour disruptions.
“Fortunately healthy labour relations in VDS mitigated the full effect [of the labour disruptions]. VDS continues to investigate new opportunities on the back of ongoing investment in optimising fleet, IT infrastructure and people,” he said.
OneLogix yesterday reported a 33 percent growth in revenue to R664.9 million in the six months to November last year from R498.9m in the previous corresponding period.
Lourens attributed the strong revenue performance to strong organic growth across the group and the maiden contribution of United Bulk.
OneLogix last year finalised the acquisition of a 60 percent stake in specialist bulk liquid transporter United Bulk for R55m from Tanker Solutions. It was its largest acquisition to date and marked its further diversification into complementary logistics fields to reduce its dependence on its auto logistics businesses.
The group also owns PostNet, which Lourens said continued to contribute meaningfully to the group’s performance with sustainably high operating margins.
Operating profit rose by 34 percent to R67.75m from R50.7m as the combined operating margin was maintained at 10.2 percent.
Net cash generated from operations grew by 93 percent to R63.29m from R32.7m. This translated into a 29 percent improvement in headline earnings a share to 17.6c.
The group decided not to pay an interim dividend.
Lourens attributed this to the temporary impact on the group’s cash reserves of the Izingwe share buy-back. This follows Izingwe in September expressing its desire to exit its 10.25 percent investment in OneLogix.
Lourens said the group had capitalised on this opportunity by repurchasing, cancelling and delisting these shares after shareholders in December unanimously approved the transaction and the purchase consideration of R60.8m.
The group extended its logistics services during the reporting period in the area of heavy and abnormal equipment through the acquisition of a majority stake in Madison Freight Lines and started its third proprietary business, OneLogix Linehaul.
Lourens said OneLogix’s strategy of acquiring small entrepreneurial businesses, offering them the benefit of a management platform that allowed them to expand and realise their potential, together with a focus on expanding existing businesses with continually refined business systems and processes, was working well.
The stock leapt 15.79 percent yesterday to close at R3.30.