Niche logistics provider OneLogix on Thursday announced that its headline earnings per share (HEPS) and diluted HEPS for the financial year ended May 31, had increased by 11% year-on-year to 37.3c, on the back of a slightly decreased trading result, reduced net financing costs and slightly less-than-average shares in issue for the year.

Core HEPS and diluted core HEPS increased by 9% to 43.7c during the period, but earnings a share decreased by 29% to 37.2c owing to the prior year one-off post-tax profit from the DriveRisk disposal of R36.5-million, and from the Umlaas Road sale and leaseback of R12.7-million.

This decrease was, however, offset by increased trading earnings of 4.2c a share.

OneLogix further reported 19% growth in revenue for the period.

The positive results follow on the back of the logistics group sustaining an uninterrupted profit trajectory for a decade, despite an increasingly hostile trading environment.

CEO Ian Lourens noted that the stronger first half of the year, compared with the tougher second half, was indicative of the ever-weakening local economy.

However, Lourens told Engineering News Online that, despite these challenging times, all 12 of OneLogix’s businesses remained profitable, with only three trading down from last year.

“Despite this, the majority of the group’s businesses delivered bottom line growth, almost exclusively organic in nature, which again affirms the strength of our strategy and the resilient business models of our underlying businesses, guided as they are by highly-skilled management teams,” Lourens commented.

Looking ahead, he said OneLogix would “trade smarter”, especially with the assistance of its entrepreneurial team.

In terms of acquisition opportunities, should any arise, the group was willing to consider these but said none were “piquing its interest” at this stage.

Meanwhile, the group extended the footprint of its Umlaas Road logistics hub in response to market demand to entrench a strategic advantage through purchasing the adjoining 40 ha property in June last year.

Cash resources of R58-million have been expended to date, including the land acquisition and preliminary design work.

With the R280-million project developing over the last five years, Lourens told Engineering News Online that Phase 3 was currently being rolled out.

Construction began in April and it was expected that the project would be completed by June 2020.

Commenting on the project, Lourens called it “an unconditional success” owing to the project having positioned OneLogix in the market wherein it operates, while simultaneously enabling it to become a full supply chain deliverer of services.

FINANCIAL DETAILS

Revenue grew 19% to R2.7-billion on the back of increased activity in all segments, mainly attributable to organic growth.

Trading profit was down 5% to R160-million, with trading margins having declined from 7.3% to 5.8%, primarily as a result of significantly increased fuel costs, as well as continued increased leased assets utilisation.

Operating profit, excluding capital items, decreased in line with trading profit from R158.4-million to R150.8-million.

Net finance costs decreased by 46% to R22.1-million as debt related to the disposal of Umlaas Road was settled in the prior period, the allocation of financing costs inherent in leased assets was included in operating expenses, and the cash flow position was enhanced through positive net working capital developments.

Profit before tax, excluding capital items, increased by 9% to R128.7-million on the back of slightly lower trading profits and a significant reduction in net financing costs.

Cash generated from operations decreased negligibly by 1% to R299.5-million, largely falling in line with the movement in trading profit.

In line with the last three years, OneLogix declared a final gross dividend of 5c a share, resulting in a total yearly dividend of 11c a share.

Lourens said that while it was OneLogix’s preference to continue declaring a dividend, future declarations would continue to be evaluated in the context of the board’s ongoing review of trading conditions, growth prospects and related business demands facing the group.

“It’s hard for us to say, categorically, [whether it will continue on this trajectory,” he told Engineering News Online, reiterating that OneLogix did not have a dividend policy “set in stone”.

“Because we’re a small company, we need to be fairly flexible if there is big trouble or big opportunities for which we might need to use cash,” he clarified.

OPERATIONAL REVIEW

Under the group’s Abnormal Logistics division, the vehicle component – comprising OneLogix VDS and OneLogix TruckLogix – performed well despite market constraints.

OneLogix Projex emerged from particularly tough trading conditions with a credible performance, the company said.

The group’s Primary Product Logistics division produced mixed results, with OneLogix Jackson and OneLogix Linehaul having been “stellar performers”, while OneLogix United Bulk and OneLogix Buffelshoek continued to struggle owing to “listless markets”.

The smaller Logistics Services division, meanwhile, also delivered a strong performance during the period, with its Atlas 360 business remaining solid, while its newly-acquired, smaller cohort OneLogix Cranbourne Panelbeaters produced pleasing results.

OneLogix Cargo Solutions, now a viable standalone clearing and forwarding operation, performed steadily in its evolving niche market and OneLogix Warehousing continued to offer value for the group.

OUTLOOK

Trading conditions for all OneLogix companies are expected to remain difficult for the foreseeable future.

“However, we will continue to focus on extracting maximum efficiencies from existing businesses to protect and grow their individual market shares in their respective niche markets,” Lourens commented.

He added that the group’s tested business models ensured that each business was well-placed within its respective market and was well-equipped to both withstand economic headwinds and to exploit emerging opportunities.