Metrofile says its restructuring is working


Metrofile says its restructuring is working

Published Date: 2019-09-06 | Source: Stephen Gunnion | Author: Stephen Gunnion

Metrofile says its restructuring is working

The documents storage business reported a much stronger second half and said the benefits would continue to flow through.

Metrofile says it's starting to see the positive effects of a strategic review and restructuring of its business, with some of the benefits filtering through in the second half of the year. And while it expects the restructuring to have a bigger impact next year, it said conditions are likely to remain tough.

The documents storage business has restructured its debt and is disposing of businesses that it considered non-core after the review. These include CSX Customer Services, which operates mostly in the education and public sectors and was sold at the end of June with a loss on disposal of R3 million and impairment of goodwill of R30 million. It's also in the process of exiting Metrofile Nigeria, which has been unable to achieve scale and profitability, as well as its minority stake in Lexie Legal Services. It will discontinue its investment in Dexterity Solutions, the business it established 18 months ago, but said its digital strategy remained unaffected.

Revenue from continuing operations rose 5% to R913 million in the year to end-June as box volumes grew by 5% to 11.1 million. It maintained earnings before interest, tax, depreciation and amortisation (EBITDA) at R271 million due to a much better second half. But earnings per share (EPS) sank 94% to 1.8c and headline EPS fell 29% to 20.5c mainly due to once-off restructuring costs and a higher effective tax rate. Normalised HEPS decreased by 14% to 27.2c as finance costs rose after last year's acquisitions. It's cut its dividend by 52% to 10c per share.

Its shares rose 5.8% to R1.65 yesterday.

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