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Annual Financial Results for the year ended 30 June 2023
METROFILE HOLDINGS LIMITED
Incorporated in the Republic of South Africa
(Registration number 1983/012697/06
Share Code: MFL ISN: ZAE000061727
(“Metrofile” or “the Company” or “the Group”)
ANNUAL FINANCIAL RESULTS
FOR THE YEAR ENDED 30 JUNE 2023
SALIENT FEATURES
REVENUE INCREASED BY 16% TO R1 134 MILLION
EBITDA INCREASED BY 6% TO R345 MILLION AND OPERATING PROFIT INCREASED BY 6% TO R255 MILLION
EPS AND HEPS INCREASED BY 4% AND 5% RESPECTIVELY TO 32.1C
DIVIDEND PER SHARE WAS MAINTAINED AT 18C FOR THE YEAR, WITH A FINAL DIVIDEND OF 9C DECLARED
PURCHASED 10 044 754 SHARES (R33.8 MILLION) UNDER THE SHARE BUY-BACK PROGRAMME
FINANCIAL REVIEW
REVENUE
Revenue increased by 16% to R1 134 million (FY2022: R980 million). Metrofile concluded the acquisition of
IronTree Internet Services (Pty) Ltd (IronTree) in the prior period and this acquisition has now been
included for the full twelve months under review. Excluding the acquisition related revenue growth of
IronTree, organic revenue increased by 13% primarily as a result of significant growth in digital
services. The 2023 financial year saw the return to offices by some of our clients which has increased the
demand for both our products and services. Furthermore, actions taken in the last quarter of the prior
financial year, including the investment in the go-to-market industry team, yielded positive results with
growth in storage, image processing and products and solutions. Outside South Africa, Botswana and Middle
East traded in line with expectations however, Kenya and Mozambique experienced challenges in their
respective operating environments. Gross box volumes intake increased by 6% from new and existing clients
and was offset by destructions and withdrawals of 9%. Closing box volumes for the Group as at 30 June 2023
were 11.1 million (30 June 2022: 11.4 million) as net box volume decreased by 3%.
OPERATING PROFIT
Operating profit, before acquisition related costs, grew by 6% to R255 million (FY2022: R240 million) as a result
of increased revenue. Operating margin was lower due to additional costs as well as a change in revenue mix,
mainly as a result of lower margin related to image processing. Additional costs were driven mainly by inflationary
pressure, investment in the go-to-market industry team and an increase in IT related costs following the upgrades
to our IT infrastructure and application environment, which are now complete.
CASH AND DEBT
Net finance costs were 18% higher at R58 million (FY2022: R49 million) following an increase in interest rates
and net debt. Net debt rose by 11% to R496 million (FY2022: R446 million). This was due to increased working
capital mainly attributable to higher trade and other receivables as well as capital allocated to the share buy-
back programme and the increase in the investment in our Middle East operation. Interest-bearing liabilities were
refinanced post year-end following a revised debt facilities agreement, with the new term facilities effective on
31 August 2023. This process has resulted in total debt facilities of R852 million comprising R652 million
committed and R200 million uncommitted.
REVIEW OF OPERATIONS
MRM SOUTH AFRICA
Revenue from MRM South Africa increased by 14% to R613 million (FY2022: R539 million) mainly as a result of
growth in image processing, paper services and improved sales volumes of flat boxes. Operating profit grew by
5% to R208 million (FY2022: R199 million) as a result of revenue growth and includes the additional costs
related to the go-to-market industry team. Operating margin reduced due to the change in revenue mix, however
we anticipate a recovery in margin as growth in revenue will result in improved utilization of the investment
made in the go-to-market team.
MRM REST OF AFRICA
MRM Rest of Africa consists of operations in Kenya, Botswana and Mozambique. Revenue increased by 15% to R105
million (FY2022: R91 million) and operating profit decreased by 4% to R27 million (FY2022: R28 million) due
to various once-off costs within the region following changes in the operational environment, which we
anticipate will improve going forward. Positive operational results were achieved in all territories with
growth in net box volumes as well as digital services from existing and new clients.
MRM MIDDLE EAST
MRM Middle East consists of operations in the United Arab Emirates and Oman. This region continued to grow and
expand its digital project pipeline with revenue increasing by 15% to R99 million (FY2022: R86 million).
Operating profit increased by 30% to R22 million (FY2022: R17 million).
PRODUCTS AND SERVICES SOUTH AFRICA
Our Products and Services South Africa suite of offerings includes Tidy Files, Cleardata, Metrofile VYSION and
IronTree. Overall, revenue increased by 20% to R318 million (FY2022: R264 million) with operating profit
increasing by 33% to R38 million (FY2022: R28 million). Tidy Files achieved improved revenue due to increased
demand from our clients, notwithstanding a challenging operating environment due to the flooding that occurred
during December 2022 and January 2023, which along with extended loadshedding schedules, impacted productivity.
Metrofile VYSION, which was launched 24 months ago, has continued to grow significantly with workflow automation
related sales improving. IronTree continues to grow ahead of expectations and we are currently planning the
expansion of its services into the other geographies within which we operate.
REPORT OF THE INDEPENDENT AUDITORS
The summarised consolidated financial statements for the year ended 30 June 2023 have been audited
by BDO South Africa Incorporated, who expressed an unmodified opinion thereon. The auditor also
expressed an unmodified opinion on the consolidated financial statements from which the summarised
consolidated financial statements were derived. The consolidated financial statements and auditor’s
report, including the key audit matter, are available on the Company’s website
https://www.metrofile.com/investor-relations/.
SHARE BUY-BACK PROGRAMME
The Board has authorised the continuation of the share buy-back programme under the general authority of the
Company. During FY2023 the Company purchased 10 044 754 shares (R33 761 399) at an average price of R3.36 per
share, which we anticipate will achieve an accretive return. The Board considers the value-add to shareholders
of the capital allocation decisions relating to acquisitions, expansion, share buy-backs and dividends, as well
as the judicious use of available cash and debt resources.
DIVIDEND DECLARATION AND FINAL DIVIDEND
The dividend cover policy range of between 1.5x and 2.0x remains in place. The Board declared a final cash dividend
of 9 cents per share, bringing the total dividend for the year to 18 cents per share.
Notice is hereby given that a final gross cash dividend of 9 cents per share in respect of the year ended 30 June
2023 has been declared payable, from income reserves, to the holders of ordinary shares recorded in the books of
the Company on Friday, 6 October 2023. The last day to trade cum-dividend will therefore be Tuesday, 3 October
2023 and Metrofile shares will trade ex-dividend from Wednesday, 4 October 2023. Payment of the dividend will be
on Monday, 9 October 2023. Share certificates may not be dematerialised or rematerialised from Wednesday, 4
October 2023 to Friday, 6 October 2023, both days inclusive. Withholding tax on dividends will be deducted for
all shareholders who are not exempt in terms of the legislation at a rate of 20% which will result in a final net
cash dividend of 7.2 cents per share. The Company’s issued share capital at the period end was 433 699 958 shares
(423 655 204 net of treasury shares) and the Company’s tax number is 9375/066/71/0.
OUTLOOK
We are pleased to announce the successful award of a significant contract in the South African public sector
to the value of R417 million over 3 years which is currently being contested by one of the unsuccessful
bidders. Furthermore, we have also been awarded a significant contract in the United Arab Emirates to the
value of R180 million over 2 years. These contracts are subject to the finalisation of various service level
agreements and the successful on-boarding of our relevant services, which we anticipate to be the key focus
area for the 2024 financial year. We expect continued organic growth in all regions with enhanced
profitability.
The expansion of our core capabilities in digital and cloud services has distinguished Metrofile from
traditional competitors. Continued growth in the revenue contribution from digital services has validated
our strategy of innovating across our core offerings. We are transforming our Company and preparing it for
accelerated digital and cloud adoption by shifting our investments to strategic growth areas that will allow
us to focus on accelerated market growth opportunities. Metrofile continues to be well positioned, capable
and ready to be at the core of this exciting journey.
Metrofile will host a webcast of the financial results at 10:30 on Wed 13 September 2023.
Registration for the webcast:
https://78449.themediaframe.com/links/metrofile230913.html
The presentation will also be available on the Group’s website: www.metrofile.com
This shortform announcement is the responsibility of the directors and is only a summary of the information
in the audited annual financial statements and does not contain full or complete details. The audited annual
financial statements are published on:
– The JSE website at https://senspdf.jse.co.za/documents/2023/jse/isse/mfl/MFLFY23.pdf
– The Company’s website at https://www.metrofile.com/investor-relations/
Any investment decisions by investors and/or shareholders should be based on consideration of the audited
annual financial statements, which are also available for inspection at our registered offices at no charge
during office hours. Full electronic copies may be requested from Elmarie Smuts:
elmaries@metrofileholdings.co.za and from the sponsor at jsesponsor@standardbank.co.za
11 September 2023
DIRECTORS
P Langeni (Chairman)^*, MS Bomela (Deputy Chairman)*, PG Serima (CEO), S Mansingh (CFO), SV Zilwa†*, A
Khumalo^*, LE Mthimunye^*, CS Seabrooke^*, STM Seopa^*, DL Storom*, L Rood (Alternate)^*.
^Independent *Non-executive †Lead independent
COMPANY SECRETARY
EM Smuts
REGISTERED OFFICE:
First Floor, 28 Fricker Road, Illovo, 2196, Gauteng, South Africa
www.metrofile.com
SPONSOR
The Standard Bank of South Africa Limited
TRANSFER SECRETARIES
Computershare Investor Services (Pty) Ltd
Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196, Gauteng, South Africa
INVESTOR RELATIONS
Anne Dunn: 082 448 2684
anne@anedunn.co.za
Date: 11-09-2023 09:45:00
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