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Unaudited Summarised Group Interim Results for the six months ended 31 December 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")
UNAUDITED SUMMARISED GROUP INTERIM RESULTS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2023
SUMMARISED FINANCIALS
Unaudited Unaudited
six months six months
ended ended
31 Dec 2023 31 Dec 2022
Revenue (R'000) 577 047 564 056
EBITDA (R'000) 159 760 166 028
Operating profit (R'000) 111 467 117 953
EPS (cents) 13.0 15.0
HEPS (cents) 13.0 15.0
DPS (cents) 7.0 9.0
Number of shares in issue* 422 175 219 427 157 354
* Net of treasury shares
RESULTS OVERVIEW
Results overview for the period:
– Revenue increased by 2% to R577 million following growth in secure storage offset by lower demand in products,
services and digital.
– EBITDA decreased by 4% to R160 million and operating profit decreased by 5% to R111 million.
– EPS and HEPS decreased by 13% to 13c mainly as a result of the increase in finance costs following higher
interest rates.
– Interim dividend per share decreased by 22% to 7c for the period.
– Purchased 1 479 985 shares (R4.4 million) under the share buy-back programme during the period with a
cumulative 11 524 739 treasury shares held as at 31 December 2023.
FINANCIAL REVIEW
REVENUE
Revenue increased by 2% to R577 million (1HFY2023: R564 million), as the start of the financial year saw a
positive demand for all services following a strong period in the prior financial year however general
market conditions softened during the second quarter of our financial year. Demand for cloud services
remained strong and now contributes c.30% of our digital services. Confidential destruction gained more
traction following the further adoption of POPI legislative requirements as well as positive results from
our customer acquisition strategy. Furthermore, we noted increased office activity as our paper services
improved with a slight uptick in box volumes during our second quarter. These positive results were
unfortunately negatively impacted by three main aspects. In particular, our trading was mainly impacted by
the increase in interest rates (c. R6.4m), customer retention investment in UAE and internal process
challenges within our scanning centres in MRM SA that eroded our margins. While we have limited control over
interest rates, we have introduced measures to limit further impact of the other two areas in 2HFY2024.
OPERATING PROFIT
Operating profit was down by 5% to R111 million (1HFY2023: R118 million) as a result of lower than inflation
increase in revenue. Operating margin decreased mainly as a result of inflationary pressure as well as 11%
increase in labour following internal process challenges within our scanning centres in MRM SA. These have
been addressed and we anticipate an improvement in margin going forward.
CASH AND DEBT
Net finance costs were 20% higher at R32 million (1HFY2023: R27 million) following an increase in interest
rates and net debt. Net debt rose by 3% to R507 million (1HFY2023: R493 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 during the period 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 1% to R311 million (1HFY2023: R309 million) mainly as a result
of growth in secure storage following an improved rate mix as well as higher paper services. Operating
profit was down by 10% to R87 million (1HFY2023: R97 million) and operating margin reduced due to the lower
than inflationary growth in revenue as well as internal process challenges within our scanning centres.
These challenges have been resolved and we anticipate operational improvement in 2HFY2024.
MRM Rest of Africa
MRM Rest of Africa consists of operations in Kenya, Botswana and Mozambique. Revenue decreased by 7% to R49
million (1HFY2023: R52 million) and operating profit increased by 40% to R18 million (1HFY2023: R13 million)
following a positive resolution on a long-standing legal dispute in Kenya. Excluding this, margin was in
line with expectations. 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 28% to R61 million (1HFY2023: R48
million). Operating profit however decreased by 48% to R6 million (1HFY2023: R11 million) due to a significant
lower margin on an isolated project as well as lower margins on a new take-on project.
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 1% to R156 million (1HFY2023: R154 million) with operating
profit increasing by 2% to R15.5 million (1HFY2023: R15.2 million). IronTree continues to grow ahead of
expectations and we are currently planning the expansion of its services into the other geographies in which
we operate. Metrofile VYSION was significantly lower compared to the prior period, with workflow automation
related sales reducing due to a longer than anticipated sales cycle.
SHARE BUY-BACK PROGRAMME
During the first half of FY2024 the Company purchased 1 479 985 shares (R4 391 000) at an average price of
R2.97 per share, which we anticipate will achieve an accretive return, with a total of 11 524 739 treasury
shares held at 31 December 2023.
DIVIDEND DECLARATION
The dividend cover policy range of between 1.5x and 2.0x remains in place. The Board declared an interim
cash dividend maintained at 7 cents per share.
Notice is hereby given that an interim gross cash dividend of 7 cents per share in respect of the period
ended 31 December 2023 has been declared payable, from income reserves, to the holders of ordinary shares
recorded in the books of the Company on Friday, 5 April 2024. The last day to trade cum-dividend will
therefore be Tuesday, 2 April 2024 and Metrofile shares will trade ex-dividend from Wednesday, 3 April 2024.
Payment of the dividend will be on Monday, 8 April 2024. Share certificates may not be dematerialised or
rematerialised from Wednesday, 3 April 2024 to Friday, 5 April 2024, 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 5.6 cents per share. The Company's issued share
capital at the period end was 433 699 958 shares (422 175 219 net of treasury shares) and the Company's tax
number is 9375/066/71/0.
CHANGES TO THE BOARD OF DIRECTORS AND COMPANY SECRETARY
There were no changes to the Board for the six months ended 31 December 2023 or up to the date of this
announcement.
OUTLOOK
Metrofile's physical and digital subscription business currently contributes 62% of the Group's overall
revenue. Plans are in place to ensure growth in the subscription-based business to achieve an optimal mix
that will support predictable growth. This mix will be achieved partially organically but also through
investments into digital assets such as the successful and value enhancing IronTree acquisition. This will
ensure the move of our primary offerings towards non-paper based subscriptions, while retaining our dominant
position in paper based storage in South Africa. Whilst we expect a challenging economic environment given
the current macro-economic situation and upcoming elections, we believe we will see positive results from
our operational interventions that stemmed from challenges experienced during 1HFY2024.
This shortform announcement is the responsibility of the directors and is only a summary of the information
in the full announcement. The information contained herewith has not been reviewed or reported on by the
auditors. The full announcement is published on:
• The JSE website at
https://senspdf.jse.co.za/documents/2024/jse/isse/mfl/mflh1fy24.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 full
announcement. Electronic copies of the full announcement may be requested by contacting Elmarie Smuts:
elmaries@metrofileholdings.com and from the sponsor at jsesponsor@standardbank.co.za and will be available
for inspection Metrofile's registered office at no charge during office hours.
4 March 2024
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
E 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
mailto:anne@annedunn.co.za
Date: 04-03-2024 10:15:00
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