Logistics group reports strong African growth
JSE-listed logistics group OneLogix reports steady volumes across its businesses and its logistics trunk extending into Africa is bearing fruit, with 15% of group revenue generated outside South Africa.
OneLogix CEO Ian Lourens says the group aims to capitalise on its presence in these markets to grow revenue from African operations in the future.
Five of OneLogix’s eight companies are growing steadily in Southern African Development Community countries, including Tanzania and the Democratic Republic of Congo, as well as in Kenya, he says.
“We have an enabling culture and corporate structure in the group, with 75% of the companies owned by the managers, meaning that their wealth is closely tied to the performance of the group. Our corporate governance focuses mainly on ensuring good corporate behaviour by our companies and balancing our publicly listed interests with the entrepreneurial beha- viour of the managers,” adds says Lourens.
The group achieved a 20% increase in revenue for the year ended May 31, and reports that most of its growth was organic, as well as a portion from acquisitions.
The group bought a 60% controlling stake in liquid bulk carrier United Bulk in December for R55-million after receiving Competition Commission approval.
“United Bulk is a well-managed business and the high-quality liquid trailers are significant assets, which are being used to transport liquids, from milk to ammonia and liquid petroleum gas. The trucks are well maintained, though older than OneLogix’ fleet guidelines. We will replace the older trucks in the fleet as we continue. Profit from this acquisition will begin to show in operations during the new year.”
OneLogix spent R87-million on capital expenditure, of which 70% was spent on its vehicle fleet and, of this, 85% was spent on expanding the fleet and 15% on replacing old vehicles.
“Having a decentralised corporate management structure, coupled with our ability to retain the original entrepreneurs in the businesses, which translates into action and drive for business and group objectives, means that we can assimilate new acquisitions quickly and use the strengths of the various business units to support the operations of our other companies.”
The company reports strong customer retention and has had solid new customer acquisitions during this year, but is experiencing margin squeeze, owing to prices and exposure to risks in the motor retail industry.
“Vehicles are consumer goods, not commodities. However, we do not foresee risk in the motor retail sector and have dealt with the new heavy-vehicle transport licences issue, which threatened our efficiency in vehicle transportation.”
OneLogix regards rail as a potential risk to its vehicle delivery market share. However, this is mitigated by long upgrade lead times of rail, which is also more suited to transporting commodities.
The company declared a 5c a share second-half dividend, bringing the total distribution to 9.5c a share for the year ended May 31, 2013.
“Our gearing ratio enables us to raise more capital if we find a good acquisition. We will continue to investigate suitable acquisitions and are focusing on regional and diversified growth to mitigate risks from a flat vehicle-market performance,” he concludes.
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