GRAHAM WACKRILL Businesses must archive and manage all types of records, whether in physical or digital format, boosting Metrofile’s growth
JSE-listed records management group Metrofile says the necessity for busi-nesses to archive and manage physical and digital information enabled its records-management unit to achieve double-digit growth in 2013. But CEO Graham Wackrill says the company also reduced its debt-to-equity ratio to 25.1% during the year, which has reduced its finan-cing costs and positioned it for further growth in the year ahead.
The group will continue to focus on cross-selling the group’s diverse range of services to new and existing customers and has reduced its debt to R140.8-million after building new warehouses at a cost of R28.3-million.
“Net finance costs reduced by 21.2%, in line with the continued reduction in the group’s debt level. The group has, as a guideline, a targeted debt level of 1.5 times earnings before interest, taxes, depreciation and amortisation (Ebitda), and dividend cover of 2.25 times Ebitda,” emphasises Wackrill.
Metrofile’s expansion into Africa will be driven by the demand of existing customers requiring similar services to those provided in South Africa. With Metrofile having a presence in Mozambique and Nigeria, expansion into other African countries is being explored, taking into account, among other aspects, potential target countries’ business and political environments, market attractiveness and overall risk, he says.
Confidential record destruction company Cleardata has registered successful expansion and cash generated from its operations increased by 22.3%, compared with 2012.
However, document equipment maintenance and service company CSX Customer Services fell short of full-year targets, despite a better second half.
“Prospects for CSX Customer Services in the year ahead are good, given the economic environment,” says Wackrill.
Paper collection and recycling service company Rainbow Paper Management has increased volumes for five consecutive years, but the pulp paper price has negatively impacted on revenue and profits.
Further, after exiting business rescue, disaster recovery business Global Continuity has recorded losses for its first full financial year owing to a tough economic climate. The business has been restructured and is expected to become profitable in the 2014 financial year.
A planned increase in capital expenditure of R71-million has been allocated to expansion, which includes two new buildings totalling R28.3-million and document storage racking of R25.5-million.
“Building capital expenditure has acceler-ated owing to favourable interest rates, steel prices and the group’s increased borrowing capacity. The planned investments during the 2014 financial year are set to decrease. However, there is an opportunity to buy two strategically important buildings, which the Metrofile Records Management division already occupies. This will result in spending R40-million, with external rentals decreasing accordingly.”
Metrofile accounts for its property portfolio on a cost basis, the total of which as at June 2013 amounted to R207.5-million, but which has an open market value of R335.8-million and a replacement value of R440.3-million, concludes Wackrill.