OneLogix, the JSE logistics and transport group, maintained its impressive track record with the fifth consecutive period of growth since the market began to emerge from its post-2008 slump.  The group beat challenging trading conditions to deliver revenue and operating profit up more than 33% for the six months to November 2013 (“the period”), and remained a steady generator of cash. Strong existing businesses and stellar returns on recent acquisitions were the key drivers of growth.

During the period the group extended its logistics services in the area of heavy and abnormal equipment through the acquisition of a majority stake in Madison Freight Lines.  OneLogix also started up its third new proprietary business - OneLogix Linehaul - which extends the current logistics service in respect of general freight to cross-border movement.

Revenue increased to R665 million, buoyed by strong organic growth and the first-time inclusion for the full period of United Bulk and Drive Report. Operating profit of R67,8 million benefitted from the higher top line and further reflected a once-off reduction in the fleet depreciation charge as the estimated useful life of the fleet was extended. The operating margin remained steady at 10,2%. Headline earnings per share was up by 29% to 17,6 cents. Core HEPS (adjusted for amortisation charges in respect of acquisitions) increased 34% to 18 cents. The group remains strongly cash generative with cash flows from operations almost doubled to
R63,2 million.

CEO Ian Lourens says: “The underlying businesses are solid, well positioned in their respective niche markets and led by motivated and capable management.” He adds that OneLogix’s strong bias to entrepreneurial business, balanced with corporate experience, is another kicker of sustainability. 

He says OneLogix also has a credible acquisition record.  “Our success in selecting and bedding down new businesses is evident in the results.”  New addition United Bulk looks set to continue its healthy performance on the back of the group’s investment in fleet expansion, while Drive Report is robust with its popular driver behaviour management offering.

Projex, one of the group’s earlier start-up successes, has established a foothold as a significant operator in freight logistics at Durban harbour. Lourens says the historical working relationship between Projex and new acquisition Madison is expected to open up opportunity for customer, fleet and infrastructure synergies.

In the Specialised Transport division, the group’s largest business - Vehicle Delivery Services maintained its leadership of and performance in a challenging market. Both VDS and Commercial Vehicle Delivery Services operate in the automotive market where waning consumer demand is constricting growth and industry-wide strikes are disrupting productivity at vehicle manufacturers.

Another group stalwart, PostNet, continued to contribute meaningfully to the group’s performance with sustainably  high operating margins.  Lourens points out that the business leverages regular annuity income to maintain its performance.  The Logistics Services division includes  Atlas Panelbeaters, while fledgling software support  business, QSA, is in the early phase of development and a small contributor to earnings. 

Lourens says he is confident that each company in the group is well positioned to take advantage of growth opportunities in its respective niche, despite the still difficult trading environment. “Our decentralised, entrepreneurial management model ensures that the individual management team’s strengths, networks and expertise can support that business’s resilience, even in tough market conditions.”

OneLogix has not declared an interim dividend for the period given the impact on the group’s cash reserves, albeit temporary, of the share buy-back after the end of the period.  BEE partner Izingwe indicated its intention to exit the group and OneLogix paid R60,8 million out of cash reserves to purchase, cancel and delist these shares.  Shareholders approved this move by the company in December 2013.

The share closed yesterday at R2, 85.