Up, up and away
AFTER TRADING between 60c and 75c for most of last year, AltX-listed Onelogix’s share price has taken off in the past few months, peaking at 109c and holding just above 100c. The interim report for the six months to November gives good justification for this.
Onelogix describes itself as a specialist logistics service provider. While no detailed sectoral breakdown is provided, what it calls its “stellar performer” is the VDS auto logistics division, though the most visible service to the public is probably the chain of 215 franchised PostNet outlets. Media Express operates in the pricesensitive niche of express printed media delivery, and 4Logix/Gijima provides logistics for the rail transport of bulk commodities to the ports.
The company has excellent BEE credentials. Chairman Sipho Pityana is executive chairman of Izingwe, deputy chairman of Aberdare Cables and a former DG of the departments of labour and foreign affairs. There’s an effective 25% BEE shareholding in the operating subsidiaries through intermediate company Onelogix (Pty) by a broad-based consortium led by Izingwe and a staff trust, and 49% of 4Logix/Gijima is held by black-owned Tsoseletso Resources.
In the six months to November, revenue was 59% up on last year, at R128m. Operating profit was 61% higher at R16,6m and, after a much higher tax charge, headline earnings per share (HEPS) were still up a healthy 35%. Onelogix does not pay dividends, retaining all profits to fund growth.
HEPS are on an unexciting but fairly steady upward trend: in the past five six-month periods respectively 2,5c, 4,0c, 3,8c, 4,0c and 5,1c. However, Onelogix warns that the accumulated loss in Onelogix (Pty) has now been almost fully absorbed. When this process is complete, the BEE partners will get their full profit share.
Had this applied in the first half, HEPS would have been about 15% lower.
In spite of this, Onelogix still expects HEPS growth for the full year. It says organic growth should be sustainable in the medium to long term and will be the main driver, though it will look at appropriate niche opportunities to complement its core activities.
Even allowing for some dilution, 12-month HEPS should be at least 10c, maybe even a little more. A forward p:e ratio barely if at all into double digits looks good value for a company with this record and prospects.