Up, up and away

Finweek English Edition - - Companies & markets - MICHAEL COUL­SON

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.

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