Fil­ing away re­turns

Finweek English Edition - - INVESTMENT - SI­MON BROWN

TYP­I­CALLY IN the stock­mar­ket, in­vestors look for ex­cit­ing but bor­ing qual­ity busi­nesses that can de­liver top re­turns, and Metrofile is one of those. Re­cent re­sults for the year end­ing June 2013 showed rev­enue up 13% and HEPS +17%, with the full-year div­i­dend up 47%.

The Metrofile busi­ness model is sim­ple – it stores doc­u­ments for com­pa­nies that are re­quired by leg­is­la­tion to keep var­i­ous doc­u­ments for a num­ber of years, in other words the busi­ness model is solid – its clients must store the doc­u­ments and Metrofile has the ma­jor­ity mar­ket share in this space. Fur­ther, a com­pany is not go­ing to just let any­one store its im­por­tant doc­u­ments, and Metrofile has al­ready built a rep­u­ta­tion in this sec­tor.

The com­pany is also ex­pand­ing into Africa as it fol­lows ex­ist­ing clients that have asked it to pro­vide its ser­vices in other coun­tries.

With low lev­els of debt, strong moats to pro­tect the busi­ness and a cau­tious African ex­pan­sion strat­egy they are un­likely to shoot the lights out but they will de­liver con­sis­tent prof­its.

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