OneLogix yearns for a recovery
Logistics services provider OneLogix has positioned itself for a recovery but management is getting frustrated by the time it is taking SA to rebound from the pandemic. The company’s earnings per share fell 13% in the year to end-May 2021 to 12.5c as the country was placed in and out of economic lockdowns.
Logistics services provider OneLogix has positioned itself for a recovery but management is getting frustrated by the time it is taking SA to rebound from the pandemic.
The company, which has a market capitalisation of R592m, saw its revenue fall 6% to R2.46bn in the year to end-May 2021 and its earnings per share fall 13% to 12.5c per share, as the country was placed in and out of economic lockdowns.
“I think we are in a really strong position now. All of our businesses will do well when SA’s economy gets going again. Essentially logistics are a very important part of the economy. I just hoped that we would already be through the lockdowns,” CEO Ian Lourens said.
The company of 13 businesses was unable to declare a dividend given the uncertain environment it was operating in. It last paid one two years ago.
But it still managed to maintain a healthy cash position. The group reported that cash generated from operations before short-term working capital inflows, finance costs, taxation and dividend expenses, were resilient, rising 1% to R357.8m.
This was largely because of healthy short-term cash and cost management.
The year before OneLogix had closing net working capital outflow of R156.7m, largely as many of its trucks could not operate during the hard lockdown to curb Covid-19.
Net working capital is the difference between a company’s total current assets and current liabilities. It reflects the company’s financial health
Given that SA exited the hard lockdown by June, OneLogix managed to improve its net working capital position and reported total inflows of R110.1m for the year to end-May.
Nevertheless, Covid-19 and the lockdown had substantial effects on OneLogix’s operations during the reporting period. “The impact of Covid-19 should not be underestimated, and the consequences of emergency actions taken by OneLogix in response to the pandemic were substantial,” Lourens said.
The knock-on effects of global component shortages in vehicle and truck production was felt by OneLogix TruckLogix and OneLogix VDS in particular.
“Furthermore, the reduction by original equipment manufacturers to more conservative stock holdings resulted in a year-on-year reduction of storage revenue of [about] R36m, most of which was experienced in the second half,” Lourens said.
These problems were compounded by the midyear release of the group’s additional vehicle storage facilities in KwaZuluNatal on completion of the third phase of its logistics hub “Umlaas Road Phase 3”.
The company suffered additional costs of R27m in the last five months of the year, including International Financial Reporting Standard 16 charges.
“Nonetheless, each of the 13 group companies are in good health, having weathered the protracted Covid-19 storm. Some have produced a profit improvement, while others remain inherently relevant with a strong underlying business strategy, skilful, resilient and innovative management teams together with a strong customer base that will ensure their sustainability,” Lourens said.
Management is confident that the group will excel in 2022 if the economy gets a jolt, he said. Its confidence in the future of the company is evident since members of the management hold almost 52% of OneLogix.
Direct broad-based black economic ownership sat at about 19%, with institutional shareholding at 12% and the remainder with stockbrokers and individuals.