BRANCHING OUT

OneLogix makes progress in strategy to reduce reliance on auto logistics

ONELOGIX is progressing with its strategy of reducing its dependence on the auto logistics component of the business.

The specialised logistics group in the year to May acquired a 74 percent interest in four specialised logistics companies known as Jackson and Buffelshoek for R106 million, lifted its stake in five group companies in related-party transactions for a total of R41.3m and disposed of PostNet to Aramex UK for R190.6m.

After its year-end, it concluded two more transactions, the acquisition of 100 percent of acid and solvent transportation business Vision Transport for R110m, which is still subject to Competition Commission approval, and a 75.1 percent interest in Cryogas for R5.5m.

OneLogix chief executive Ian Lourens said yesterday that these actions had been undertaken to strategically position the group for the next phase of growth, ensure its structures were well aligned and had cash to grow its niche businesses and focus on organic growth.

Lourens said the acquisition of Jackson and Buffelshoek had complemented the group’s operations and together with the other transactions represented the continued, systematic progression of the group’s acquisition strategy aimed at further reducing dependence on the auto logistics part of the business.

He said the sale of PostNet was deemed to be in the best interests of the group and PostNet in light of the skills needed to further optimise the franchise organisation, which fell outside OneLogix’s now more evolved core competencies.

Profit after tax on the Post- Net sale amounted to R144.2m.

Lourens said significant preparatory work had been completed to prepare for future growth opportunities, such was the OneLogix Logistics Hub and “the VDS vanguard expansion into east Africa”.

This was a reference to OneLogix earlier this year confirming it had expanded its vehicle transport operations in Africa by establishing businesses in Tanzania and Kenya, primarily for the transport of used vehicle imports from Japan and Korea, and was considering also expanding this business into Angola.

Lourens said VDS had completed the first phase of a storage and general utility facility in KwaZulu-Natal, known as the OneLogix Logistics Hub, at a cost of R135m.

“This hub is intended to be utilised by all group companies but particularly by VDS and will continue to enhance VDS’ competitive advantage.

“The second phase of development will be completed by mid-2016 financial year at a cost of R85m,” he said.

Boosted by the maiden contribution of OneLogix Line- haul for a full financial year and Jackson and Buffelshoek’s contribution for two months, OneLogix yesterday reported an 8 percent rise in revenue to R1.37 billion in the year to May.

Operating profit decreased to R48.7m from R118.6m because of two once-off items related to empowerment transactions concluded by the group.

Core headline earnings a share from continuing operations improved by 16 percent to 33.1c from 28.6c.

A final dividend a share of 6c was declared, lifting the total dividend for the year to 14c.

No dividend was declared in the previous year.

Lourens said the group’s strategy remained unchanged and it would continue to focus on its strengths, including growing existing businesses, establishing in-house start-ups where aligned new opportunities arose and seeking out appropriate acquisitions.

OneLogix shares rose 1.85 percent to R4.95 on the JSE yesterday, while the transport sector rose 0.83 percent.

The second phase of development will be completed by mid2016 financial year at a cost of R85m.