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OneLogix eyes niche logistics firms

Aug 28 2012 11:17
I-Net Bridge
Johannesburg – Logistics company OneLogix Group [JSE:OLG] plans to acquire “small entrepreneurial businesses” to strengthen its own operations and give those companies a growth platform‚ it said on Monday.

The acquisitions would offer those small businesses “the benefit of a management platform‚ which allows them to expand and realise their full potential”‚ said CEO Ian Lourens.

He said OneLogix would look at acquiring “niche logistics” companies.

OneLogix reported a 16% rise in headline earnings per share to 22.1c for the year to May helped solely by organic growth.

The company said a number of its subsidiaries exceeded targets despite general margin squeeze from rising input costs and intense competition.

Operating profit grew 18% to R87m. Lourens said that even taking into account increased fuel costs‚ revenue growth was substantial.

“If you strip out the high fuel costs‚ which we pass onto customers‚ revenue growth year-on-year was 23%‚” he said.

OneLogix’s specialised transport division‚ which includes its auto logistics businesses‚ reported a 30% rise in revenue to R768.4m.

The company said fleet upgrades‚ improved administration and unrivalled customer service helped it to grow client base in the “highly competitive market”.

The retail division‚ which houses PostNet and Magscene and imports and distributes select local media titles‚ reported a 4% decline in revenue to R28.6m.

PostNet made good progress despite the loss of the annuity income-generating Fax2E-mail service earlier in the year‚ said Lourens. PostNet “remains a valuable contributor” to the group with strong reliable annuity income and high margins‚ said Lourens.

“Magscene performed well despite margin squeeze from a weakening exchange rate. The business continues to capture increasing market share‚” he said. During the year to May‚ OneLogix invested R120m in‚ among other things‚ fleet‚ property and infrastructure‚ as well as an increasing its stake in OneLogix Projex from 70% to 80%. Based in Durban and Johannesburg‚ OneLogix Projex offers project logistics and abnormal load solutions throughout SA and Southern Africa.

Lourens said the economy “is not expected to kick up substantially in the medium term” and he did not foresee input costs reducing much.

But he said OneLogix “needs simply to continue what we are doing – keeping our nose to the grindstone‚ our eye on costs and our ear to the ground for good acquisition opportunities which are in line with our proven business model of purchasing entrepreneurial business with considerable growth potential.”

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