Metrofile expects to implement the final leg of its restructuring process in the next financial year, as "most of the legacy issues of the MGX era have been resolved".
Metrofile, formerly MGX, inherited debt after a restructuring process in 2003/4, and is repositioning.
The company, which yesterday released its results for the year ended June, also told shareholders that it seeks to acquire the 35% interest in Metrofile Limited that the group does not already own. It proposes to do this through a share exchange arrangement with the holding company.
Metrofile added, however, that it would have empowerment credentials as Mineworkers Investment will still hold over 25% of the group.
It is also hopeful of an improved year in the next financial period. "The group expects improved revenue and operating results from Metrofile Limited in the coming year."
However, it warned that headline earnings would be lower due to non-recurring items in this year.
The company reported revenue of R276 million for the year, up from R254 million in the previous financial year, which it says was "ahead of budget due to improved market penetration and the securing of new government business".
Its profit before taxation was higher at R31.3 million, compared to R9.1 million in the previous year. Headline earnings per share were 24.1c. Included in the headline earnings of R16.2 million are non-recurring dividends received of R2 million and tax reversals of R6.4 million.
"If these non-recurring amounts are excluded from headline earnings, headline earnings per share would be 12.1c."
Metrofile also said that, despite the consolidated balance sheet reflecting more liabilities than assets, the company is still considered to be a going concern. However, it has not declared a dividend and does not expect to do so in the "foreseeable future".
Consolidating debt
Metrofile, listed on the support services board of the JSE, has as its only business a 65% investment in Metrofile, which manages business records through its 16 storage centres and locations throughout SA.
The company recently refinanced the interest-bearing debt of R320 million at its subsidiary level. The new financing arrangement requires that interest be serviced monthly and that R145 million be repaid at the end of six years and R175 million is repaid equally over years two to six.
Metrofile also, at subsidiary level, entered into a new interest rate swap agreement for R50 million over four years. This is aimed at mitigating the "risk of increased borrowing costs on its fluctuating rate loans during this period".
Its aggregate balance of interest rate swap agreements is now R200 million.
At holding company level, it has loan notes and provisions, on which interest is being accrued monthly but not paid as the holding company has no cash flows. These total R116.4 million and the creditors are directly and indirectly secured by inter group loan notes of R298.3 million.
As a result, any amounts that have not been paid to note holders by 4 March 2009 could see the loans being converted into shares, which may dilute shares, it added.
Metrofile is also considering a rights issue in the fourth quarter of this year to raise R141 million to settle the notes and other creditors, and to reduce the company`s risk profile.
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