The Metrofile Holdings (formerly MGX) board says the company is solvent despite the fact that its liabilities exceed its assets.
However, CFO Roy Midlane says in his commentary on the results for the six months to December 2004 that the board regards the group as a going concern since the total of subordinated loans and the estimated value of goodwill and trademarks not on the balance sheet is enough to restore solvency.
The income statement, although still reflecting an attributable loss, is an improvement over that of the previous year.
Revenue for the period fell by 60% to R117.3 million (2003: R293.24 million), although operating income before depreciation and goodwill amortisation rose by 37.5% to R30.76 million (R22.37 million).
However, net finance costs of R27.29 million led to a pre-tax loss of R3.77 million (R56.92 million loss). The group`s attributable loss of R4.06 million compares with a previous loss of R64.86 million.
A headline loss of 6.6c a share is an improvement of the 73.3c a share loss for the six months to December 2003.
Metrofile Holdings` business is its 65% shareholding in Metrofile Limited, a business records management specialist.
The remaining 35% was sold in different deals after the six months to December and thus the sales are not reflected in the results.
MIC Industrial Investments owns 25% of Metrofile, while the Metrofile Employees Trust and Sabvest Investments each own 5%.
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