OneLogix still plans management buyout and delisting
OneLogix, the JSE-listed niche logistics provider, is still planning a management buyout and delisting of the company from the JSE.
There has been no change of heart on this, OneLogix CEO Ian Lourens said Thursday.
Read: OneLogix aims to complete management buyout by April/May this year
“The company will go into debt to fund the management buyout and that’s not an insurmountable problem, but there were a few issues that we had to deal with,” Lourens said.
“The fact is that it is progressing. I can’t give you a precise date but the finalization is imminent.
Lourens said in February the goal was to complete the process by April or May.
“This target has moved. We are doing our best to make this happen as soon as possible.
The company issued a warning in December 2021, which has been renewed five times, informing shareholders that its board was considering a possible delisting of the company via a cash offer of R3.30 per share.
This represents a 32.5% premium to the 30-day volume-weighted average price of R2.49 per ordinary share at the close of trading on December 17, 2021.
OneLogix has not yet made a formal offer to shareholders.
The motivation for the proposed delisting is the extremely low liquidity of OneLogix common stock, which has deterred institutional investors, and the substantial costs associated with listing on the JSE.
Lourens said Thursday that members of OneLogix’s management are the company’s largest shareholders with just under 50% of the shares outstanding.
Co-founder and current executive director Neville Bester is the largest single shareholder.
A Sens announcement released on Thursday informed shareholders that Best-Krug has acquired all of NJB Investco Proprietary Limited’s shares in OneLogix and now owns 34% of the total outstanding shares of OneLogix.
Lourens said it was part of management’s proposed buyout and delisting process, with Bester expected to change the ownership entity.
trifecta of problems
Rising fuel prices, temporary overcapacity at its Umlaas Road vehicle and truck storage facility, and a freak hailstorm that damaged “a few thousand” vehicles rattled OneLogix’s financial performance over the past year. the year until the end of May 2022.
Lourens said OneLogix is contractually able to recover fuel price increases from some customers, but in many cases does not recover those costs immediately.
He said the recovery of these costs must be spread over a period of time, resulting in margin compression.
“We are now at the wrong end of the cycle. When fuel prices go down, we are at the right end of the cycle because we only pass it on over a period of time. It hurt us a lot.
He added that when OneLogix was able to recoup fuel costs, it inflated the group’s revenue.
In the year to the end of May, he boosted OneLogix’s revenue by around R190 million.
Shortage of fleas
Lourens added that OneLogix came online with the third phase of the development of its Umlaas Road vehicle storage facility at the exact time the motor vehicle and truck markets were hampered by the lack of microchips needed for their eventual completion.
Read: Waiting for semiconductors is getting worrisome for automakers
He said that meant there were no cars to store when OneLogix was online with a huge amount of extra storage space.
“That’s what hit us more than anything else, but it’s started to rectify itself,” he said.
“The utility truck market is back to exactly where it was before the Covid-19 pandemic and motor cars are getting there too.”
Lourens said OneLogix was not negligent in not having insurance coverage for the freak hailstorm.
He said there was no hailstorm in that area and OneLogix had been advised that he did not need coverage.
“We have all kinds of cover, but for minor damage to individual vehicles we take cover up to a certain level and beyond that we take the risk.
“Several thousand vehicles were damaged and we had to bear the excess of what we were not insured for. It was a fairly large number of cars but a small amount per vehicle in repair costs, but it came to R25 million, excluding our insurance proceeds.
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“So it was a blow to us. It was effectively eight cents per share on our earnings per share [EPS] metrics,” he said.
And civil unrest…
OneLogix also suffered from lost productivity during the period of unrest in KwaZulu-Natal in July 2021 and costs incurred to secure its operations.
Lourens said this resulted in an estimated revenue drop of R20 million and profitability of R10 million.
OneLogix’s revenue increased 24% to R3.07 billion in the year to the end of May 2022, from R2.46 billion the previous year.
Lourens said revenue increased across all group operations and returned to similar or better levels than before the Covid-19 pandemic.
Operating profit excluding investment items increased by 16% to R138.7m from R119.4m after including hail damage costs incurred during the year , but offset by one-time compression costs incurred the previous year.
Earnings per share fell 72% to 3.5 cents from 12.5 cents.
Overall earnings per share fell 69% to 3.4 cents from 11.1 cents.
No dividend has been declared.
Lourens said that going forward, OneLogix’s strategy remains unchanged.
“Especially in these tough economic times, we will continue to focus on extracting maximum efficiencies from existing businesses to protect and grow their individual market shares in their respective markets,” he said. .
OneLogix shares were unchanged on Thursday to close at R2.93 per share.