Home FleetWatch 2021 OneLogix weathers brunt of pandemic storm

OneLogix weathers brunt of pandemic storm

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Another innovation out of the Onelogix group stable - the Onelogix VDO Smart truck which conforms to PBS standards.
Another innovation out of the Onelogix group stable - the Onelogix VDO Smart truck which conforms to PBS standards.

Although there is no real cause to shout from the roof tops – and understandably so given the Covid-19 impact on our economy – there is certainly good cause for the folk at OneLogix Group Limited to line the streets and give a huge ‘Hoo-Ha’ for the performance of the group as recently reported in its results for the six month period ending 30 November 2020. As Ian Lourens, Group CEO says, all 12 of the group’s companies remain in good health, having weathered the Covid-19 related impact.

Obviously in the Covid-19 climate there was a negative impact with the group reporting a 16% drop in revenue to R1,22-billion compared to the same period for the previous year (2019). Revenue declines were, in fact, experienced in all segments of the business, particularly the Abnormal Logistics segment. Operating profit, excluding capital items, decreased in line with trading profit to R71,2 million, from R93,5 million. However, this was impacted on by once-off retrenchment costs of R8.8 million during the period, predominantly in the OneLogix VDS business, which falls within the Abnormal Logistics segment.

One might ask that with these figures, why on earth would one want to go out on the street shouting Hoo-Ha? The question would be entirely relevant if Covid-19 had not hit the world. However, given the Covid-induced listless economic environment over the past year, the Hoo-Ha is well justified. As Lourens says, the group weathered the Covid-19 related impact – and that in itself is good news.

Lourens adds that notwithstanding the challenges, some achieved a profit improvement, while others remain inherently relevant with a strong underlying business strategy, skilful, resilient and innovative management teams, and a strong customer base that will ensure their sustainability. 

He added that although OneLogix UB (United Bulk) was subjected to an unprotected strike that significantly impacted operations late in the period, it continued with its productivity-based reinvigoration process, with the results expected to become evident in the coming months.

Post the end of the period, shareholders authorised the implementation of the sale of the Umlaas phase 3 development for a total consideration of R310-million as well as the subsequent leaseback of the property from the purchasers. This transaction was completed on 15 December 2020. 

And how’s this. Instead of pulling back and holding tight, post the end of the reporting period and with effect from 1 December 2020, the group acquired a 100% interest in the specialist agricultural equipment logistics company, Agritrans, for a cash purchase consideration of R18,6-million and two deferred contingent payments of R1,125-million each payable on 1 December 2021 and 1 December 2022 subject to the retention of a customer contract. 

“Agritrans, which is based in Frankfort in the Free State, is a well-established and respected operator with blue-chip customers in South Africa and neighbouring countries. There have been immediate managerial, operational, fleet and marketing synergies for the group,” says Lourens, adding that had the Agritrans businesses been acquired effective 1 June 2020, the effect on the statement of comprehensive income would have been an increase in revenue of R16,3-million and an increase in profit after tax of R1,7-million.

Ian Lourens, Group CEO of Onelogix Group Ltd: “Going forward, our strategy remains unaltered. We will continue to focus on extracting maximum efficiencies from existing businesses in order to protect and grow their individual market shares in their respective niche markets.”
Ian Lourens, Group CEO of Onelogix Group Ltd: “Going forward, our strategy remains unaltered. We will continue to focus on extracting maximum efficiencies from existing businesses in order to protect and grow their individual market shares in their respective niche markets.”

The group has also continued its share repurchase programme, acquiring 1,9 million OneLogix shares on the open market up to 15 February 2021 for a cost consideration of R4,4-million.

Lourens says that after careful consideration, the board had decided not to declare an interim dividend as the group wishes to preserve its cash resources given prevailing uncertain market conditions and the need to expand and grow the business should the opportunities arise. Cash generated from operations before net working capital inflows, net finance costs, taxation and dividends, remained resilient with a 12% decrease to R180,1-million. Net cash resources at the reporting date amounted to R280,4-million. 

Looking ahead, Lourens says trading conditions for all group companies are expected to remain difficult for the foreseeable future. “We’re experiencing a significant reduction in vehicle stockholding volumes in our storage yards as a result of the reduced stockholding models implemented by the original equipment manufacturers to navigate current trading conditions. We will continue to monitor the situation.”

“Going forward, our strategy remains unaltered. We will continue to focus on extracting maximum efficiencies from existing businesses in order to protect and grow their individual market shares in their respective niche markets. The executive management team maintains full confidence in our experienced, stable management teams with their proven entrepreneurial skills and fully expects them to continue guiding our businesses through the prevailing unprecedented and tough market conditions. 

“Notwithstanding the difficult market conditions, our tested business models have ensured that each group business remains well-placed within its respective market and is well-equipped to both withstand economic headwinds and to exploit emerging opportunities.

“We expect acquisitive opportunities to continue, given the severity of the economic difficulties and we’ll continue to assess these appropriately together with further start-up opportunities.”

Lourens says that the group continues to prioritise building high-quality, high-performance teams with an enabling culture. “Our continued and successful involvement with the international Top Employer programme provides an objective assessment as to the success of these endeavours. We therefore remain deeply appreciative to all our staff and management teams who continue to perform at the highest level of excellence despite the challenges thrown their way.”

As is well known, the trucking industry has been hard hit over the past year with many people forgetting that during Level 5 of the lockdown, there were many companies whose trucks were parked off full-time with not one cent of revenue coming into the coffers during that time. Once the strict lockdown conditions started to be lifted, companies had to then embark on a recovery path.

Certainly, the trucking industry  can be considered the wheels of the economy but there are times when its hell on wheels. Last year was such a time. So for a company like Onelogix to have weathered the storm and still look ahead to express confidence in the future, is good news all round. From FleetWatch, we give them a big HOO-HA!

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