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METROFILE HOLDINGS LTDMETROFILE HOLDINGS LTDMETROFILE HOLDINGS LTD

METROFILE HOLDINGS LTD

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Our opinion on the current state of METROFILE(MFL)Metrofile (MFL) is a company that specialises in records storage and management, image processing, and backup. The company has been listed since 1995 and has a 57.4% Black ownership. The Mineworkers Investment Company owns 38.64% of the business, and Sanlam owns 5%. The company's record management division has 52 facilities at 27 locations with over 100,000 square meters of offices and warehousing. Housatonic Partners, a US company, made an offer to buy 100% of Metrofile for 330c per share but delayed the deal because of COVID-19. They indicated that they would want to see the end-June 2020 results and "three months of normal trade" before reconsidering. Despite this, they have assured the company of their wish to continue with the possible transaction for the acquisition of Metrofile. In its results for the year to 30th June 2024, the company reported revenue up 1% and headline earnings per share (HEPS) down 49%. The company said, "General market conditions were weak. Demand for cloud services remained strong and now contributes 32% (2023: 26%) of our digital services revenue." We see this as a good-quality small business that seems to be battling in a very tough economic climate. Technically, the share now appears to be in a new downward trend. On 5th September 2024, the company announced that its CEO, Pfungwa Serima, would resign with effect from 30th September 2024. He will be replaced by Thabo Seopa.
JSE:MFL
by PDSnetSA
Our opinion on the current state of METROFILE(MFL)Metrofile (MFL) is a company specializing in records storage and management, image processing, and backup services. Listed since 1995, the company has a 57.4% Black ownership, with the Mineworkers Investment Company holding 38.64% and Sanlam owning 5%. Metrofile's record management division operates 52 facilities across 27 locations, encompassing over 100,000 square meters of office and warehouse space. Previously, Housatonic Partners, a U.S. company, made an offer to buy 100% of Metrofile for 330c per share. However, the deal was delayed due to COVID-19, with Housatonic Partners indicating a desire to review the end-June 2020 results and observe "three months of normal trade" before reconsidering the acquisition. Despite the delay, Housatonic Partners assured their intention to continue discussions regarding the possible transaction. In its results for the six months ending 31st December 2023, Metrofile reported a 2% increase in revenue, but a 13% decline in headline earnings per share (HEPS). The company noted that while the financial year started positively with strong demand for services, general market conditions softened during the second quarter. In a trading statement for the year ending 30th June 2024, Metrofile estimated that HEPS would fall by between 41% and 52%. The weaker results were attributed to lower-than-expected volumes in its physical storage and filing operations in South Africa, challenges in its South African scanning centers, delays in the implementation of contested tender wins, margin pressure in its Middle East operations, and the impact of high interest rates. Metrofile is a solid small business, but it is currently struggling in a challenging economic environment. Although the company seems poised for a potential recovery, it has indicated that all takeover prospects are now off the table. Technically, the share appears to be entering a new downward trend, reflecting the current difficulties the company faces.
JSE:MFL
by PDSnetSA
Our opinion on the current state of MFLMetrofile Holdings, operating under the ticker MFL, is a prominent entity in the records storage and management, image processing, and backup industry. Since its listing in 1995, Metrofile has established a significant presence in its sector, boasting a 57.4% Black ownership. The Mineworkers Investment Company is a major shareholder with a 38.64% stake, while Sanlam holds 5% of the business. The company operates 52 facilities across 27 locations, providing over 100,000 square meters of office and warehousing space dedicated to its record management division. The interest from Housatonic Partners, a U.S.-based company, in acquiring 100% of Metrofile for 330c per share underscores the company's value and potential. However, the acquisition process encountered delays due to the COVID-19 pandemic, with Housatonic seeking to review the end-June 2020 results and witness "three months of normal trade" before moving forward. Despite these hurdles, Housatonic has expressed a continued interest in pursuing the acquisition, indicating a vote of confidence in Metrofile's operations and future prospects. For the six-month period ending 31st December 2023, Metrofile reported a modest revenue increase of 2%, albeit with a 13% decline in headline earnings per share (HEPS). The company acknowledged a positive demand for its services at the start of the fiscal year, following a strong performance in the previous year. However, it also noted a softening in market conditions during the second quarter, reflecting the challenges faced in a tough economic climate. Despite these challenges and the cancellation of takeover prospects, Metrofile appears poised for a strong recovery. This resilience is further evidenced by the company's technical stock performance. After breaking above its long-term downward trendline on 11th November 2020 at 244c, the share price surged to 365c, demonstrating the market's positive response to the company's fundamentals and potential growth prospects. Although the share price has since retraced to 265c, indicating a new downward trend, Metrofile's fundamental strengths and operational capabilities suggest potential for future growth and recovery in the challenging economic environment it operates within.
JSE:MFL
by PDSnetSA