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.
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.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.