Metrofile surges 12% after it receives buyout offer

The share price of JSE-listed documents and storage management specialist Metrofile jumped 12.73% to a six-month high on Friday, after it said it had received a takeover offer from an unnamed company. 

The company’s board had constituted an independent subcommittee to consider the offer for Metrofile’s entire issued share capital, the company said.

At 9.15am Metrofile’s share price was up 12.73% to R1.86, bringing its gain so far this week to 33%.

Metrofile’s share price had been boosted 5.77% on Thursday when it reported that headline earnings per share (Heps) grew 29% to 20.5c in the year to end-June.

The company’s free-cash flow had risen 38% to R119, allowing for a 4% reduction in net debt to R588m, with the company reporting it had restructured its debt during the period.

Net finance costs, however, had risen 50% to R69m as a result of acquisitions in the prior year. In 2018, Metrofile completed its acquisition of Kenyan company G4S Secure Data Solutions for R281m. Metrofile said at the time its new subsidiary was East Africa’s largest records management company.

The group had said on Thursday that the effects of its restructuring were evident in the second half of its financial year to end-June, and were expected to continue to positively effect its performance going forward.

“While challenging trading conditions are expected to persist, the group remains optimistic as net box volume growth is anticipated throughout the various regions,” it said.

Box volumes had increased 5% in the year to end-June, but the company’s revenue from digital services fell 1%, with the company citing delays due the postponement of projects by government departments, as well as SA’s elections.

gernetzkyk@businesslive.co.za