Metrofile FY HEPS slump 49%

Document and storage management specialist Metrofile has recently reported a significant decline of almost 50% in its full-year headline earnings. This drop has been attributed to low-volume growth across the business and a challenging trading environment. Shivan Mansingh, the Chief Financial Officer at Metrofile, discussed the company's performance and future outlook in an interview with CNBC Africa. The year was characterized by a stagnation in revenue growth, in contrast to a 16% increase seen in the previous year. Metrofile consists of four main divisions, with the storage business performing well with a 5% growth. However, challenges were encountered in the product business, which sells various office products, and the recorded conversion business. The cloud business saw double-digit growth, but struggles were evident in the product and paper-to-digital conversion arms. The increase in interest rates and finance costs by 17% further impacted the company's overall performance. Addressing the challenges faced during the year, Mansingh highlighted strategic initiatives that have been put in place to support the company's recovery. These include exiting the product manufacturing business Tidy Files, implementing cost reduction measures, and operational adjustments in South Africa. Despite facing competitive pressures in the Middle East market, Mansingh expressed optimism about the recovery plan's progress and the early positive outcomes observed post-year end. The Middle East market witnessed intensified competition with the entry of new players adopting aggressive pricing strategies, leading to pricing pressures and a need for Metrofile to adjust its pricing to retain market share. In addition to the Middle East, Metrofile operates in territories like Botswana and Mozambique, which have shown growth and stability. However, the business in Kenya faced challenges, resulting in impairments, although a new management team has been appointed to steer the business towards growth. One significant decision taken by Metrofile during the year was the closure of the tidy files manufacturing component due to declining demand accelerated by the COVID-19 impact. The decision-making process involved thorough evaluation and numerous engagements before arriving at the resolution to close the underperforming division. Mansingh outlined the company's focus on enhancing customer service and implementing action plans to address the challenges faced. He mentioned that positive developments have been observed in pipeline growth, particularly in secure storage and digitization, as well as in the public sector. The recent activities in the public sector have been attributed to delayed decision-making post-elections, with an optimistic outlook on the traditional storage business and opportunities in digital conversion, workflow solutions, and cloud services. Despite the temporary setbacks experienced in the past months, Metrofile remains confident in its strategic direction and the alignment of its business model with the evolving market demands. The company aims to leverage its strengths and capitalize on growth opportunities to drive performance and regain momentum in the coming months.