Metrofile H1 2022 expectation

Metrofile is document storage, clould-based service and digital data management compamy

Metrofile has long been a favourite of Smalltalkdialy since its depths of dispair some years ago when it slumped to R1.30 a share

It over geared an acquisition in East Africa and its balance sheet, normally its strength, went tilt. New management were installed and a strategic review of exiting low margin, non-core divisions to focus on its core area of expertise - managing the storage and retrieval of documents via physical or digital methods - saw a turn-around in the stock and its share price

A cash bid pre-Covid by an US private equity firm also helped but that stalled as Covid got n the way, though interest from many parties continues to swirl around the R1,3 billion stock controlled by Sabcap and empowerment firm MIC

The last 6-months has not been great for Metrofile. Its performing well but operational challenges and the hangover from last year's civil unrest, floods in Durban and the local Government sloth in awarding tenders hit Metrofile's H1

The acquisition of IronTree will soften the earnings slip but I still forecast a weakness in H1 2022 earnings

The balance sheet should remain resilient and I continue to see debt reduction and good dividends

2022 will be a speed bump for Metrofile and at R3.00 its current share price I continue to see attractions to the stock for the longer-term

Here is my last note on Metrofile and my expectations

https://drive.google.com/file/d/1A4nFj5gHk5jeZZbRYCvx2eJDvf9Uj9CM/view?usp=sharing