Mark McGowan, Chief Financial Officer of JSE-listed Metrofile Holdings Limited
JSE-listed Metrofile Holdings Limited today announced the acquisition of Document Bank Botswana (Pty) Ltd. (Document Bank), is a leading information storage, protection and retrieval organisation. This acquisition allows Metrofile to further implement its strategy of acquiring bolt-on acquisitions in areas believed to offer medium to long-term growth opportunities.
This is according to Mark McGowan, Chief Financial Officer of JSE-listed Metrofile Holdings Limited, who says that the acquisition in this region ticks off the next step in the organization’s overarching Africa expansion strategy. “As a leading company operating in the records and information management sector, which applies world-class systems and controls to guarantee maximum efficiency, Document Bank is an ideal partner for Metrofile.”
The acquisition combines the best of both worlds for existing and future clients by pairing Document Bank, a regional leader that understands the information and records management needs specific to the local market, with Metrofile’s international expertise, product range and economies of scale, says McGowan.
Trevor Swanepoel, Managing Director of Document Bank says that the organisation’s product and service offering will still include its existing services such as document storage and management, confidential destruction, a Tidy Files filing solution, document imaging, system design, data storage, disaster recovery and remote back-up facilities. “As a member of Metrofile, Document Bank’s services will also expand to include all Metrofile services such as software management, paper recycling and business continuity services to provide existing and new customers with a holistic solution.”
The day to day operations of the company will continue to be run by the current Document Bank management team which has extensive experience in the records and information management industry, he says. “The company's overall strategy will be determined and controlled by the Board of Directors, comprised of both Metrofile and Document Bank leadership. Document Bank will now trade in the market under the name Document Bank – A Metrofile Group Company.”
“We are confident that this acquisition will enable Metrofile to benefit from Document Bank’s impressive track record, extensive customer base, local knowledge and understanding of the particulars of the regional market, making this endeavour mutually beneficial for stakeholders and clients,” concludes McGowan.
Metrofile Holdings Limited has been listed on the JSE limited (“JSE”) since 1995 and its ordinary shares are quoted in the “Support Services” sector of the JSE. Metrofile is a black-owned Company with black ownership amounting to 52,8%. Its largest shareholder is its empowerment partner, Mineworkers Investment Company (“MIC”) which owns 34,41% of Metrofile’s equity.
Its services include Records Storage and Management, Image Processing, Backup Storage and Management, Records management Software and Records Management Consultancy, Business Continuity and IT Continuity, File Plan Development, Confidential Records Destruction, Paper Recycling as well the sale and maintenance of a wide range of business equipment, including scanners, library security systems, mailing and packaging machines.
The Metrofile Records Management division is the market leader in both physical and digital information and records management in Africa and is represented in the six major provinces of South Africa, Mozambique, Nigeria, Zambia and United Arab Emirates. It operates from 44 facilities, at 21 locations, covering more than 83 800 square metres of warehousing and office space. In accordance with its owner/lessee model, 66,5% of these facilities are owned by the Group. The rest of the Group’s divisions lease their premises.
The CSX Customer Services brand has contracts in numerous other African countries.
This century is always looking at improving new super high speed technology to make life easier. On the other hand, beckoning as an emerging fierce reversal force to equally match or dominate this life enhancing super new tech, comes swift human adversaries which seem to have come to make living on earth even more difficult.
The recent discovery of a pandemic, Covid-19, which moves at a pace of unimaginable and unpredictable proportions; locking people inside homes and barring human interactions with its dreaded death threat, is currently being felt.
Member of Parliament for Kanye North, Thapelo Letsholo has cautioned Government against excessive borrowing and poorly managed debt levels.
He was speaking in Parliament on Tuesday delivering Parliament’s Finance Committee report after assessing a motion that sought to raise Government Bond program ceiling to P30 billion, a big jump from the initial P15 Billion.
Government Investment Account (GIA) which forms part of the Pula fund has been significantly drawn down to finance Botswana’s budget deficits since 2008/09 Global financial crises.
The 2009 global economic recession triggered the collapse of financial markets in the United States, sending waves of shock across world economies, eroding business sentiment, and causing financiers of trade to excise heightened caution and hold onto their cash.
The ripple effects of this economic catastrophe were mostly felt by low to middle income resource based economies, amplifying their vulnerability to external shocks. The diamond industry which forms the gist of Botswana’s economic make up collapsed to zero trade levels across the entire value chain.
The Upstream, where Botswana gathers much of its diamond revenue was adversely impacted by muted demand in the Midstream. The situation was exacerbated by zero appetite of polished goods by jewelry manufacturers and retail outlets due to lowered tail end consumer demand.
This resulted in sharp decline of Government revenue, ballooned budget deficits and suspension of some developmental projects. To finance the deficit and some prioritized national development projects, government had to dip into cash balances, foreign reserves and borrow both externally and locally.
Much of drawing was from Government Investment Account as opposed to drawing from foreign reserve component of the Pula Fund; the latter was spared as a fiscal buffer for the worst rainy days.
Consequently this resulted in significant decline in funds held in the Government Investment Account (GIA). The account serves as Government’s main savings depository and fund for national policy objectives.
However as the world emerged from the 2009 recession government revenue graph picked up to pre recession levels before going down again around 2016/17 owing to challenges in the diamond industry.
Due to a number of budget surpluses from 2012/13 financial year the Government Investment Account started expanding back to P30 billion levels before a series of budget deficits in the National Development Plan 11 pushed it back to decline a decline wave.
When the National Development Plan 11 commenced three (3) financial years ago, government announced that the first half of the NDP would run at budget deficits.
This as explained by Minister of Finance in 2017 would be occasioned by decline in diamond revenue mainly due to government forfeiting some of its dividend from Debswana to fund mine expansion projects.
Cumulatively since 2017/18 to 2019/20 financial year the budget deficit totaled to over P16 billion, of which was financed by both external and domestic borrowing and drawing down from government cash balances. Drawing down from government cash balances meant significant withdrawals from the Government Investment Account.
The Government Investment Account (GIA) was established in accordance with Section 35 of the Bank of Botswana Act Cap. 55:01. The Account represents Government’s share of the Botswana‘s foreign exchange reserves, its investment and management strategies are aligned to the Bank of Botswana’s foreign exchange reserves management and investment guidelines.
Government Investment Account, comprises of Pula denominated deposits at the Bank of Botswana and held in the Pula Fund, which is the long-term investment tranche of the foreign exchange reserves.
In June 2017 while answering a question from Bogolo Kenewendo, the then Minister of Finance & Economic Development Kenneth Mathambo told parliament that as of June 30, 2017, the total assets in the Pula Fund was P56.818 billion, of which the balance in the GIA was P30.832 billion.
Kenewendo was still a back bench specially elected Member of Parliament before ascending to cabinet post in 2018. Last week Minister of Finance & Economic Development, Dr Thapelo Matsheka, when presenting a motion to raise government local borrowing ceiling from P15 billion to P30 Billion told parliament that as of December 2019 Government Investment Account amounted to P18.3 billion.
Dr Matsheka further told parliament that prior to financial crisis of 2008/9 the account amounted to P30.5 billion (41 % of GDP) in December of 2008 while as at December 2019 it stood at P18.3 billion (only 9 % of GDP) mirroring a total decline by P11 billion in the entire 11 years.
Back in 2017 Parliament was also told that the Government Investment Account may be drawn-down or added to, in line with actuations in the Government’s expenditure and revenue outturns. “This is intended to provide the Government with appropriate funds to execute its functions and responsibilities effectively and efficiently” said Mathambo, then Minister of Finance.
Acknowledging the need to draw down from GIA no more, current Minister of Finance Dr Matsheka said “It is under this background that it would be advisable to avoid excessive draw down from this account to preserve it as a financial buffer”
He further cautioned “The danger with substantially reduced financial buffers is that when an economic shock occurs or a disaster descends upon us and adversely affects our economy it becomes very difficult for the country to manage such a shock”