eXtract Group Limited. JSE: EXG

Extract Group Limited shares

Background of Extract Group

  • Eqstra, now changed to Extract Group Limited since November 2016, distributes mobile capital equipment on long-term leases and rental and provides related value added annuity services.

  • Each of the group’s three divisions, which comprise of industrial equipment, fleet management and logistics and contract mining and plant rental provide a specialist service along the value chain of capital equipment management, ranging from distribution to the last point of disposal.

  • Extract Group Limited prides itself on being a leading supplier of a range of services to the mining industry both on a local South African level, on the African continent as well as globally.

  • Extract Group Limited is driven by the strong inclination to create lasting partnerships with it clients, based on the mutual objectives of extracting value through management driven efficiencies and various innovations through an all-encompassing and inspiring innovation based company culture.

Extract Group Shares Growth Driver

  • The Extract Group Limited’s mission is to constantly strive to improve uptime on its machines, directly affecting operation speed and efficiency which generally bodes well for its live operation data statistics.

  • It is to enhance its client’s value proposition, delivering good returns for its various shareholders and ensuring that Extract Group Limited’s share price is showing encouraging growth forecasts and that it continually improves on its professional proficiencies, thus positively shaping the company’s dividends.

  • The company looks to achieve better alignment of interests, ensuing that the company cuts down on unnecessary fat, and continues driving a lean and clean operational machine.

  • Extract Group Limited is also looking at broadening its service offering. This not only is a statement of the company looking to expand its operational base but is an affirmation of the state of growth of the company. As such the company is looking to broaden its base of service offering today, to better shape Extract Group Limited share price and improve on its stock attractiveness in the more long term.

  • Extract Group Limited prides itself on being, “positioned to drive innovation in an industry on the cusp of change.” This alludes to the fact that Extract sees itself as an industry leader and as such has the capacity and indeed responsibility to drive change leadership.

  • Extract believes that it must also look consolidate its contract mining space, in order to drive its operational, management and human capital efficiencies. Lastly the group believes that it must have an uncompromising commitment to safety, especially for its valued and extensive labour base.

  • Extract believes that it must also look consolidate its contract mining space, in order to drive its operational, management and human capital efficiencies. Lastly the group believes that it must have an uncompromising commitment to safety, especially for its valued and extensive labour base.

Extract Group Investor Tip

  • Diversification of the Extract Group was evident in its consistent performance for the year, despite it facing a number of challenges on the back of tough trading conditions. During the year, the group focused on a number of areas. These included an embargo placed on capital expenditure, preservation of cash flows and strengthening of the balance sheet. These were managed by strict divisional debt levels in light of the capital markets remaining contracted, redeployment of excess assets and improved management of working capital.

  • Eqstra, now called Extract also focused on cost containment, closure and right-sizing of underperforming businesses. Despite the obstacles, the group increased operating profit by 10.6% to R1 037 million, an improvement from recent history’s R938 million and profit after taxation marginally by R3 million to R254 million (after an impairment of leasing assets in the Contract Mining and Plant Rental division of R97 million).

  • The improved performance of the group’s overall liquidity position was as a result of curtailed expansionary capital expenditure and stringent divisional debt management.

  • Fleet Management and Logistics produced good results, despite the decreased growth rate as part of the short-term cash preservation strategy. The continued drive of value added product sales, which are less capital intensive in nature, has reported a 13.3% growth for the year.

  • This progression aligns with the strategic intent of evolving the group into an asset-light integrated services business. Industrial equipment delivered a solid performance, with better gross margins in the South African forklift business and increased market share.

  • The division’s business in the United Kingdom and Ireland continues to generate excellent returns with an increase of profit before taxation of 32.9%, based on higher sales volumes and a weaker exchange rate. Contract Mining and Plant Rental’s operating profit increased by 28.9%.

  • The division recorded a loss before taxation of R38 million for the year (after an impairment of R97 million) compared to a loss of R24 million in the prior year. The turnaround strategy implemented has resulted in improved efficiencies and utilisations, the benefits of which will be seen in the coming year.

  • The cost of holding excess assets from contracts which have terminated over the last 18 months, had a significant impact on Contract Mining and Plant Rental’s results. The successful deployment of excess assets in the latter part of the 2015 financial year, will positively impact the division’s results going forward. The Benga contract in Mozambique concludes in December 2015.

  • Management is in negotiations with the concession holders to either extend the contract or sell the assets to them. The group will continue to place additional emphasis on the ongoing improvement of margins against persisting adverse market conditions and challenges.

  • The decrease in the net working capital to revenue percentage can be attributable to the dedicated focus that working capital management is receiving. Lower inventory levels in Industrial Equipment and negotiated payment terms with the OEMs have assisted in driving working capital levels down. The group’s provisioning policies were strictly applied throughout the year.

  • Extract Limited’s forklift businesses both in South Africa and the UK performed well. Extract expects that this performance will continue into the new year. The forklift market in South Africa is forecasted to remain flat on last year while the UK market should increase marginally in line with GDP growth.

  • Extract’s fleet management and logistics division faces intense competition from major players for whom full vertical integration with motor dealership operations offers an advantage, and who due to scale can offer preferential funding rates.

  • The group has successfully implemented a turnaround in its contract mining and plant rental division, with losses curtailed and contracts, revised where required. The group will ensure that execution will be strictly according to contract terms in future with no deviations accepted.

Extract Group Major Shareholders

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How to buy Extract Group Holdings Shares

  • Extract Group Holdings : How to buy Extract Group Holdings Shares Online

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  • Here are the steps you must follow to Buy / Purchase Extract Group Holdings shares with utmost confidence:

    1. Start by Filling in the BUY THIS SHARE form.
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