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PSV
PSV
PSV - PSV - Reviewed Abridged Results For The Year Ended 28 February 2007
PSV HOLDINGS LIMITED
(Formerly Elexir Technology Holdings Limited)
(Incorporated in the Republic of South Africa)
(Registration number 1998/004365/06)
JSE Share code: PSV & ISIN: ZAE000078705
("PSV" or the Company)
Reviewed abridged results for the year ended 28 February 2007
HIGHLIGHTS:
EBITDA R 25.6 million
Cash flow from operations R 25 million
LISTED ON THE JSE`S Alternative Exchange in April 2006
Experienced excellent CONTRACT GROWTH in the past year
HEADLINE EARNINGS per share of 7,47 cents were attained
BEE AGREEMENT with Vunani Capital to acquire 25.7% shareholding being
finalised
Income statements for the year ended 28 February 2007
GROUP
2007 2006
Continuing Operations
Revenue 151 023 542 9 211
Cost of sales 91 550 571 0
Gross profit 59 472 970 9 211
Operating expenses 39 274 642 725 137
Operating profit/(loss) 20 198 328 (715 926)
Financial income 1 574 540 156
Financial expenses 2 621 998 0
Profit/(loss) before 19 150 870 (715 770)
taxation
Taxation 5 474 120 (1 573)
Profit/(loss) for the
year from
continuing operations 13 676 750 (714 197)
Profit after tax from 487 261
discontinued operations
Profit for the year
attributable to
ordinary shareholders 14 164 011 (714 197)
Basic earnings per 7,56 (3,21)
share (cents)
Headline earnings per 7,47 (3,30)
share (cents)
Diluted earnings per 7,09 (3,21)
share (cents)
Diluted headline 7,00 (3,30)
earnings per share
(cents)
Continuing operations
Basic earnings per 7,30
share (cents)
Diluted earnings per 6,85
share (cents)
Reconciliation of
headline earnings
Net profit attributable 14 164 011 (717 343)
to ordinary
shareholders
(Profit)/loss on (175 900) (19 927)
disposal of property,
plant and equipment
13 988 111 (737 270)
Headline earnings per 7.47 (3.30)
share (cents)
Headline earnings per share is calculated by dividing the headline earnings
attributable to ordinary shareholders by the weighted average number of
ordinary shares in issue during the year.
CASH FLOW STATEMENTS for the year ended 28 February 2007
GROUP
2007 2006
CASH GENERATED
BY/(UTILISED IN)
OPERATIONS 25 725 416 (19 881)
Cash receipts from -
customers
Cash paid to suppliers -
and employees
Financial income 1 580 223 156
Financial expenses (3 082 107)
Taxation paid (9 065 473)
Net cash inflow/
outflow) from
operating activities 15 158 059 (19 725)
CASH FLOWS FROM
INVESTING
ACTIVITIES
Fixed assets acquired (4 113 834) 26 316
Listing fees (3 446 501)
Acquisition of Colvic
Petroleum
Products (Pty) Ltd (18 345
194)
Proceeds on disposal of
Colvic
Petroleum Products (Pty) 17 857 933
Ltd
Cash paid investing in (42 092 (43 288)
subsidiaries 137)
Loan accounts acquired 2 676 081
Cash paid in share buy (2 981 516)
backs
Net cash (outflow)/
inflow from
investing activities (50 445 (16 972)
168)
CASH FLOW FROM FINANCING
ACTIVITIES
Capital raised 43 950 000
Borrowings repaid 241 561
Loans receivable repaid (859 700)
Net cash (outflow)/
inflow from
financing activities 43 331 861 -
Movement in cash and
cash
equivalents 8 044 753 (36 697)
Cash and cash
equivalents at
beginning of year 37 824 74 521
Cash and cash 8 082 577 37 824
equivalents at end of
year
BALANCE SHEETS as at 28 February 2007
GROUP
2007 2006
ASSETS
Non-current assets 125 969 700 -
Property, plant and 6 910 226
equipment
Specific intangible 20 273 365
assets
Goodwill 96 991 453
Investment in subsidiary
Deferred taxation 253 010
Loans receivable 1 541 647
Current assets 80 470 678 129 729
Inventories 32 270 609
Trade and other 39 591 049 91 904
receivables
Cash and cash 8 609 021 37 825
equivalents
Total assets 206 440 379 129 729
EQUITY AND LIABILITIES
Shareholders` equity
Ordinary shareholders` 152 674 476 (1 084
interest 199)
Stated capital (share 236 177 740 2 231 280
capital)
Share premium 93 911
800
Retained earnings (83 063 (97 227
271) 279)
Foreign translation (439 992)
reserve
Total liabilities 53 765 903 1 213 928
Non-current liabilities 3 542 558
Borrowings 3 542 558
Current liabilities 50 223 345 1 213 928
Trade and other payables 44 504 556 1 213 928
Taxation payable 5 192 343
Bank overdrafts 526 446
Total equity and 206 440 379 129 729
liabilities
SEGMENTAL REPORT for the year ended 28 February 2007
Pump spares Engineering
and valves linings and
industrial Petrochemical Total
supplies
Revenue 47 120 064 37 851 047 67 033 449 151 148 769
Gross profit 25 762 232 16 705 308 14 608 039 60 785 711
Operating 11 146 849 6 504 354 12 327 447 33 473 118
expenses
Profit after 8 775 423 7 397 319 1 221 587 17 699 448
tax
Gross 49 134 319 7 449 349 32 120 126 88 823 834
Assets*
Gross 24 966 403 5 359 636 15 836 783 45 881112
Liabilities*
*Excludes deferred tax assets/liabilities
STATEMENT OF CHANGES IN EQUITY
GROUP Share capital Share premium
Balance as at 28 February 2005 2 231 280 93 911 800
Disposal of subsidiaries
Net profit/(loss) for the year
Balance as at 28 February 2006 2 231 280 93 911 800
Conversion of share capital/premium to (2 231 280) (93 911 800)
stated capital
Issue of share capital to vendors
Issue of share capital for cash
Net buy back of shares
Listing fees taken to stated capital
Forfeiture of shares per agreement
Cancellation of Colvic shares
Net profit/(loss) for the year
Colvic group profits until unbundling
Forex translation reserve - PSV Zambia
Balance as at 28 February 2007 - -
STATEMENT OF CHANGES IN EQUITY (continued)
Reserves
GROUP Revaluation reserve Accumulated loss
Balance as at 28 February 2005 (98 208 794)
Disposal of subsidiaries 1 698 858
Net profit/(loss) for the year (717 343)
Balance as at 28 February 2006 (97 227 279)
Conversion of share
capital/premium to stated
capital
Issue of share capital to
vendors
Issue of share capital for
cash
Net buy back of shares
Listing fees taken to stated
capital
Forfeiture of shares per
agreement
Cancellation of Colvic shares
Net profit/(loss) for the year 13 627 452
Colvic group profits until 487 261
unbundling
Forex translation reserve - (439 992)
PSV Zambia
Balance as at 28 February 2007 (439 992) (83 063 268)
STATEMENT OF CHANGES IN EQUITY (continued)
GROUP Stated capital Total
Balance as at 28 February 2005 (2 065 714)
Disposal of subsidiaries 1 698 858
Net profit/(loss) for the year (717 343)
Balance as at 28 February 2006 (1 084 199)
Conversion of share capital/premium to 96 143 080 -
stated capital
Issue of share capital to vendors 138 563 979 138 563 979
Issue of share capital for cash 43 950 000 43 950 000
Net buy back of shares (2 981 516) (2 981 516)
Listing fees taken to stated capital (3 446 501) (3 446 501)
Forfeiture of shares per agreement (17 218 785) (17 218 785)
Cancellation of Colvic shares (18 345 258) (18 345 258)
Net profit/(loss) for the year 13 676 750
Colvic group profits until unbundling (487 261) -
Forex translation reserve - PSV Zambia (439 992)
Balance as at 28 February 2007 236 177 738 152 674 476
COMMENTS
INTRODUCTION:
The Board of Directors is pleased to present the reviewed results for the
year ended 28 February 2007 ("the final results").
NATURE OF BUSINESS:
PSV Holdings Ltd ("the Group") is an industrial engineering company
focusing on pumps, valves, engineering linings, industrial supplies and
fuel pumps and dispensers.
BUSINESS REVIEW:
The year being reported on has been good but challenging for PSV. The
company has experienced excellent contract growth, being awarded either new
or extensions to existing supply and service contracts. The year has also
been challenging as we signed an agreement with the previous vendors of
three of the subsidiaries of Colvic Petroleum Products (Pty) Ltd ("Colvic`)
to cancel the acquisition. The decision to unwind the transaction was based
largely on synergies between the two companies not being met. Petrologic
(Pty) Ltd, which was part of Colvic was retained by PSV and will remain
part of the Group. Petrologic was retained because it demonstrated the best
synergistic value to the Group with strong management and future growth
prospects.
FINANCIAL REVIEW:
As the year ended February 2007 was the maiden year in which consolidated
annual financial statements were prepared for the Group and its
subsidiaries, no meaningful comparatives are available. The Group generated
an operating profit of R20,2 million (13,4%) on revenue of R151 million and
an after tax profit of R14,2 million. Headline earnings per share amounted
to 7,47 cents per share (2006 -3,30 cents per share).
The revenue line was impacted negatively due to the cancellation of the
Colvic transaction. Management is satisfied that the "Group" is now more
focused with an emphasis on the supply of products well understood by
management.
The Group`s cash flow position and working capital management continues to
improve compared to mid year, notwithstanding a major investment in stock
to cater for the expected increase in demand from our Zambian operation.
IFRS adjustments had a material detrimental impact on the company`s after
tax earnings.
The unwinding of discounts arising on deferred purchase considerations
owing to the vendors of company`s acquired together with the amortization
of specific intangibles reduced after tax earnings by R3,679 million.
REVIEW OF OPERATIONS:
During the year under review the Group has been awarded new contracts in
various subsidiaries as well as receiving extensions on some existing
projects:
- A contract at the Mopani Copper Mine was extended to include the
supply of spares, management of the pump workshop and the control of the
pump spares inventory;
- Groupline has progressed with the three Eskom contracts namely,
Komati, Camden and Grootvlei and expect to complete these projects in the
new financial year;
- Petro-logic has continued servicing and supplying new petrol
dispensers and;
- Omnirapid our industrial supply company, has doubled in turnover and
profitability by exploiting internal synergies within the Group.
Annuity income of the group remains sound.
PROSPECTS:
The Group will look towards expanding its manufacturing capacity in South
Africa to allow the production of pump spares and valves to meet an
increase in demand at Mopani Copper Mines in Zambia. The total Mopani
contract is worth approximately R30 million per annum over the next two
years;
Petrologic is expecting a contract for dispensing units for Zimbabwe
totaling approximately R4,2 million. In addition, facilities at Petro-logic
are being expanded to facilitate the creation of lucrative dispenser repair
facilities.
Group Line Projects is expecting to secure a contract for linings on an
iron ore project. The contract is estimated to be worth at least R10
million.
To sustain the growth the Group, will invest additional funds in human and
infrastructural resources. In order to expand our product offering, the
Group will investigate various acquisition possibilities.
Additional cost saving measures are underway through the pooling of
resources, and the extraction of synergies when PSV moves into a new head
office and manufacturing site together with three existing subsidiaries.
In the past, due to a lack of BEE participation, PSV was unable to benefit
from supply and refurbishment contracts with South African mines. Since a
BEE initiative is currently being finalised with Vunani Capital, the
Group`s management is confident this will assist in marketing to South
African mines. Management believes the process will not be immediate and
the benefits are most likely to be realised over the next 12 to 18 months.
On the completion of the BEE transaction, the Group will implement a staff
share incentive scheme. The Group has appointed an accreditation agency to
review our current scorecard and recommend changes necessary to increase
our BEE rating. The Group is also in the process of investigating a social
responsibility initiative, which should be in place during the current
year.
ACCOUNTING POLICIES:
The annual financial statements have been prepared in accordance with the
recognition and measurement criteria embodied in the International
Financial Reporting Standards ("IFRS").
DIVIDENDS:
The Group will continue to retain and utilise cash generated to fund
working capital requirements and potential acquisitions. The Board will
review the dividend policy annually.
AUDITORS REPORT:
KPMG Inc., the Group`s independent auditors, have reviewed the abridged
results, and have expressed an unmodified opinion. Their review report is
available for inspection at the company`s registered office.
For and on behalf of the Board
A DA SILVA AR DREISENSTOCK
Chief Executive Officer Financial Director
18 May 2007
DIRECTORS:
Executive Directors: AJD Da Silva (Chief Executive Officer),
P Robinson, AR Dreisenstock (Chief Financial Officer), D Kelly
Independent Directors: JJH Mateya (Chairman), GJV Shongwe,
Secretary: AR Dreisenstock
REGISTERED OFFICE:
2nd Floor West Tower, Nelson Mandela Square, Sandown, Sandton
PO Box 1078, Jukskei Park, 2153
T: (011) 0860 778 778
F: (011) 0860 329 778
REGISTRATION NUMBER 1998/004365/06
TRANSFER SECRETARIES:
Computershare Investor Services 2004 (Pty) Limited
70 Marshall Street, Johannesburg, South Africa, 2001
PO Box 24, Newtown, 2113
Refer to PSV`s corporate website: www.psvholdings.com
Date: 21/05/2007 07:30:02 Produced by the JSE SENS Department.
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