| Fri 28 Mar 2008, 15:09 | | PMV - Primeserv Group - Audited Results For The Year Ended 31 December 2007 |
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PMV
PMV
PMV - Primeserv Group - Audited Results For The Year Ended 31 December 2007
and dividend declaration
PRIMESERV GROUP LIMITED
("Primeserv" or "the Group")
Incorporated in the Republic of South Africa
Registration number: 1997/013448/06
Share code: PMV
ISIN: ZAE000039277
www.primeserv.co.za
e-mail: productivity@primeserv.co.za
AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2007
HIGHLIGHTS
- Revenue increased by 36%
- Operating Profit increased by 296%
- HEPS increased by 192%
Income Statement for the year ended 31 December 2007
Audited Pro forma Audited
12 months 12 months 18 months
ended ended ended
31 Dec 2007 31 Dec 2006 31 Dec 2006
R`000 R`000 R`000
Revenue (1) 474 197 348 821 518 111
EBITDA 19 741 5 746 6 106
Depreciation (1 829) (1 225) (1 820)
Operating profit 17 912 4 521 4 286
Interest received 2 190 1 849 3 319
Interest paid (3 002) (787) (1 397)
Interest paid on borrowings (2 620) (787) (1 397)
IFRS 3 Business combination
charge (382) - -
Share of profit from associate
company 80 4 66
Profit before exceptional items 17 180 5 587 6 274
Exceptional items - (5) 537
Profit before taxation 17 180 5 582 6 811
Taxation (3 350) (865) (1 175)
Profit after taxation 13 830 4 717 5 636
Attributable to:
Ordinary shareholders 13 830 4 863 5 636
Minority interest - (146) -
Attributable profit 13 830 4 717 5 636
Reconciliation of headline
earnings
Profit attributable to
shareholders 13 830 4 863 5 636
After-tax effect of profit
on sale of fixed assets (12) (132) (130)
Headline earnings 13 818 4 731 5 506
Weighted average number
of shares (`000) 114 569 114 564 114 662
Diluted number of
shares (`000) 117 162 116 384 116 382
Earnings per share (cents) 12,07 4,24 4,92
Diluted earnings per
share (cents) 11,80 4,18 4,84
Headline earnings per
share (cents) 12,06 4,13 4,80
Diluted headline earnings
per share (cents) 11,79 4,06 4,73
(1) Revenue note: Excludes revenue from Bathusi Staffing Services (Proprietary)
Limited, which was deconsolidated as a result of a BEE transaction and has since
been accounted for as an associate. The effect on the Outsourcing division and
the HR Solutions division was as follows:
Audited Pro forma Audited
12 months 12 months 18 months
ended ended ended
31 Dec 2007 31 Dec 2006 31 Dec 2006
R`000 R`000 R`000
Outsourcing 49 064 43 764 68 026
HR Solutions 808 1 227 1 624
49 872 44 991 69 650
Segmental Analysis for the year ended 31 December 2007
Audited Pro forma Audited
12 months 12 months 18 months
ended ended ended
31 Dec 2007 31 Dec 2006 31 Dec 2006
R`000 R`000 R`000
Revenue (1)
Outsourcing 433 956 312 703 465 928
Computer Training Colleges 23 505 20 207 28 611
HR Solutions 16 736 15 911 23 572
474 197 348 821 518 111
Operating profit
Outsourcing 23 787 16 282 19 730
Computer Training Colleges 4 220 3 488 4 281
HR Solutions 850 (1 485) (2 588)
Central Services (10 945) (13 764) (17 137)
17 912 4 521 4 286
Cash Flow Statement
for the year ended 31 December 2007
Audited Pro forma Audited
12 months 12 months 18 months
ended ended ended
31 Dec 2007 31 Dec 2006 31 Dec 2006
R`000 R`000 R`000
Cash flows from operating
activities (3 776) (3 927) (1 049)
Cash flows from investing
activities (175) (749) (2 185)
Cash flows applied to
new acquisition (5 449) - -
Cash flows from financing
activities (274) 481 (120)
Net decrease in cash and
cash equivalents (9 674) (4 195) (3 354)
Cash and cash equivalents
at beginning of period 1 511 5 706 4 865
Cash and cash equivalents
at end of period (8 163) 1 511 1 511
Balance Sheet as at 31 December 2007
Audited Pro forma Audited
31 Dec 2007 31 Dec 2006 31 Dec 2006
R`000 R`000 R`000
Assets
Non-current assets 21 826 17 944 17 944
Equipment and vehicles 4 639 3 117 3 117
Goodwill 7 127 - -
Intangible assets 576 576 576
Investment and loan in
associate 3 183 4 725 4 725
Long-term receivables - 451 451
Deferred tax asset 6 301 9 075 9 075
Current assets 103 756 69 480 69 480
Inventories 1 137 741 741
Trade receivables 76 755 48 252 48 252
Other receivables 2 485 2 254 2 254
Taxation receivable 208 67 67
Cash and cash equivalents 23 171 18 166 18 166
Total assets 125 582 87 424 87 424
Equity and liabilities
Equity 55 846 43 592 43 592
Capital and reserves 55 785 43 531 43 531
Minority interest 61 61 61
Non-current liabilities 680 262 262
Current liabilities 69 056 43 570 43 570
Trade and other payables 36 904 26 915 26 915
Current portion of financial
liabilities 572 387 387
Short-term vendor obligation 818 - -
Bank borrowings 30 762 16 268 16 268
Total equity and liabilities 125 582 87 424 87 424
Number of shares in issue at
end of period (`000) 114 889 114 417 114 417
Net asset value per
share (cents) 49 38 38
Statement of Changes in Equity
for the year ended 31 December 2007
Audited Pro forma Audited
12 months 12 months 18 months
ended ended ended
31 Dec 2007 31 Dec 2006 31 Dec 2006
R`000 R`000 R`000
Balance at beginning of
the period 43 592 40 316 39 397
Share trust movement (396) (144) (144)
Minority shareholders`
interest - (146) -
Share-based payment reserve 55 - -
Net income attributable to
shareholders 13 830 4 863 5 636
Dividend paid (1 235) (1 297) (1 297)
Balance at end of the period 55 846 43 592 43 592
COMMENTARY
Profile
Primeserv is an investment holding company whose products and services meet the
human resources (HR) needs of the South African corporate, industrial and
government sectors and are provided through its specialised HR Solutions,
Computer Training Colleges and Outsourcing divisions. These offerings
incorporate HR solutions, consulting, skills training centres, corporate and
vocational training programmes, as well as resourcing and flexible staffing
services, including labour outsourcing and wage bureau operations.
Overview
Primeserv changed its year-end to 31 December during the previous financial
period, consequently the results for the year ended 31 December 2007 are
compared with the pro forma results for the
12 months ended December 2006 to facilitate a more meaningful analysis.
All Group operations delivered improved year-on-year performance. Group revenue
increased by 36% from R348,8 million for the pro forma 12 months ended December
2006 to R474,2 million for the year under review. This excludes revenue
generated by Bathusi Staffing Services (Pty) Limited ("Bathusi"), the Group`s
BEE associate company, of R49,9 million (see Revenue note 1 to the Income
Statement).
Group EBITDA increased by 244% from R5,7 million to R19,7 million, whilst
operating profit increased by 296% from R4,5 million to R17,9 million. The
Group`s operating margin percentage increased from 1,3% to 3,8%, reflecting
improved operating efficiencies. Profit before tax increased by 207% from R5,6
million to R17,2 million, resulting in headline earnings per share increasing by
192% from 4,13 cents per share to 12,06 cents per share.
The balance sheet has continued to strengthen albeit that the Group has seen an
increase in bank borrowings and trade payables. The Group increased its
investment in working capital with trade receivables having risen from R48,3
million to R76,8 million while cash resources increased to R23,2 million. A
large part of the increases in working capital and borrowings is directly
attributable to the Staff Dynamix acquisition. Net asset value has increased by
29% from 38 cents per share to 49 cents per share.
The Outsourcing division, specialising in flexible staffing solutions to
business and heavy industry, increased revenue by 39% from R312,7 million to
R433,9 million. The division`s revenue benefited from the solid performance of
the Staff Dynamix acquisition, although its impact was only for ten months. The
division`s operating profit increased by 46% from R16,3 million to R23,8
million.
In line with the division`s expanding branch network, increased staffing
capability and capacity, the logistics, warehousing, construction and industrial
flexible staffing units performed well. The professional draughting and
engineering staffing unit remained challenged by the continued dearth of
suitability qualified and experienced contractors.
The division`s mega-project wage bureau unit experienced later than planned
start dates on certain key projects, nevertheless a positive contribution was
delivered.
The outsourcing component of the Bathusi operation, which specialises in the
provision of flexible staffing to the petrochemical mining and allied
industries, grew revenue by 12% from R43,8 million to R49,1 million.
The Outsourcing division together with the Group`s other HR Services divisions
continues to seek solutions that address the constraints brought about by the
national skills shortage.
The Computer Training Colleges division increased revenue by 16% from R20,2
million to R23,5 million. Operating profit increased by 21% from R3,5 million to
R4,2 million. Further investment in the development of new products and courses
as well as upgrading infrastructure at a number of colleges continued throughout
the year.
The human capital HR Solutions division, comprising the HR Consulting and the
Technical Training units, continued to improve its performance, delivering an
operating profit of R0,85 million compared to the pro forma R1,5 million loss
incurred for the previous twelve months. The division is of strategic value to
the Group and in particular to the delivery of Primeserv`s integrated HR
Services model.
The Group remains focused on revenue growth, margin improvement and working
capital management, and continues to pursue acquisitive opportunities.
Further Cautionary Announcement
Further to the announcement released on SENS on 26 February 2008 and in the
press on 27 February 2008, shareholders are advised to continue to exercise
caution when dealing in the company`s securities until a further announcement is
made.
Prospects
Barring unforeseen or adverse economic conditions during the year, the Group
anticipates improved operating results.
Accounting Policies
The results for the year have been prepared in accordance with the Group`s
accounting policies. These comply with International Financial Reporting
Standards, the South African Companies Act of 1973 and the JSE Listings
Requirements and are consistent with those of the prior period.
Auditors` Report
The results for the year have been audited by PKF (Jhb) Inc. and their
unqualified report is available for inspection at the company`s registered
office.
On behalf of the Board
JM Judin M Abel 28 March 2008
Chairman Chief Executive Officer Bryanston
Dividend Declaration
Further to a 0,5 cent per share interim dividend paid in October 2007, notice is
hereby given that a final dividend of 1,5 cents per share is declared, payable
to shareholders recorded in the register of the company at the close of business
on the record date as set out below. The salient dates applicable to the
dividend are as follows:
Last day to trade "cum" final dividend Wednesday, 30 April 2008
First day to trade "ex" final dividend Monday, 5 May 2008
Record date Friday, 9 May 2008
Payment date Monday, 12 May 2008
No share certificates may be dematerialised or rematerialised between Monday, 5
May 2008 and Friday, 9 May 2008, both days inclusive.
Directors: JM Judin (Chairman)*, M Abel (Chief Executive Officer), Prof S Klein*
(American), AT McMillan (British),
DL Rose*, DC Seaton* * Non-executive
Company Secretary: R Sack
Registered address: Venture House, Peter Place Park, 54 Peter Place, Bryanston
(PO Box 3008, Saxonwold 2132)
Transfer secretaries: Computershare Investor Services (Pty) Limited, 70 Marshall
Street, Johannesburg 2001 (PO Box 61051, Marshalltown 2107)
Sponsor: Deloitte & Touche Sponsor Services (Pty) Limited, The Woodlands,
Woodlands Drive, Woodmead, Sandton 2146
Date: 28/03/2008 15:09:51 Produced by the JSE SENS Department.
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