| Wed 10 Sep 2008, 7:30 | | PMV - Primeserv - Unaudited results for the 6 months ended 30 June 2008 |
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PMV
PMV
PMV - Primeserv - Unaudited results for the 6 months ended 30 June 2008
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
Revenue increased by 12%
EBITDA increased by 44%
Operating Profit increased by 47%
HEPS increased by 78%
Unaudited results for the 6 months ended 30 June 2008
Income Statement
for the six months ended 30 June 2008
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
30 Jun 30 Jun 31 Dec
2008 2007 2007
R`000 R`000 R`000
Revenue 241 381 215 232 474 197
EBITDA 10 213 7 105 19 741
Depreciation (995) (850) (1 829)
Operating profit 9 218 6 255 17 912
Interest received 1 894 205 2 190
Interest paid on borrowings (2 226) (932) (2 620)
IFRS 3 Business
combination charge (148) (143) (382)
Share of profit from
associate company 39 45 80
Profit before taxation 8 777 5 430 17 180
Taxation (1 066) (1 114) (3 350)
Profit for the period 7 711 4 316 13 830
Attributable to:
Ordinary shareholders 7 711 4 316 13 830
Minority shareholders - - -
Attributable profit 7 711 4 316 13 830
Reconciliation of headline
earnings
Net profit attributable
to shareholders 7 711 4 316 13 830
After-tax effect of
profit on sale of
fixed assets - (7) (12)
Headline earnings 7 711 4 309 13 818
Weighted average number of
shares (`000) 114 970 114 417 114 569
Diluted weighted average
number of shares (`000) 116 633 115 905 117 162
Earnings per share (cents) 6,71 3,77 12,07
Diluted earnings per share
(cents) 6,61 3,72 11,80
Headline earnings per share
(cents) 6,71 3,77 12,06
Diluted headline earnings
per share (cents) 6,61 3,72 11,79
Segmental Analysis
for the six months ended 30 June 2008
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
30 Jun 30 Jun 31 Dec
2008 2007 2007
R`000 R`000 R`000
Revenue
Human Capital Outsourcing 222 136 194 607 433 956
Human Capital Development 19 245 20 625 40 241
241 381 215 232 474 197
Operating profit
Human Capital Outsourcing 14 391 9 250 23 787
Human Capital Development 1 580 2 959 5 070
Central Services (6 753) (5 954) (10 945)
9 218 6 255 17 912
Cash Flow Statement
for the six months ended 30 June 2008
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
30 Jun 30 Jun 31 Dec
2008 2007 2007
R`000 R`000 R`000
Cash flows from operating
activities 1 270 558 (3 776)
Cash flows from investing
activities (2 678) (1 009) (175)
Cash flows from acquisition
of business - (790) -
Cash flows applied as
working capital
to Staff Dynamix - (2 083) -
Cash flows from financing
activities (1 632) 451 (5 723)
Net decrease in cash and
cash equivalents (3 040) (2 873) (9 674)
Cash and cash equivalents at
beginning of period (8 163) 1 511 1 511
Cash and cash equivalents at
end of period (11 203) (1 362) (8 163)
Balance Sheet
as at 30 June 2008
Unaudited Unaudited Audited
30 Jun 30 Jun 31 Dec
2008 2007 2007
R`000 R`000 R`000
Assets
Non-current assets 24 643 24 152 21 826
Equipment and vehicles 4 183 4 594 4 639
Goodwill 7 127 5 473 7 127
Intangible assets 576 576 576
Investment and loan in
associate 5 322 4 206 3 183
Deferred tax asset 7 435 9 303 6 301
Current assets 113 130 89 566 103 756
Inventories 1 085 1 485 1 137
Trade receivables 78 857 60 021 76 755
Other receivables 2 566 1 967 2 485
Taxation receivable - 101 208
Cash and cash equivalents 30 622 25 992 23 171
Total assets 137 773 113 718 125 582
Equity and liabilities
Equity 60 810 47 384 55 846
Capital and reserves 60 749 47 323 55 785
Minority interest 61 61 61
Non-current liabilities 526 83 680
Current liabilities 76 437 66 251 69 056
Trade and other payables 32 689 32 160 36 904
Current portion of financial
liabilities 422 5 860 572
Taxation 1 595 1 264 -
Short-term vendor obligation 328 - 818
Bank borrowings 41 403 26 967 30 762
Total equity and liabilities 137 773 113 718 125 582
Number of shares in issue at
end of period (`000) 113 784 115 499 114 889
Net asset value
per share (cents) 53 41 49
Statement of Changes in Equity
for the six months ended 30 June 2008
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
30 Jun 30 Jun 31 Dec
2008 2007 2007
R`000 R`000 R`000
Balance at beginning of
the period 55 846 43 592 43 592
Share trust movement (989) 136 (396)
Share-based payment reserve 58 - 55
Net profit attributable to
shareholders 7 711 4 316 13 830
Dividend paid (1 816) (660) (1 235)
Balance at end of the period 60 810 47 384 55 846
Commentary
Profile
Primeserv Group Limited is an investment holding company listed in the
Industrial Goods and Services, Business Training and Employment Agencies
sector of the JSE.
The Group focuses on delivering human resources (HR) products, services and
solutions through its operating pillar, Primeserv HR Services. This
incorporates two main areas of specialisation: Human Capital Development
operating through two divisions, Primeserv HR Solutions and Primeserv
Colleges; and Human Capital Outsourcing operating through the Group`s largest
division, Primeserv Outsourcing.
These complementary divisions provide an integrated HR value chain that can
be applied in its entirety or in modular form. These divisions encompass a
comprehensive range of HR consulting solutions and services, corporate and
vocational training programmes, technical skills training, computer training
colleges, as well as resourcing and flexible staffing services, complemented
by wage bureaus and HR logistics outsourcing operations.
Overview
Consolidated Group operations have continued to improve their period-on-
period performance with revenue growing by 12% from R215,2 million for the
six months ended 30 June 2007 to R241,4 million for the current review
period. Group EBITDA increased by 44% from R7,1 million to R10,2 million,
whilst operating profit increased by 47% from R6,3 million to R9,2 million.
Comparable Group operating margin increased from 2,9% to 3,8%. Profit before
tax increased by 62% from R5,4 million to R8,8 million, resulting in headline
earnings per share increasing by 78% from 3,77 cents per share to 6,71 cents
per share.
The balance sheet remains strong although working capital invested in trade
receivables is higher than is optimal, particularly in the prevailing high
interest rate environment. Trade receivables increased from R60 million to
R78,9 million, partly attributable to the Staff Dynamix acquisition. This
investment in working capital has resulted in a higher level of borrowings.
The Group is strongly focused on improved working capital management. Net
asset value has increased by 29% to 53 cents per share (30 June 2007: 41
cents per share).
The Outsourcing division, specialising in flexible staffing solutions to
businesss and heavy industry, increased revenue by 14% from R194,6 million to
R222,1 million, with its operating profit increasing by 56% from R9,3 million
to R14,4 million. The logistics, warehousing, construction and industrial
flexible staffing units performed satisfactorily. The professional draughting
and engineering staffing unit remained constrained by the on-going skills
shortage. The division`s mega-project wage bureau unit improved its period-on-
period performance.
The Human Capital Development segment comprising the HR Solutions division`s
HR Consulting, Technical Training and Computer Training Colleges units
delivered a mixed set of results. The Computer Training Colleges unit
experienced a very difficult first six months due to lower than anticipated
learner registrations, primarily as a consequence of the opportunity
(afforded at the outset of 2008 by the Department of Education) to learners
to re-write their matric examinations. Learner numbers have been further
dampened by economic pressures. The Computer Training Colleges unit will
remain under pressure for the balance of the year. Conversely the HR
Consulting and Technical Training units improved their performance. They
continue to provide key strategic value to the delivery of Primeserv`s
integrated HR Services model.
Post-balance Sheet Event
Subsequent to 30 June 2008, the Group acquired the white-collar professional
contract staffing business, Denverdraft, subject to the fulfilment of
conditions precedent. The acquisition is of both strategic and commercial
value and allows the Group to better address the continuing dearth of skills
in this market segment.
Broad-Based Black Economic Empowerment (B-BBEE)
Primeserv`s ongoing commitment to the B-BBEE process has led to it recently
being awarded an upgrade in its empowerment rating from a Level 4 to a Level
3 B-BBEE value-added supplier.
Prospects
Improved operating results are anticipated for the second half of the year.
Accounting Policies
The results for the period have been prepared in accordance with the Group`s
accounting policies which are consistent with the previous period. These
comply with International Financial Reporting Standards ("IFRS") and with IAS
34 - Interim Financial Reporting and JSE Listings Requirements.
On behalf of the board
JM Judin M Abel
Non-Executive Chairman Chief Executive Officer
10 September 2008
Bryanston
Dividend Declaration
Notice is hereby given that Primeserv has declared an interim dividend
(dividend declaration number 7) for the six months ended 30 June 2008 of 1
cent per ordinary share.
The salient dates applicable to the interim dividend are as follows:
Last day to trade "CUM" dividend Friday, 3 October 2008
First day to trade "EX" dividend Monday, 6 October 2008
Record date Friday, 10 October 2008
Payment date Monday, 13 October 2008
No share certificates may be dematerialised or rematerialised between Monday,
6 October 2008 and Friday, 10 October 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: GB Mons
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 2196
Date: 10/09/2008 07:30:01 Produced by the JSE SENS Department.
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