| Thu 19 Mar 2009, 15:25 | | PMV - Primeserv Group Limited - Audited Results for the Year Ended 31 December |
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PMV
PMV
PMV - Primeserv Group Limited - Audited Results for the Year Ended 31 December
2008 Highlights
PRIMESERV GROUP LIMITED
("Primeserv" or "the Group" or "the Company")
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 2008 HIGHLIGHTS
Revenue increased by 14%
Operating Profit increased by 22%
HEPS increased by 28%
Dividend increased by 50%
Income Statement
for the year ended 31 December 2008
Audited Audited
year year
ended ended
31 Dec 2008 31 Dec 2007
R `000 R `000
Revenue (1) 539 878 474 197
EBITDA 23 638 19 741
Depreciation (1 866) (1 829)
Operating profit 21 772 17 912
Interest received 3 691 2 190
Interest paid (4 552) (3 002)
Interest paid on borrowings (4 300) (2 620)
IAS 39 - Financial Instruments
charge (2) (252) (382)
Share of profit from
associate company 97 80
Profit before taxation 21 008 17 180
Taxation (3 154) (3 350)
Profit for the year 17 854 13 830
Attributable to:
Ordinary shareholders 17 507 13 830
Minority shareholders 347 -
Attributable profit 17 854 13 830
Reconciliation of
headline earnings
Net profit attributable
to shareholders 17 507 13 830
After-tax effect of profit on
sale of fixed assets (IAS 16) 83 (12)
Headline earnings 17 590 13 818
Weighted average number
of shares (`000) 114 134 114 569
Diluted weighted average number
of shares (`000) 116 950 117 162
Earnings per share (cents) 15,34 12,07
Diluted earnings per share (cents) 14,97 11,80
Headline earnings per share (cents) 15,41 12,06
Diluted headline earnings
per share (cents) 15,04 11,79
(1) Revenue note: Excludes revenue from Bathusi Staffing Services (Proprietary)
Limited, which was deconsolidated as a result of a B-BBEE transaction and has
since been accounted for as an associate. The excluded revenue in the current
year was R61,5 million (2007: R49,9 million).
(2) Interest paid note: Interest raised in terms of IAS 39 - Financial
Instruments charge.
Segmental Analysis
for the year ended 31 December 2008
Audited Audited
year year
ended ended
31 Dec 2008 31 Dec 2007
R `000 R `000
Revenue
Human Capital Outsourcing 501 715 433 956
Human Capital Development 38 163 40 241
539 878 474 197
Operating profit
Human Capital Outsourcing 27 758 23 787
Human Capital Development 2 710 5 070
Central Services (8 696) (10 945)
21 772 17 912
Cash Flow Statement
for the year ended 31 December 2008
Audited Audited
year year
ended ended
31 Dec 2008 31 Dec 2007
R `000 R `000
Cash generated from/
(utilised in) operations 5 019 (1 394)
Net interest paid (861) (430)
Dividends paid (2 869) (1 235)
Taxation paid (1 259) (717)
Cash flows from operating
activities 30 (3 776)
Cash flows from investing
activities (9 860) (6 020)
Cash flows from financing
activities (1 531) 307
Net decrease in cash and
cash equivalents (11 361) (9 489)
Cash and cash equivalents at
beginning of year (7 591) 1 898
Cash and cash equivalents at
end of year (18 952) (7 591)
Balance Sheet
as at 31 December 2008
Audited Audited
31 Dec 2008 31 Dec 2007
R `000 R `000
Assets
Non-current assets 25 322 21 826
Equipment and vehicles 4 416 4 639
Goodwill 9 605 7 127
Intangible assets 676 576
Investment and loan in associate 2 673 3 183
Long-term receivables 3 602 -
Deferred tax asset 4 350 6 301
Current assets 113 077 103 756
Inventories 863 1 137
Trade receivables 91 980 76 755
Other receivables 3 610 2 485
Taxation receivable 264 208
Cash and cash equivalents 16 360 23 171
Total assets 138 399 125 582
Equity and liabilities
Equity 68 094 55 846
Capital and reserves 67 686 55 785
Minority interest 408 61
Non-current liabilities 363 680
Current liabilities 69 942 69 056
Trade and other payables 33 954 36 904
Current portion of financial
liabilities 176 572
Short-term vendor obligation 500 818
Bank borrowings 35 312 30 762
Total equity and liabilities 138 399 125 582
Number of shares in issue at
end of year (`000) 110 809 114 889
Net asset value per share (cents) 61 49
Statement of Changes in Equity
for the year ended 31 December 2008
Audited Audited
year year
ended ended
31 Dec 2008 31 Dec 2007
R `000 R `000
Balance at beginning of the year 55 846 43 592
Share trust movement (2 987) (396)
Minority shareholders` interest 347 -
Share-based payment reserve 250 55
Profit for the year attributable to
ordinary shareholders 17 507 13 830
Dividends paid (2 869) (1 235)
Balance at end of the year 68 094 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 Limited.
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, supplemented by
wage bureaus and HR logistics outsourcing operations.
Overview
Consolidated Group operations grew revenue by 14% from R474,20 million for the
twelve months ended 31 December 2007 to R539,88 million for the year under
review. Earnings before interest, tax, depreciation and amortisation (EBITDA)
increased by 20% to R23,64 million. Group operating profit at R21,77 million
reflects a 22% improvement year-on-year. Profit after tax increased by 29% from
R13,83 million to R17,85 million resulting in headline earnings per share
improving by 28% from 12,06 cents per share to 15,41 cents per share for the
current year.
The balance sheet remains strong although working capital invested in trade
receivables is higher than optimal. Trade receivables increased from R76,76
million to R91,98 million, partly attributable to the Staff Dynamix and
Denverdraft acquisitions. This investment in working capital has resulted in a
higher level of borrowings than in the prior year. The Group remains focused on
improving working capital management. The Group generated a positive operating
cash flow, albeit that due primarily to investing activities, the Group
experienced a net cash outflow. Net asset value has increased by 25% from 49
cents per share to 61 cents per share.
The Outsourcing division, specialising in flexible staffing solutions to
business and heavy industry, increased revenue by 16% from R433,96 million to
R501,72 million, with its operating profit increasing by 17% from R23,79 million
to R27,76 million. The logistics, warehousing, construction and industrial
flexible staffing units performed satisfactorily. The petrochemical staffing
supply unit delivered a solid performance. The "white collar" professional
draughting and engineering staffing unit was, for the greater part of the year,
constrained by the on-going skills shortage. The Group acquired the
complementary "white collar" professional staffing business of Denverdraft with
effect from 1 August 2008 and the results and balance sheet effects are
incorporated from that date. The full benefits arising out of this acquisition
are anticipated to be realised over the course of 2009. The division`s mega-
project wage bureau unit improved its period-on-period performance.
The HR Solutions division`s HR Consulting and Technical Training units delivered
a good set of results, improving their year-on-year performance. They continue
to provide key strategic value to the delivery of Primeserv`s integrated HR
Services model.
The Computer Training Colleges division experienced a very challenging year 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, whilst also being hampered by
the effects of the economic slowdown. Corrective measures have been implemented
and the unit is anticipated to deliver improved results in the current reporting
period.
Broad-Based Black Economic Empowerment (B-BBEE)
Primeserv remains committed to transformation and has maintained its Level 3 B-
BBEE value-added supplier status.
Events after balance sheet date
Management is not aware of any material events which occurred subsequent to the
year ended 31 December 2008.
Prospects
Given the current economic crisis and the Group`s exposure to the industrial and
mining sectors, as well as the economic pressures being faced by learners
registered with the Colleges division, difficult trading conditions are
anticipated for the present financial year. The Group is focused on maintaining
its market position, whilst rigorous cost controls that match cost structures
with business performance without sacrificing operational capacity and service
delivery excellence will be key in the year ahead.
Accounting Policies
The results for the year 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, IAS 34 - Interim Financial
Reporting, the South African Companies Act and the JSE Limited Listings
Requirements.
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 19 March 2009
Chairman Chief Executive Officer Bryanston
Dividend Declaration
Further to a 1 cent per share interim dividend paid in October 2008, notice is
hereby given that a final dividend of 2 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 Thursday, 30 April 2009
First day to trade "EX"
final dividend Monday, 4 May 2009
Record date Friday, 8 May 2009
Payment date Monday, 11 May 2009
No share certificates may be dematerialised or rematerialised between Monday, 4
May 2009 and Friday, 8 May 2009, both days inclusive.
Directors: JM Judin (Chairman)*, M Abel (Chief Executive Officer), Prof S Klein*
(American), LM Maisela*,AT McMillan (British), DL Rose*, DC Seaton*
* Non-executive
Company Secretary: ER Goodman Secretarial Services cc (represented by E Goodman)
Registered address: Venture House, Peter Place Park, 54 Peter Place, Bryanston,
2021
(PO Box 3008, Saxonwold, 2132)
Transfer secretaries: Computershare Investor Services (Pty) Limited, 70 Marshall
Street, Johannesburg, 2001
(PO Box 61051, Marshalltown, 2107)
Auditors: PKF (Jhb) Inc., 42 Wierda Road West, Wierda Valley, Sandton, 2196
(Private Bag X10046, Sandton, 2147)
Sponsor: Deloitte & Touche Sponsor Services (Pty) Limited, The Woodlands,
Woodlands Drive, Woodmead, 2196
(Private Bax X6, Gallo Manor, 2052)
Date: 19/03/2009 15:25:01 Produced by the JSE SENS Department.
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