| Fri 14 Aug 2009, 16:28 | | PMV - Primeserv Group - Unaudited Results For The Six Months Ended 30 June 2009 |
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PMV
PMV
PMV - Primeserv Group - Unaudited Results For The Six Months Ended 30 June 2009
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
UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2009
Consolidated Statement of Comprehensive Income
for the six months ended 30 June 2009
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
30 Jun 30 Jun 31 Dec
2009 2008 2008
R`000 R`000 R`000
Revenue (1) 255 375 241 381 539 878
EBITDA 7 415 10 213 23 638
Depreciation (827) (995) (1 866)
Operating profit 6 588 9 218 21 772
Interest received 1 878 1 894 3 691
Interest paid (2 801) (2 374) (4 552)
Interest paid on borrowings (2 779) (2 226) (4 300)
IFRS 3 - Business
Combination charge (22) (148) (252)
Share of profits from
associate - 39 97
Profit before taxation 5 665 8 777 21 008
Taxation (878) (1 066) (3 154)
Profit for the period 4 787 7 711 17 854
Attributable to:
Equity shareholders of
the Company 4 787 7 711 17 507
Minority shareholders`
interest - - 347
Comprehensive income for the
period attributable to
equity holders 4 787 7 711 17 854
Reconciliation of
headline earnings
Net profit attributable
to shareholders 4 787 7 711 17 507
After-tax effect of profit
on sale of fixed assets (4) - 83
Headline earnings 4 783 7 711 17 590
Weighted average number of
shares (`000) 110 702 114 970 114 134
Diluted weighted average
number of shares (`000) 111 023 116 633 116 950
Earnings per share (cents) 4,32 6,71 15,34
Diluted earnings
per share (cents) 4,31 6,61 14,97
Headline earnings
per share (cents) 4,32 6,71 15,41
Diluted headline earnings
per share (cents) 4,31 6,61 15,04
(1) Revenue note: Excludes revenue of R22,3 million (June 2008: R22,8 million)
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.
Segmental Analysis
for the six months ended 30 June 2009
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
30 Jun 30 Jun 31 Dec
2009 2008 2008
R`000 R`000 R`000
Revenue
Human Capital Outsourcing 231 553 222 136 501 715
Human Capital Development 23 822 19 245 38 163
255 375 241 381 539 878
Operating profit/(loss)
Human Capital Outsourcing 7 245 14 391 27 758
Human Capital Development 4 180 1 580 2 710
Central Services (4 837) (6 753) (8 696)
6 588 9 218 21 772
Consolidated Condensed Statement of Cash Flows
for the six months ended 30 June 2009
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
30 Jun 30 Jun 31 Dec
2009 2008 2008
R`000 R`000 R`000
Cash flows from operating
activities 13 331 1 270 30
Cash flows from investing
activities (5 791) (2 678) (9 860)
Cash flows from financing
activities (99) (1 632) (1 531)
Net increase/(decrease) in
cash and cash equivalents 7 441 (3 040) (11 361)
Cash and cash equivalents at
beginning of period (18 952) (8 163) (7 591)
Cash and cash equivalents at
end of period (11 511) (11 203) (18 952)
Consolidated Statement of Financial Position
as at 30 June 2009
Unaudited Unaudited Audited
30 Jun 30 Jun 31 Dec
2009 2008 2008
R`000 R`000 R`000
Assets
Non-current assets 29 659 24 643 25 322
Equipment and vehicles 4 832 4 183 4 416
Goodwill 9 605 7 127 9 605
Intangible assets 659 576 676
Investments and loan
in associate 5 985 5 322 2 673
Long-term receivables 3 765 - 3 602
Deferred tax asset 4 813 7 435 4 350
Current assets 114 809 113 130 113 076
Inventories 600 1 085 863
Trade receivables 88 777 78 857 91 980
Other receivables 1 414 2 566 3 609
Taxation receivable - - 264
Cash and cash equivalents 24 018 30 622 16 360
Total assets 144 468 137 773 138 398
Equity and liabilities
Equity 70 004 60 810 68 093
Capital and reserves 69 596 60 749 67 685
Minority interest 408 61 408
Non-current liabilities 264 526 363
Current liabilities 74 200 76 437 69 942
Trade and other payables 37 281 32 689 33 954
Current portion of
financial liabilities 176 422 176
Taxation payable 714 1 595 -
Short-term vendor obligation 500 328 500
Bank borrowings 35 529 41 403 35 312
Total equity and
liabilities 144 468 137 773 138 398
Number of shares in issue at
end of period (`000) 109 192 113 784 110 809
Net asset value
per share (cents) 64 53 61
Consolidated Statement of Changes in Equity
for the six months ended 30 June 2009
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
30 Jun 30 Jun 31 Dec
2009 2008 2008
R`000 R`000 R`000
Balance at beginning of
the period 68 093 55 846 55 846
Share trust movement (706) (989) (2 988)
Minority shareholders`
interest - - 347
Share-based payment reserve 39 58 250
Net profit attributable to
shareholders 4 787 7 711 17 507
Dividend paid (2 209) (1 816) (2 869)
Balance at end of the period 70 004 60 810 68 093
COMMENTARY
Profile
Primeserv Group Limited is an investment holding company which focuses on
delivering human resources (HR) products, services and solutions. The two main
areas of specialisation are Human Capital Development and Human Capital
Outsourcing. The Group`s offering comprises HR consulting solutions and
services, corporate and vocational training programmes, technical skills
training centres, computer training colleges, as well as resourcing and flexible
staffing services, supported by wage bureaus and HR logistics outsourcing
operations. This comprehensive HR value chain can be applied through Primeserv`s
IntHRgrate Model in its entirety or in modular form.
Overview
Impacted by the global economic slowdown, there was a significant contraction in
GDP attributable to the mining, agriculture, manufacturing and services sectors
of the national economy during the review period. Overall consumer confidence
remains low, despite aggressive interest rate cuts by the South African Reserve
Bank, and inflation continues to exceed its mandated targets. Continual high
levels of industrial action across various sectors further aggravated the
slowdown in the economy, and impacted negatively on business confidence. In the
light of these conditions, businesses have adopted a conservative and inward
focused strategy resulting in the postponement and shelving of capital projects,
cutting of budgets in regard to discretionary expenditure such as training, new
employment and non-essential maintenance. These factors, coupled with lower
consumer spending and the resultant shrinking of the retail sector, have
impacted negatively on the business of the Group.
Against this background, when compared to the comparable six-month period, ended
30 June 2008, Group EBITDA has fallen by 27% from R10,2 million to R7,4 million
with operating profit down by 28% from R9,2 million to R6,6 million. Profit
after tax showed a decline of 38% from R7,7 million to R4,8 million resulting in
headline earnings per share of 4,32 cents per share compared to 6,71 cents per
share for the comparable period. Counter to the above trend and primarily due to
the acquisition of the lower-margin Denverdraft business, consolidated Group
revenue has increased by 5,8% from R241,4 million to R255,4 million.
The balance sheet has continued to strengthen, particularly as a result of
improved working capital management. Cash flows from operating activities
improved from R1,3 million in the prior comparable period to R13,3 million
during the current review period. The overall cash position after cash flows
from investing and financing activities has improved by R10,5 million from an
outflow of R3,0 million to an inflow of R7,4 million. The Group closed the
period with cash resources of R24 million on hand. Net asset value has improved
by 20% from 53 cents per share to 64 cents per share.
The Outsourcing division delivered an operating profit of R7,2 million for the
review period. The logistics, warehousing, construction and industrial flexible
staffing units experienced difficult trading conditions. Delays and
cancellations in certain civil, municipal infrastructure and industrial capital
projects also impacted the division`s performance. The "white collar"
professional draughting and engineering units have been particularly challenged
by curtailed projects in the mining, engineering and petrochemical industries.
The division`s mega-project wage bureaus delivered a solid performance during
the review period due to involvement in large scale ongoing infrastructure
projects.
The Human Capital Development segment, comprising the HR Solutions division`s HR
Consulting and Technical Training units and the Computer Training Colleges
division, improved its period-on-period performance, with operating profit
increasing by 165% from R1,6 million to R4,2 million.
The HR Consulting unit maintained its growth trend and the Technical Training
unit, a specialist provider of skills programmes that are in short-supply
nationally, continued to improve its performance, although somewhat less than
anticipated due to budgetary constraints at major industrial clients.
The Computer Training Colleges division showed an increase in learners
registered compared with the prior year and delivered a strongly improved
performance.
The Group remains focused on client retention, improving working capital
management and cost containment. Measures have been taken to ensure that
overhead structures are managed to match current and anticipated operational
requirements.
Directorate
The Group has appointed Mr Raphael Sack as Financial Director to the Board with
effect from 1 July 2009.
B-BBEE
Primeserv has maintained its Level 3 B-BBEE value added supplier rating. The
Group improved its empowerment rating from number 55 to number 12 in the
authoritative Financial Mail/Empowerdex 2009 survey. Ongoing commitment to
further transformation remains a Group imperative.
Post-balance sheet events
Management is not aware of any material events which occurred subsequent to the
period ended 30 June 2009. There has been no material change in the Group`s
contingent liabilities since the period-end.
Prospects
The Outsourcing division`s exposure to the industrial and mining sectors, given
the adverse economic environment together with the financial pressures on
learners registered with the Colleges division and budgetary constraints
affecting major clients in regard to discretionary consulting and training
expenditure, indicate that difficult trading conditions are expected to continue
for at least the next twelve to eighteen months. The Group is well positioned to
benefit from improved trading conditions when they occur. Given its strong
balance sheet, the Group will continue to seek further acquisitions.
Accounting policies
The results for the six months ended 30 June 2009 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.
On behalf of the Board
JM Judin M Abel 14 August 2009
Non-Executive Chairman Chief Executive Officer Bryanston
Dividend declaration
Notice is hereby given that Primeserv has declared an interim dividend (dividend
declaration number 9) for the six months ended 30 June 2009 of 0,5 cents per
ordinary share.
The salient dates applicable to the interim dividend are as follows:
Last day to trade "CUM" dividend Friday, 9 October 2009
First day to trade "EX" dividend Monday, 12 October 2009
Record date Friday, 16 October 2009
Payment date Monday, 19 October 2009
No share certificates may be dematerialised or rematerialised between Monday, 12
October 2009 and Friday, 16 October 2009, both days inclusive.
Directors: JM Judin (Chairman)*, M Abel (Chief Executive Officer), Prof S Klein*
(American), LM Maisela*, AT McMillan (British), DL Rose*, R Sack (Financial
Director), 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
(PostNet Suite 200, Private Bag X30500, Houghton, 2041)
Sponsor: Deloitte & Touche Sponsor Services (Pty) Limited, The Woodlands,
Woodlands Drive, Woodmead, 2196
(Private Bag X6, Gallo Manor, 2052)
Date: 14/08/2009 16:28:56 Produced by the JSE SENS Department.
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