| Tue 29 Nov 2011, 17:11 | | PMV - Primeserv Group Limited - Unaudited Results for the six months ended 30 |
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PMV
PMV
PMV - Primeserv Group Limited - Unaudited Results for the six months ended 30
September 2011
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
UNAUDITED RESULTS for the six months ended 30 September 2011
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the 6 months ended 30 September 2011
Unaudited Unaudited Audited
6 months 6 months 15 months
ended ended ended
30 Sept 30 Jun 31 Mar
2011 2010 2011
R`000 R`000 R`000
Revenue 307 357 256 211 665 281
Cost of sales (249 513) (209 538) (542 947)
Gross profit 57 844 46 673 122 334
EBITDA 8 350 6 472 12 937
Depreciation (1 344) (909) (2 572)
Operating profit 7 006 5 563 10 365
Interest received 2 990 2 516 4 720
Interest paid (2 687) (2 474) (4 756)
Share of loss from associate (847) (169) (202)
Profit before taxation 6 462 5 436 10 127
Taxation (1 353) (1 647) (1 659)
Total comprehensive income
for the period 5 109 3 789 8 468
Total comprehensive income attributable to:
Ordinary shareholders of
the Company 5 271 3 765 9 281
Non-controlling shareholders`
interest (162) 24 (813)
Total comprehensive income 5 109 3 789 8 468
Reconciliation of headline earnings
Net profit attributable to
shareholders 5 271 3 765 9 281
Headline earnings 5 271 3 765 9 281
Weighted average number of
shares (`000) 95 037 105 163 102 174
Diluted weighted average
number of shares (`000) 96 046 105 163 103 166
Earnings per share (cents) 5,55 3,58 9,08
Diluted earnings per
share (cents) 5,49 3,58 9,00
Headline earnings per
share (cents) 5,55 3,58 9,08
Diluted headline earnings
per share (cents) 5,49 3,58 9,00
Dividend paid per share (cents) 2,50 2,50 3,00
SEGMENTAL ANALYSIS
for the 6 months ended 30 September 2011
Unaudited Unaudited Audited
6 months 6 months 15 months
ended ended ended
30 Sept 30 Jun 31 Mar
2011 2010 2011
R`000 R`000 R`000
Revenue from external customers
Human Capital Outsourcing 275 667 234 446 606 007
Human Capital Development 31 690 21 765 59 274
Total 307 357 256 211 665 281
Business segment results
Human Capital Outsourcing 8 901 8 572 18 084
Human Capital Development 1 397 1 393 (2 766)
Central Services (3 292) (4 402) (4 953)
Operating profit 7 006 5 563 10 365
Interest received 2 990 2 516 4 720
Interest paid (2 687) (2 474) (4 756)
Share of loss from associate (847) (169) (202)
Profit before taxation 6 462 5 436 10 127
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 30 September 2011
Unaudited Unaudited Audited
30 Sep 30 Jun 31 Mar
2011 2010 2011
R`000 R`000 R`000
Assets
Non-current assets 36 909 32 841 28 171
Property, equipment and vehicles 9 998 4 823 6 072
Goodwill 12 012 12 312 12 012
Intangible assets 1 348 626 601
Long-term receivables 1 214 4 927 1 214
Investment and loan in associate 5 704 5 639 2 874
Deferred tax asset 6 633 4 514 5 398
Current assets 109 826 103 674 97 655
Inventories 1 497 1 172 1 017
Trade receivables 82 352 71 264 64 922
Other receivables 3 596 2 661 6 466
Cash and cash equivalents 22 381 28 577 25 250
Assets held for sale 3 257 - -
Total assets 149 992 136 515 125 826
Equity and liabilities
Capital and reserves 79 519 74 329 78 056
Equity attributable to equity
holders of the Company 79 749 73 560 78 124
Non-controlling interest (230) 769 (68)
Non-current liabilities 4 066 564 632
Financial liabilities 4 066 564 632
Current liabilities 66 407 61 622 47 138
Trade and other payables 26 479 30 472 17 914
Current portion of financial
liabilities 101 132 116
Taxation payable 2 139 1 358 1 702
Short-term vendor obligation 903 1 639 851
Bank borrowings 36 785 28 021 26 555
Total equity and liabilities 149 992 136 515 125 826
Number of shares in issue at
end of period (`000) (net of
treasury and share trust
shares) 92 152 102 773 95 231
Net asset value per share (cents) 86 72 82
CONSOLIDATED CONDENSED STATEMENT OF CHANGES IN EQUITY
for the 6 months ended 30 September 2011
Unaudited Unaudited Audited
6 months 6 months 15 months
ended ended ended
30 Sept 30 Jun 31 Mar
2011 2010 2011
R`000 R`000 R`000
Balance at beginning of
the period 78 056 74 722 74 722
Attributable earnings for
the period 5 271 3 765 9 281
Dividends paid (2 381) (2 757) (2 596)
Share repurchases (1 276) (1 429) (2 652)
Share-based payment reserve 11 4 114
Non-controlling shareholders`
interest (162) 24 (813)
Balance at end of the period 79 519 74 329 78 056
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
for the 6 months ended 30 September 2011
Unaudited Unaudited Audited
6 months 6 months 15 months
ended ended ended
30 Sept 30 Jun 31 Mar
2011 2010 2011
R`000 R`000 R`000
Cash flows from operating
activities 57 14 229 10 300
Cash flows from investing
activities (10 759) (11 113) (7 029)
Cash flows from financing
activities (16) 1 969 (208)
Returned to shareholders
- dividends paid (2 381) (2 757) (2 596)
Net (decrease)/increase in
cash and cash equivalents (13 099) 2 328 467
Cash and cash equivalents
at beginning of period (1 305) (1 772) (1 772)
Cash and cash equivalents at
end of period (14 404) 556 (1 305)
COMMENTARY
PROFILE
Primeserv Group Limited is an investment holding company focusing 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 divisions provide a comprehensive HR value chain that can be applied
through Primeserv`s IntHRgrateTrade Mark Model in its entirety or in modular
form. These divisions encompass an extensive range of HR consulting solutions
and services, corporate and vocational training programmes, technical skills
training centres, computer and business training colleges, as well as resourcing
and flexible staffing services, supported by wage bureaus and HR
logistics outsourcing operations.
OPERATING ENVIRONMENT
The economic environment for the six months to 30 September 2011 remained
constrained in the face of international concerns regarding the European debt
crisis and the concomitant sluggishness of the South African economy resulting
in lacklustre demand locally, which have both affected business and consumer
confidence. The reticence of business to engage in capital projects or to
undertake budgeted training, given the economic uncertainty, along with subdued
consumer demand have, together, fostered difficult operating conditions.
OVERVIEW OF RESULTS
The Group`s year-end was changed during the last financial year from the end of
December to the end of March, therefore these results are not matching the same
review periods and accordingly various comparisons with the prior reporting
period are not detailed in the commentary below. Sales revenue for the 6 months
to September 2011 was R307,4 million which realised a gross profit of R57,8
million at slightly better margins than was reported at the end of March 2011.
Both EBITDA and operating profit are indicative of improvements in expense
management across the Group. The interest received amount includes a
reallocation of revenue from the sales line in accordance with accounting rules
relating to payment terms extended to credit customers. The net interest value
is positive at R0,3 million. The share of loss from the Group`s associate
company, Bathusi Staffing Services (Pty) Limited, due to the loss of a major
contract, hampered the results and remedial action to restore this business to
profitability has been taken. The Group`s effective tax rate has benefited from
allowances granted for learnership training.
Total comprehensive income attributable to shareholders of the Group was R5,3
million. Earnings per share and headline earnings per share increased by 55%
from 3,58 cents per share recorded for the 6 months ended 30 June 2010 to 5,55
cents per share. Diluted earnings per share and diluted headline earnings per
share improved by 53% from 3,58 cents per share to 5,49 cents per share.
Cash flows from operating activities have shown a decrease from those reported
at year-end. This is attributable to relatively high sales in September with an
associated increase in cash invested in debtors, as well as to increased
expenditure on infrastructure, share repurchases and a dividend payment.
The Group`s balance sheet remains strong and includes the acquisition of an
investment property. Bank borrowings at the end of the period increased in line
with strong September sales. The net asset value per share has increased by 5%
from 82 cents per share at the end of the last financial year to 86 cents per
share at the end of September 2011.
HUMAN CAPITAL OUTSOURCING
The division`s revenue was R275,7 million for the review period with an
operating profit of R8,9 million. Trading in the "white collar" professional
draughting and engineering unit as well as in the division`s mega-project wage
bureaus remained under pressure. This is largely due to a relative lack of large
scale infrastructure projects which underpin the success of these units. The
"blue collar" flexible staffing units involved in logistics, warehousing and
distribution delivered a marginally improved set of results, whilst staffing
supply to the construction industry continued to be affected by reduced manpower
demand. Initiatives have been undertaken in partnership with specialised service
providers to provide additional value-added product offerings to the Group`s
clients and personnel.
Recent pronouncements by government have lent some important credence to the
view that the optimal resolution to the debate relating to the future of the
temporary services industry will involve regulation rather than outright
banning.
HUMAN CAPITAL DEVELOPMENT
The segment recorded revenue of R31,7 million which is an encouraging
improvement after some difficult times over the last few years. The computer
training and business colleges unit had far better learner registrations than
was the case at the same time last year. Continued uncertainty regarding the
financial state of the SETAs has meant that businesses have withheld the
training expenditure on which the technical training unit depends for its own
business. The unit has undertaken an increased number of learnership training
projects which unlock value not only for the Group, but also bring skills
development benefits to clients and importantly to the individuals being
trained. The HR Consulting unit performed satisfactorily during the review
period.
GROUP STRATEGY AND OUTLOOK
The Group strategy is that of an investment holding company in the services
industry, and whilst it focuses on organically and acquisitively growing its
existing staffing, skills development and HR consulting operations so as to
broaden its service and product offerings, it is also actively seeking to
diversify its revenue streams through a series of corporate activities. This
strategy is aimed at enhancing the sustainability of the Group. Volume growth
within existing operations and the continual review of operating expenditure to
obtain optimal efficiencies remains a Group imperative. The Group has also
invested in a number of new programmes, particularly in the sphere of business
process outsourcing, as well as having developed new resources that will deliver
added value to clients and staff. An extensive and revitalised investment in
marketing and sales is also being implemented. All of these, taken together, are
intended to deliver improved top-line growth and increased profitability across
all sectors of the Group. Nevertheless, economic uncertainty, and the reluctance
by many businesses to expand their own operations, render the Group`s own view
of its performance for the full year as being cautiously optimistic. This
general forecast has not been reviewed nor reported on by the Company`s
auditors.
B-BBEE/TRANSFORMATION
The Group remains strongly committed to ongoing transformation. As part of this
commitment the Group has resolved to effect changes to the Board composition as
well as within the underlying operating entities, certain of which are already
in the process of being implemented.
CORPORATE GOVERNANCE
The Board and the individual directors are committed to the values of integrity,
transparency, responsibility and accountability in enforcing the highest
standards of corporate governance. The Group`s first integrated annual report
was published in respect of the 15-month period ended 31 March 2011 and details
various initiatives and statistics relating to the governance of the Group.
EVENTS AFTER THE REPORTING DATE
Management is not aware of any material events which have occurred subsequent to
the end of September 2011. There has been no material change in the Group`s
contingent liabilities since the period-end.
ACCOUNTING POLICIES
The results for the six months have been prepared in accordance with the Group`s
accounting policies which are consistent with the period ended 31 March 2011 and
these comply with International Financial Reporting Standards and the AC 500
standards, as issued by the Accounting Practices Board. This report has been
prepared in accordance with IAS 34 - Interim Financial Reporting, the South
African Companies Act and the JSE Limited Listings Requirements. The interim
financial statements have been prepared by the Group Financial Director, Mr R
Sack.
DIVIDEND DECLARATION
Notice is hereby given that Primeserv has declared an interim dividend (dividend
declaration number 13) for the 6 months ended 30 September 2011 of 0,50 cents
per share, 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" dividend Friday, 6 January 2012
First day to trade "EX" dividend Monday, 9 January 2012
Record date Friday, 13 January 2012
Payment date Monday, 16 January 2012
No share certificates may be dematerialised or rematerialised between Monday, 9
January 2012 and Friday, 13 January 2012, both days inclusive.
On behalf of the Board
JM Judin M Abel
Independent Non-Executive Chairman Chief Executive Officer
R Sack
Financial Director
29 November 2011
Bryanston
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*,
CS Shiceka#
# Independent Non-Executive
* 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: Charles Orbach & Company, Third Floor, 3 Melrose Boulevard, Melrose
Arch, 2076
(PO Box 355, Melrose Arch, 2076)
Sponsor: Deloitte & Touche Sponsor Services (Pty) Limited, The Woodlands,
Woodlands Drive, Woodmead, 2196
(Private Bag X6, Gallo Manor, 2052)
Date: 29/11/2011 17:11:13 Produced by the JSE SENS Department.
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