| Wed 28 Aug 2002, 0:00 | | Primeserv Group Limited - Reviewed Results For The |
|
Primeserv Group Limited - Reviewed results for the year ended 30 June 2002
Primeserv Group Limited
(Previously Privest Group Limited)
("Primeserv" or "the Group")
Incorporated in the Republic of South Africa
(Registration number 1997/013448/06)
Reviewed results for the year ended 30 June 2002
SALIENT FEATURES
- Attributable income up 89%
- Headline earnings per share up 24%
- Cash flow of 7,2 cents per share
INCOME STATEMENT
Annualised
Reviewed pro forma Audited
12 months 12 months 16 months
ended ended ended
30 June 30 June 30 June
2002 2001 % 2001
R`000 R`000 change R`000
Revenue 532 924 585 565 (9,0) 780 753
Operating profit 18 764 22 611 (17,0) 30 148
Exceptional items 869 2 823 3 764
Restructuring charges 5 748 7 664
Depreciation 4 111 4 904 (16,2) 6 539
Net income before interest 13 784 9 136 50,9 12 181
Net interest paid 5 936 4 343 36,7 5 790
Net income before taxation 7 848 4 793 63,7 6 391
SA normal taxation 2 137 1 777 20,3 2 370
Net income attributable
to shareholders 5 711 3 016 89,4 4 021
Reconciliation of headline
earnings
Net income attributable
to shareholders 5 711 3 016 89,4 4 021
After tax effect of
pre-acquisition
costs 656
After tax effect of
loss on sale of
fixed assets 23 (18)
Goodwill amortisation 132
After tax effect of
uncollected debts 690 920
Revaluation of share
incentive scheme 1 837 2 449
Headline earnings 6 522 5 525 18,0 7 390
Weighted average number
of shares in issue (`000) 138 289 144 713 144 713
Earnings per share (cents) 4,13 2,08 98,6 2,78
Headline earnings per
share (cents) 4,72 3,82 23,6 5,11
SEGMENTAL ANALYSIS
Annualised
Reviewed pro forma Audited
12 months 12 months 16 months
ended ended ended
30 June 30 June 30 June
2002 2001 2001
R`000 R`000 R`000
Revenue
Corporate and organisational
services 49 980 50 668 67 557
Staffing services 482 944 534 897 713 196
532 924 585 565 780 753
Net income before taxation
Corporate and organisational
services 212 1 445 1 927
Staffing services 7 636 3 348 4 464
7 848 4 793 6 391
ABRIDGED CASH FLOW STATEMENT
Reviewed Audited
12 months 16 months
ended ended
30 June 30 June
2002 2001
R`000 R`000
Operating activities 14 669 17 066
Investing activities (4 049) (44 962)
Financing activities (702) (356)
Net increase/(decrease) in cash
at bank and borrowings 9 918 (28 252)
Cash obtained from businesses
and subsidiaries acquired 206
Cash at bank and borrowings at
beginning of the year (34 673) (6 627)
Cash at bank and borrowings at end
of the year (24 755) (34 673)
Weighted average number of shares (000) 138 289 144 713
Cash flow per share (cents) 7,17 (19,52)
BALANCE SHEET
Reviewed Audited
30 June 30 June
2002 2001
R`000 R`000
Assets
Non-current assets 45 338 47 536
Equipment and vehicles 6 431 10 217
Intangibles 1 278
Proceeds due from disposal of business 2 411
Deferred tax asset 33 762 35 873
Share incentive scheme 1 456 1 446
Current assets 100 200 100 396
Inventories 437 386
Trade and other receivables 92 790 93 557
Taxation 171 192
Cash at bank 6 802 6 261
Total assets 145 538 147 932
Equity and liabilities
Capital and reserves 79 214 75 132
Non-current liabilities 1 421 1 934
Current liabilities 64 903 70 866
Trade and other payables 33 045 29 442
Short-term borrowings 301 490
Bank borrowings 31 557 40 934
Total equity and liabilities 145 538 147 932
Number of shares in issue at year-end (`000) 130 523 140 610
Net asset value per share (cents) 61 53
STATEMENT OF CHANGES IN EQUITY
Reviewed Audited
12 months 16 months
ended to
30 June 30 June
2001 2001
R`000 R`000
Balance at beginning of year - as
previously shown 75 132 115 455
Prior year adjustment 13 686
Balance at beginning of year - restated 75 132 129 141
Net shares issued/(reversed) during the period (174)
Net share premium issued/(reversed)
during the year (52 399)
Intangible asset and share issue
expenses written off (58)
Repurchase of securities (1 629) (5 399)
Net income for the year 5 711 4 021
Balance at end of the year 79 214 75 132
COMMENTS
INTRODUCTION
As of 1 July 2002, Privest Group Limited changed its name to Primeserv Group
Limited ("Primeserv" or "the Group"). The new name has evolved to reflect the
Group`s strategic direction and to demonstrate Primeserv`s commitment to
delivering leading edge, brand driven, integrated human resources services to
industry through its Solutions, Training, Recruitment and Outsourcing divisions.
FINANCIAL REVIEW
The results for the year under review are compared to the pro forma annualised
results for the sixteen months ended 30 June 2001. In line with the Group`s
strategy of streamlining revenue in the Outsourcing division to improve margins,
sales were actively reduced in the second half of the year, consequently Group
revenue decreased by 9% from the pro forma R585,6 million to R532,9 million. Net
profit before taxation increased by 64% to R7,8 million and net income
attributable to shareholders improved by 89% to R5,7 million, despite higher
interest charges. The repurchase of securities resulted in the weighted average
number of shares in issue decreasing to 138,3 million and the total number of
shares outstanding at the year-end decreasing to 130,5 million. Headline
earnings per share increased by 24% to 4,72 cents. Cash flow for the year
improved strongly from a negative R28,3 million to a positive R9,9 million with
cash flow per share of 7,2 cents. The Group`s net asset value per share
increased by 15% to 61 cents.
OPERATIONAL REVIEW
Primeserv is being strategically positioned into two client centric categories
that focus on delivering a complete human resources service:
- Corporate and organisational services - operationally driven by the Group`s
Solutions and Training divisions; and
- Staffing services - operated through the Recruitment and Outsourcing
divisions.
These two categories have been used to present segmental performance.
CORPORATE AND ORGANISATIONAL SERVICES
The Solutions division felt the impact of severely depressed sales due to
changes in management and difficult market conditions. This translated into a
reversal of performance over the previous year, resulting in a loss by the
division, thereby impacting negatively on the Group`s operating margin.
Corrective measures have been affected in this strategically valuable division.
The Training division increased sales despite the continuing tough economic
conditions and the slow start-up of signed contracts. Income increased over the
previous period through a return to profitability of the technical and
vocational training operations. The corporate training operations remained weak.
Investment in the development of new products, services and personnel remained
high and the division is positioned for a better performance in the year ahead.
STAFFING SERVICES
The Recruitment division experienced a poor second half as a consequence of a
decline in the permanent recruitment industry, particularly within the
division`s niche markets. This is expected to continue in the year ahead,
however, management is working toward new markets to contra these conditions.
The Outsourcing division pursued its strategic decision to streamline sales and
target better margin business with improved working capital cycles. This,
combined with the extensive reengineering of the division during the previous 18
months, impacted positively on the division`s profitability. During the latter
half of the year the division disposed of a significant portion of the business
operations of Joblock Outsourcing. The losses incurred in Mozambique have been
brought under control. The actions undertaken during the past year should result
in a stronger divisional performance in the coming year.
EMPOWERMENT
Primeserv is committed to affirmative action and Black Economic Empowerment
goals and meaningful progress has been achieved, particularly by the Group`s
empowerment partnerships, Bathusi and Empvest.
CORPORATE GOVERNANCE
Primeserv intends, where applicable, to meet the recommendations of the King II
Report. A committee supported by external advisors has been appointed to review
the structure of the Board and the Group`s compliance to King II.
ACCOUNTING POLICIES
The accounting policies as set out in the Group`s previous annual report have
been consistently applied throughout the year under review. These policies are
in accordance with South African Statements of Generally Accepted Accounting
Practice.
REVIEW BY INDEPENDENT AUDITORS
The results have been reviewed by the Group`s auditors. Their unqualified review
report is available for inspection at the company`s registered office.
DIVIDEND
In line with the Group`s policy to use cash resources to reduce gearing and meet
additional growth opportunities, no dividend has been declared.
OUTLOOK
Primeserv is positive about its future, especially as the trend towards the
outsourcing of human resource services accelerates within southern Africa. The
Group remains focused on enhancing its balance sheet through risk and working
capital management and margin improvement. Further investment will be made in
the Primeserv brand, systems and the human capital and entrepreneurial flair
required to drive the sustainable business model.
For and on behalf of the board
M Abel
Executive chairman
PL Gray
Chief operating officer
JA Sparke
Chief financial officer
Johannesburg
28 August 2002
DIRECTORS
M Abel (Executive chairman), PL Gray (Chief operating officer), JM Judin*,
Professor S Klein* (American), G Magomola*, S Meltzer*, CS Seabrooke*, JA Sparke
(Chief financial officer) (*non-executive)
Registered address
Venture House, Peter Place Park, 54 Peter Place, Bryanston 2021, (PO Box 3008,
Saxonwold 2132)
Transfer secretaries
Computershare Investor Services Limited, Edura House, 41 Fox Street,
Johannesburg 2001. (PO Box 62391, Marshalltown 2107)
e-mail: productivity@primeserv.co.za
Share code: PMV
ISIN number: ZAE000039277
www.primeserv.co.za
Date: 28/08/2002 05:40:30 PM Produced by the JSE SENS Department
