| Wed 23 Mar 2005, 17:28 | | Primeserv - Unaudited interim results for the six |
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Primeserv - Unaudited interim results for the six months ended 31 December 2004
Primeserv Group Limited
(`Primeserv` or `the Group`)
Incorporated in the Republic of South Africa
(Registration number 1997/013448/06)
Share code: PMV ISIN: ZAE000039277
Unaudited interim results for the six months ended 31 December 2004
Income statement
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31-Dec-04 31-Dec-03 30-Jun-04
R`000 R`000 R`000
Revenue 208 362 209 879 397 244
EBITDA before exceptional debt (1 181) 5 068 5 448
provisions and forex losses
Loss on forex 40 510 739
Depreciation 792 1 332 2 226
Goodwill amortisation 41 41 81
Exceptional debt provisions - - 5 875
Operating (loss)/profit (2 054) 3 185 (3 473)
Interest received 339 1 437 3 240
Interest paid (751) (1 389) (2 915)
Net (loss)/profit before other (2 466) 3 233 (3 148)
exceptional items
Other exceptional items - - 6 800
Net (loss)/profit before taxation (2 466) 3 233 (9 948)
Taxation 927 982 (1 410)
Net (loss)/profit after taxation (3 393) 2 251 (8 538)
Outside shareholders` interest 201 29 2
Net (loss)/profit attributable to (3 594) 2 222 (8 540)
shareholders
Reconciliation of headline
(loss)/earnings
Net (loss)/profit attributable to (3 594) 2 222 (8 540)
shareholders
After tax effect of profit on sale (21) (25) (98)
of fixed assets
Goodwill amortisation 41 41 81
Headline (loss)/earnings (3 574) 2 238 (8 557)
Weighted average number of shares 116 691 117 921 117 123
(`000)
Diluted weighted average number of 118 312 120 206 118 744
shares (`000)
(Loss)/earnings per share (cents) (3,08) 1,88 (7,29)
Diluted (loss)/earnings per share (3,04) 1,85 (7,19)
(cents)
Headline (loss/)earnings per share (3,06) 1,90 (7,31)
(cents)
Segmental analysis
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31-Dec-04 31-Dec-03 30-Jun-04
R`000 R`000 R`000
Revenue
Outsourcing 188 743 182 004 345 069
Computer colleges 9 271 8 981 19 557
HR Solutions 10 348 18 894 32 618
208 362 209 879 397 244
Operating profit/(loss) before
exceptional debt provisions
Outsourcing 5 097 6 162 12 529
Computer colleges 754 592 2 755
HR Solutions (6 013) (1 758) (9 955)
Central services (1 892) (1 811) (2 927)
(2 054) 3 185 2 402
Operating profit/(loss)
Outsourcing 5 097 6 162 6 654
Computer colleges 754 592 2 755
HR Solutions (6 013) (1 758) (9 955)
Central services (1 892) (1 811) (2 927)
(2 054) 3 185 (3 473)
Balance Sheet
Unaudited Unaudited Audited
31-Dec-04 31-Dec-03 30-Jun-04
R`000 R`000 R`000
ASSETS
Non-current assets 13 214 15 946 14 636
Equipment and vehicles 2 815 3 844 3 297
Intangibles 535 616 576
Long-term receivables 1 463 4 904 1 662
Deferred tax asset 8 401 6 582 9 101
Current assets 68 321 69 122 60 369
Inventories 744 666 619
Trade receivables 52 747 50 691 47 502
Other receivables 3 496 10 378 3 196
Cash at bank 11 334 7 387 9 052
Total assets 81 535 85 068 75 005
EQUITY AND LIABILITIES
Capital and reserves 32 660 48 014 36 627
Minority interest 207 34 4
Non-current liabilities 556 1 396 1 300
Current liabilities 48 112 35 624 37 074
Trade and other payables 27 446 20 211 26 334
Short-term interest bearing 185 200 205
borrowings
Taxation 460 520 495
Bank borrowings 20 021 14 693 10 040
Total equity and liabilities 81 535 85 068 75 005
Number of shares in issue at end 114 841 116 341 116 691
of period (`000)
Net asset value per share (cents) 29 41 31
Statement of changes in equity
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31-Dec-04 31-Dec-03 30-Jun-04
R`000 R`000 R`000
Balance at beginning of the period 36 627 47 232 47 232
- as previously stated
Adjustment for change in accounting - (739) (739)
of share trust
Balance at beginning of the period 36 627 46 493 46 493
- restated
Repurchase of securities (373) (717) (787)
Issue of shares from share trust - 16 43
Dividend paid - - (582)
Net (loss)/profit for the period (3 594) 2 222 (8 540)
Balance at the end of the period 32 660 48 014 36 627
Cash Flow Statement
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31-Dec-04 31-Dec-03 30-Jun-04
R`000 R`000 R`000
Operating activities (7 038) 841 6 606
Investing activities (443) (1 042) (431)
Financing activities (198) 121 58
Net (decrease)/increase in cash at (7 679) (80) 6 233
bank and borrowings
Borrowings net of cash at bank at (1 193) (7 426) (7 426)
beginning of the period
Borrowings net of cash at bank at (8 872) (7 506) (1 193)
end of the period
COMMENTARY
Profile
Primeserv is a holding company with specialised subsidiary operations that meet
the human resources (HR) needs of the South African corporate, industrial and
government sectors.
Operational review
Primeserv`s core business unit, the Outsourcing Division, continues to generate
sound profits and cashflows. Its logistics and industrial services units
achieved satisfactory growth, with a strong performance in the Gauteng region.
The white collar, petro-chemicals, engineering and construction units remained
static. The Division`s main strategy is to grow revenue nationally whilst
continuing to improve margins and operating cash flows. To this end the Group
is increasing its investment in human capital and IT systems.
The Computer Colleges Division continued to show organic growth. With the
expected higher student intakes in the second half, a good performance for the
full year is anticipated. Capital investment is planned for the upgrading of
existing colleges and the opening of new ones.
The HR Solutions Division comprising the Technical and Corporate Training units
and the HR consulting operation, continued to experience difficulties with weak
sales, high fixed expenses, and down-sizing costs. The Division is being
restructured where possible with the profitable components being retained and
other closed. The Division`s poor performance is expected to continue into the
second half of the financial year.
The Group is also continuing to utilise the intellectual capital and
capabilities within the HR Solutions Division via a series of BEE joint
ventures.
Financial review
As a result of the losses in the HR Solutions Division, the Group produced poor
results for the six months to 31 December 2004. Overall, a headline loss of
3,06 cents per share was recorded for the period under review. Whilst the Group
as a whole incurred an operating loss of R2 million, the Outsourcing and
Colleges Divisions produced a R5,9 million operating profit. The higher
operating profit of the Outsourcing Division in the previous comparative period
was attributable to the positive impact of AC133 adjustments.
Group cash flow was affected by the losses in the HR Solutions Division, as well
as a less favourable December period end for the collection of trade
receivables. Specifically, the nett borrowing position of the Group at the
December period end was negatively affected by the late payment (of some 4 days)
of R7,1 million of trade receivables.
The interest received relative to the previous comparative period has reduced
substantially due to the negligible effect of AC133 adjustments for the current
period. The Group`s interest paid declined as a result of improved working
capital management and the early settlement of a long term loan and its interest
recoupment.
The Group is actively engaged with the South African Revenue Services in seeking
a resolution to the PAYE dispute previously reported.
Accounting policies
Results for the period have been prepared in accordance with South African
Statements of Generally Accepted Accounting Practice applicable to interim
financial reporting and are consistent with those used in the Financial
Statements for the year ended 30 June 2004.
Dividend
It is the Group`s policy to consider an annual dividend after the year-end
relative to the financial year`s results.
Post balance sheet event
The sale of the business of the Secunda Branch of Primeserv ABC Recruitment
(Pty) Ltd and its related assets and liabilities to Bathusi Staffing Services
(Pty) Ltd, a Black owned company in which Primeserv holds a significant minority
interest, was unanimously approved by Primeserv shareholders at the general
meeting of the Company on 28 January 2005. As this was the final condition
which needed to be met in terms of the sale agreement, and occurred after 31
December 2004, the accounting for this BEE transaction will take place in the
second half of the financial year in terms of AC140, Business Combinations.
Changes in directorate and company secretary
AT McMillan and NN Rodrigues (CFO) were appointed Executive Directors effective
30 September 2004. C Nkosi was appointed Non-Executive Director on 30 September
2004 and DL Rose was appointed independent Non-Executive Director on 24 February
2005. CS Seabrooke did not offer himself for re-election at the AGM held on 28
January 2005. The Group extends its thanks to Mr Seabrooke for his valuable
contribution as a Non-Executive Director over the past 5 years.
NN Rodrigues was appointed Company Secretary on 30 September 2004.
Prospects
The Group anticipates an improved performance in the second half of the
financial year.
For and on behalf of the board
JM Judin M Abel
Chairman Chief Executive Officer
Bryanston
23 March 2005
Directors: JM Judin (Chairman)*, M Abel (CEO), Professor S Klein* (American), AT
McMillan, C Nkosi*, NN Rodrigues (CFO), DL Rose*, DC Seaton* (*non-executive)
Company secretary: NN Rodrigues
Registered address:
Venture House, Peter Place Park, 54 Peter Place, Bryanston 2021
(PO Box 3008, Saxonwold 2132)
Transfer secretaries: Computershare Investor Services 2004 (Pty) Ltd, 70
Marshall Street, Marshalltown, Johannesburg 2001, (PO Box 61051, Marshalltown
2107)
Sponsor: Deloitte & Touche Sponsor Services (Pty) Limited
e-mail: productivity@primeserv.co.za
www.primeserv.co.za
Date: 23/03/2005 05:09:22 PM
Produced by the JSE SENS Department
