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Unaudited Interim results
M&S HOLDINGS LIMITED
(Registration number 2006/011359/06)
JSE code: MSA ISIN: ZAE000165446
UNAUDITED CONDENSED CONSOLIDATED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2012
CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME
6 months ended 31 December Year ended
R'000 2012 2011 30 June
Re-presented 2012
Unaudited Unaudited Audited
Revenue 220 905 165 205 340 629
Cost of sales (190 611) (138 967) (287 578)
Gross profit 30 294 26 238 53 051
Net operating expenses (12 118) (10 633) (22 125)
Operating profit before impairments 18 176 15 605 30 926
Impairment of Investments in joint ventures - - (644)
Impairment of Loans to joint ventures - - (1 206)
Operating profit 18 176 15 605 29 076
Interest received - 650 759
Interest paid (999) (718) (2 801)
Profit before taxation 17 177 15 537 27 034
Taxation (5 210) (4 344) (9 488)
Profit attributable to the equity holders of the parent 11 967 11 193 17 546
Other comprehensive income - - -
Comprehensive income attributable to the equity
holders of the parent from continuing operations 11 967 11 193 17 546
Comprehensive loss attributable to the equity holders
of the parent from discontinued operations - (98 386) (110 906)
Total comprehensive income / (loss) attributable to
the equity holders of the parent 11 967 (87 193) (93 360)
Weighted average shares in issue ('000) 155 182 203 182 188 231
Headline earnings reconciliation
Attributable earnings / (loss) 11 967 (87 193) (93 360)
Impairment of assets of the disposal group - 78 922 78 922
Loss recognised on the sale of the disposal group - - 11 910
Loss on sale of property, plant and equipment (after taxation) - 19
Impairment of Investments - - 644
Headline earnings 11 967 (8 271) (1 865)
Earnings per share (cents)
Earnings / loss per share 7.7 (42.9) (49.6)
From continuing operations 7.7 5.5 9.3
From discontinued operations - (48.4) (58.9)
Headline earnings / (loss) per share 7.7 (4.1) (1.0)
From continuing operations 7.7 5.5 9.7
From discontinued operations - (9.6) (10.7)
CONDENSED GROUP STATEMENT OF FINANCIAL POSITION
31 December 30 June
R'000 2012 2011 2012
Unaudited Unaudited Audited
ASSETS
Non-current assets 30 627 44 913 28 595
Property, plant and equipment 5 604 27 458 5 343
Goodwill 13 980 13 980 13 980
Investment in and loans to joint ventures 3 777 1 870 2 455
Vendor loan payable 5 000 - 5 000
Deferred taxation 2 266 1 605 1 817
Current assets 66 014 71 481 64 317
Inventories 1 056 4 289 1 722
Trade and other receivables 61 491 66 907 61 389
Bank and call deposits 3 467 285 1 206
TOTAL ASSETS 96 641 116 394 92 912
EQUITY AND LIABILITIES
Capital and reserves 49 606 64 446 37 639
Non-current liabilities 2 233 1 864 1 820
Interest bearing liabilities 2 233 1 517 1 820
Deferred taxation - 347 -
Current liabilities 44 802 50 084 53 453
Interest bearing liabilities - 2 874 378
Interest bearing loan from related party - - 3 500
Bank overdrafts and invoice discounting 10 109 23 929 17 356
Trade and other payables 31 525 22 067 29 079
Taxation payable 3 168 1 214 3 140
TOTAL EQUITY AND LIABILITIES 96 641 116 394 92 912
Shares in issue ('000) 155 182 203 182 155 182
Net asset value per share (cents) 32.0 31.7 24.3
Net tangible asset value per share (cents) 23.0 24.8 15.2
CONDENSED GROUP STATEMENT OF CASH FLOWS
6 months ended 31 December Year ended
R'000 2012 2011 30 June
2012
Unaudited Unaudited Audited
Cash flow from operations 11 563 (3 132) 6 847
Cash generated by operations 18 194 2 857 18 906
Interest received - 650 759
Interest paid (999) (1 611) (4 013)
Taxation paid (5 632) (5 028) (8 805)
Cash flow from investing activities (2 143) (130) (5 088)
(Increase) / decrease in advances to joint ventures (1 322) (747) (2 644)
Cash flow from disposal of subsidiary - - (1 905)
Net (investment) / proceeds on disposal of in property, plant
and equipment (821) 617 (539)
Cash flow from financing activities
Movement in loans payable 35 (3 411) (938)
(Decrease) / increase cash resources 9 455 (6 673) 821
Cash resources at beginning of period (16 150) (16 971) (16 971)
Cash resources at end of period (6 695) (23 644) (16 150)
Cash resources (6 642) (23 644) (16 150)
Bank and call deposits 3 467 285 1 206
Bank overdraft and invoice discounting (10 109) (23 929) (17 356)
CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY
6 months ended 31 December Year ended
R'000 2012 2011 30 June
2012
Unaudited Unaudited Audited
Equity at beginning of period 37 639 151 639 151 639
Total comprehensive income for the period 11 967 (87 193) (93 360)
Shares repurchased as per subsidiary sale agreement - - (20 640)
Equity at end of period 49 606 64 446 37 639
SEGMENT REPORTING (CONTINUING OPERATIONS)
6 months ended 31 December Year ended
R'000 2012 2011 30 June
2012
Unaudited Unaudited Audited
Revenue
Personnel outsourcing 214 908 158 943 328 428
Total revenue 217 448 161 338 332 776
Internal (2 540) (2 395) (4 348)
Safety surveillance 5 997 6 262 12 201
Total Group 220 905 165 205 340 629
Operating profit 18 176 15 605 30 926
Personnel outsourcing 16 472 13 543 26 385
Safety surveillance 1 704 2 062 4 282
Head office - - 259
Impairments
Personnel outsourcing - - (1 850)
Net interest (paid) / received (999) (68) (2 042)
Personnel outsourcing (1 280) (39) (2 040)
Safety surveillance 281 (29) (2)
Profit before taxation 17 177 15 537 27 034
Personnel outsourcing 15 192 13 504 22 495
Safety surveillance 1 985 2 033 4 280
Head office - - 259
INFORMATION ON DISPOSAL GROUPS (SCAFFOLDING)
6 months ended 31 December Year ended
R'000 2012 2011 30 June
2012
Unaudited Unaudited Audited
Analysis of the results of discontinued operations
Revenue - 7 329 19 905
Expenses - (25 900) (38 767)
Impairment of assets of the disposal group - (78 922) (78 922)
Operating loss - (97 493) (97 784)
Interest received - - -
Interest paid - (893) (1 212)
Loss before tax - (98 386) (98 996)
Tax - - -
Loss after tax - (98 386) (98 996)
Loss recognised on the sale of the disposal group - - (11 910)
Total comprehensive loss attributable to the equity
holders of the parent from discontinued operations - (98 386) (110 906)
Assets of the disposal group disposed of
Non-current assets - 24 813 24 697
Property, plant and equipment - 24 752 24 624
Deferred tax asset - 61 73
Current assets - 19 644 21 677
Inventories - 2 749 2 061
Trade and other receivables - 16 895 17 711
Bank and call deposits - - 1 905
Non-current assets held for sale
TOTAL ASSETS - 44 457 46 374
Liabilities of the disposal group disposed of
for sale
Non-current liabilities - 2 795 2 317
Interest bearing liabilities - 2 795 2 317
Current liabilities - 4 644 6 505
Interest bearing liabilities - 1 398 -
Bank overdrafts and invoice discounting - 1 925 -
Trade and other payables - 1 321 6 505
TOTAL LIABILITIES - 7 439 8 822
Cash flow information
Cash flow from operations - (7 775) 4 206
Cash flow from investing activities - 1 117 753
Cash flow from financing activities - 6 603 (1 183)
(Decrease) / increase cash resources - (55) 3 776
UNAUDITED CONDENSED CONSOLIDATED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER
2012
NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS
BASIS OF PREPARATION AND ACCOUNTING POLICIES
The condensed consolidated interim results for the six months ended 31 December 2012 have been prepared in
terms of International Financial Reporting Standards and comply with IAS 34 – Interim Financial Reporting, the
Listings Requirements of the JSE Limited, the Companies Act No. 71 of 2008 as amended and the SAICA
Financial Reporting Guides as issued by the Accounting Practices Committee.
The condensed consolidated interim statements do not include all of the information required for a full set of
annual financial statements.
The principle accounting policies used in the preparation of the interim results are consistent with those applied in
the annual financial statements for the year ended 30 June 2012.
The condensed consolidated results for the six months ended 31 December 2012 have not been reviewed or
audited by the group’s auditors.
The condensed interim financial statements have been prepared under the supervision of Ms. SL Grobler CA
(SA), Financial Director.
EVENTS AFTER REPORTING DATE
The directors are not aware of any material events that occurred between the balance sheet date and the date of
this report.
DISCONTINUED OPERATION
On 8 March 2012, the Group sold the entire issued share capital and Group loan accounts against the Scaffolding
Division (Top Fix Scaffolding (Pty) Ltd and MBM Administration and Labour Brokers (Pty) Ltd) to Mr BW Marais.
Financial information relating to the scaffolding business operation is set out after the Segment report. The results
of the discontinued operation are disclosed separately in the Statement of comprehensive income and
comparative figures have been re-presented. Refer to the SENS announcement of 23 April 2012 for full details of
the transaction.
FINANCIAL PERFORMANCE
The Group’s performance for the six months ended on 31 December 2012 exceeded expectations despite the
challenging economic environment. The disposal of the loss-making scaffolding division during the previous
period also contributed to positive group results.
Revenue from continuing operations increased by 33.7% from R165.2 million to R220.9 million in the current
period, while the gross profit percentage dropped from 15.9% to 13.7%, mainly due to continuing pressure on
margins.
For the six months ended 31 December 2012, headline earnings per share from continuing operations amounted
to 7.7 cents, compared to 5.5 cents for the comparative period ended 31 December 2011.
Operating profit from continuing operations rose by 16.5% to R18.2 million.
Further to the SENS announcements of 6 December 2012 and 11 February 2013, group results for the period
ended 31 December 2012 reflect earnings and headline earnings per share of 7.7 cents, compared to a loss per
share of 42.9 cents and a headline loss per share of 4.1 cents for the comparative period to 31 December 2011.
The increase is mainly due to the elimination of losses previously suffered in the scaffolding division.
Net interest charges incurred rose from R961 000 for the period ended 31 December 2011 to R999 000 in the
current period.
PERSONNEL OUTSOURCING
The Personnel Outsourcing division achieved an operating profit for the period of R16.5 million, representing an
increase of 21.6% on those achieved for the period ended 31 December 2011. The spectrum of local clients have
been broadened, contracts for international personnel placements in Mozambique have been renewed and
further international placements are being actively pursued.
SAFETY SURVEILLANCE
The Safety Surveillance division’s revenue decreased from R6.3 million to R6.0 million, resulting in a lower
operating profit of R1.7 million (2011 – R2.1 million) for the period. Management has identified growth
opportunities and is optimistic about future prospects.
RELATED PARTY TRANSACTIONS
During the previous period the Group borrowed various amounts to assist with working capital requirements from
Mr JJ Senekal (non-executive director) on a short term basis (one month loans) at a rate of R 50 000 per month
per R 1 million borrowed. An amount of R 3.5 million was owed to Mr Senekal at 30 June 2012 and was repaid in
July 2012. Interest on the loan amounted to R175 000 and is included in net interest charges for the period.
FUTURE PROSPECTS
The Personnel Outsourcing division will take advantage of the rapid expansion of the client base and the resulting
organic growth opportunities and acquisition prospects.
The Safety Surveillance division anticipates an increase in revenue during the second half of the year, due to the
establishment of their in-house training facility. Current sale volumes are expected to continue and margins are
expected to remain stable.
The Group is focused on securing new contract business in all divisions.
CAPITAL COMMITMENTS AND CONTINGENCIES
The Group had no significant outstanding capital commitments or contingencies as at 31 December 2012.
DIVIDEND DECLARATION
The Board of Directors has resolved not to declare a dividend for the period ended 31 December 2012.
For and on behalf of the Board
BT Ngcuka (Chairman) FF Goosen (Chief Executive)
Date: 14 February 2013
Directors:
BT Ngcuka* (Chairman); FF Goosen (CEO); SL Grobler (Financial Director); JJ Senekal*#;
NN Sonjani*#; PN de Waal*
(* - non-executive) (# - independent)
Secretary and Registered Office:
MN Hattingh, 6 Topaz Street, Littleton Manor, Centurion 0157
Transfer Secretaries:
Link Market Services South Africa (Pty) Ltd, 11 Diagonal Street, Johannesburg 2000 (PO Box 4844,
Johannesburg 2001)
Designated Advisor:
Sasfin Capital, a division of Sasfin Bank Ltd
Website:
www.msholdings.co.za
14 February 2013
Johannesburg
Designated advisor
Sasfin Capital, a division of Sasfin Bank Limited
Date: 14/02/2013 04:29:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
