Wrap Text
Provisional audited condensed consolidated results for the year ended 28 February 2013
PSV HOLDINGS LIMITED
Incorporated in the Republic of South Africa
(Registration number 1998/004365/06)
Share code: PSV
ISIN: ZAE000078705
("PSV" or "the Company" or "the Group")
Provisional audited condensed consolidated results for the year ended 28 February 2013
Highlights
- Revenue up 45,6% to R381,1 million (2012: R261,7 million)
- Reduction in net finance costs of 47,7% to R3,7 million (2012: R7,1 million)
- Profit before tax - continuing operations of R10,0 million (2012: negative R32,6 million)
- Profit from continuing operations of R4,2 million (2012: negative R36,9 million)
- Headline earning per share from continuing operations up 123,2% to 2,78 cents per share (2012: negative 11,98 cps)
- Cash at end of year of R16,7 million (2012: R9,2 million)
Condensed consolidated statement of comprehensive income
for the year ended 28 February 2013
2013 2012
R R
Revenue 381 109 304 261 747 911
Cost of sales (297 767 130) (202 715 144)
Gross profit 83 342 174 59 032 767
Other income 1 563 627 4 529 415
Other expenses (71 169 895) (88 988 029)
Results from operating activities 13 735 906 (25 425 847)
Finance income 2 035 634 341 775
Finance costs (5 765 951) (7 478 758)
Net finance costs (3 730 317) (7 136 983)
Profit/(loss) before income tax 10 005 589 (32 562 830)
Income tax (5 772 703) (4 408 301)
Profit/(loss) for the year from continuing operations 4 232 886 (36 971 131)
(Loss)/profit from discontinued operations (877 981) 527 030
(Loss)/profit on sale of discontinued operations (27 136 736) 18 820 209
(Loss)/profit for the year attributable to ordinary shareholders (23 781 831) (17 623 892)
Other comprehensive income
Foreign currency translation gain/(loss)* 3 008 463 (96 179)
Total comprehensive (loss)/income for the year (20 773 369) (17 720 071)
* The foreign currency translation gain/(loss) has been calculated
on an after-tax basis. The tax effect is as follows: 577 071 (13 564)
Basic loss per share (cents) (9,36) (7,06)
Basic profit/(loss) per share (cents) - continuing operations 1,67 (14,80)
Basic profit/(loss) per share (cents) - discontinued operations (11,03) 7,74
Headline profit/(loss) per share (cents) 3,66 (9,86)
Headline profit/(loss) per share (cents) - continuing operations 2,78 (11,98)
Headline profit/(loss) per share (cents) - discontinued operations 0,88 2,12
Diluted loss per share (cents) (9,24) (6,83)
Diluted profit/(loss) per share (cents) - continuing operations 1,64 (14,33)
Diluted profit/(loss) per share (cents) - discontinued operations (10,89) 7,50
Diluted headline profit/(loss) per share (cents) 3,61 (9,55)
Diluted headline profit/(loss) per share (cents) - continuing operations 2,75 (11,60)
Diluted headline profit/(loss) per share (cents) - discontinued operations 0,86 2,05
Weighted average number of shares in issue 254 066 206 249 770 838
Reconciliation of headline profit/(loss)
Loss attributable to ordinary shareholders (23 781 831) (17 623 892)
Profit/(loss) on disposal of property, plant and equipment (39 243) 636 643
Loss/(profit) on disposal of discontinued operations 27 136 736 (18 820 209)
Gain on bargain purchase - (10 788 130)
Impairment of non-current assets - 10 700 000
Impairment of intangible assets - 6 060 308
Impairment of goodwill 2 870 573 8 175 025
Deferred tax on impairment of intangibles - (1 696 886)
Reversal of foreign currency translation reserve on sale of
PSV Zambia Limited 3 102 469 -
Headline profit/(loss) 9 288 704 (24 630 427)
Headline profit/(loss) - continuing operations 7 064 216 (29 926 376)
Condensed consolidated statement of financial position
as at 28 February 2013
2013 2012
R R
ASSETS
Non-current assets
Property, plant and equipment 21 212 730 31 860 127
Intangible assets 11 750 851 15 353 434
Goodwill 29 186 265 32 056 838
Loans receivable - 688 060
Deferred taxation assets 2 171 068 2 410 108
Total non-current assets 64 320 914 82 368 567
Current assets
Inventories 33 953 769 42 866 901
Trade and other receivables 70 570 850 57 613 569
Short-term portion of loans receivable - 1 000 000
Taxation receivable - 838 451
Cash and cash equivalents 23 029 914 27 180 014
Discontinued operations and non-current assets held for sale 21 843 562 78 949 436
Total current assets 149 398 095 208 448 371
Total assets 213 719 009 290 816 938
EQUITY
Share capital 273 059 364 271 606 106
Share-based payment reserve 141 842 205 782
Foreign currency translation reserve (187 160) (3 195 623)
Retained loss (175 955 326) (142 844 627)
Total equity attributable to equity holders of the Company 97 058 720 125 771 638
LIABILITIES
Non-current liabilities
Deferred purchase consideration 7 578 457 20 503 934
Deferred taxation liabilities 4 873 649 5 695 681
Loans and borrowings 5 642 916 22 499 840
Total non-current liabilities 18 095 022 48 699 455
Current liabilities
Loans from directors - 1 600 000
Trade and other payables 67 868 525 57 749 051
Taxation payable 4 779 574 2 476 742
Current portion of deferred purchase consideration 7 133 970 1 953 252
Bank overdraft 6 280 851 18 010 869
Current portion of loans and borrowings 2 161 107 9 089 812
Discontinued operations and non-current liabilities held for sale 10 341 240 25 466 119
Total current liabilities 98 565 267 116 345 845
Total liabilities 116 660 289 165 045 300
Total equity and liabilities 213 719 009 290 816 938
Net asset value (cents) 38,20 49,73
Net tangible asset value per share (cents) 22,09 30,98
Total number of shares in issue (net of treasury shares) 254 066 206 252 923 856
Condensed consolidated statement of changes in equity
for the year ended 28 February 2013
Foreign
Share- currency
based translation
Share payment (deficit)/
capital reserve reserve
R R R
Balance at 28 February 2011 270 806 106 263 021 (3 099 444)
Foreign currency translation reserve - - (96 179)
Loss for the year - - -
- - (96 179)
Transactions with owners, recorded directly in equity
Contributions by and distributions to owners
Issue of shares 2 887 904 - -
Acquisition of shares by subsidiary company (2 887 904) - -
Issue of shares to director 800 000 - -
Share-based payment transactions - (57 239) -
800 000 (57 239) -
Balance at 29 February 2012 271 606 106 205 782 (3 195 623)
Loss for the year - - -
Other comprehensive income
Sale of foreign subsidiary - - 3 099 444
Foreign currency translation reserve - - (90 981)
- - 3 008 463
Transactions with owners, recorded directly in equity
Contributions by and distributions to owners
Dividends paid - - -
Issue of shares to Group employees 1 453 258 - -
Share-based payment transactions - (63 935) -
1 453 258 (63 935) -
Balance at 28 February 2013 273 059 364 141 842 (187 160)
Condensed consolidated statement of changes in equity
for the year ended 28 February 2013
Retained
loss Total
R R
Balance at 28 February 2011 (125 220 735) 142 748 948
Foreign currency translation reserve - (96 179)
Loss for the year (17 623 892) (17 623 892)
(17 623 892) (17 720 071)
Transactions with owners, recorded directly in equity
Contributions by and distributions to owners
Issue of shares - 2 887 904
Acquisition of shares by subsidiary company - (2 887 904)
Issue of shares to director - 800 000
Share-based payment transactions - (57 239)
- 742 761
Balance at 29 February 2012 (142 844 627) 125 771 638
Loss for the year (23 781 831) (23 781 832)
Other comprehensive income
Sale of foreign subsidiary - 3 099 444
Foreign currency translation reserve - (90 981)
(23 781 831) (20 773 368)
Transactions with owners, recorded directly in equity
Contributions by and distributions to owners
Dividends paid (9 328 871) (9 328 872)
Issue of shares to Group employees - 1 453 259
Share-based payment transactions - (63 935)
(9 328 871) (7 939 548)
Balance at 28 February 2013 (175 955 326) 97 958 720
Condensed consolidated statement of cash flows
for the year ended 28 February 2013
2013 2012
R R
Cash flows from operating activities 8 989 683 30 060 057
Taxation paid (5 322 694) (4 677 439)
Net cash from/(used in) operating activities 3 666 989 25 382 618
Cash flows from investing activities
Additions to property, plant and equipment to expand operations (11 623 849) (11 143 748)
Proceeds from disposal of property, plant and equipment 7 921 201 1 069 682
Acquisition of business - (3 204 036)
Proceeds on sale of subsidiaries 46 406 906 37 464 252
Financial income 2 035 634 380 056
Net cash (used in)/from investing activities 44 739 892 24 566 206
Cash flows from financing activities
Loans repaid/(granted) to previous vendors 1 688 060 (1 688 060)
Loans repaid (2 057 653) (11 042 240)
Settlement of deferred purchase consideration (7 367 288) (5 893 357)
External loans (repaid)/granted to finance property,
plant and equipment (20 908 955) 4 545 252
Financial expenses (4 085 768) (7 724 988)
Dividends paid (9 328 872) -
Loans from directors - 1 600 000
Net cash used in financing activities (42 060 476) (20 203 393)
Net increase in cash and cash equivalents 6 346 405 29 745 431
Cash transferred to assets held for sale (450 402) (9 908 239)
Bank overdraft transferred to liabilities held for sale 1 683 915 -
Cash and cash equivalents at beginning of year 9 169 145 (10 668 047)
Cash and cash equivalents at end of year 16 749 063 9 169 145
Segmental report
as at 28 February 2013
Shared
Industrial Specialised Services
Supplies Services and other Total
R R R R
2013
Total segment revenue 201 916 452 181 675 347 - 383 591 799
Intersegmental revenue (2 482 495) - - (2 482 495)
Reportable segment revenue 199 433 957 181 675 347 - 381 109 304
Gross profit 54 349 321 28 992 853 - 83 342 174
Depreciation and amortisation 1 984 380 1 660 136 2 988 407 6 632 923
Other operating expenses 29 733 839 16 667 078 18 136 055 64 536 973
Profit/(loss) before tax from 15 187 917 3 519 341 (8 701 669) 10 005 589
continuing operations
Loss before tax from (2 589 729) (19 563 730) (3 199 830) (25 353 289)
discontinued operations
Capital expenditure 7 517 392 2 292 851 1 813 597 11 623 839
Gross assets 69 123 335 69 479 841 72 944 765 211 547 941
Gross liabilities 53 644 009 42 943 355 15 199 276 111 786 639
2012
Total segment revenue 164 096 718 109 407 657 - 273 504 375
Intersegmental revenue (10 536 926) (1 219 538) - (11 756 464)
Reportable segment revenue 153 559 792 108 188 119 - 261 747 911
Gross profit 42 129 492 16 903 275 - 59 032 767
Depreciation and amortisation 1 296 603 1 459 374 4 534 948 7 290 925
Other operating expenses 21 214 849 12 427 816 48 054 439 81 697 104
Profit/(loss) before tax from 6 208 718 (926 701) (37 844 847) (32 562 830)
continuing operations
Profit before tax from - - 4 698 119 4 698 119
discontinued operations
Capital expenditure 15 952 747 3 583 734 6 795 971 26 332 452
Gross assets 69 560 306 68 039 403 150 807 121 288 406 830
Gross liabilities
32 342 376 32 920 112 94 087 131 159 349 619
Commentary
Basis of preparation
The audited condensed consolidated financial statements ("the financial statements") for the year ended 28 February 2013
("the year") have been prepared in accordance with the framework concepts, the recognition and measurement requirements
of International Financial Reporting Standards ("IFRS"), the disclosure and presentation requirements of "IAS 34: Interim
Financial Reporting", the SAICA financial reporting guides as issued by the Accounting Practices Committee, the Listings
Requirements of the JSE Limited and in the manner required by the South African Companies Act. The accounting policies and
method of computation applied in preparation of the financial statements are in accordance with IFRS and are consistent
with those applied in the audited annual financial statements for the year ended 29 February 2012.
The financial statements have been prepared under the supervision of the Financial Director, Tony Dreisenstock.
Introduction
The audited condensed consolidated financial results for the year reflect improved trading conditions from continuing
operations. The Group has successfully unbundled loss-making and cash-hungry businesses during the course of the year
establishing a stable platform for growth in the forthcoming year.
Financial results
Revenue from continuing operations increased by 46% to R381,1 million from R261,7 million. The growth in the business
is attributable to improving market conditions and additional working capital injected back into the business from proceeds
derived on the sale of the pumps business. Gross profit margin was maintained at 22%. Operating costs were reduced by
approximately 20% compared to the previous period, largely due to substantial cost-cutting measures implemented at head
office, and the disposal of loss-making operations. Segmental growth was achieved in Africa, outside of the traditional
South African market.
The Company made a profit before income tax from continuing operations of R10,0 million compared to a loss of R32,6 million
in 2012.
During the year under review the pump and the petrochemical businesses were sold and disclosed as discontinued operations.
A loss of R27,1 million was attributable to the discontinued operations which negatively impacted the overall result for
the year. The total comprehensive loss for the year was R20,8 million compared to a loss of R17,7 million in 2012.
Headline earnings per share from continuing operations grew by 123,2% to 2,78 cents per share compared to the loss of
11,98 cents in the previous period.
At year-end, cash of R16,7 million was recorded, 82% up on the R9,2 million for 2012.
Operational review
Industrial Supplies
This segment contributed 52% (2012: 59%) to the Group's consolidated revenue at an average gross profit margin of 27,6%
(2012: 27,4%). Revenue increased substantially to R199,4 million (2012: R153,6 million). Omnirapid continued to show strong
growth primarily due to mining supply orders increasing, whilst Turbo Agencies grew marginally, enjoying slightly better
margins. Turbo Agencies invested in additional infrastructure required as it had experienced an increase in service
contracts and workshop equipment orders. Notwithstanding, the investment will see the business poised for significant
growth, already reflecting in the order book, together with better margins expected in the new financial year.
Specialised Services
Specialised Services contributed 48% (2012: 41%) to the Group's consolidated revenue at an average gross profit margin
of 16,0% (2012: 15,6%). The segmental revenue increased from R108,2 million to R181,7 million. Both the African Cryogenics
and the Engineered Linings businesses showed substantial top line growth. However the latter experienced cash flow
pressure due to the resultant surge in working capital required.
Subsequent events
On 13 May 2013, PSV announced on SENS the disposal of the Mitech business. Mitech is a specialised control valves
business that produces valves which are primarily used in the mining and petrochemical industries. Each Mitech valve
produced has essentially one application and its own pattern, thus ensuring that Mitech is a highly specialised and
niche valve producer.
The rationale for the disposal is that Mitech did not meet PSV's return on investment targets. It was therefore decided
to dispose of Mitech and focus efforts on maximising the returns generated by the rest of the companies within the Group.
Mitech was sold for a total consideration of R7,0 million in cash. The effective date of the disposal is 1 April 2013 and
there are no outstanding conditions precedent.
On headline earnings per share the disposal is accretive to the amount of 60,47% and HEPS shows an increase from 1,72
cents per share to 2,76 cents per share before and after the transaction, respectively.
The disposal was classified as a Category 2 transaction in terms of the Listings Requirements of the JSE and does not
require shareholder approval.
Auditors' opinion
The financial statements for the year have been audited by the Company's auditors, Certified Master Auditors Inc.
Their unmodified audit opinion is available for inspection at PSV's registered office.
Dividends
After the disposal of the pumps business, the Group declared a special dividend amounting to R9,3 million. The Group
will continue to retain and utilise cash generated to fund working capital requirements and as such, no dividends were
declared or proposed. The Board reviews the dividend policy annually.
Changes to the board
Dave Kelly resigned as a Non-Executive Director on 30 August 2012. The Board thanks Dave for his contribution to the
Company. Eric Ratshikhopha was appointed on 19 October 2012 as an Independent Non-Executive Director and as a member
of the Audit & Risk Committee as well as the Chairman of the Social and Ethics Committee meeting.
Prospects
PSV has always had a strong footprint in Africa and is looking to leverage this in the coming year. Turbo Agencies in
particular is busy expanding its product offering and its geographic representation. A marketing manager has been
appointed to exploit African opportunities across the PSV Group of companies. PSV has experienced larger capex spend by
mines in Africa and is looking to take advantage of this opportunity. The domestic market continues to show sustainable
growth in the segments we operate in.
Both segments started the new year with larger order books than last year.
Appreciation
We would like to acknowledge our management team and staff, our valued customers, suppliers, business partners, advisors,
our fellow directors and the shareholders for their continued support.
For and on behalf of the Board
AJD da Silva
Chief Executive Officer
AR Dreisenstock
Chief Financial Officer
27 May 2013
Directors
Executive Directors:
AJD da Silva (Chief Executive Officer); AR Dreisenstock (Chief Financial Officer)
Non-Executive Directors:
R Patmore (Independent Chairperson); A de la Rue (Independent Chairman of the Audit Committee); E Ratshikhopha
(Independent Chairman of the Social and Ethics Committee); P
Robinson*
* British
Company secretary
Merchantec Capital
Auditors
Certified Master Auditors Inc.
Designated adviser
Merchantec Capital
Registered office
PSV Holdings Office Park
Corner Barbara and North Reef Roads
Henville Ext, Elandsfontein
Postnet Suite 229
Private Bag X19
Gardenview, 2047
Tel (local): (011) 657 6000
Tel (international): +27 11 657 6000
Fax: (011) 822 8470
Transfer secretaries
Computershare Investor Services Proprietary Limited
70 Marshall Street
Johannesburg
South Africa
2001
PO Box 61051
Marshalltown
South Africa
2107
Date: 27/05/2013 08:30:00 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.
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