Wrap Text
REVIEWED PROVISIONAL RESULTS
FOR THE YEAR ENDED 31 MARCH 2017
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
REVIEWED PROVISIONAL RESULTS
FOR THE YEAR ENDED 31 MARCH 2017
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2017
Reviewed Audited
March 2017 March 2016
R'000 R'000
Revenue 642 122 572 388
Cost of sales (540 905) (472 342)
Gross profit 101 217 100 046
Other income 1 139 4 128
Operating expenses (80 749) (89 690)
Operating profit 21 607 14 484
Interest received 291 454
Interest paid (2 385) (3 819)
Profit before taxation 19 513 11 119
Taxation (2 770) 105
Profit and total comprehensive income 16 743 11 224
Profit and total comprehensive income attributable to:
Ordinary shareholders of the Company 16 008 12 860
Non-controlling shareholders' interest - share of profit/(loss) 735 (1 636)
Profit and total comprehensive income 16 743 11 224
Earnings per share and diluted earnings per share (cents) 17.77 13.86
Note:
Weighted average number of shares ('000) 90 064 92 787
Diluted weighted average number of shares ('000) 90 064 92 787
Headline earnings per share and diluted headline earnings per share (cents) 17.77 13.86
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2017
Reviewed Audited
March 2017 March 2016
R'000 R'000
ASSETS
Non-current assets 42 936 44 619
Equipment and vehicles 3 513 3 693
Investment property 7 045 7 645
Goodwill 20 822 18 170
Intangible assets - 882
Deferred tax asset 11 556 14 229
Current assets 132 781 97 398
Inventories 177 103
Trade receivables 125 651 79 994
Other receivables 4 256 8 576
Taxation receivable 634 637
Cash and cash equivalents 2 063 8 088
Total assets 175 717 142 017
EQUITY AND LIABILITIES
Equity 106 170 90 643
Capital and reserves 114 426 99 634
Non-controlling interest (8 256) (8 991)
Current liabilities 69 547 51 374
Trade and other payables 31 454 19 388
Bank borrowings 38 093 31 986
Total equity and liabilities 175 717 142 017
Note:
Number of shares in issue at end of year (net of treasury shares) ('000) 90 064 90 064
Net asset value per share (cents) 127 110
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2017
Distribu- Non-
Share Share table Treasury controlling Total
Capital premium reserves shares Total interest equity
R '000 R '000 R '000 R '000 R '000 R '000 R '000
Opening
balances at
1 April 2015 1 321 1 351 101 308 (14 748) 89 232 (7 355) 81 877
Attributable
earnings for
the year - - 12 860 - 12 860 (1 636) 11 224
Dividends paid - - (927) - (927) - (927)
Acquisitions by
share trust - - - (1 531) (1 531) - (1 531)
Balances at
1 April 2016 1 321 1 351 113 241 (16 279) 99 634 (8 991) 90 643
Attributable
earnings for
the year - - 16 008 - 16 008 735 16 743
Dividends paid - - (1 216) - (1 216) - (1 216)
Closing
balances at
31 March 2017 1 321 1 351 128 033 (16 279) 114 426 (8 256) 106 170
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2017
Reviewed Audited
March 2017 March 2016
R'000 R'000
Profit before taxation 19 513 11 119
Adjustment for non-cash items 3 017 4 753
Operating cash flows before working capital changes 22 530 15 872
Net working capital changes (29 345) 6 128
Taxation paid - (1 018)
Cash flows from operating activities (6 815) 20 982
Cash flows from investing activities (4 101) (1 386)
Cash flows from financing activities (1 216) (2 600)
Net (decrease)/increase in cash and cash equivalents (12 132) 16 996
Cash and cash equivalents at beginning of year (23 898) (40 894)
Cash and cash equivalents at end of year (36 030) (23 898)
SEGMENTAL ANALYSIS
FOR THE YEAR ENDED 31 MARCH 2017
Reviewed Audited
March 2017 March 2016
R'000 R'000
Revenue from external customers
Staffing and Recruitment Services 609 891 532 350
Training and Consulting Services 32 231 40 038
Total 642 122 572 388
Revenue - inter-segment
Staffing and Recruitment Services - -
Training and Consulting Services 153 99
Total 153 99
Business segment operating profit results
Staffing and Recruitment Services 33 639 27 326
Training and Consulting Services (1 297) 1 055
Shared Services (10 735) (13 897)
Operating profit 21 607 14 484
Interest received 291 454
Interest paid (2 385) (3 819)
Profit before taxation 19 513 11 119
Business segment EBITDA
Staffing and Recruitment Services 35 195 28 609
Training and Consulting Services (950) 1 397
Shared Services (9 670) (13 816)
Total 24 575 16 190
Business segment total assets
Staffing and Recruitment Services 125 787 109 656
Training and Consulting Services 21 173 19 989
Shared Services 28 757 12 372
Total 175 717 142 017
Business segment net assets
Staffing and Recruitment Services 79 199 61 564
Training and Consulting Services 16 138 17 409
Shared Services 10 833 11 670
Total 106 170 90 643
COMMENTARY
REVIEWED RESULTS FOR THE YEAR ENDED 31 MARCH 2017
Primeserv Group is an investment holding
company focused on providing market leading
business support services to organisations
throughout Southern Africa. Our services
are delivered through our operating pillar,
Primeserv Human Capital Services. This
incorporates two main areas of specialisation,
namely Staffing and Recruitment Services
and Training and Consulting Services. We
offer a client-centric, insight-based, integrated
approach to human capital planning and
implementation. For our clients this means
increased productivity, reduced human
resources related risk and the freedom to
concentrate on their core business.
Notwithstanding challenging economic
conditions with worsening levels of
unemployment and continuing political and
economic uncertainty, the Group has shown an
improved performance during the year under
review. Revenue has increased by 12% for the
year from R572.4 million to R642.1 million. The
improved revenues are largely attributable to
new contracts concluded and the expansion
of national contracts in the second half of
the year. EBITDA increased by 52% from
R16.2 million to R24.6 million, with operating
profit increasing by 49% from R14.5 million to
R21.6 million. Net profit before tax improved
by 76% from R11.1 million to R19.5 million and
net profit after tax increased by 49% from
R11.2 million to R16.7 million. After adjusting
for non-controlling interests, earnings per
share and headline earnings per share have
correspondingly increased by 28% from
13.86 cents per share to 17.77 cents per share.
In line with its improved profitability, the
Group's balance sheet continues to strengthen
with net asset value improving from 110 cents
to 127 cents per share. Trade receivables have
increased from R80.0 million to R125.7 million.
This is in part due to increased sales which
commenced in the second half of the year and
resulted in an increase in the overall days sales
outstanding (DSO) from 45 days to 63 days.
Complexities in the procurement process of
a major new client delayed payment of initial
amounts outstanding, and clients with longer
credit terms have become a more meaningful
component of the business. A substantial
element of the trade receivables outstanding
at year-end had been received at the date of this
report. The increased sales and movement in
DSO have also impacted cash flow, specifically
at year-end, and gave rise to a net cash outflow
for the year of R12.1 million as opposed to an
inflow of R17.0 million in the prior year.
Revenue in the Group's Staffing and
Recruitment Services segment increased by
15% from R532.4 million to R609.9 million, with
operating profit increasing from R27.3 million
to R33.6 million and EBITDA increasing from
R28.6 million to R35.2 million for the period
under review. Operating efficiencies in the
Group's Shared Services segment have
further contributed to the improvement in the
Group's overall operating profit. The Training
and Consulting Services segment experienced
an unanticipated decline of 19% in its revenue
from R40 million to R32.2 million and moved
from an operating profit of R1.1 million in the
prior year to an operating loss of R1.3 million
in the current year. The business model of
this segment has been adapted to meet the
challenges faced by the business and a more
variable cost model has been put in place to
deal with the changing revenue patterns. The
Group continues to closely monitor the results
of this segment in order to ensure that it is
properly able to realise its strategic importance
to the Group, where it plays a pivotal role in
the Group's ongoing programmes of skills
development allied to youth employment
advancement.
DSO for the Recruitment and Staffing Services
segment, due to the reasons set out above,
increased from 42 to 61 days, whilst those for
the Training and Consulting Services segment
also showed a small increase in its DSO from
82 to 89 days, primarily as a result of delayed
payments from relevant SETAs.
Whilst organic growth opportunities remain a
focus, the Group continues to seek acquisitions
aimed at expanding its business support
services.
BASIS OF PREPARATION
The condensed consolidated financial
statements are prepared in accordance with
the requirements of the JSE Limited Listings
Requirements for provisional reports and
the requirements of the Companies Act of
South Africa. The Listings Requirements
require provisional reports to be prepared
in accordance with the framework concepts
and the measurement and recognition
requirements of International Financial
Reporting Standards (IFRS) and the SAICA
Financial Reporting Guides as issued by the
Accounting Practices Committee and Financial
Pronouncements as issued by the Financial
Reporting Standards Council and to also, as
a minimum, contain the information required
by IAS 34-Interim Financial Reporting. The
accounting policies applied in the preparation
of the condensed consolidated financial
statements are in terms of IFRS and are
consistent with those applied in the previous
consolidated annual financial statements. The
results were prepared by the Group Financial
Director, Mr R Sack CA (SA).
REVIEW OPINION
The Group's auditors, Mazars, have reviewed
the financial results for the year ended
31 March 2017. A copy of their unmodified
review report is available for inspection at the
Company's registered office.
The auditor's report does not necessarily
report on all information contained in these
financial results. Any reference to future
financial performance included in this
announcement has not been reviewed nor
reported on by the auditors. Shareholders
may obtain further information regarding the
nature of the auditor's engagement as per
inspection of the report at the Company's
registered office.
FINANCIAL INSTRUMENTS
At the reporting date, the Group's financial
assets and financial liabilities are all current.
The carrying value of all financial assets
and financial liabilities is a reasonable
approximation of fair value.
DIVIDEND
Notice is hereby given that a final gross cash
dividend of 2.00 cents per share
(2016: 1.35 cents per share) for the year ended
31 March 2017 was declared on Friday,
23 June 2017, payable to shareholders
recorded in the share register of the Company
at the close of business on the record date
appearing below. The salient dates pertaining
to the final dividend are as follows:
Last date to trade Tuesday, 18 July 2017
"cum" dividend
Date trading Wednesday, 19 July 2017
commences "ex"
dividend
Record date Friday, 21 July 2017
Date of payment Monday, 24 July 2017
Ordinary share certificates may not be
dematerialised or rematerialised between
Wednesday, 19 July 2017 and Friday,
21 July 2017, both days inclusive.
Shareholders who are not exempt from the
Dividend Withholding Tax of 20% will therefore
receive a net dividend of 1.60 cents per share.
The Company has 132 062 743 ordinary shares
in issue and its income tax reference number
is 9408/002/71/6. The dividend is being paid
out of income reserves.
All times provided in this announcement are
South African local times.
Where applicable, dividends in respect
of certificated shares will be transferred
electronically to shareholders' bank accounts
on the payment date. In the absence of
specific mandates, dividend cheques will be
posted to shareholders at their risk. Ordinary
shareholders who hold dematerialised shares
will have their accounts at their CSDP or broker
credited on Monday, 24 July 2017.
EVENTS AFTER THE REPORTING DATE
Management is not aware of any material
events which have occurred subsequent to the
end of March 2017. There has been no material
change in the Group's contingent liabilities
since year-end.
By order of the Board
CS Ntshingila M Abel R Sack
Chairperson CEO Financial Director
Primserv Group Limited
Illovo, Sandton
23 June 2017
CORPORATE INFORMATION
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
email: productivity@primeserv.co.za
DIRECTORS
CS Ntshingila(#) (Chairperson), M Abel (CEO), JM Judin(#), LM Maisela*, DL Rose(#),
R Sack (Financial Director)
(#) Independent non-executive
* Non-executive
COMPANY SECRETARY
ER Goodman Secretarial Services CC (represented by M Janse van Rensburg)
REGISTERED ADDRESS
25 Rudd Road, Illovo, Sandton, 2196
(PO Box 3008, Saxonwold, 2132)
TRANSFER SECRETARIES
Computershare Investor Services (Pty) Ltd, Rosebank Towers, 15 Biermann Avenue,
Rosebank, Johannesburg, 2196
(PO Box 61051, Marshalltown, 2107)
AUDITORS
Mazars, 54 Glenhove Road, Melrose Estate, 2196
(PO Box 6697, Johannesburg, 2000)
SPONSOR
Grindrod Bank Limited
(Registration number 1994/007994/06)
4th Floor Grindrod Towers, 8A Protea Place, Sandton, 2196
(PO Box 78011, Sandton, 2146)
www.primeserv.co.za
Date: 23/06/2017 04:24:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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