Wrap Text
Provisional audited condensed consolidated results for the year ended 28 February 2018
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 2018
Condensed consolidated statement of comprehensive income
Audited for the
Audited for the year ended
year ended 28 February
28 February 2017
2018 (Restated)
R R
Revenue 212 963 458 186 987 988
Cost of sales (169 970 454) (154 557 268)
Gross profit 42 993 004 32 430 720
Other income 712 474 2 936 879
Other expenses (39 657 378) (30 955 017)
Results from operating activities 4 048 100 4 412 582
Finance income 1 083 795 435 566
Finance costs (3 763 161) (3 194 523)
Net finance costs (2 679 366) (2 758 957)
Profit before tax from continuing operations 1 368 734 1 653 625
Deferred tax (929 271) (1 897 297)
Profit/(loss) for the year from continuing operations 439 463 (243 672)
Revenue 14 366 278 19 588 132
Net expenses (15 991 000) (21 063 679)
Pretax (loss) (1 624 722) (1 475 547)
Tax 361 782 320 303
(Loss) from discontinued operations (1 262 940) (1 155 244)
(Loss) for the year attributable to ordinary shareholders (823 477) (1 398 916)
Other comprehensive income that may be recycled in
future periods
Foreign currency translation (loss)/gain not subject to tax (495 571) 433 814
Other comprehensive income that will not be subsequently
reclassified to profit or loss
Revaluation surplus net of tax 622 784 -
Total comprehensive (loss) for the year (696 264) (965 102)
Reconciliation of headline earnings
Profit/(loss) after tax attributable to ordinary shareholders
- continuing operations 439 463 (243 672)
Loss/(profit) on disposal of property, plant and equipment
- continuing operations 100 146 (171 917)
Loss/(profit) on sale of disposal group 165 381 (2 166 764)
Tax effect on adjustments - continuing operations (28 041) 452 195
Headline profit/(loss) - continuing operations 676 949 (2 130 158)
(Loss) after tax attributable to ordinary shareholders
- discontinued operations (1 262 940) (1 155 244)
(Profit) on disposal of property, plant and equipment
- discontinued operations (20 350) (118 152)
Tax effect on adjustments - discontinued operations 4 477 25 993
Headline (loss) - discontinued operations (1 278 813) (1 247 403)
Headline (loss) (601 864) (3 377 561)
Basic and diluted (loss) per share (cents) (0.31) (0.53)
Basic and diluted profit/(loss) per share (cents)
- continuing operations 0.17 (0.09)
Basic and diluted (loss) per share (cents) - discontinued operations (0.48) (0.44)
Headline (loss) per share (cents) (0.23) (1.28)
Headline profit/(loss) per share (cents) - continuing operations 0.26 (0.81)
Headline (loss) per share (cents) - discontinued operations (0.48) (0.47)
Actual number of shares in issue at end of the year 265 879 842 265 879 842
Weighted number of shares in issue at end of the year 263 810 429 263 792 329
There are no shares with a dilutive impact.
Condensed consolidated statement of financial position
28 February 29 February
28 February 2017 2016
2018 (Restated) (Restated)
R R R
ASSETS
Non-current assets 42 540 858 48 403 904 45 396 914
Property, plant and equipment 11 793 921 11 940 100 9 784 915
Goodwill and intangible assets 17 784 334 17 873 134 18 022 334
Long-term portion of retention debtors receivable 847 162 - -
Loans receivable - long term 1 336 387 2 503 409 -
Deferred taxation 10 779 054 16 087 261 17 589 665
Current assets 77 634 144 70 974 507 78 338 987
Inventories 35 702 949 22 402 757 24 706 428
Trade and other receivables 37 575 071 40 772 594 38 169 124
Taxation receivable - 55 441 55 441
Loans receivable - short term 197 450 1 662 901 -
Cash and cash equivalents 4 158 674 6 080 814 15 407 994
Non-current assets held for sale 11 093 272 - -
Total assets 131 268 274 119 378 411 123 735 901
EQUITY
Share capital 273 329 475 273 329 475 273 329 475
Revaluation surplus 622 784 - -
Foreign currency translation reserve (138 587) 356 984 (76 830)
Retained (loss) (245 284 942) (244 461 464) (243 062 549)
Total equity attributable to ordinary shareholders
of the Company 28 528 730 29 224 995 30 190 096
LIABILITIES
Non-current liabilities 2 147 455 5 527 141 3 977 566
Deferred tax 49 728 74 592 -
Loans and borrowings 2 097 727 5 452 549 3 977 566
Current liabilities 91 190 103 84 626 275 89 540 225
Billings in excess of work certified 679 002 50 352 1 145 040
Trade and other payables 66 776 700 59 201 983 58 580 506
Bank overdraft 20 980 994 20 323 105 23 670 202
Current portion of loans and borrowings 665 119 2 951 858 4 312 964
Taxation payable - - 69 812
Provisions 2 088 288 2 098 977 1 761 701
Non-current liabilities held for sale 9 401 987 - 28 014
Total liabilities 102 739 544 90 153 416 93 545 805
Total equity and liabilities 131 268 274 119 378 411 123 735 901
Condensed consolidated statement of changes in equity
Foreign
currency
Share translation Revaluation
capital reserve surplus
Balance at 29 February 2016 273 329 475 (76 830) -
Prior year adjustment due to early adoption
of IFRS 15 - - -
Balance at 29 February 2016 (restated) 273 329 475 (76 830) -
Total comprehensive (loss) for the year - - -
Other comprehensive income from
currency fluctuations - 433 814 -
Balance at 28 February 2017 (restated) 273 329 475 356 984 -
Total comprehensive (loss) for the year - (495 571) 622 784
Balance at 28 February 2018 273 329 475 (138 587) 622 784
Retained
(loss) Total
Balance at 29 February 2016 (241 606 579) 31 646 066
Prior year adjustment due to early adoption of IFRS 15 (1 455 970) (1 455 970)
Balance at 29 February 2016 (restated) (243 062 549) 30 190 096
Total comprehensive (loss) for the year (1 398 916) (1 398 916)
Other comprehensive income from currency fluctuations - 433 814
Balance at 28 February 2017 (restated) (244 461 464) 29 224 995
Total comprehensive (loss) for the year (823 477) (696 264)
Balance at 28 February 2018 (245 284 942) 28 528 730
Condensed consolidated statement of cash flows
28 February 28 February
2018 2017
R R
Cash flows from operating activities (2 228 673) 3 561 140
Taxation paid 55 441 (69 812)
Net cash (used in)/from operating activities (2 173 233) 3 491 328
Net cash (used in)/from operating activities - continuing operations (3 836 432) 3 491 328
Net cash from operating activities - discontinued operations 1 663 199 -
Cash flows from investing activities
(Additions) to property, plant and equipment to expand operations (746 398) (3 664 021)
Proceeds from disposal of property, plant and equipment 1 777 185 745 232
Loan repaid/(advanced) on sale of business to B-BBEE partner - (1 981 758)*
Loan repaid on B-BBEE sale 3 188 542* -
Finance income 366 268 418 212
Net cash from/(used in) investing activities 4 585 597 (4 482 335)
Net cash from/(used in) investing activities - continuing operations 4 495 696 (4 482 335)
Net cash from investing activities - discontinued operations 89 901 -
Cash flows from financing activities
Loans and borrowings (repaid) (3 255 881) (950 122)
Finance expenses (3 763 161) (4 038 954)
Net cash (used in) financing activities (7 019 042) (4 989 076)
Net cash (used in) financing activities - continuing operations (4 984 642) (4 989 076)
Net cash (used in) financing activities - discontinued operations (2 034 400) -
(Decrease) in cash and cash equivalents (4 606 677) (5 980 083)
Net (decrease) in cash and cash equivalents - continuing operations (4 325 377) (5 980 083)
Net (decrease) in cash and cash equivalents - discontinued operations (281 300) -
2 026 648 -
Cash balance transferred to non-current assets held for sale (244 449) -
Bank overdraft transferred to non-current liabilities held for sale 2 271 097 -
Cash and cash equivalents at beginning of the year (14 242 291) (8 262 208)
Cash and cash equivalents at end of the year (16 822 320) (14 242 291)
* This amount was previously classified under financing activities and has
been reclassified to better reflect the nature of the cash flows.
Segmental report
Shared Total
Industrial Specialised Services Continued
Supplies Services and Other operations
R R R R
For the 12 months ended
28 February 2018
Total segment revenue 112 019 381 109 536 174 - 221 555 555
Inter-segment revenue (8 592 097) - - (8 592 097)
Reportable segment revenue 103 427 284 109 536 174 - 212 963 458
Gross profit 17 760 703 25 216 812 15 489 42 993 004
Operating expenses (8 949 208) (15 690 501) (15 017 669) (39 657 378)
Depreciation and amortisation - (88 100) (303 219) (391 319)
Other operating expenses (8 949 208) (15 602 401) (14 714 450) (39 266 059)
Profit/(loss) before tax from
continuing operations 8 895 724 6 820 662 (14 347 652) 1 368 734
Profit/(loss) after tax excluding
discontinued operations 6 296 861 5 114 137 (10 971 535) 439 463
Capital expenditure - - 1 993 585 1 993 585
Total assets 22 758 447 63 456 240 45 053 587 131 268 274
Continuing operations 11 665 175 63 456 240 45 053 587 120 175 002
Discontinued operations 11 093 272 - - 11 093 272
Total liabilities 22 329 822 60 036 300 20 373 422 102 739 544
Continuing operations 12 927 836 60 036 300 20 373 422 93 337 558
Discontinued operations 9 401 986 - - 9 401 986
For the 12 months ended
28 February 2017 (Restated)
Total segment revenue 88 312 702 109 385 112 - 197 697 814
Inter-segment revenue (9 694 152) (1 015 674) - (10 709 826)
Reportable segment revenue 78 618 550 108 369 438 - 186 987 988
Gross profit 14 779 784 17 828 543 (177 607) 32 430 720
Operating expenses (12 242 974) (11 113 507) (7 598 536) (30 955 017)
Depreciation and amortisation (26 815) (111 179) (1 540 768) (1 678 762)
Other operating expenses (12 216 159) (11 002 328) (6 057 768) (29 276 255)
Profit/(loss) before tax
from continuing operations 2 051 925 5 271 545 (5 669 845) 1 653 625
Profit/(loss) after tax
excluding discontinued operations 1 478 051 4 018 181 (5 739 904) (243 672)
Capital expenditure 30 575 3 467 558 1 229 887 4 728 020
Total assets 40 320 717 53 264 998 25 792 696 119 378 411
Total liabilities 39 239 249 68 745 569 (17 831 402) 90 153 416
Commentary
BASIS OF PREPARATION
The provisional audited condensed consolidated results for the year ended 28 February 2018
("the year") have been prepared in accordance with 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 Financial Reporting
Pronouncements as issued by the Financial Reporting Standards Council, the Listings
Requirements of the JSE Limited and the Companies Act, 2008 (Act 71 of 2008), as amended.
The accounting policies and method of computation applied in preparation of these provisional
audited condensed consolidated results are in accordance with IFRS and are consistent with
those applied in the annual financial statements for the year ended 28 February 2017.
This provisional report is extracted from audited information but is not itself audited. The board of
directors of PSV ("the Board") takes full responsibility for the preparation of this report and confirms
that the financial information has been correctly extracted from the underlying annual financial
statements.
The annual financial statements have been prepared under the supervision of the Financial Director,
Tony Dreisenstock CA(SA), and have been audited by the Group's auditors, Certified Master
Auditors Inc., whose unqualified audit report is available for inspection at the registered office of
the Company.
The unqualified audit report contains an emphasis of matter paragraph regarding management's
consideration with regards to the liquidity issues the Group is facing. Their opinion is not
modified in respect of this matter.
The auditor's report does not necessarily report on all of the information contained in this
announcement. Shareholders are therefore advised that in order to obtain a full understanding of
the nature of the auditor's engagement they should obtain a copy of the audit report, together with
the accompanying financial information, from the Group's registered office. Any reference to future
financial performance included in this announcement has not been reviewed by or reported on by
the Group's auditor.
NATURE OF BUSINESS
PSV is an industrial engineering holding company comprising two operating business segments
namely:
- Industrial Supplies (including steel, piping, industrial tools and consumable supplies).
- Specialised Services (including comprehensive cryogenic and gas systems and the supply and
installation of geosynthetic linings).
INTRODUCTION
Notwithstanding tough cash constraints, the Group's sustained turnaround continues to gather
momentum. The Group generated an after-tax profit from continuing operations of R0.44 million
compared to a loss after tax of R0.24 million in the 2017 financial year. These figures have been
restated due to the Group's decision to early adopt IFRS 15 dealing with revenue recognition.
FINANCIAL RESULTS
The early adoption of IFRS 15 necessitated the restatement of the financial results for the
year ended February 2017 and the presentation of a comparative restated statement of financial
position as at February 2016. The implementation of IFRS 15 resulted in an additional after-tax
loss of R1.46 million for February 2016 and R0.25 million for February 2017. The current year's
after-tax profit was increased by R0.42 million as a result of the early implementation.
In addition, the Group decided to change its accounting policy from the cost to the revaluation
model in respect of the road tanker class of asset. The carrying value of the road tanker was
measured in terms of the level three hierarchy as stipulated in IFRS 13. The consequential
revaluation surplus reflected in other comprehensive income amounted to R0.62 million after tax.
Turbo Agencies meets the requirements contained in IFRS 5 as being treated as a disposal group
and a discontinued operation. This resulted in the restatement of our year-end 28 February 2017
results in the statement of comprehensive income and the reclassification of all relevant assets
and liabilities held for sale in the 28 February 2018 statement of financial position.
Turnover increased by 13.89% to R212.96 million (2017 (restated): R186.99 million), gross margins
strengthened to 20.19% (2017 (restated): 17.34%). The net result was that the Group generated
an after-tax profit from continuing operations of R0.44 million compared to a R0.24 million loss
(restated) in the previous financial year. The headline loss per share strengthened from a loss
of 1.28 cents per share ("cps") (restated) to a loss of 0.23 cps.
Notwithstanding the pleasing turnaround in the business, our cash flow position worsened by
R2.58 million, principally caused by high finance costs, repayment of loans and slow debtor
payments. The Group's debt to equity ratio (net of cash) improved from 77% in 2017 to 69% in the
current financial year mainly due to the reclassification of Turbo Agencies as a discontinued
operation. The Group's net tangible asset per share decreased marginally to 4.07 cps from 4.30
cps (restated) in 2017.
OPERATIONAL REVIEW
Industrial Supplies
This segment contributed 49% (2017 (restated): 42%) to the Group's consolidated reportable
segment revenue, at an average gross profit margin of 17.17% (2017 (restated): 18.80%).
Omnirapid's tenacity, resilience and indomitable will to succeed despite all odds was inspirational.
The customer base was diversified, major clients regained and budgetary expectations far exceeded.
The business expanded by 27% compared to the previous financial year, the order book is full and
prospects are excellent.
Turbo Agencies made an operating loss for the year. Despite maintaining margins at historic levels,
the business contracted particularly in the domestic sales space in Botswana. This contraction was
primarily attributable to the poor state of the Botswana economy and the consequentially restricted
working capital cycles that retarded the division's ability to place timeous orders with suppliers
resulting in cancelled orders. The Group made funds available to Turbo Agencies in early February
2018, unlocking the trade cycle. Notwithstanding, the Board has taken a decision to actively pursue
selling the business.
Specialised Services
Specialised Services contributed 51% (2017 (restated): 58%) to the Group's consolidated reportable
segment revenue at an average gross profit margin of 23.02% (2017 (restated): 16.45%).
The successful implementation of a new, dynamic and innovative approach to doing business has
stimulated the appetite of the major gas companies. African Cryogenics is currently enjoying
unsurpassed interest levels manifesting in increased enquiries and consequential orders. Working
capital management has tightened considerably and cash flow generation and profitability have
improved. The division has expanded by 52% compared to the same time last year, and productivity
levels have improved by 50%.
Engineered Linings suffered a severe setback in the second half of the financial year as the
execution of their strong order book was materially delayed by extraneous factors. The division's
inability to timeously fill the void created against the backdrop of high fixed operating costs,
materially eroded profitability and placed the entire Group under financial pressure. Fortunately, the
situation started to improve towards the end of the financial year and profitability and cash flow
are gradually being restored. With the restructuring of management, and the re-establishment of
the Johannesburg office, we expect a sustained return to profitability in the coming months.
DIVIDENDS
No dividends were declared or proposed. The Board reviews the dividend policy annually.
CHANGES TO THE BOARD
There have been no changes to the Board for the period under review.
SUBSEQUENT EVENTS
Subsequent to the financial year-end, the Group entered into a subscription of shares agreement
with Regis Holdings Limited ("Regis"), in terms of which, subject to certain conditions precedent,
including shareholder approval, Regis will acquire a 34.99% stake in the Group for R25.7 million.
GOING CONCERN
The directors have made an assessment of the ability of the Group to continue as a going concern.
Notwithstanding the consolidated current liabilities exceed the consolidated current assets,
the Board is confident that the Group will continue as a going concern for the following reasons:
- the subscription of new shares by Regis will inject R25.7 million cash into the Group;
- a condition precedent of the abovementioned subscription is the sourcing of a credible B-BBEE
partner. The Group has been aggressively pursuing this objective and is positive on concluding
an agreement in the short term;
- the Board is actively pursuing selling Turbo Agencies which will eliminate a loss-making operation
and proximately R6 million of interest-bearing debt;
- all remaining business operations are profitable and our budgetary projections for 2019 indicate
that our profitability is sustainable; and
- the Group currently enjoys the support of its bankers.
PROSPECTS
We are confident that the recapitalisation of the Group's balance sheet as well as the introduction
of a new B-BBEE partner will secure substantial additional orders for the Group and have a significant
positive impact on our future prospects.
For and on behalf of the Board
AJD da Silva
Chief Executive Officer
AR Dreisenstock
Chief Financial Officer
Johannesburg
14 June 2018
DIRECTORS
Executive directors
AJD da Silva (Chief Executive Officer)
AR Dreisenstock (Chief Financial Officer)
Independent non-executive directors
E Ratshikhopha (Chairman of the Board)
A de la Rue (Chairman of the Audit and Remuneration Committees)
L Mosiah (Chairman of the Social and Ethics Committee)
COMPANY SECRETARY
Merchantec Capital
DESIGNATED ADVISER
Merchantec Capital
AUDITORS
Certified Master Auditors Inc.
REGISTERED OFFICE
Stoneridge Office Park
8 Greenstone Place
Building C
2nd Floor
Greenstone Hill
Tel (local): (0860) 778 778
Tel (international): +27 11 452 4004
Fax: (0860) 329 778
TRANSFER SECRETARIES
Link Market Services South Africa Proprietary Limited
13th Floor
Rennie House
19 Ameshoff Street
Braamfontein
(PO Box 4844, Johannesburg, 2000)
Telephone: +27 (0) 11 713 0899
Facsimile: +27 (0) 86 674 4381
www.psvholdings.com
Date: 14/06/2018 03:25:00 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.
Sharenet Sites 
