Wrap Text
Reviewed Results for the year ended 31 March 2019
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 results For the year ended 31 March 2019
Condensed consolidated statement of profit and loss and other comprehensive income
For the year ended 31 March 2019
Reviewed Audited
March March
2019 2018
R '000 R '000
Revenue 806 735 725 289
Cost of sales (694 451) (618 287)
Gross profit 112 284 107 002
Other income 2 461 1 069
Operating expenses (89 483) (85 817)
Operating profit 25 262 22 254
Interest received 293 268
Interest paid (668) (2 249)
Profit before taxation 24 887 20 273
Taxation (1 883) (586)
Profit and total comprehensive income 23 004 19 687
Profit and total comprehensive income attributable to:
Ordinary shareholders of the Company 22 988 19 544
Non-controlling interest 16 143
Profit and total comprehensive income 23 004 19 687
Basic earnings per share and diluted earnings per shares (cents) 25.61 21.70
Condensed consolidated statement of financial position
As at 31 March 2019
Reviewed Audited
March March
2019 2018
R '000 R '000
ASSETS
Non-current assets 42 244 44 936
Equipment and vehicles 5 104 5 514
Investment property 5 745 6 445
Goodwill 21 178 21 178
Intangible assets 430 646
Deferred tax asset 9 787 11 153
Current assets 172 372 127 311
Inventories 132 162
Trade and other receivables 165 244 122 707
Cash and cash equivalents 6 996 4 442
Total assets 214 616 172 247
EQUITY AND LIABILITIES
Capital and reserves 141 872 122 686
Ordinary share capital and share premium 2 672 2 672
Treasury shares (17 292) (16 279)
Retained earnings 164 589 144 406
Equity attributable to equity holders of the Company 149 969 130 799
Non-controlling interests (8 097) (8 113)
Current liabilities 72 744 49 561
Trade and other payables 53 370 36 498
Bank borrowings 19 374 13 063
Total equity and liabilities 214 616 172 247
Condensed consolidated statement of changes in equity
For the year ended 31 March 2019
Equity
attributable
to equity Non-
Share Treasury Retained holders of controlling
Share capital premium shares earnings the company interests Total equity
R '000 R '000 R '000 R '000 R '000 R '000 R '000
Audited: Opening balances at 1 April 2017 1 321 1 351 (16 279) 128 033 114 426 (8 256) 106 170
Audited: Total comprehensive
income - profit - - - 19 544 19 544 143 19 687
Audited: Dividends paid (3.50 cents per share) - - - (3 171) (3 171) - (3 171)
Audited: Balance at 1 April 2018 1 321 1 351 (16 279) 144 406 130 799 (8 113) 122 686
Reviewed: Total comprehensive income - profit - - - 22 988 22 988 16 23 004
Reviewed: Dividends paid (3.10 cents per share) - - - (2 805) (2 805) - (2 805)
Reviewed: Acquisition of treasury shares - - (1 013) - (1 013) - (1 013)
Reviewed: Closing balances at 31 March 2019 1 321 1 351 (17 292) 164 589 149 969 (8 097) 141 872
Condensed consolidated statement of cash flows
For the year ended 31 March 2019
Reviewed Audited
March March
2019 2018
R '000 R '000
Cash flows from operations 1 213 36 084
Taxation (paid) / refunded (1) 451
Interest paid (668) (2 249)
Interest received 293 268
Cash flows generated from operating activities 837 34 554
Cash flows utilised in investing activities (776) (3 974)
? purchase of equipment and vehicles (776) (3 351)
? other investing activities - (623)
Cash flows utilised in financing activities (3 818) (3 171)
? acquisition of treasury shares (1 013) -
? dividends paid (2 805) (3 171)
Net (decrease) / increase in cash and cash equivalents (3 757) 27 409
Cash and cash equivalents at beginning of year (8 621) (36 030)
Cash and cash equivalents at end of year (12 378) (8 621)
Segmental analysis
For the year ended 31 March 2019
Reviewed Audited
March March
2019 2018
R '000 R '000
Revenue: sales to external customers
Staffing Services 786 552 700 243
Training and Consulting Services 20 183 25 046
Total 806 735 725 289
Revenue: inter-segment revenue
Staffing Services - -
Training and Consulting Services 90 30
Total 90 30
Business segment operating profit results
Staffing Services 35 084 38 182
Training and Consulting Services 594 (5 901)
Shared Services (10 416) (10 027)
Operating profit 25 262 22 254
Interest received 293 268
Interest paid (668) (2 249)
Profit before taxation 24 887 20 273
Business segment EBITDA
Staffing Services 35 840 39 295
Training and Consulting Services 1 084 (5 362)
Shared Services (9 564) (9 084)
Total 27 360 24 849
Notes
Basis of preparation
The reviewed condensed consolidated results for the year ended 31 March 2019 have been prepared
in accordance with the framework concepts and the measurement and recognition requirements of
International Financial Reporting Standards (IFRS) and Financial Pronouncements as issued by the
Financial Reporting Standards Council. The report contains the information required by International
Accounting Standard (IAS) 34: Interim Financial Reporting, and are in compliance with the Listings
Requirements of the JSE Limited. The accounting policies as well as the methods of computation used
in the preparation of the results for the year ended 31 March 2019 are in terms of IFRS and are
consistent with those applied in the audited annual financial statements for the year ended 31 March 2018,
other than those in respect of the implementation of IFRS 9 and IFRS 15. There has been no
material effect due to the adoption of IFRS 9 and IFRS 15. There is no significant difference between
the carrying amounts of financial assets and liabilities and their fair values. The results are presented
in Rand, which is Primeserv Group Limited's reporting currency.
The company's directors are responsible for the preparation and fair presentation of the reviewed
condensed consolidated results. These results have been prepared by the Group Financial Director,
Mr R Sack, CA(SA).
Auditor's review
The results have been reviewed by the Group's auditors, Mazars. Their unqualified review opinion is
available for inspection at the company's registered office. Their review was conducted in accordance
with ISRE 2410 "Review of interim financial information performed by the independent auditor of the
entity."
Headline earnings per share
Reviewed Audited
March March
2019 2018
R '000 R '000
Attributable earnings 22 988 19 544
Headline earnings adjustments
? Loss on disposal of equipment and vehicles 4 67
? Impairment of investment in property 700 600
? Tax effect in respect of adjustments (298) (273)
Attributable headline earnings 23 394 19 938
Headline earnings and diluted headline earnings per share (cents) 26.06 22.14
Weighted average number of shares at year end ('000) 89 778 90 064
Net asset value per share
Reviewed Audited
March March
2019 2018
R '000 R '000
Number of shares in issue at end of year (net of treasury shares) ('000) 88 389 90 064
Net asset value per share (cents) 167 145
Tangible net asset value per share (cents) 132 109
Final dividend
Notice is hereby given that a gross cash dividend of 2.50 cents per share for the year ended 31 March
2019 was declared on Friday, 14 June 2019, 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 interim dividend are as follows:
Last date to trade "cum" dividend Tuesday, 16 July 2019
Date trading commences "ex" dividend Wednesday, 17 July 2019
Record date Friday, 19 July 2019
Date of payment Monday, 22 July 2019
Ordinary share certificates may not be dematerialised or rematerialised between Wednesday,
17 July 2019 and Friday, 19 July 2019, both days inclusive.
Shareholders who are not exempt from the Dividend Withholding Tax of 20% will therefore receive a
net dividend of 2.00 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 credited at their CSDP or broker on Monday, 22 July 2019.
Events after the reporting date
Management is not aware of any material events that occurred subsequent to the end of March 2019.
There has been no change in the Group's contingent liabilities since year-end.
Directors
DL Rose#^ (Chairman), M Abel (CEO), B Kali#, LM Maisela*, R Sack (FD)
# Independent non-executive *Non-executive ^Lead Independent
On behalf of the Board
DL Rose M Abel R Sack
Chairman CEO FD
14 June 2019, Illovo
Commentary
For the year ended 31 March 2019
Primeserv is an investment holding company and a
leading provider of integrated business support
services focused on providing client-centric human
capital services, spanning staffing and recruitment
services, productivity and functional outsourcing
services and training and consulting services. We
align our customised services to our clients' needs,
optimising their required human capital base to
enhance the capabilities of their organisations. Our
innovative solutions deliver economically
measurable value-added services that directly
impact on productivity and performance. This
allows our clients to prioritise business objectives,
so as to achieve their strategic goals. Primeserv has
a strong focus on workplace flexibility solutions
which are aligned to government initiatives aimed
at enhancing youth employment opportunities, and
on the development of labour force skills through
its training and learnership programmes with a
particular emphasis on the up-skilling of youth in
South Africa.
The Group has delivered another solid set of results
with revenue for the year increasing by 11% from
R725.3 million to R806.7 million when compared to
the previous year. Gross profit increased by 5%
from R107.0 million to R112.3 million and operating
profit increased by 14% from R22.3 million to
R25.3 million. Net finance costs also reflected a strong
improvement, decreasing from a net charge of
R2.0 million to R0.4 million. Profit before taxation
improved by 23% from R20.3 million to R24.9 million.
Earnings per share increased by 18% from
21.70 cents per share for the past year to 25.61
cents per share. The Group's balance sheet has also
continued to strengthen with the net asset value
climbing by 15% from 145 cents per share to 167
cents per share. During the year under review the Group
invested in the repurchase of shares as part of its buy-back
programme. Cash flows for the year were affected by
some significant project business that was
delivered towards the latter part of the financial
year, evidenced in the steep increase in trade
receivables and cash outflows. A significant portion
of these trade receivables were collected after year end,
resulting in a return to positive cash generation. As a result
the Days Sales Outstanding (DSO) moved out from 52 days to 63 days.
Whilst the Group's gearing increased slightly from 7% to 8%,
the interest cover improved from 11 times to 67 times.
The improved performance of the Group has
facilitated an increase in the dividends declared
with the overall dividend increasing by 29% from
3.10 cents per share to 4.00 cents per share (refer
dividend declaration below).
Revenue generated by the Staffing Services
segment increased by 12% from R700.2 million to
R786.6 million albeit that the project business
referred to above, was earned at lower margins.
Consequently, the segment's operating profit
decreased by 8% from R38.2 million to
R35.1 million. The segment's DSO increased from 52 days
to 63 days. The blue-collar staffing unit, which
specialises in servicing the logistics, warehousing
and distribution market, as well as the wholesale
and retail, and manufacturing and construction
sectors, produced a satisfactory set of results given
the prevailing adverse economic conditions. The
white-collar professional draughting and
engineering staffing unit delivered another pleasing
performance. As indicated in our interim report for
the six months to September 2018, the staffing unit
servicing the power generation sector faced
"extreme margin pressure".
The Training and Consulting Services segment was
restructured during the year and as a consequence
saw its revenue decrease by 19% from R25.1 million
to R20.2 million. The remedial actions implemented
over the last year resulted in a meaningful
turnaround with an operating profit of R0.6 million
being delivered when compared to the operating
loss of R5.9 million incurred in the prior year. The
segment's DSO improved from 54 days to 38 days at the
end of the current reporting period. The segment
continues to perform a strategic function within the
Group's operations.
Despite challenging and uncertain market
conditions, the Group is well positioned to respond
to opportunities as and when they present
themselves.
Sponsor
Grindrod Bank Limited
4th Floor Grindrod Towers, 8A Protea Place, Sandton, 2196
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