Johannesburg, Mar 15 (I-Net Bridge) - Primeserv Group (PMV), the investment holding company, on Monday reported a dip in its full year diluted headline earnings per share (HEPS) to 10.51 cents from 15.04 cents.

The company reported a net profit attributable to shareholders of 11.5 million rand for the 12 months to end December 2009, compared to 17.5 million rand for the 12 months to end December 2008.

Consolidated group revenue for the review period declined by 3% from 539.9 million rand to 523.5 million rand as businesses continued to bear the effects of the global economic slowdown.

Group EBITDA fell by 19% from 23.6 million rand to 19.1 million rand with operating profit down by 20% from 21.8 million rand to 17.5 million rand.

The total annual dividend has been maintained at 3 cents per share.

“Notwithstanding the poor trading environment, the group’s balance sheet continued to strengthen with cash flows from operations improving by 20.4 million rand, while cash flows from investing and financing activities improved by 71%,” the company said.

Working capital invested in trade receivables improved by 13.1 million rand from 92.0 million rand to 78.9 million rand at year-end.

Cash and cash equivalents improved by 70% from 16.3 million rand to 27.8 million rand at year-end, while bank borrowings reduced by 16% from 35.3 million rand to 29.5 million rand.

The group’s net gearing has improved from 29% to 3% over the 12 months under review while net asset value per share has increased by 16% from 61 cents per share to 71 cents per share.

An investment holding company focusing on delivering human resources (HR)products, services and solutions, Primserv ahs two main areas of specialization -Human Capital Development operating through Primeserv HR Solutions and Primeserv Colleges; and Human Capital Outsourcing, operating through the group’s largest division, Primeserv Outsourcing.

Revenue in the outsourcing division declined by 5% from 501.7 million rand to 478.1 million rand with the division’s full year operating profit declining by 31% from 27.8 million rand to 19.2 million rand.

The logistics, warehousing, construction and industrial flexible staffing units
continued to experience depressed trading conditions.

The “white collar” professional draughting and engineering units have been particularly affected by the curbing of large-scale mining and engineering projects.

“There has been much speculation and debate in the press and other public media about the role of the atypical contract labour and temporary employment services industry within the South African economy.  In line with this the group believes that additional regulation of the industry may be necessary,” the company said.

It said it remained convinced of the positive role within the economy to be played by the temporary employment services industry and is committed to the International Labour Organisation concept of “decent work”.

The company said it has been a pro-active participant in forums where the issues of
temporary employment services have been considered and has also been active on less formal levels in attempting to achieve a common understanding and a negotiated solution in the best interest of all stakeholders.

Looking ahead the company said with the pace of South Africa’s economic recovery remaining uncertain, a period of at least 18 months of further restrictive trading conditions are expected to prevail.

“Consequentially, the group remains cautious in regard to anticipated future results,” it said.

It believes the group operations are well placed to benefit when the upturn occurs while its low gearing and strong balance sheet, position it well to seek out strategic acquisitive opportunities that will broaden the business base and provide further impetus for growth.
Ends
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