Unaudited Condensed Consolidated Financial Results

Transcription

1 PSV HOLDINGS LIMITED Incorporated in the Republic of South Africa (Registration number 1998/004365/06) Share code: PSV ISIN: ZAE ( PSV or the Company or the Group ) Unaudited Condensed Consolidated Financial Results for the 31 August 2012 and appointment of independent non-executive director

2 Condensed consolidated statement of comprehensive income for the period ended 31 August August August 2011 (Restated) Audited for the 12 months ended 29 February 2012 Revenue Gross profit Operating expenses* (42 338) (22 604) (79 046) Operating profit/(loss) (16 714) Net finance charges** (513) (3 291) (8 377) Profit/(loss) before taxation from continuing operations (25 091) Taxation (2 618) Profit/(loss) for the period from continuing operations (28 488) (Loss)/profit from discontinued operations (23 666) Total comprehensive (loss)/income for the period (23 093) (17 624) Reconciliation of headline (loss)/earnings (Loss)/profit attributable to PSV equity holders (23 093) (17 624) Loss/(profit) on disposal of fixed assets 144 (775) (637) Impairments Deferred tax reversed on impairment of specific intangibles (1 697) Loss/(profit) on sale of discontinued operations (18 820) Gain on bargain purchase (10 788) Headline earnings/(loss) (24 631) Headline earnings/(loss) continuing operations (28 453) Basic (loss)/earnings per share (cents) (9,03) 0,92 (7,06) Basic earnings/(loss) per share (cents) from continuing operations 0,22 0,80 (11,41) Headline earnings/(loss) per share (cents) 1,72 0,61 (9,86) Headline earnings/(loss) per share (cents) from continuing operations 0,28 0,49 (11,39) Diluted (loss)/earnings per share (cents) (8,74) 0,91 (6,83) Diluted earnings/(loss) per share (cents) from continuing operations 0,22 0,78 (11,04) Diluted headline earnings/(loss) per share (cents) 1,66 0,60 (9,55) Diluted headline earnings/(loss) per share (cents) from continuing operations 0,27 0,48 (11,04) Actual number of shares in issue at period end Weighted number of shares in issue at period end Fully diluted weighted average number of shares in issue at period end * Operating expenses are net of sundry income and include depreciation, impairments and amortisation charges ** Actual net interest paid was R2 225 million. Balance comprises deferred purchase consideration interest and foreign exchange gains and losses

3 Condensed consolidated statement of financial position as at 31 August 2012 Unaudited 31 August 2012 Unaudited 31 August 2011 Audited 29 February 2012 ASSETS Non-current assets Current assets Total assets EQUITY AND LIABILITIES Equity Non-current liabilities Current liabilities Total equity and liabilities Net asset value per share (cents) 35,68 58,62 50,72 Tangible net asset value per share (cents) 23,92 34,77 31,60

4 Condensed consolidated statement of changes in equity for the period ended 31 August August August 2011 Audited for the 12 months ended 29 February 2012 Balance at the beginning of the period Total comprehensive income for the period (23 093) (17 624) Dividends paid (9 219) Share-based payment transactions Foreign currency translation differences (96) Balance at the end of the period Condensed consolidated statement of cash flows for the period ended 31 August August August 2011 Audited for the 12 months ended 29 February 2012 Cash flows from operating activities (10 604) Cash flows from investing activities (8 830) Cash flows from financing activities (19 893) (8 185) Net movement in cash and cash equivalents (3 269) Cash at acquisition of subsidiary (2 001) Cash transferred to assets held for sale (4 120) (9 908) Cash and cash equivalents at the beginning of the period (10 668) (10 668) Cash and cash equivalents at the end of the period (15 938) (9 169)

5 Condensed consolidated segmental information for the 31 August 2012 Valves and Industrial Supplies Specialised Services Other Total Discontinued operations Revenue Gross profit Operating expenses* Profit/(loss) before tax (2 472) (6 254) (2 527) (15 465) Depreciation/amortisation Capital expenditure Gross assets** Gross liabilities** * Operating expenses exclude other income and finance costs ** Deferred tax assets and deferred tax liabilities are excluded Condensed consolidated segmental information for the 31 August 2011 Valves and Industrial Supplies Specialised Services Other Total Discontinued operations Revenue (55) Gross profit (406) Operating expenses* Profit/(loss) before tax (12 142) Depreciation/amortisation Capital expenditure (989) (893) Gross assets** Gross liabilities** (11 891) * Operating expenses exclude management fees, depreciation, other income and finance costs ** Deferred tax assets and deferred tax liabilities are excluded

6 COMMENTARY NATURE OF BUSINESS PSV is an industrial engineering holding company comprising two operating business segments: Valves and Industrial Supplies; and Specialised Services (including geosynthetic lining and cryogenic activities). BASIS OF PREPARATION The condensed consolidated financial statements have been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards ( IFRS ) and the presentation and disclosure requirements of IAS 34: Interim Financial Reporting, the JSE Limited Listings Requirements and in the manner required by the Companies Act, No 71 of 2008, as amended, of South Africa. The accounting policies used in the preparation of the interim financial statements for the 31 August 2012, are in terms of IFRS and are consistent with those applied in the Audited Financial Statements of the Group for the year ended 29 February These results have not been reviewed or audited by the Group s auditors, and have been compiled under the supervision of the Chief Financial Officer, Tony Dreisenstock, CA(SA). FINANCIAL REVIEW The period under review was materially affected by two major corporate actions, namely; The sale of the businesses comprising the pump segment for a purchase consideration of R54 million plus the recovery of R14 million loan accounts; and The sale of the business of Petrologic to Tokheim International. In order to better understand the financial position of the Group, the prior year statement of comprehensive income has been restated to reflect the results of the above businesses as discontinued operations. The liquidation of the Group s primary debt, coupled with the elimination of a major loss-making subsidiary, has permitted management to implement the last phase of the restructuring programme. This programme also entails decentralising the Group, transferring shared service costs to the subsidiaries where possible and practical as well as materially reducing the remaining fixed costs. The effects of the last phase of the restructuring will only start to filter through in the next six months. The Group s revenue from continuing operations has increased by 65,7% to R182,3 million (August 2011: R110,0 million). The gross profit margin remained constant at just over 25%. Operating costs, relative to turnover, have increased slightly to 23,2% (August 2011: 20,6%) but are substantially lower than the 28,6% operating cost ratio which prevailed at the February 2012 financial year-end. The effects of repaying the Company s primary debt resulted in a drop in finance costs and a material reduction in the Group s debt:equity ratio which now stands at 13% (August 2011: 34%). The decision to transfer the business of Petrologic to Tokheim resulted in a substantial loss on discontinued operations amounting to R21,9 million. The loss is mainly attributable to the impairment of fixed assets and stock and will not impact upon the Group s headline earnings. The balance of the loss made on discontinued operations is attributable to loan accounts written off and relevant disposal costs arising from the sale of the pump segment. Cash Flow Review The Group s cash flows have improved from R9,2 million in February 2012 to R17,5 million as at 31 August 2012 due to the following factors: Net cash received on the sale of the pump companies and the settlement of residual Investec debt Cash reinvested into subsidiaries for working capital purposes (10 000) Dividend paid to shareholders (9 218) Income tax paid (including R1,5 million extraneous tax charge levied by the DRC tax authorities)* (3 523) Net finance costs paid (net of exchange gains and losses) (513) Cash balances transferred to pump companies on sale (4 120) Cash generated from operations * The tax charge is currently being investigated by the Group s auditors and tax attorneys

7 The loss attributable to the sale of Petrologic has not affected the Group s cash flows. The remaining businesses are generally profitable and cash generative. Due to the substantial growth in the remaining cash-generating units, the Board has decided that a detailed assessment of the Group s goodwill and intangibles will only be undertaken at year-end. Accordingly, no impairment was made at this time. OPERATIONAL REVIEW Valves and Industrial Supplies This segment contributed 62% (August 2011: 31%) to the Group s consolidated revenue at an average gross profit margin of 31,8% (August 2011: 31,2%). Revenue increased substantially to R112,7 million (August 2011: R59,8 million). The increase in revenue is partially attributable to the inclusion of the revenue from PSV Mitech for the first time amounting to R13,8 million. However, the remaining companies in this segment, namely Omnirapid and Turbo Agencies, have exceeded budget expectations and shown organic growth patterns exceeding 30% on the prior period. Specialised Services Specialised Services contributed 38% (August 2011: 69,7%) to the Group s consolidated revenue at an average gross profit margin of 14,6% (August 2011: 18,6%). The segmental revenue increased from R50,2 million to R69,6 million mainly as a result of a 65% increase in revenue generated by Engineered Linings. The small loss generated in this segment is expected to reverse in the next six months due to the existing escalating order book. CHANGES TO THE BOARD During the period under review, Portia Molefe resigned as independent non-executive director on 11 July 2012 and David Joseph Kelly resigned as non-executive director on 30 August We would like to thank Portia and Dave for their hard work and dedication. In addition, the Board is pleased to advise shareholders of the appointment of Eric Ratshikhopha as independent non-executive director with immediate effect. Eric will also be appointed as member of the Audit Committee and as chairman of the Social and Ethics Committee. He currently holds a number of directorships on foundations and serves as a trustee on a number of trusts. His background includes vast work experience in the mining sector, having been involved in industrial relations, health and safety, strategic management and corporate social investment. Eric has worked at Gencor, Genmin, Billiton SA and most recently as Corporate Development Director at Xstrata. His wealth of experience in transformation, stakeholder relations and community development as well as general management practices will be advantageous to PSV. The Board welcomes Eric and looks forward to his contribution to PSV. DIVIDENDS Other than the special dividend paid in July 2012, 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 will review the dividend policy annually. SUBSEQUENT EVENTS Aside from the transfer of Petrologic to Tokheim with effect from 4 September 2012, there have been no material events that have occurred since 31 August 2012 up to the date of this report. PROSPECTS With the implementation of the decentralising model well under way, the management team of PSV is confident regarding the Group s prospects. The real benefits of this model are expected to fully unfold during the course of next year. The continuing operations of the Group are profitable as well as cash generative and should contribute to the Group s growth going forward. The Group s order book is healthy at record levels compared to the prior periods. For and on behalf of the Board AJD da Silva Chief Executive Officer 19 October 2012 AR Dreisenstock Chief Financial Officer

8 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); P Robinson* * British COMPANY SECRETARY 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): Tel (international): Fax: TRANSFER SECRETARIES Computershare Investor Services Proprietary Limited, 70 Marshall Street, Johannesburg, South Africa, 2001 PO Box 61051, Marshalltown, South Africa, 2107 DESIGNATED ADVISER Merchantec Capital Maxx Corporate Communications