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CSG Holdings HY 2013 results

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CSG Holdings HY 2013 results

CSG Holdings HY 2013 results

Published in: Investor Relations
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  • 1. (Registration number 2006/011359/06) | JSE code: MSA | ISIN: ZAE000165446 UNAUDITED CONDENSED CONSOLIDATED RESULTS FOR SIX MONTHS ENDED 31 DECEMBER 2012 Announcement appeared on SENS 14 February 2013 CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME Six months ended 31 December Year ended R’000 2012 Unaudited 2011 Re-presented Unaudited 30 June 2012 Audited Revenue 220 905 165 205 340 629 Cost of sales (190 611) (138 967) (287 578) Gross profit 30 294 26 238 53 051 Net operating expenses (12 118) (10 633) (22 125) Operating profit before impairments 18 176 15 605 30 926 Impairment of investments in joint ventures – – (644) Impairment of loans to joint ventures – – (1 206) Operating profit 18 176 15 605 29 076 Interest received – 650 759 Interest paid (999) (718) (2 801) Profit before taxation 17 177 15 537 27 034 Taxation (5 210) (4 344) (9 488) Profit attributable to the equity holders of the parent 11 967 11 193 17 546 Other comprehensive income – – – Comprehensive income attributable to the equity holders of the parent from continuing operations 11 967 11 193 17 546 Comprehensive loss attributable to the equity holders of the parent from discontinued operations – (98 386) (110 906) Total comprehensive income/(loss) attributable to the equity holders of the parent 11 967 (87 193) (93 360) Weighted average shares in issue (‘000) 155 182 203 182 188 231 Headline earnings reconciliation Attributable earnings/(loss) 11 967 (87 193) (93 360) Impairment of assets of the disposal group – 78 922 78 922 Loss recognised on the sale of the disposal group – – 11 910 Loss on sale of property, plant and equipment (after taxation) – – 19 Impairment of Investments – – 644 Headline earnings 11 967 (8 271) (1 865) Earnings per share (cents) Earnings/Loss per share 7,7 (42,9) (49,6) From continuing operations 7,7 5,5 9,3 From discontinued operations – (48,4) (58,9) Headline earnings/(loss) per share 7,7 (4,1) (1,0) From continuing operations 7,7 5,5 9,7 From discontinued operations – (9,6) (10,7) CONDENSED GROUP STATEMENT OF FINANCIAL POSITION R’000 31 December 30 June 2012 Unaudited 2011 Unaudited 2012 Audited ASSETS Non-current assets 30 627 44 913 28 595 Property, plant and equipment 5 604 27 458 5 343 Goodwill 13 980 13 980 13 980 Investment in and loans to joint ventures 3 777 1 870 2 455 Vendor loan payable 5 000 – 5 000 Deferred taxation 2 266 1 605 1 817 Current assets 66 014 71 481 64 317 Inventories 1 056 4 289 1 722 Trade and other receivables 61 491 66 907 61 389 Bank and call deposits 3 467 285 1 206 Total assets 96 641 116 394 92 912 EQUITY AND LIABILITIES Capital and reserves 49 606 64 446 37 639 Non-current liabilities 2 233 1 864 1 820 Interest-bearing liabilities 2 233 1 517 1 820 Deferred taxation – 347 – Current liabilities 44 802 50 084 53 453 Interest-bearing liabilities – 2 874 378 Interest-bearing loan from related party – – 3 500 Bank overdrafts and invoice discounting 10 109 23 929 17 356 Trade and other payables 31 525 22 067 29 079 Taxation payable 3 168 1 214 3 140 Total equity and liabilities 96 641 116 394 92 912 Shares in issue (‘000) 155 182 203 182 155 182 Net asset value per share (cents) 32,0 31,7 24,3 Net tangible asset value per share (cents) 23,0 24,8 15,2 CONDENSED GROUP STATEMENT OF CASH FLOWS R’000 Six months ended 31 December Year ended Unaudited 2012 Unaudited 2011 Audited 30 June 2012 Cash flow from operations 11 563 (3 132) 6 847 Cash generated by operations 18 194 2 857 18 906 Interest received – 650 759 Interest paid (999) (1 611) (4 013) Taxation paid (5 632) (5 028) (8 805) Cash flow from investing activities (2 143) (130) (5 088) (Increase)/Decrease in advances to joint ventures (1 322) (747) (2 644) Cash flow from disposal of subsidiary – – (1 905) Net (investment)/proceeds on disposal of in property, plant and equipment (821) 617 (539) Cash flow from financing activities Movement in loans payable 35 (3 411) (938) (Decrease)/Increase cash resources 9 455 (6 673) 821 Cash resources at beginning of period (16 150) (16 971) (16 971) Cash resources at end of period (6 695) (23 644) (16 150) Cash resources (6 642) (23 644) (16 150) Bank and call deposits 3 467 285 1 206 Bank overdraft and invoice discounting (10 109) (23 929) (17 356) SEGMENT REPORTING (CONTINUING OPERATIONS) R’000 Six months ended 31 December Year ended Unaudited 2012 Unaudited 2011 Audited 30 June 2012 Revenue Personnel outsourcing 214 908 158 943 328 428 Total revenue 217 448 161 338 332 776 Internal (2 540) (2 395) (4 348) Safety surveillance 5 997 6 262 12 201 Total group 220 905 165 205 340 629 Operating profit 18 176 15 605 30 926 Personnel outsourcing 16 472 13 543 26 385 Safety surveillance 1 704 2 062 4 282 Head office – – 259 Impairments Personnel outsourcing – – (1 850) Net interest (paid)/received (999) (68) (2 042) Personnel outsourcing (1 280) (39) (2 040) Safety surveillance 281 (29) (2) Profit before taxation 17 177 15 537 27 034 Personnel outsourcing 15 192 13 504 22 495 Safety surveillance 1 985 2 033 4 280 Head office – – 259 CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY R’000 Six months ended 31 December Year ended 2012 Unaudited 2011 Unaudited 30 June 2012 Audited Equity at beginning of period 37 639 151 639 151 639 Total comprehensive income for the period 11 967 (87 193) (93 360) Shares repurchased as per subsidiary sale agreement – – (20 640) Equity at end of period 49 606 64 446 37 639 INFORMATION ON DISPOSAL GROUPS (SCAFFOLDING) R’000 Six months ended 31 December Year ended 2012 Unaudited 2011 Unaudited 30 June 2012 Audited Analysis of the results of discontinued operations Revenue – 7 329 19 905 Expenses – (25 900) (38 767) Impairment of assets of the disposal group – (78 922) (78 922) Operating loss – (97 493) (97 784) Interest received – – – Interest paid – (893) (1 212) Loss before tax – (98 386) (98 996) Tax – – – Loss after tax – (98 386) (98 996) Loss recognised on the sale of the disposal group – – (11 910) Total comprehensive loss attributable to the equity holders of the parent from discontinued operations – (98 386) (110 906) Assets of the disposal group disposed of Non-current assets – 24 813 24 697 Property, plant and equipment – 24 752 24 624 Deferred tax asset – 61 73 Current assets – 19 644 21 677 Inventories – 2 749 2 061 Trade and other receivables – 16 895 17 711 Bank and call deposits – – 1 905 Non-current assets held for sale – – – Total assets – 44 457 46 374 Liabilities of the disposal group disposed of Non-current liabilities – 2 795 2 317 Interest-bearing liabilities – 2 795 2 317 Current liabilities – 4 644 6 505 Interest-bearing liabilities – 1 398 – Bank overdrafts and invoice discounting – 1 925 – Trade and other payables – 1 321 6 505 Total liabilities – 7 439 8 822 Cash flow information Cash flow from operations – (7 775) 4 206 Cash flow from investing activities – 1 117 753 Cash flow from financing activities – 6 603 (1 183) (Decrease)/Increase cash resources – (55) 3 776 NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS Basis of preparation and accounting policies The condensed consolidated interim results for the six months ended 31 December 2012, have been prepared in terms of International Financial Reporting Standards and comply with IAS 34 – Interim Financial Reporting, the Listings Requirements of the JSE Limited, the Companies Act, No. 71 of 2008, as amended, and the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee. The condensed consolidated interim statements do not include all of the information required for a full set of annual financial statements. The principle accounting policies used in the preparation of the interim results are consistent with those applied in the annual financial statements for the year ended 30 June 2012. The condensed consolidated results for the six months ended 31 December 2012 have not been reviewed or audited by the group’s auditors. The condensed interim financial statements have been prepared under the supervision of Ms SL Grobler CA(SA), Financial Director. Events after reporting date The directors are not aware of any material events that occurred between the balance sheet date and the date of this report. Discontinued operation On 8 March 2012, the group sold the entire issued share capital and group loan accounts against the Scaffolding Division (Top Fix Scaffolding (Pty) Limited and MBM Administration and Labour Brokers (Pty) Limited) to Mr BW Marais. Financial information relating to the scaffolding business operation is set out after the segment report. The results of the discontinued operation are disclosed separately in the statement of comprehensive income and comparative figures have been re-presented. Refer to the SENS announcement of 23 April 2012 for full details of the transaction. Financial performance The group’s performance for the six months ended on 31 December 2012, exceeded expectations despite the challenging economic environment. The disposal of the loss-making scaffolding division during the previous period also contributed to positive group results. Revenue from continuing operations increased by 33,7% from R165,2 million to R220,9 million in the current period, while the gross profit percentage dropped from 15,9% to 13,7%, mainly due to continuing pressure on margins. For the six months ended 31 December 2012, headline earnings per share from continuing operations amounted to 7,7 cents, compared to 5,5 cents for the comparative period ended 31 December 2011. Operating profit from continuing operations rose by 16,5% to R18,2 million. Further to the SENS announcements of 6 December 2012 and 11 February 2013, group results for the period ended 31 December 2012 reflect earnings and headline earnings per share of 7,7 cents, compared to a loss per share of 42,9 cents and a headline loss per share of 4,1 cents for the comparative period to 31 December 2011. The increase is mainly due to the elimination of losses previously suffered in the scaffolding division. Net interest charges incurred rose from R961 000 for the period ended 31 December 2011 to R999 000 in the current period. Personnel outsourcing The personnel outsourcing division achieved an operating profit for the period of R16,5 million, representing an increase of 21,6% on those achieved for the period ended 31 December 2011. The spectrum of local clients have been broadened, contracts for international personnel placements in Mozambique have been renewed and further international placements are being actively pursued. Safety surveillance The safety surveillance division’s revenue decreased from R6,3 million to R6,0 million, resulting in a lower operating profit of R1,7 million (2011: R2,1 million) for the period. Management has identified growth opportunities and is optimistic about future prospects. Related-party transactions During the previous period the group borrowed various amounts to assist with working capital requirements from Mr JJ Senekal (non-executive director) on a short-term basis (one month loans) at a rate of R50 000 per month per R1 million borrowed. An amount of R3,5 million was owed to Mr Senekal at 30 June 2012, and was repaid in July 2012. Interest on the loan amounted to R175 000 and is included in net interest charges for the period. Future prospects The Personnel Outsourcing division will take advantage of the rapid expansion of the client base and the resulting organic growth opportunities and acquisition prospects. The Safety Surveillance division anticipates an increase in revenue during the second half of the year, due to the establishment of their in-house training facility. Current sale volumes are expected to continue and margins are expected to remain stable. The group is focused on securing new contract business in all divisions. Capital commitments and contingencies The group had no significant outstanding capital commitments or contingencies as at 31 December 2012. Dividend declaration The Board of directors has resolved not to declare a dividend for the period ended 31 December 2012. For and on behalf of the Board BT Ngcuka (Chairman) FF Goosen (Chief Executive Officer) 14 February 2013 Directors BT Ngcuka* (Chairman); FF Goosen (Chief Executive Officer); SL Grobler (Financial Director); JJ Senekal*#; NN Sonjani*#; PN de Waal* (* non-executive) (# independent) Secretary and registered office MN Hattingh, 6 Topaz Street, Littleton Manor, Centurion, 0157 Transfer secretaries Link Market Services South Africa (Pty) Limited, 11 Diagonal Street, Johannesburg, 2000 (PO Box 4844, Johannesburg, 2001) Designated advisor Sasfin Capital, a division of Sasfin Bank Limited Website: www.msholdings.co.za (Registration number 2006/011359/06) | JSE code: MSA |

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