Context to results PSV HOLDINGS LIMITED NTAV of 18.76 cps is 56% - - PDF document

▶
context to results
SMART_READER_LITE
LIVE PREVIEW

Context to results PSV HOLDINGS LIMITED NTAV of 18.76 cps is 56% - - PDF document

Dec 19, 2023 261 likes •391 views

PSV HOLDINGS LIMITED Interim results presentation to shareholders Six months ended 31 August 2014 PSV HOLDINGS LIMITED Context to results PSV HOLDINGS LIMITED NTAV of 18.76 cps is 56% * greater than share price showing underlying value

slide-1
SLIDE 1

1

PSV HOLDINGS LIMITED

PSV HOLDINGS LIMITED

Interim results presentation to shareholders

Six months ended 31 August 2014

PSV HOLDINGS LIMITED

Context to results

2

* Based on a share price of 12 cps as at 11 November 2014

NTAV of 18.76 cps is 56% * greater than share price showing underlying value in the business Omnirapid continues to produce strong and steady results African Cryogenics remains profitable

slide-2
SLIDE 2

2

PSV HOLDINGS LIMITED

Negatives

  • Strike actions (Mining & NUMSA) impacted operations
  • High head office costs
  • Major Engineered Linings customer went into liquidation
  • Cash reserves reduced to fund losses
  • Working capital management
  • Poor performance from Turbo Group due to delayed contracts

Background to the six months

3

Positives

  • Integration of African Cryogenics progressing well
  • Engineered Linings losses stopped. Business now cash generative
  • Omnirapid remain profitable despite tough economic conditions

PSV HOLDINGS LIMITED

Industrial Supplies (sale of goods & service) Specialised Services (manufacturing & installation)

Make up of operating segments

4

slide-3
SLIDE 3

3

PSV HOLDINGS LIMITED

African footprint

Democratic Republic

  • f the Congo

Zambia Botswana

Kitwe Cape Town

Zimbabwe Namibia

Gaborone Jhb Kolwezi Kolwezi (DRC) Kitwe (Zambia) Gaborone (Botswana) Turbo Agencies Cape Town Kitwe (Zambia) Gaborone (Botswana) Head Office Johannesburg Regional Offices

5

FINANCIAL OVERVIEW

PSV HOLDINGS LIMITED

6

slide-4
SLIDE 4

4

PSV HOLDINGS LIMITED

Statement of comprehensive income

7

Unaudited 31 Aug 2014 R '000s Unaudited 31 Aug 2013 R '000s Audited 28 Feb 2014 R '000s Revenue 135 947 225 512 391 121 Gross profit 26 825 43 475 72 186 Gross profit % 19.7% 19.3% 18.5% Operating expenses (37 288) (34 225) (74 724) Operating (loss) / profit (10 463) 9 248 (2 538) Net finance charges (1 626) (1 017) (2 230) (Loss) / PBT for the period from continuing operations (12 089) 8 231 (4 768) Taxation 1 623 (3 154) 11 458 (Loss) / Profit for the period from continuing operations (10 466) 5 077 6 690 (Loss) from discontinued operations

  • (4 838)

(4 837) Total comprehensive income / (loss) for the period (10 466) 239 1 853

PSV HOLDINGS LIMITED

Statement of comprehensive income

8

Unaudited 31 Aug 2014 R '000s Unaudited 31 Aug 2013 R '000s Audited 28 Feb 2014 R '000s Revenue 135 947 225 512 391 121

  • Strike action negatively impacted the whole group
  • Engineered Linings right sized
slide-5
SLIDE 5

5

PSV HOLDINGS LIMITED

Statement of comprehensive income

9

Unaudited 31 Aug 2014 R '000s Unaudited 31 Aug 2013 R '000s Audited 28 Feb 2014 R '000s Revenue 135 947 225 512 391 121 Gross profit 26 825 43 473 72 186 Gross profit % 19.7% 19.3% 18.5% Operating expenses (37 288) (34 225) (74 724) Operating (loss) / profit (10 463) 9 248 (2 538) Net finance charges (1 626) (1 017) (2 230) (Loss) / PBT for the period from continuing operations (12 089) 8 231 (4 768) Q1 Q2 Total Revenue 57 598 78 349 135 947 Gross Profit 8 179 18 646 26 825 Gross Profit % 14.20% 23.80% 19.73% EBITDA (7 460) 466 (6 995) PBT/(Loss) (9 866) (2 223) (12 089)

PSV HOLDINGS LIMITED

Statement of comprehensive income

10

Unaudited 31 Aug 2014 R '000s Unaudited 31 Aug 2013 R '000s Audited 28 Feb 2014 R '000s Revenue 135 947 225 512 391 121 Gross profit 26 825 43 475 72 186 Gross profit % 19.7% 19.3% 18.5% Operating expenses (37 288) (34 225) (74 724) Operating (loss) / profit (10 463) 9 248 (2 538) Net finance charges (1 626) (1 017) (2 230) (Loss) / PBT for the period from continuing operations (12 089) 8 231 (4 768) Taxation 1 623 (3 154) 11 458 (Loss) / Profit for the period from continuing operations (10 466) 5 077 6 690 (Loss) from discontinued operations

  • (4 838)

(4 837) Total comprehensive income / (loss) for the period (10 466) 239 1 853 Strike action (R2,0m) Write-offs associated with Protech Khuthele (R1,9m) Protech Khuthele non-invoiced amount (R2,5m) Retrenchment costs, relocation costs AC, EL operating losses, Turbo operating losses (R4,1m) (R10,5m)

slide-6
SLIDE 6

6

PSV HOLDINGS LIMITED

Earnings per share

31 Aug 2014 31 Aug 2013 Basic (loss)/earnings per share (cents) (3.98) 0.09 Headline (loss)/earnings per share (cents) (4.01) 2.00 Diluted (loss)/earnings /(loss) per share (cents) (3.98) 0.09 Diluted headline (loss)/earnings per share (cents) (4.01) 1.99 Actual number of shares in issue at end of the period 272 548 272 548 Weighted number of shares in issue at end of the period 262 990 263 781 Fully diluted weighted average number of shares in issue at end of the period 263 218 265 308

11

PSV HOLDINGS LIMITED

Consolidated balance sheet

Unaudited 31 Aug 2014 Audited 28 Feb 2014 ASSETS Non-current assets 69 075 73 057 Current assets 116 012 115 996 Inventory 29 852 29 358 Trade and other receivables 65 633 58 033 Taxation receivable

  • 894

Cash and cash equivalents 20 527 27 711 Total assets 185 087 189 053 EQUITY AND LIABILITIES Equity 88 293 99 000 Non-current liabilities 12 948 15 367 Current liabilities 83 846 74 686 Current portion of deferred purchase consideration 5 722 6 599 Taxation payable 2 456 3 171 Current portion of long term liabilities 3 135 2 836 Trade and other payables 51 245 45 407 Bank overdraft 21 288 16 673 Total equity and liabilities 185 087 189 053

12

slide-7
SLIDE 7

7

PSV HOLDINGS LIMITED

Liquidity analysis

13

31 Aug 2014 28 Feb 2014 Current ratio 1.38 1.55 Acid Test ratio 1.03 1.16 Debt Equity (interest-bearing) 44.14% 38.12% Debt Equity (net of cash) 20.89% 10.12% Interest cover (net interest) (6.44) 9.10 Total interest-bearing debt 38 972 37 734 31 Aug 2014 28 Feb 2014 Earthwise Loan 5 989 7 258 Repayable in full 28 Feb 2016 bears interest at prime + 1% Parry Loan 3 000 4 000 Repayable in full 28 Feb 2015 bears interest at prime Finance Leases and Loan 8 695 9 803 Repayment period ranges 3 to 5 years at interest rates varying between 8 to 11%. Bank Overdraft 21 288 16 673 38 972 37 734

PSV HOLDINGS LIMITED

Liquidity analysis

14

31 Aug 2014 28 Feb 2014 Current ratio 1.38 1.55 Acid Test ratio 1.03 1.16 Debt Equity (interest-bearing) 44.14% 38.12% Debt Equity (net of cash) 20.89% 10.12% Interest cover (net interest) (6.44) 9.10 Total interest-bearing debt 38 972 37 734 Total interest-bearing debt net of cash 18 445 10 024 NAV per share (cents) 33.57 37.88 NTAV per share (cents) 18.76 22.65

slide-8
SLIDE 8

8

PSV HOLDINGS LIMITED

21.5% 26.3% 16.1% 12.0% 0% 10% 20% 30% 40% 50% Aug 2014 Aug 2013

Segmental

15

Segment GP % Revenue - Aug 2014

Specialised Services Industrial Supplies

Revenue – Aug 2013

51% 49% 70% 30%

PSV HOLDINGS LIMITED

70%

Industrial Supplies

Omnirapid – reduced turnover and profitability, cash generative Turbo Agencies incurred losses ‒ Mining contracts not yet renewed ‒ Inflated infrastructural costs ‒ Bad debts

  • K&M Mining Botswana
  • Mutanda Mining
  • Orapa Mining
  • First Quantum

Industrial Supplies 51% Aug 2014 Aug 2013 Turnover R95,5m R115,8m GP margin 21.5% 26.3% PBT % (0.1)% 8.8%

Aug 2014 Aug 2013

16

slide-9
SLIDE 9

9

PSV HOLDINGS LIMITED

30% 49%

Specialised Services

Aug 2014 Aug 2013

Aug 2014 Aug 2013 Turnover R42,3m R109,7m GP margin 16.1% 12.0% PBT % (9.5)% 2.0% Specialised Services

17

African Cryogenics - new facility improving efficiencies ─ Cash generative ─ Affected by industrial strike action ─ Development of new tanker designs and technologies

PSV HOLDINGS LIMITED

Specialised Services

18

Engineered Linings - radical downsizing ─ Infrastructure costs cut by 75% ─ Payment arrangements in place Focus on smaller low value, high margin installations Risk profile of business is now more positive

slide-10
SLIDE 10

10

PSV HOLDINGS LIMITED

Abridged cashflow statement

(761) (5 288) 2 996 (9 507) 11 038 31 Aug 2014 (R ‘000s) Cash and cash equivalents at end of period / year Cash flows from financing activities Cash flows from investing activities Cash flows from operations Cash and cash equivalents at beginning of period / year

19

11 038 (6 891) 4 320 (3 140) 16 749 28 Feb 2014 (R ‘000s)

PSV HOLDINGS LIMITED

PROSPECTS

PSV HOLDINGS LIMITED

20

slide-11
SLIDE 11

11

PSV HOLDINGS LIMITED

Remedial actions taken - Post interims

21

Cancellation of lease due to landlord non performance Relocated to new offices Reduced head office staff numbers Omnirapid moved into African Cryogenics facility Turbo Agencies:

‒ Mid management replaced as part of turnaround plan ‒ Revamp of offices ‒ Centralised procurement in SA ‒ Implementing new operating procedures ‒ Head count reduction:

  • 52% in Zambia
  • 33% in Botswana

Engineered Linings

‒ Management restructured ‒ PSV Holdings taken over admin & finance functions ‒ 30% reduction in headcount ‒ Break-even position reduced by 75% ‒ Payment terms with critical suppliers negotiated African Cryogenics ‒ Improved operating and production efficiencies due to facility consolidation ‒ Aggressive marketing to gas companies in SA combating imports

Head Office Industrial Supplies Specialised Services Operating cost saving of

50%

Operating cost saving of

20%

EL cost saving

  • f

70%

Nov 2014

Effective from

Feb 2015

Effective from

Sep 2014

Effective from

PSV HOLDINGS LIMITED

Potential cost savings

Approximate: Head office costs R1 000 000 pm Omnirapid R50 000 pm Turbo Agencies R200 000 pm African Cryogenics R100 000 pm Engineered Linings R200 000 pm

22

Remedial action

will alleviate

cash flow

pressure Full impact of cost savings to be realised in 2016

slide-12
SLIDE 12

12

PSV HOLDINGS LIMITED

Short term plans

23

Omnirapid

  • Focus on excellent reputation of

client service

  • Focus on margin maintenance

Expect tough trading conditions for the next six months Severe remedial action taken ensures PSV remains a going concern

African Cryogenics

  • Aggressive marketing focusing on

gas companies ordering locally, away from imports

  • New tanker design and technologies
  • Assessment of export market

With these actions in place,

losses will reduce

and

profitability

will be restored

Therefore: Turbo Agencies

  • Implementing new procurement

and marketing strategies

  • Customer diversification
  • Mining and automotive focus

Engineered Linings

  • Focus on smaller profitable contracts
  • Commission driven large material supply
  • Rebuilding closer relationships with suppliers
  • Focus on liquidating old debt

With these in place, Turbo should

return to profitability

with positive cash generation

PSV HOLDINGS LIMITED

PSV HOLDINGS LIMITED

Thank you