Interim results Six months ended 31 August 2010 P S V H O L D I N G S L I M I T E D 2010
Agenda Company overview Segmental review Financial overview Corporate Action Prospects 2 PSV HOLDINGS LIMITED
Background to the six months Positive influences Negative influences • Prospects have doubled • Economic downturn continues to put pressure on various businesses • Rand/US$ - cheaper imports • Toughest six months since company • Successful restructuring of Petrologic listed (profitable for the past year) • Government and large customer • Project-based businesses within Group spending not materialised experiencing increased orders • Tender award process is being extended • Re-pricing on tenders takes time and squeezes margin • Rand/US$ - higher selling prices 3 PSV touches your life in some way each day PSV HOLDINGS LIMITED
Segmental review 4 PSV touches your life in some way each day PSV HOLDINGS LIMITED PSV HOLDINGS LIMITED
Pumps, Spares & Valves Turnover R49.6m 25% GP margin: 25.3% Both turnover and GP margins under pressure • M+P turnover down ― Restructuring underway Blantyre Water Board • APE has strong order book ― Good working capital management ― Excellent prospects in place 5 PSV touches your life in some way each day PSV HOLDINGS LIMITED
Engineering Linings & Industrial Supplies 25% Turnover R89.6m Turnover R89.6m GP margin: 23.3% 46% Turnover up but GP’s under pressure • Groupline – turnover up 86% with a GP margin of 32% ― Projects across the board with a full order book • Omnirapid – turnover and GP increased ― Growth due to service excellence ― Inter-company trading remains strong • Engineered Linings – new Managing Director ― Margin pressure ― Full order book at better margins 6 PSV touches your life in some way each day PSV HOLDINGS LIMITED
Specialised Services Turnover R56.5m 25% 29% GP margin: 21.2% 46% Turnover down but improved GP margins • Petrologic – new management team ― Restructuring showing excellent results • Cryoshield – 6 months as part of PSV and performing ahead of expectations • Within next 6 months RAGI and Cryoshield will be merged into one business 7 PSV touches your life in some way each day PSV HOLDINGS LIMITED
Financial overview 8 PSV touches your life in some way each day PSV HOLDINGS LIMITED PSV HOLDINGS LIMITED
Condensed consolidated statement of comprehensive income Unaudited Unaudited R’000s 31 Aug 2010 31 Aug 2009 Variance Revenue 195 578 191 521 2.12% Gross Profit 45 393 50 635 -10.35% GP % 23,2% 26,4% -12,2% Operating expenses 32 932 29 992 -9,8% OPEX % 16,8% 15,7% 7,5% EBITDA (before impairment of goodwill & intangibles) 14 713 23 864 -38,4% EBITDA % 7,5% 12,5% -39,6% Net finance costs 4 334 7 502 42,2% DPN, Amortisation & Impairments 5 258 75 541 93,0% PBT (after impairment of goodwill & intangibles) 5 121 -59 179 108,7% Profit after tax 3 680 -59 788 106,2% PAT % 1,9% -31,2% 106,0% Headline Earnings 3 218 6 920 -53,5% Normalised Earnings 5 424 11 060 -51,0% 9 PSV touches your life in some way each day PSV HOLDINGS LIMITED
Earnings Per Share Unaudited Unaudited Cents 31 Aug 2010 31 Aug 2009 Basic EPS (cents) 1.48 (25.25) HEPS (cents) 1.30 2.92 Normalised EPS 2.19 4.67 Diluted EPS (cents) 1.45 (24.11) Diluted HEPS (cents) 1.27 2.79 Weighted avg. no. of shares (’000) 247 962 236 795 10 PSV touches your life in some way each day PSV HOLDINGS LIMITED
Reconciliation of Headline earnings Unaudited Unaudited R000’s 31 Aug 2010 31 Aug 2009 Profit / (Loss) after tax 3 680 (59 788) Profit on disposal of assets (462) (73) Impairment of goodwill and specific intangibles - 69 421 Deferred tax reversed on impairment of intangibles - (2 640) Headline Earnings 3 218 6 920 Interest on deferred purchase consideration 627 1 534 Amortisation of intangible assets 1 442 2 733 Deferred taxation on amortization of intangible assets (425) (765) Share based payments 570 289 Straight lining of rentals (8) 239 Normalised earnings 5 424 11 060 11 PSV touches your life in some way each day PSV HOLDINGS LIMITED
Normalised Margin Analysis (excluding impairments) Gross profit: 23%, Operating margins: 5% Industry benchmarks: GP% 20% - 24%, Operating margin 8% - 16% (with certain sector peers experiencing losses) Change in margin percentage PBT Gross Profit EBIT Rm 40% 20 30% 15 15.4 20% 10 13.3 10.2 10% 5 5.1 0% 0 Aug 2007 Aug 2008 Aug 2009 Aug 2010 * * Excluding impairment of goodwill & intangibles 12 PSV touches your life in some way each day PSV HOLDINGS LIMITED
Segmental Analysis Pumps, Spares and Valves Rm 70 Gross profit Revenue PBT 60 63.3 50 49.6 40 45.6 30 41.3% 20 37.5% 25.0% 10.4 10 6.4 0 -1.9 -10 Aug 2008 Aug 2009 Aug 2010 13 PSV touches your life in some way each day PSV HOLDINGS LIMITED
Segmental Analysis Engineering Linings and General Industrial Supplies Rm 100 Gross profit Revenue PBT 89.6 75 67.7 50 55.2 27.8% 23.0% 22.6% 25 9.1 9.1 2.2 0 Aug 2008 Aug 2009 Aug 2010 14 PSV touches your life in some way each day PSV HOLDINGS LIMITED
Segmental Analysis Specialised Services Rm 100 Gross profit Revenue PBT 75 70.4 61.4 56.5 50 25 19.4% 16.5% 21.0% 3.6 2.5 1.6 0 Aug 2008 Aug 2009 Aug 2010 15 PSV touches your life in some way each day PSV HOLDINGS LIMITED
Abridged statement of financial position Unaudited Audited R’000 31 Aug 2010 28 Feb 2010 ASSETS Non-current assets 130 211 121 311 Current assets 148 424 156 833 278 635 278 144 Total assets EQUITY AND LIABILITIES Shareholders' equity Ordinary shareholders' interest 154 471 150 221 Non-current liabilities 26 005 24 051 Current liabilities 98 160 103 873 278 635 278 144 Total equity and liabilities 39.0 38.3 Tangible net asset value per share (cents) 16 PSV touches your life in some way each day PSV HOLDINGS LIMITED
Movement Analysis • Non-current assets – Goodwill & intangible assets of R7,8m arising on acquisition of Cryoshield (Pty) Ltd • Current assets – Increase in inventories primarily attributable to 200% growth in Groupline projects – Decrease in trade and other receivables due to collection of long outstanding money from Zambian copper mines • Current liabilities – Payment of contract creditors arising on projects in Engineered Linings 17 PSV touches your life in some way each day PSV HOLDINGS LIMITED
Average net working capital Days 210 109 150 88 Stock 97 85 104 92 90 83 Net days 83 81 80 Debtors 30 54 52 Creditors -45 -48 -30 -85 -109 -90 -150 Aug 2007 Aug 2008 Aug 2009 Aug 2010 18 PSV touches your life in some way each day PSV HOLDINGS LIMITED
Condensed consolidated statement of cash flows Six months – 31 Aug 2010 Six months – 31 Aug 2009 Cash & cash equivalents at beginning -12.13 -3.06 of period (incl. acquisitions) 0.73 6.10 Cash flow from operations Cash effects of inv. activities -14.01 -19.18 Cash effects of financing activities 9.10 5.69 Net movement in cash & cash equivalents -4.20 -7.39 Cash at end of period -16.03 -10.45 -30 -20 -10 0 10 20 30 -30 -20 -10 0 10 20 30 Rm Rm 19 PSV touches your life in some way each day PSV HOLDINGS LIMITED
Corporate Action 20 PSV touches your life in some way each day PSV HOLDINGS LIMITED PSV HOLDINGS LIMITED
Turbo Agencies Background to Turbo Agencies Synergies with PSV group • Began trading in 1986 • PSV products will boost product selection for TA • Established agency agreements with importers across the three countries and manufacturers in SA • Entrepreneurial • Supplier of tooling and equipment to • Leverage off TA’s customer network with PSV • Mining range of products • Engineering • Kitwe • Automotive industries • Certain common clients (e.g. Mopani Mine) • MD – Keith Parry • Establishment of credible ongoing African footprint • Operational in Botswana, Zambia and DRC Sectors serviced: Service division: • Effective date: 01 March 2011 • Auto & general • Compressors Deal conditions: • Construction • Airline reticulations • Purchase consideration R24m financed as follows: • Mining & engineering • Oil management systems ― R12m in PSV shares over 2 years subject to profit warranty • Environmental products • Vehicle lifts ― R12m vendor finance loan payable over 5 years • Technical services • Diagnostic equipment at prime +1 • Overhead cranes • Turbo to repay pre-acquisition: • Lifting equipment ― Dividend loan of P3m • Maintenance of underground ― Management fee P5,4m workshops • Above repayments subject to free cashflow availability • Maintenance of cranes formula and profit warranty & employment service conditions 21 PSV touches your life in some way each day PSV HOLDINGS LIMITED
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