Interim results Six months ended 31 August 2010 P S V H O L D I N - - PowerPoint PPT Presentation

P S V H O L D I N G S L I M I T E D

Six months ended 31 August 2010

Interim results 2010

PSV HOLDINGS LIMITED

Agenda Company overview Segmental review Financial overview Prospects

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Corporate Action

PSV HOLDINGS LIMITED

PSV touches your life in some way each day 3

Background to the six months

• Prospects have doubled
• Rand/US$ - cheaper imports
• Successful restructuring of Petrologic

(profitable for the past year)

• Project-based businesses within Group

experiencing increased orders

Positive influences Negative influences

• Economic downturn continues to put

pressure on various businesses

• Toughest six months since company

listed

• Government and large customer

spending not materialised

• Tender award process is being

extended

• Re-pricing on tenders takes time and

squeezes margin

• Rand/US$ - higher selling prices

PSV HOLDINGS LIMITED

PSV touches your life in some way each day

PSV HOLDINGS LIMITED

Segmental review

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PSV HOLDINGS LIMITED

PSV touches your life in some way each day 25% 5

Pumps, Spares & Valves

Turnover R49.6m Both turnover and GP margins under pressure

• M+P turnover down

― Restructuring underway

• APE has strong order book

― Good working capital management ― Excellent prospects in place

Blantyre Water Board

GP margin: 25.3%

PSV HOLDINGS LIMITED

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Engineering Linings & Industrial Supplies

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

25% 46% Turnover R89.6m

Turnover R89.6m GP margin: 23.3%

PSV HOLDINGS LIMITED

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Specialised Services

25% 46% 29%

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 Turnover R56.5m GP margin: 21.2%

PSV HOLDINGS LIMITED

PSV touches your life in some way each day

PSV HOLDINGS LIMITED

Financial overview

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PSV HOLDINGS LIMITED

PSV touches your life in some way each day

Condensed consolidated statement of comprehensive income

R’000s Unaudited 31 Aug 2010 Unaudited 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%

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PSV HOLDINGS LIMITED

PSV touches your life in some way each day

Earnings Per Share

Cents Unaudited 31 Aug 2010 Unaudited 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

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PSV HOLDINGS LIMITED

PSV touches your life in some way each day

Reconciliation of Headline earnings

R000’s Unaudited 31 Aug 2010 Unaudited 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

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PSV HOLDINGS LIMITED

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Normalised Margin Analysis (excluding impairments)

13.3 15.4 10.2 5.1 5 10 15 20

0% 10% 20% 30% 40% Aug 2007 Aug 2008 Aug 2009 Aug 2010

Change in margin percentage

PBT Gross Profit EBIT

Rm

* Excluding impairment of goodwill & intangibles

*

Gross profit: 23%, Operating margins: 5% Industry benchmarks: GP% 20% - 24%, Operating margin 8% - 16%

(with certain sector peers experiencing losses)

PSV HOLDINGS LIMITED

PSV touches your life in some way each day

Segmental Analysis

10.4 6.4

• 1.9
• 10

10 20 30 40 50 60 70 Aug 2008 Aug 2009 Aug 2010 Revenue PBT 45.6 63.3 49.6

Pumps, Spares and Valves

41.3% 37.5% Gross profit 25.0% Rm

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PSV HOLDINGS LIMITED

PSV touches your life in some way each day

Segmental Analysis

67.7 55.2 89.6 9.1 2.2 9.1 25 50 75 100 Aug 2008 Aug 2009 Aug 2010 Revenue PBT

Engineering Linings and General Industrial Supplies

Gross profit 22.6% 27.8% 23.0% Rm

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PSV HOLDINGS LIMITED

PSV touches your life in some way each day

Segmental Analysis

Specialised Services

61.4 70.4 56.5 3.6 1.6 2.5 25 50 75 100 Aug 2008 Aug 2009 Aug 2010 Revenue PBT 19.4% 16.5% Gross profit 21.0% Rm

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PSV HOLDINGS LIMITED

PSV touches your life in some way each day

Abridged statement of financial position

R’000 Unaudited 31 Aug 2010 Audited 28 Feb 2010 ASSETS Non-current assets 130 211 121 311 Current assets 148 424 156 833 Total assets 278 635 278 144 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 Total equity and liabilities 278 635 278 144 Tangible net asset value per share (cents) 39.0 38.3

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PSV HOLDINGS LIMITED

PSV touches your life in some way each day

• 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

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Movement Analysis

PSV HOLDINGS LIMITED

PSV touches your life in some way each day

• 85
• 109
• 48
• 45

80 81 54 52 88 109 97 85 83 83 104 92

• 150
• 90
• 30

30 90 150 210 Aug 2007 Aug 2008 Aug 2009 Aug 2010

Days

Stock Creditors Net days Debtors

Average net working capital

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PSV HOLDINGS LIMITED

PSV touches your life in some way each day

• 16.03
• 4.20

9.10

• 14.01

0.73

• 12.13
• 30
• 20
• 10

10 20 30

• 10.45
• 7.39

5.69

• 19.18

6.10

• 3.06
• 30
• 20
• 10

10 20 30 Cash flow from operations Cash & cash equivalents at beginning

• f period (incl. acquisitions)

Six months – 31 Aug 2010

Rm

Condensed consolidated statement of cash flows

Six months – 31 Aug 2009

Rm Cash effects of inv. activities Cash effects of financing activities Net movement in cash & cash equivalents Cash at end of period

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PSV HOLDINGS LIMITED

PSV touches your life in some way each day

PSV HOLDINGS LIMITED

Corporate Action

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PSV HOLDINGS LIMITED

PSV touches your life in some way each day 21

Turbo Agencies

• Began trading in 1986
• Established agency agreements with importers

and manufacturers in SA

• Supplier of tooling and equipment to
• Mining
• Engineering
• Automotive industries
• MD – Keith Parry
• Operational in Botswana, Zambia and DRC

Background to Turbo Agencies Synergies with PSV group

• PSV products will boost product selection for TA

across the three countries

• Entrepreneurial
• Leverage off TA’s customer network with PSV

range of products

• Kitwe
• Certain common clients (e.g. Mopani Mine)
• Establishment of credible ongoing African footprint

Sectors serviced:

• Auto & general
• Construction
• Mining & engineering
• Environmental products
• Technical services

Service division:

• Compressors
• Airline reticulations
• Oil management systems
• Vehicle lifts
• Diagnostic equipment
• Overhead cranes
• Lifting equipment
• Maintenance of underground

workshops

• Maintenance of cranes
• Effective date: 01 March 2011

Deal conditions:

• Purchase consideration R24m financed as follows:

― R12m in PSV shares over 2 years subject to profit warranty ― R12m vendor finance loan payable over 5 years at prime +1

• Turbo to repay pre-acquisition:

― Dividend loan of P3m ― Management fee P5,4m

• Above repayments subject to free cashflow availability

formula and profit warranty & employment service conditions

PSV HOLDINGS LIMITED

PSV touches your life in some way each day

Turbo Agencies - SWOT Analysis

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Strengths Weaknesses

• Well established in Botswana & Zambia
• Experienced, “hands-on” management team

(who will remain)

• Agents for high quality products
• Diverse clientele – mines, government,

parastatals and manufacturing industry

• TAB & TAZ require local citizen participation –

impacting growth opportunities

• Botswana market highly competitive due to

competition from South Africa

• Reliance on Keith Parry

(Succession planning being implemented)

Threats Opportunities

• Value of inventory affected by Pula fluctuations
• Competition from South Africa
• Instability in DRC
• Zambia shows good growth prospects
• Currently contracting out excess logistics capacity
• Welding equipment sales and an agency for Linde

forklifts

• Increased mining investment in Zambia and DRC
• Increase TAB sales to Debswana
• Focus on government tenders in Botswana
• Establishment of an on-site store in DRC

PSV HOLDINGS LIMITED

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Turbo Agencies

1986

Turbo Agencies (TA) commences

• perations in Gaborone,

Botswana

1995

TA (Pty) Ltd incorporated in Botswana

2003

TA commences operations in Kitwe, Zambia and registers TA Zambia Ltd

2007

50.1% of TAB sold to Earthwize Environmental Services (Pty) Ltd and TAB purchases 100%

• f the share capital of TAZ

2010

TAB acquires 100% of TAZ to form TAG

2009

TA commences operations in Kolwezi, DRC and registers TA (DRC) SPRL with shareholders TAZ (10%) and TAB (90%)

PSV HOLDINGS LIMITED

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New African Footprint

Democratic Republic

• f the Congo

Zambia Botswana Kitwe

• Cape Town
• Port Elizabeth
• Durban
• Kitwe (Zambia)

Regional Offices Head Office Johannesburg

Durban

Port Elizabeth Cape Town

• Namibia
• Zimbabwe

PSV expansion

Zimbabwe Namibia Kolwezi Lusaka Gaborone

• Kolwezi
• Kitwe
• Gaborone
• Lusaka

Turbo Agencies

PSV touches your life in some way each day

PSV HOLDINGS LIMITED

PSV HOLDINGS LIMITED

Prospects

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PSV HOLDINGS LIMITED

PSV touches your life in some way each day 26

Prospects

Overall PSV prospects:

• Confirmed order book R113 million
• Prospects of R225 million
• New PSV engineering park established

(home to PSV Holdings, Engineered Linings (JHB), Omnirapid, Mather + Platt and Petrologic)

• Future capacity for two other PSV Holding companies
• Water works contract

in Zambia

• Opportunities within Eskom

power stations

• Groupline has full order book
• Export opportunities to

Ghana, Zimbabwe, Burkina Faso, Nigeria and Malawi

• Increased margins will come

through for Engineered Linings

• Service project renewal

with Engen

• 3 petrochemical projects

close to being signed Specialised Services Engineering Linings and Industrial Supplies Pumps, spares and valves

PSV HOLDINGS LIMITED

PSV touches your life in some way each day

PSV touches your life in some way each day

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PSV touches your life in some way each day

PSV HOLDINGS LIMITED

PSV HOLDINGS LIMITED

Questions & Answers

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