Primeserv slashes dividend as economic uncertainty prevails
The company says it has taken measures to reduce costs as the lockdown takes a toll on revenue
Staffing and recruitment services company Primeserv Group said on Wednesday that it had slashed its final gross dividend by 40% as the company weathers an uncertain business environment.
Primeserve said its final gross dividend had been cut to 1.5c per share while its total gross dividend in the year to end-March was down 25% to 3c, “in light of the prevailing circumstances and considering the interests of shareholders and the operational needs of the business”.
The group said its headline earnings per share (HEPS) jumped by 23% to 32.08c and EPS up 20% to 30.73c in the year to March 31, 2020.
Net asset value per share was up 20% to 200c and operating profit rose 8% to R27.3m.
“The operating performance across all Primeserv’s Integrated Business Support Services operating units was admirable given the difficult and constrained economic conditions confronting the South African economy,” the company said.
Cash flows from operating activities rose by R31.8m from R0.8m in the comparable period.
The company, which also offers outsourcing services and consulting, said revenue for its businesses that service the construction, mining, manufacturing, retail and face-to-face training and consulting sectors have been significantly affected by the national lockdown.
Primeserve said it has taken measures to reduce costs as the lockdown takes a toll on revenue also factoring in the uncertainty of when revenue will return to levels seen before Covid-19.
“Cost reduction measures have been instituted across the group without impacting any service delivery capability,” Primeserv said.
“The group remains well funded through both internal cash resources and current bank facilities and anticipates that it will be able to meet all its existing operational needs as well as be in a position to avail itself of new growth opportunities as and when they become apparent,” the company said.
Primeserv's share price was unchanged at 85c on Wednesday while it had gained more than 21% over the past three months.
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