The company said trading conditions in the year were challenging due to the uncertain economic environment coupled with political and regulatory pressures facing the temporary employment services industry.
"Primeserv has invested in a number of new programmes, particularly in the sphere of business process outsourcing, as well as having developed new resources which will deliver added value to clients and staff. An extensive and revitalised investment in marketing and sales is also being rolled out. This strategy is aimed at enhancing the profitable sustainability of the group," Primeserv CEO Merrick Abel said in the statement.
The group's revenue for the period saw a drop of over R42m to R613,1m. Primeserv's revenue from human capital outsourcing was R522,6m with an operating profit of R10,4m.
The company said that trading in the "white collar" professional draughting and engineering unit and the division's megaproject wage bureaus remained under pressure given the absence of major infrastructure projects.
"Performance in the 'blue collar' flexible staffing units involved in the logistics, warehousing and distribution arena was also constrained. The introduction of value-adding products and services to both contractors and clients is gaining traction," the group said.
Revenue from human capital development was recorded at R60,5m, a slight improvement from the previous period's R59,2m. "Revenue within the computer training and business colleges unit was below expectation due to less than optimal learner registrations at a number of its further education and training colleges during the most recent registration period."
The group said that the current business model of its human capital development is under "strategic review".
Primeserv said the debate between government, business and organised labour regarding the labour broking industry has progressed and seemed to have culminated in government's view that increased regulation and not banning is required. "Primeserv is of the view that the impending labour legislation will favour the larger and reputable temporary employment services providers who have the necessary IT and HR infrastructures capable of meeting the demands of a strictly regulated environment."
Primeserv has proposed no final dividend for the year under review.
"Volume growth within existing operations and the continual review of operating expenditure to obtain optimal efficiencies remain imperatives.
"The prevailing challenging business and operating environment resulting from economic uncertainty dictates that Primeserv's outlook of performance for the year ahead remains conservative," Abel said.
Source: Business Day via I-Net Bridge
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