Za mvs 2012_fy

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Information about Za mvs 2012_fy
Investor Relations

Published on March 11, 2014

Author: AfricanisCool

Source: slideshare.net

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Mvelaserve South Africa FY 2012 results

REVIEWED CONDENSED CONSOLIDATED PRELIMINARY FINANCIAL RESULTS for the year ended 30 June 2012

HIGHLIGHTS Revenue up 12% to R5 117 million Cash flow from operations up 26% to R369 million Operating profit for H2 2012 up 17% on H1 2012 HEPS for H2 2012 of 47,3 cents up from 19,5 cents in H1 2012 and up from 10,3 cents in H2 2011 Successful turnaround of RoyalMnandi and RoyalServe Cleaning Operating profit down 41% but, on a comparable basis, up 26% from 2011 Mvelaserve is a leading, black empowered provider of outsourced business support services across southern Africa. Mvelaserve listed independently on the JSE Main Board in the ‘Business Support Services’ sector on 29 November 2010.

Mvelaserve Reviewed Condensed Consolidated Preliminary Financial Results 2012 1 Condensed consolidated preliminary statement of financial position Restated Restated Reviewed Audited Audited 30 June 2012 30 June 2011 30 June 2010 Note* R’000 R’000 R’000 ASSETS Non-current assets 1 148 402 1 109 260 975 105 Property, plant and equipment 3 440 185 431 915 387 619 Intangible assets 4 628 485 622 547 545 335 Investments in associates 8 779 9 095 8 269 Other investments 17 149 11 518 16 362 Deferred income tax assets 53 804 34 185 17 520 Current assets 1 211 334 1 071 425 1 753 501 Other investments 8 373 11 921 15 553 Other current assets 908 438 816 259 1 363 139 Restricted cash 5.1 151 495 116 458 115 029 Cash and cash equivalents 5.1 143 028 126 787 259 780 Assets in disposal group held-for-sale – 79 800 5 045 TOTAL ASSETS 2 359 736 2 260 485 2 733 651 EQUITY AND LIABILITIES Capital and reserves 918 935 902 337 233 300 Owners of the parent 909 017 887 049 227 817 Non-controlling interest 9 918 15 288 5 483 Non-current liabilities 295 403 323 036 1 367 158 Interest-bearing liabilities 6 253 303 288 845 605 470 Non-interest-bearing liabilities – – 722 117 Derivative financial instrument 19 633 25 523 36 900 Deferred income tax liabilities 22 467 8 668 2 671 Current liabilities 1 145 398 980 312 1 133 193 Interest-bearing liabilities 6 159 735 137 809 178 500 Non-interest-bearing liabilities 5 414 3 467 18 136 Other current liabilities 980 249 839 036 936 557 Liabilities in disposal group held-for-sale – 54 800 – TOTAL EQUITY AND LIABILITIES 2 359 736 2 260 485 2 733 651 * The notes form an integral part of the condensed consolidated financial statements and should be read in conjunction with the financial information.

Mvelaserve Reviewed Condensed Consolidated Preliminary Financial Results 20122 Condensed consolidated preliminary statement of profit or loss and other comprehensive income Reviewed Audited 30 June 2012 30 June 2011 R’000 R’000 Continued operations Revenue 4 943 383 4 400 888 Profit from operations 195 361 296 358 Goodwill impaired (18 554) (121 550) Net finance costs (45 854) (57 098) Finance income 7 163 14 640 Finance costs (53 017) (71 738) Investment income 10 577 71 422 Share of profit from associates 3 981 826 Dividend income 700 3 800 Fair value adjustments and net profit from investments 5 896 66 796 Profit before taxation 141 530 189 132 Taxation expense (71 605) (77 227) South African (current, deferred, capital gain) and foreign taxation (64 821) (73 069) Secondary Tax on Companies (6 784) (4 158) Profit for the year from continued operations 69 925 111 905 Profit from discontinued operations 4 662 16 038 Total profit for the year 74 587 127 943 Other comprehensive income Item that will be reclassified subsequently to profit or loss when specific conditions are met: 2 538 (10 206) Currency translation differences 2 538 (10 206) Total comprehensive income for the year 77 125 117 737 Profit for the year attributable to: Owners of the parent – continued operations 65 730 106 600 Owners of the parent – discontinued operations 4 662 16 038 Non-controlling interest 4 195 5 305 74 587 127 943 Total comprehensive income attributable to: Owners of the parent – continued operations 68 268 96 394 Owners of the parent – discontinued operations 4 662 16 038 Non-controlling interest 4 195 5 305 77 125 117 737 Ordinary share performance Reviewed Audited 30 June 2012 30 June 2011 Weighted average number of ordinary shares in issue (‘000) 141 562 139 703 Earnings per ordinary share (cents) 49,7 87,8 Headline earnings per ordinary share (cents) 66,8 159,8 Earnings per ordinary share from continued operations (cents) 46,4 76,3 Headline earnings per ordinary share from continued operations (cents) 60,1 155,1 Earnings per ordinary share from discontinued operations (cents) 3,3 11,5 Headline earnings per ordinary share from discontinued operations (cents) 6,7 4,7 Number of ordinary shares in issue (‘000) 141 562 141 562 Net asset value per ordinary share (cents) 642,1 626,6 Net tangible asset value per ordinary share (cents) 160,2 162,7

Mvelaserve Reviewed Condensed Consolidated Preliminary Financial Results 2012 3 Reconciliation between profit attributable to owners of the parent and headline profit attributable to owners of the parent: Reviewed Audited 30 June 2012 30 June 2011 R’000 R’000 Profit attributable to owners of the parent 70 392 122 638 IAS 27 – loss/(profit) on disposal of subsidiaries and investments 4 806 (44 288) IAS 36 – net impairment of long lived assets 5 200 – IAS 16 – profit on sale of property, plant and equipment (6 685) (3 156) IFRS 3 – profit on deemed disposal of associate – (10 667) IAS 36 – goodwill impairment 18 554 121 550 IFRS 5 – impairment of disposal group held-for-sale – 28 631 Tax effect of the above transactions 2 254 8 577 Headline profit attributable to owners of the parent 94 521 223 285 Condensed consolidated preliminary statement of cash flows Restated Restated Reviewed Audited Audited 30 June 2012 30 June 2011 30 June 2010 Note* R’000 R’000 R’000 Profit from operations^ 200 470 340 322 292 442 Payments under finance leases (4 853) – – Non-cash items 158 971 (29 944) 108 572 Working capital 14 395 (16 418) (37 008) Cash generated from operations 368 983 293 960 364 006 Net interest paid (48 507) (47 392) (60 494) Dividend income from investments and associates 5 149 3 820 4 108 Taxation paid (78 936) (102 487) (58 659) Cash flows from operating activities 246 689 147 901 248 961 Cash flows from investing activities 5.3 (130 991) (133 706) (175 879) Cash flows from financing activities 5.3 (46 088) 42 585 75 866 Dividends paid – owners of the parent (50 962) (187 488) – Dividends paid – non-controlling interest (12 738) (2 401) (613) Net movement in cash and cash equivalents and bank overdrafts 5 910 (133 109) 148 335 Cash and cash equivalents at the beginning of the year 126 787 259 780 111 445 Cash held in disposal group held-for-sale 8 679# (8 679) – Effect of exchange rate fluctuations on cash held 1 652 8 795 – Cash and cash equivalents at the end of the year 143 028 126 787 259 780 * The notes form an integral part of the condensed consolidated financial statements and should be read in conjunction with the financial information. ^ Includes discontinued operations. # Cash held in disposal group held-for-sale as at 30 June 2011.

Mvelaserve Reviewed Condensed Consolidated Preliminary Financial Results 20124 Condensed consolidated preliminary segmental information The presentation of the segment information has been amended since the prior year to disclose catering and cleaning as separate segments and, as such, the prior year information has been restated to be in line with the current year’s presentation. Restated Reviewed Audited 30 June 2012 30 June 2011 Note* R’000 R‘000 NET ASSETS Facilities management services 379 929 359 256 Security services 384 966 356 862 Catering services 74 286 90 104 Cleaning services 136 726 125 764 Diversified services# (56 972) (54 649) Net assets from discontinued operations – 25 000 918 935 902 337 REVENUE INCLUDING INTER-SEGMENTTRADING Facilities management services 1 281 260 1 149 200 Security services 2 267 658 1 977 502 Catering services 572 432 711 991 Cleaning services 484 080 450 209 Diversified services# 723 100 273 957 Revenue from discontinued operations 180 390 180 448 5 508 920 4 743 307 REVENUE FROM EXTERNAL CLIENTS Facilities management services 1 278 726 1 145 634 Security services 2 238 467 1 966 538 Catering services 456 169 656 372 Cleaning services 349 318 380 897 Diversified services# 620 703 251 447 Revenue from discontinued operations 173 569 164 133 5 116 952 4 565 021 PROFIT/(LOSS) FROM OPERATIONS 5.2 Facilities management services 121 930 111 905 Security services 143 943 142 966 Catering services (10 755) (39 352) Cleaning services 3 142 12 702 Diversified services# (62 899) 68 137 Profit from discontinued operations 5 109 43 964 200 470 340 322 NET FINANCE INCOME/(COSTS) Facilities management services 5 075 (4 184) Security services (9 793) (9 781) Catering services (1 591) (1 032) Cleaning services ( 464) (1 886) Diversified services# (39 081) (40 215) Net finance income from discontinued operations 1 140 684 (44 714) (56 414) INVESTMENT INCOME Facilities management services 3 981 4 311 Security services – 49 367 Catering services – – Cleaning services – – Diversified services# 6 596 17 744 Investment income from discontinued operations 153 20 10 730 71 442 TAXATION Facilities management services (34 170) (36 885) Security services (30 989) (24 416) Catering services 6 650 3 733 Cleaning services 4 583 (2 462) Diversified services# (17 679) (17 197) Taxation from discontinued operations 3 065 – (68 540) (77 227)

Mvelaserve Reviewed Condensed Consolidated Preliminary Financial Results 2012 5 Condensed consolidated preliminary segmental information continued Restated Reviewed Audited 30 June 2012 30 June 2011 Note* R’000 R‘000 TOTAL PROFIT/(LOSS) FORTHEYEAR 5.2 Facilities management services 96 743 75 147 Security services 103 161 155 736 Catering services (5 696) (36 651) Cleaning services 7 261 8 354 Diversified services# (131 544) (90 681) Total profit from discontinued operations 4 662 16 038 74 587 127 943 TOTAL COMPREHENSIVE INCOME/(LOSS) FORTHEYEAR 5.2 Facilities management services 96 743 75 147 Security services 106 962 154 179 Catering services (6 759) (45 300) Cleaning services 7 261 8 354 Diversified services# (131 744) (90 681) Total comprehensive income from discontinued operations 4 662 16 038 77 125 117 737 * The notes form an integral part of the condensed consolidated financial statements and should be read in conjunction with the financial information. # Includes head office.

Mvelaserve Reviewed Condensed Consolidated Preliminary Financial Results 20126 Condensed consolidated preliminary statement of changes in equity Audited – balance at 30 June 2010 Transactions with non-controlling interests: Acquistion of subsidiaries Dividends paid Total comprehensive income for the year Profit for the year Other comprehensive income for the year Transactions with owners: Shares issued Dividends paid Audited – balance at 30 June 2011 Transactions with non-controlling interests: Acquistion of subsidiaries Dividends paid Total comprehensive income for the year Profit for the year Other comprehensive income for the year Transactions with owners: Dividends paid Reviewed – balance at 30 June 2012

Mvelaserve Reviewed Condensed Consolidated Preliminary Financial Results 2012 7 Foreign Total currency attributable Non- Capital Share translation Distributable to owners controlling and capital reserve reserve of the parent interest reserves R’000 R’000 R’000 R’000 R’000 R’000 – – 227 817 227 817 5 483 233 300 – – – – 6 901 6 901 – – – – (2 401) (2 401) – (10 206) 122 638 112 432 5 305 117 737 – – 122 638 122 638 5 305 127 943 – (10 206) – (10 206) – (10 206) 734 288 – – 734 288 – 734 288 – – (187 488) (187 488) – (187 488) 734 288 (10 206) 162 967 887 049 15 288 902 337 – – – – 3 173 3 173 – – – – (12 738) (12 738) – 2 538 70 392 72 930 4 195 77 125 – – 70 392 70 392 4 195 74 587 – 2 538 – 2 538 – 2 538 – – (50 962) (50 962) – (50 962) 734 288 (7 668) 182 397 909 017 9 918 918 935

Mvelaserve Reviewed Condensed Consolidated Preliminary Financial Results 20128 Notes to the condensed consolidated preliminary financial statements 1. Accounting policies The reviewed condensed consolidated preliminary financial statements for the year ended 30 June 2012 have been prepared using the measurement and recognition requirements of International Financial Reporting Standards (IFRS) and AC 500 standards as issued by the Accounting Practices Board or its successor, and contains information as required by IAS 34 – Interim Financial Reporting.This is in accordance with the JSE Limited Listings Requirements and the Companies Act, 71 of 2008, as amended. The accounting policies adopted in these reviewed condensed consolidated preliminary financial statements are consistent with the accounting policies applied in the audited annual financial statements for the year ended 30 June 2011. The amendments to IAS 1 – Presentation of Financial Statements issued in June 2011, effective for periods beginning on or after 1 July 2012, has been early adopted. The reviewed condensed consolidated preliminary financial statements for the year ended 30 June 2012 were compiled under the supervision of Mr GE Röth, Chief Financial Officer. 2. Business combinations With effect from 1 August 2011, Mvelaserve obtained 51,6% of the issued share capital of Velocity Road Rehabilitation (Pty) Limited (“Velocity”), a new start-up company for a consideration of R10 million. With effect from 1 September 2011, the group obtained the assets and liabilities of a mast and infrastructure business, for a consideration of R17,5 million. 20% of the share of a subsidiary, LTP, was issued as part settlement of the purchase consideration, which resulted in an increase of the non-controlling interest. Velocity LTP Other Total R’000 R’000 R’000 R’000 Property, plant and equipment – 1 688 1 455 3 143 Intangible assets – 120 – 120 Deferred taxation – 66 – 66 Inventory – – 184 184 Trade and other receivables – 4 429 26 4 455 Net cash and cash equivalents – 86 – 86 Total assets – 6 389 1 665 8 054 Asset-based finance – (855) – (855) Trade and other payables – (2 034) (324) (2 358) Total liabilities – (2 889) (324) (3 213) Net assets acquired – 3 500 1 341 4 841 Non-controlling interest – – 327 327 Goodwill 10 000 14 000 2 412 26 412 Total purchase price 10 000# 17 500# 4 080 31 580 Satisfied by: Equity of subsidiary – LTP – 3 500 – 3 500 Cash 10 000 11 000 4 080 25 080 Loans – 3 000 – 3 000 10 000 17 500 4 080 31 580 # The purchase price allocation of the acquisitions during the year has not been finalised at the date of these financial statements.The excess of the consideration over the net asset value of the businesses acquired has been disclosed as goodwill.The group is in the process of separately identifying assets and liabilities acquired as part of the business combinations. ‘Other’ relates to franchises bought back by the Khuseti and Protea Coin business units. The following revenue and profit/(loss) after taxation numbers have been consolidated into the group results relating to business combinations effected during the year: Results that would have been consolidated Actual results had the business combination consolidated for the been effective on current year 1 July 2011 Profit/(loss) Profit/(loss) after after Revenue taxation Revenue taxation R’000 R’000 R’000 R’000 LTP 34 249 394 39 023 451 Velocity 3 554 (9 810) 3 554 (9 810) Disposal of subsidiary The group disposed of its 100% interest in Contract Forwarding (Pty) Limited (“Contract Forwarding”) with effect from 31 May 2012 for a consideration of R2,00. Contract Forwarding repaid R25 million of its shareholders’ loan, with an additional R10 million being payable in three years’ time. Cash advances from the group, to the value of R8,3 million, between the effective date and the implementation date, were repaid.

Mvelaserve Reviewed Condensed Consolidated Preliminary Financial Results 2012 9 Contract Forwarding R’000 Property, plant and equipment (609) Deferred tax asset (3 065) Trade and other receivables (78 118) Net cash and cash equivalents 10 805 Total assets (70 987) Interest-bearing liabilities 6 813 Trade and other payables 59 368 Total liabilities 66 181 Net assets disposed (4 806) Loss on disposal 4 806 Total purchase price – Reviewed Audited 30 June 2012 30 June 2011 R’000 R’000 3. Property, plant and equipment Balance at the beginning of the year 431 915 387 619 Additions 169 685 168 703 Acquired through business combinations 3 143 15 298 Disposals (10 486) (11 634) Depreciation for the year (146 798) (125 964) Reversal of impairment 1 364 – Impairment of assets (6 564) (1 364) Reclassification to intangible assets (2 199) – Reclassified to disposal group held-for-sale – (743) Foreign currency translation reserve 125 – Balance at the end of the year 440 185 431 915 4. Intangible assets Balance at the beginning of the year 622 547 545 335 Acquired through business combinations 26 532 201 295 Goodwill reclassified to disposal group in prior year – 1 460 Reclassified from property, plant and equipment 2 199 – Additions 2 281 1 858 Amortisation (6 520) (5 851) Impairment (18 554) (121 550) Balance at the end of the year 628 485 622 547 Restated Restated Audited Audited 30 June 2011 30 June 2010 R’000 R’000 5. Restatements 5.1 Cash and cash equivalents A classification change on cash and cash equivalents was corrected in the current period. As a result, restricted cash has been separately disclosed. This change had the following effect on the statement of financial position: Previously stated Cash and cash equivalents 243 245 374 809 Restated 243 245 374 809 Restricted cash 116 458 115 029 Cash and cash equivalents 126 787 259 780

Mvelaserve Reviewed Condensed Consolidated Preliminary Financial Results 201210 Notes to the condensed consolidated preliminary financial statements continued 5.2 Segmental information The segmental information for 30 June 2011 was adjusted to exclude head office management fees in accordance with the manner reviewed by the chief operating decision-maker in the current period.This correction had the following effect on the presented segmental information: Previously Restated stated Audited Audited 30 June 2011 30 June 2011 R’000 R‘000 Profit/(loss) from operations Facilities management services 111 905 105 428 Security services 142 966 136 487 Cleaning and catering services† (26 650) (31 871) Diversified services# 68 137 86 314 Profit from discontinued operations 43 964 43 964 340 322 340 322 TOTAL PROFIT/(LOSS) FORTHEYEAR Facilities management services 75 147 68 670 Security services 155 736 149 257 Cleaning and catering services† (28 297) (33 518) Diversified services# (90 681) (72 504) Total profit for the year from discontinued operations 16 038 16 038 127 943 127 943 TOTAL COMPREHENSIVE INCOME/(LOSS) FORTHEYEAR Facilities management services 75 147 68 670 Security services 154 179 147 700 Cleaning and catering services† (36 946) (42 167) Diversified services# (90 681) (72 504) Total comprehensive income for the year from discontinued operations 16 038 16 038 117 737 117 737 # Includes head office. † Due to growth in the businesses the cleaning and catering divisions were reported in separate segments in the current year. No other periods were affected by this correction. 5.3 Statement of cash flows Certain reclassifications will be made to the statement of cash flows that are not evident from the condensed consolidated statement of cash flows due to the aggregation of numbers. 6. Interest-bearing liabilities Reviewed Reviewed 30 June 2012 30 June 2012 Reviewed Audited Asset-based Bank 30 June 2012 30 June 2011 finance loans Total Total R’000 R’000 R’000 R’000 Balance at the beginning of the year 198 434 228 220 426 654 783 970 New loans 130 009 5 500 135 509 400 505 Acquired through business combinations 855 – 855 127 543 Amounts repaid (99 755) (50 000) (149 755) (723 619) Loans forgiven – – – (164 971) Accrued interest effect 13 ( 238) ( 225) 3 226 Balance at the end of the year 229 556 183 482 413 038 426 654 Disclosed as: Non-current interest-bearing liabilities 253 303 288 845 Current interest-bearing liabilities 159 735 137 809 413 038 426 654

Mvelaserve Reviewed Condensed Consolidated Preliminary Financial Results 2012 11 Notes to the condensed consolidated preliminary financial statements continued 6. Interest-bearing liabilities (continued) Reviewed Audited 30 June 2012 30 June 2011 R’000 R’000 7. Capital commitments and contingencies Capital expenditure Contracted for 13 538 19 688 Not contracted for 4 782 11 478 18 320 31 166 Operating leases Land and buildings 149 789 154 257 Plant and equipment 9 178 6 555 Motor vehicles 85 290 2 418 244 257 163 230 Contingent liabilities SARS has issued a request for information and explanations relating to one of the group subsidiaries to which a revised assessment was received. The matter is still pending and the financial impact, if any, cannot be quantified at this stage. The contingent liability disclosed in the financial statements in the prior year in respect of the alleged robbery which took place at Johannesburg International Airport was resolved in the current year with no financial impact to the group. 8. Related party disclosure Security services to the value of R5,9 million were provided to Mvelaphanda Holdings (Pty) Limited during the period. At year-end a balance of R3,2 million was still outstanding in this respect. A doubtful debt provision to the value of R1,7 million was raised against this debtor. At year-end an amount of R9,2 million was receivable by Mvelaserve from Mvelaphanda Holdings (Pty) Limited which resulted from previous period transactions.This balance was fully provided for. Events subsequent to balance sheet date The directors are not aware of any other matters or circumstances arising after the reporting period up to the date of this report not otherwise dealt with in this report that requires an adjustment to the financial results at reporting date. On 30 June 2012, the group was in breach of its net interest debt to shareholders’ funds, excluding intangible assets but including trademarks, covenant in respect to its Nedbank funding. Nedbank has issued a condonation in respect of the breach on 5 September 2012. A breach of the debt covenant, giving Nedbank the right to demand repayment at a future compliance date within one year of the reporting date, is not likely and therefore amounts not expected to be paid within one year have been classified as non-current. Reviewed report The condensed consolidated preliminary financial statements has been reviewed by Mvelaserve’s independent auditors, PricewaterhouseCoopers Inc. Their unmodified review conclusion is available for inspection at the group’s registered office.. Commentary Introduction The board presents the results for the year ended 30 June 2012 (“the year”). Operating results for the second half of the year showed a significant strengthening, despite challenging economic conditions in a continually decelerating domestic economy. The successful turnaround of RoyalMnandi and RoyalServe Cleaning contributed strongly to the improved performance. During the year, the group acquired a controlling interest in Velocity and the assets and liabilities of a mast and infrastructure business through LTP. The group disposed of its interest in Contract Forwarding at the end of May 2012. Group profile Mvelaserve is a leading diversified business support services group with operations in Southern Africa, Ghana, Nigeria and the UAE, employing approximately 32 000 people.The group offers a wide range of integrated services which include, amongst others: facilities management, security, catering and cleaning. Mvelaserve’s blue-chip customer base ranges across the public and private sectors encompassing leading banks, mining houses and retailers as well as parastatals and provincial and local governments. Financial review Revenue for the year increased 12% to R5 117 million (2011: R4 565 million), driven mainly by increases in revenue at Protea Coin and TFMC, as well as the inclusion of Stamford Sales for the full year under review. Operating expenses (excluding depreciation, impairment and amortisation charges) increased by 13% to R4 796 million from R4 263 million. The 41% decrease in operating profit to R200 million (2011: R340 million) is a result of an anticipated contraction in the TFMC profit margin during the year, and net once-off exceptional income of R87 million included in operating profit for the previous year. The operating margin for the year decreased to 4% from 7% as a result of, inter alia, the margin contraction at TFMC and at Protea Coin as well as the inclusion of an operating loss for Stamford Sales for the full year. However, H2 2012 showed robust growth in operating profit of 17% following the successful turnaround of RoyalMnandi and RoyalServe Cleaning, amongst other positive operational achievements. Net interest paid declined to R45 million (2011: R56 million) as a result of reduced debt. Interest cover increased to 6,1 times from 4,3 times on a comparable basis, which is above the group benchmark of 5 times.

Mvelaserve Reviewed Condensed Consolidated Preliminary Financial Results 201212 Net income from investments of R11 million (2011: R71 million) comprised dividend income of R1 million, share of profit from associates of R4 million, and a favourable fair value adjustment of R6 million in respect of a derivative financial instrument. The group’s taxation charge for the year amounted to R69 million (2011: R77 million), consisting of current tax of R71 million, Secondary Tax on Companies (“STC”) of R7 million and a deferred tax credit of R9 million, resulting in an effective tax rate (excluding the effect of STC) of 43% (2011: 36%).The effective tax rate was negatively affected by, inter alia, impairments of goodwill of R19 million, impairments of assets of R5 million, a prior year net underprovision of R7 million and R49 million in assessed losses for which no deferred tax asset has been raised, which were all offset to an extent by profit from associates of R4 million. These adjustments amount to effective tax of R21 million, which represents 15% of the 43% effective tax rate. Attributable earnings per share (“EPS”) and headline earnings per share (“HEPS”) decreased to 49,7 cents (2011: 87,8 cents) and 66,8 cents (2011: 159,8 cents), respectively. Although HEPS showed a marked decline from the previous year, the prior year HEPS was improved by the exclusion of R150 million impairment charges in terms of SAICA’s Circular 3/2009 read with IAS 33 – Earnings per Share while the forgiveness of R165 million loans was included, which resulted in a net positive effect of 117,6 cents on HEPS for the previous year. In a similar way the profit of R44 million realised on the sale of a non-strategic division of Protea Coin and a deemed profit of R10 million with the change in shareholding in Stamford Sales, both in the previous year, had a positive effect of 39,3 cents on EPS for the prior year. Financial position Property, plant and equipment (“PPE”) increased by R8 million to R440 million from R432 million, on the back of net acquisitions of R119 million (2011: R171 million), depreciation and impairment for the year of R152 million (2011: R126 million) and the reversal of accumulated depreciation of R41 million in respect of PPE disposed of. Capital expenditure (“CAPEX”) of R170 million, excluding R3 million assets acquired through business combinations, comprised R127 million in respect of expansion to meet current growth initiatives (2011: R145 million) and replacements of R43 million (2011: R24 million). The overall CAPEX-to-depreciation reduced to 1,2 times (2011: 1,3 times) indicating a slowdown in the group’s capital investment programme. Intangible assets increased by R24 million, mainly from the preliminary acquisition accounting for the business combination ofVelocity and LTP. Impairments of goodwill at Stamford Sales and SA Water amounted to R19 million. Cash generated from operations increased 26% to R369 million (2011: R294 million) on the back of increased cash operating profits as well as a reduction in working capital. Cash EPS increased to 174,3 cents (2011:105,9 cents) for the year, while free cash flow-to-equity increased to R70 million (2011: R57 million). Cash utilised in respect of investing activities of R131 million, comprises inter alia, net CAPEX of R136 million (excluding R34 million acquisitions in terms of capitalised lease agreements), investments in Velocity and LTP of R10 million and R11 million, respectively, and the repayment of loans by Contract Forwarding of R33 million. New loans raised during the year, excluding capitalised leases, amounted to R102 million while loans repaid amounted to R149 million. Total dividends of R64 million were paid during the year, of which R51 million was paid to owners of the parent company.This equates to a cash dividend cover, based on the cash earnings per share, of 4,8 times. The related STC amounting to R7 million has been recognised in the profit or loss for the year. Interest-bearing debt, excluding the derivative financial instrument fair valued at R20 million on 30 June 2012 (2011: R26 million), amounted to R413 million (2011: R427 million) resulting in a debt: equity ratio of 47% (2011: 50%). Asset-based finance liabilities directly associated with the financing of PPE increased by R31 million to R230 million (2011: R198 million). Net asset value per share increased to 642,1 cents (2011: 626,6 cents) while net tangible asset value per share decreased to 160,2 cents from 162,7 cents. Capital and reserves The total issued share capital remained unchanged at 141 561 673 shares.The weighted average number of shares in issue increased by 1% to 141 561 673 from 139 703 474 shares at 30 June 2011 following the issue of 6 850 937 shares on 7 October 2010 for the acquisition of Zonke. Operational review Protea Coin posted good results with revenue up 14,7% to R2 268 million (2011: R1 978 million) and operating profit of R144 million (2011: R140 million) in line with expectations. Operating margins were eroded by general economic conditions and inflationary increases in the cost base. Notably the Mining division and cameo cash management environment within the Assets-In-Transit division demonstrated strong growth, despite the cost-sensitive and volatile sectors. The Technical division is on the uptick after suffering the effects of deferred spending in this area. Protea Coin continued to expand its range of services and successfully achieved market penetration into Ghana, opening an office and commencing with a large mining contract in August 2012. TFMC achieved revenue growth of 8,5% to R1 247 million (2011: R1 149 million). As anticipated operating profit was up by 8% to R121 million (2011: R112 million) as a result of the revised Telkom agreement. The contribution from non-Telkom contracts in the Customised Solutions division increased significantly during the year – from 12% to 20% – reflecting the success of organic expansion initiatives and aggressive marketing. TFMC will continue to improve its risk profile by diversifying its contract base and identifying niche services as possible stand-alone offerings. RoyalServe Cleaning achieved strong revenue growth of 7,6% to R484 million (2011: R450 million). Hygiene and laundry sector clients grew substantially, with retention of commercial contracts receiving considerable focus. Restructuring of the operation has successfully enhanced operational efficiencies including debtors’ controls. This process of optimising efficiencies is ongoing and will focus in the year ahead on wage control, amongst other areas.Targeted marketing will continue to grow the brand locally and in neighbouring countries. RoyalMnandi performed exceptionally well in the second half of the year, reporting total revenue of R572 million.Three new contracts were secured with the bulk in the Commercial division. The Mining and Healthcare divisions are addressing strategy to overcome underperformance during the year. Significant revenue growth for FY2013 is not expected in light of the overall reduction in the customer base following termination of all loss-making contracts and the loss of a major healthcare contract.The focus going forward will be strict cost control measures. Zonke posted 27% growth in revenue to R81 million (2011: R64 million) and operating profit increased 36% to R34 million (2011: R25 million). The number of limited pay-out machines being monitored increased by 16% to 7 439 from 6 424, with average gaming revenue up 14% to R3 598 per machine. Zonke will continue to grow existing businesses, especially in the Northern Cape

Mvelaserve Limited (Incorporated in the Republic of South Africa) (Registration number 1999/003610/06) JSE share code: MVS ISIN: ZAE000151353 (“Mvelaserve” or “the group”) Executive Directors: MSM Xayiya (Executive Chairman), JMS Ferreira (Chief Executive Officer), GE Röth (Chief Financial Officer) Independent Non-Executive Directors: FN Mantashe, OA Mabandla*, S Masinga, N Mbalula, GD Harlow * Lead Independent Registered Office: 28 Eddington Crescent, Highveld Technopark, Centurion, 0169 Sponsor: Investec Bank Limited Auditors: PricewaterhouseCoopers Inc. Transfer Secretaries: Computershare Investor Services (Proprietary) Limited, 70 Marshall Street, Johannesburg, 2001 A copy of these results is available on the Mvelaserve Limited website: www.mvelaserve.co.za and KwaZulu-Natal, and is developing new technology that will enable diversification into the provision of management solutions to individual operators. In line with group strategy, Zonke is pursuing expansion into selected African markets. SA Water raised revenue by 15% to R6 million despite a tough trading environment. Management changes saw immediate benefits for the company with three new major contracts secured. Focus going forward is aggressive client expansion and developing an operations and maintenance service solution for increased annuity revenues. Select African countries will be targeted in the year ahead. Mvelaserve through LTP acquired assets and liabilities of a mast and infrastructure business in September 2011 in light of strong integration opportunity with TFMC. While overall the business underperformed in terms of operating profit and margin, it strengthened considerably in the last quarter of the year. Growth is expected from further roll-out of additional masts and co- opportunities with TFMC. In light of underperformance at Circle ICT, which has not significantly expanded outside of the group as originally planned, Mvelaserve management has decided to collapse the company back into various subsidiaries. Khuseti was impacted by depressed consumer spending leading to intensified pricing pressure and competition. Operating profit fell from R24 million to R18 million and margins contracted due to rising input costs. Overall pie sales volumes increased by only 2% to just under 31 million pies, with strong growth in the export (49%), and retail and wholesale (74%) markets being offset by disappointing sales volumes to local franchises, which fell by 3 million pies year-on-year. The outlook remains subdued. The company will concentrate on continued improvement of operating efficiencies at manufacturing and franchise levels. Stamford Sales posted satisfactory results with revenue increasing by 21% to R407 million, albeit offset by a disappointing operating loss of R20 million. During the year the company rolled-out a new fleet of delivery vehicles to increase efficiencies and improve service delivery.The primary objective for the year ahead is to return the company to sustainable profitability.This will be achieved by growing sales volumes and reducing operating and inventory costs, which will be supported by the recent introduction of improved efficiencies and systems. Velocity is in a start-up phase.The company took delivery of its first seven vehicles during the year and operating crews were trained. Operations were limited to some minor pilot projects. Dividend The directors of Mvelaserve have resolved not to declare a dividend for the year. Prospects Economic conditions in the medium term are expected to remain challenging, with escalating input costs such as fuel and ongoing pricing pressure across a number of operations. Nonetheless, Mvelaserve is positive of the group’s ability to continue improving performance, given the stronger performance in H2 at most group operations. In order to achieve this objective and ensure appropriate management focus, the executive have reviewed the diversity of the group’s structure and is currently revising the business strategy going forward. Management is confident in the group’s key operations and Mvelaserve’s vision of becoming a leading business process outsource provider. Focus remains on improving margins through vigilant cost management and controlled capital expenditure. The group will continue to assess expansion opportunities in new growth markets within South Africa as well as the rest of Africa, where its strategy is to follow existing clients. MSM Xayiya JMS Ferreira GE Röth Chairman Chief Executive Officer Chief Financial Officer 5 September 2012

www.mvelaserve.co.za

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