August 14, 2020

Productive Business Solutions Limited (PBS) for the six months ended June 30, 2020 reported a 14% decrease in revenues from US$85.08 million for the 2019 period to US$73.17 million in 2020. For the quarter, revenues decreased 25% to total US$31.26 million relative to US$41.53 million the prior corresponding quarter. PBS noted that, “the loss in revenue was primarily related to our printing business, specifically in the office, print shops, education and government segments. PBS is working with our partners in the printing business to implement marketing and incentive programs to recover page volume and associated revenue (paper, supplies, and services). The decrease in revenue was partially offset by an increase in our technology related business segments, which will strengthen and solidify PBS position in the years to come.”

Direct expenses decreased 15% to close the period at US$40.49 million when compared to US$47.47 million for the same period of 2019. As such, gross profit for the six months decrease 13% to US$32.68 million (2019: US$37.61 million).

Other income fell 38% to close at US$301,000 relative to US$488,000 in 2019. While, for the quarter, other income closed at US$254,000 (2019: US$341,000).

Selling, general and administrative expenses amounted to US$28.92 million (2019: US$33.06 million), a decrease of 13%. It was noted by Management that, “included in first half expenses are $443 thousand of restructuring expenses.”

As such, operating profit fell 19% for the period to total US$4.06 million relative to the US$5.04 million in 2019. Operating profit for the quarter totalled US$1.28 million, a 45% decrease on the US$2.32 million reported in 2019.

Finance costs climbed 15% to total US$4.39 million relative to US$3.82 million in 2019. As such, loss before taxation amounted to US$330,000 relative to a profit of US$1.22 million in 2019. For the quarter, loss before taxation closed at US$862,000 relative to a pre-tax profit of US$1.05 million in 2019.

After taxation of US$809,000 (2019: US$1.03 million), the Company reported a net loss of US$1.14 million relative to a profit of US$185,000 in 2019. Net loss for the quarter amounted to US$862,000 compared to a profit of US$724,000 in the corresponding quarter of 2019. Total comprehensive loss for the period attributable to shareholders was US$2.04 million relative to the income of US$572,000 reported the prior year.

For the six months ended June 2020, net loss attributable to shareholders amounted to US$2.11 million relative to a profit of US$572,000 in 2019. While for the quarter, net loss attributable to shareholders totalled US$1.48 million compared to a profit of US$955,000.

For the period the company reported loss per share (LPS) of US$0.0092 (2019 EPS: US$0.0015). The loss per share for the quarter amounted to US$0.007 (2019 EPS: US$0.006). The twelve-month trailing LPS was US0.004. The total number of shares employed in our calculations amounted to 123,272,727 units. The stock price closed trading on August 13, 2020 at US$0.70.

Management stated, “PBS signed a Tier 2 regional distribution agreement with Apple in Q3. This further strengthens PBS’ position in the Education market and high-end Enterprise market and opens PBS ability to sell its existing portfolio solutions and services. We are honored to be selected by Apple to be their regional distributor. PBS was also awarded an exclusive provider of computer equipment and is implementing the first phase of a self-checkout kiosk with the largest American multinational retail corporation that operates a chain of hypermarkets in Central America.”

Balance Sheet at a glance:

As at June 30, 2020, PBS had total assets totalling US$178.67 million (2019: US$156.63 million) which represents an increase of 14%. This movement was mainly attributed to growth in ‘Right of Use’ and ‘Contract Assets’ to close at US$14.99 million (2019: US$591,000) and US$6.39 million (2019: nil), respectively.

Shareholders Equity amounted to US$33.11 million (2019: US$34.43 million) with a book value per share of $US0.27 (2019:US$0.28).

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