February 16, 2021
Productive Business Solutions Limited (PBS) for the year ended December 31, 2020, reported a decrease of 9% in revenues from US$180.10 million in 2019 to US$163.31 million in 2020. For the quarter, revenues increased 5% to total US$50.60 million relative to US$48.36 million the prior corresponding quarter. PBS noted the increase in revenues, “reflected a continuing strong rebound led primarily by the technology segment of the Company.”
Furthermore, “Our I.T. portfolio has a healthy backlog which will help us continue our revenue growth. PBS in Q4 2020 signed additional contracts throughout our network and these transactions will be recognized throughout 2021. This combined with the sustainability of our cost reductions program gives the company a strong platform for the upcoming year,” as per PBS
Direct expenses decreased 11% to close the period at US$96.82 million when compared to US$108.25 million for the same period of 2019. Direct expenses for the quarter amounted to US$32.38 million (2019: US$25.03 million).
As such, gross profit for the year decreased 7% to US$66.48 million (2019: US$71.86 million). Gross profit for the quarter amounted to US$18.22 million (2019: US$23.33 million).
Other income increased 79% to close at US$1.38 million relative to US$ 770,000 in 2019.
Selling, general and administrative expenses amounted to US$57.06 million (2019: US$61.08 million), a 7% decrease. As such, operating profit decreased 6% for the period to total US$10.80 million relative to the US$11.55 million in 2019. Operating profit for the quarter totaled US$4.24 million, a 1% increase on the US$4.22 million reported in the same quarter of 2019.
Finance costs increased to total US$8.92 million relative to US$7.51 million in 2019. As such, profit before taxation amounted to US$1.88 million, 53% decrease from US$4.04 million reported in 2019. PBS noted, “primarily due to the renegotiated bond interest rates which resulted in a one-time favorable impact in 2019 due its IFRS treatment. Without this treatment, PBS Interest Expense on borrowings was US$238K lower in Q4 2020 than in Q4 2019”
After taxation of US$2.10 million (2019: US$1.96 million), PBS net loss amounted to US$214,000, relative to a net profit of US$2.08 million twelve months earlier. Net profit for the quarter amounted to US$1.06 million, a 47% decrease on the US$2.01 million reported in the corresponding quarter of 2019.
Net loss attributable to shareholders for the period under review amounted US$262,000 (2019: US$1.80 million), while for the quarter, net profit attributable to shareholders closed at US$1.06 million (2019: US$1.73 million).
As such, total comprehensive loss amounted to US$2.78 million relative to an income of US$2.42 million booked in 2019. For the quarter, total comprehensive income closed at US$433,000 (2019: US$2.21 million).
For the period, the company reported loss per share (LPS) of US$0.0021 (EPS 2019: US$0.0146). The earnings per share for the quarter amounted to US$0.0086 (EPS 2019: US$0.014). The total number of shares employed in our calculations amounted to 123,272,727 units. The stock price closed trading on February 16, 2020 at US$0.79.
Management noted, “As a result of Covid-19, PBS has adapted proactively, and its coverage strategy has shifted to a vertical industry coverage model. We believe this has allowed us to react quickly to the marketplace. Our printing side of the business is slowly regaining traction as some economies begin to reopen.”
Balance Sheet at a glance:
As at December 31, 2020, PBS had total assets totaling US$181.10 million (2019: US$179.41 million) which represents an increase of 1%. The growth year over year was linked to ‘Trade and other receivables’ which improved to $52.82 million (2019: $44.06 million). Contract assets also contributed to the overall movement to close the year at $11.81 million relative to $6.08 million reported in 2019.
Shareholders Equity amounted to US$32.42 million (2019: US$35.21 million) with a book value per share of US$0.26 (2019: US$0.29).
Analyst Certification -The views expressed in this research report accurately reflect the personal views of Mayberry Investments Limited Research Department about those issuer (s) or securities as at the date of this report. Each research analyst (s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation(s) or view (s) expressed by that research analyst in this research report.
Company Disclosure -The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may effect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.