Daily News
View All NewsSouth Africa – CSG Holdings full year revenue rises 1%, but slides into loss
South Africa-based CSG Holdings (CSG: JSE) reported revenue rose by 1% to ZAR 2.15 billion (USD 152.1 million) for the year ended 31 March 2019.
CSG Holdings is a provider of outsourced personnel services, industrial and mining services, and contract catering and food services.
In May 2019 the group provided an operational update and reported that its staffing division was hit by fraud and malpractice.
| (ZAR millions) | FY 2019 | FY 2018 | Change | FY 2019 (USD millions) |
| Revenue | 2,157.0 | 2,134.5 | 1.0% | 152.1 |
| Operating Profit | 62.1 | 166.3 | -62.6% | 4.3 |
| Loss after Tax | -140.8 | 115.7 | N/A | -9.9 |
CSG operates in three segments: CSG People (Staffing Solutions division), CSG Facilities and CSG Security.
Revenue by segment
| (ZAR millions) | FY 2019 | FY 2018 | Change | FY 2019 (USD millions) |
| CSG People | 926.1 | 951.8 | -2.7% | 65.3 |
| CSG Facilities | 773.3 | 756.7 | 2.2% | 54.5 |
| CSG Security | 457.5 | 425.9 | 7.4% | 32.3 |
The group said the performance of the staffing division during the 2019 year was substantially down from the previous year due to a number of reasons, some of the most important being:
- fraudulent activities and malpractices valued at approximately ZAR 9 million (USD 634.000) over a period of time, by a senior manager in BDM Staffing (corrective action has been taken),
- a sizable BDM Staffing contract coming to an end,
- bad debts mostly from the construction industry written off in both BDM and M&S Projects (a subsidiary), and
- the initial adverse effect of management changes in subsidiaries ConinghamLee and CSG Skills Institute. The group said ConinghamLee and CSG Skills Institute are positioned for growth.
CSG CEO, Pieter Dry, commented on the group’s performance, “We had a satisfactory first six months, with a very disappointing second half of the year due to the challenging business environment and trading conditions. This was aggravated by a few negative once-off events relating to bad debts, impairment of goodwill, stock devaluation and losses, fraud and malpractices. However, we feel comfortable with our normalised EBITDA as the base for the 2020 financial year.”
“CSG has been very conservative this year and has done a thorough ’clean-up’, to make sure that we are well-positioned for growth as a result of our diversification strategy, implementation of solid growth platforms and new greenfield projects,” Dry said. “Our mission, to be a leading strategic outsource partner of choice for staffing solutions, facilities management and security in South Africa, remains unchanged. We have consolidated, and increased the basket of services we offer to our clients.”
Before publication of results today, CSG Holdings Ltd traded at ZAR 54.00 (USD 3.81), no change on the day and 25.58% above the 52 week low of ZAR 43.00 (USD 3.03) set on 24 April 2019. Based on its current share price the company has a market value of ZAR 281.50 million (USD 19.8 million).