CSG Holdings diversification pays off

CSG HOLDINGS said yesterday that its diversification strategy had paid off in the six months to September after it reported results that have been bolstered by recent acquisitions.

It said the foundation has also been laid for the future earnings with diverse services covering various industries.

“We anticipate that overall organic growth is still possible from this solid base and current economic conditions provide opportunities for further lucrative earnings accretive acquisitions at very attractive multiples.

“CSG expected the growth experienced during the period to continue for the next six months,” the group said.

The group reported a 26 percent increase in revenue to R1.1 billion, up from R832.8 million, while operating profit increased by 37.69 percent to R84.43m, up from R61.32m reported last year.

Headline earnings per share were up by 19 percent to 11.37 cents a share, up from 9.59c and headline earnings shot up by 37 percent to R59.6m, up from R43.5m as compared to the prior year.

Earnings before interest, tax, depreciation and amortisation grew by 41 percent to R93.73m.

“These improvements were achieved through both organic and acquisitive growth, as the additional earnings from the recent security and cleaning acquisitions were included in the results for the period under review,” the group said.

CSG is a contract services group offering a wide range of services, including staffing solutions, facilities management, and security and risk solutions in Southern Africa, to mostly blue-chip clients.

During the period CSG entered a deal with the RTT Group for 100 percent of its subsidiary, Revert Risk Management Proprietary, for R100m, including certain moveable assets.

CSG also acquired the issued share capital of Golden Dividend 401 Proprietary, a cleaning company, and Siyaya Hygiene and Cleaning Skills Institute Proprietary, a training company, with effect from May and June, respectively.

CSG operates in three divisions: Staffing Solutions, Facility Management, Security and Risk Solutions divisions.

In the Staffing Solutions, revenue increased by 25 percent to R492.33m and contributing R41.63m, which represents 44 percent to the operating profit of the group.

In the Facility Management, revenue rose by 11 percent to R361.58m and contributing R30.68m to the operating profit of the group.

The Security and Risk Solutions saw its revenue increasing by 77 percent to R196.41m and contributed R23.06m to the operating profit of the group.