ASSESSMENT Hasn’t exactly been a model worker over the past few years, but there’s evidence of a much improved work ethic. With the great benefit of hindsight this is perhaps the share that punters keen on staffing shares should have accumulated. Primeserv had endured a horrible time for a variety of reasons. But the group was a classic opportunity to buy a good company doing badly in a traditionally bad industry where the going is now good.
Last year Primeserv’s shares were still available at around the 20c level, which is well off the current price of 60c/share on the JSE. Primeserv, which made its first significant acquisition (Staff Dynamix) a few weeks ago, was one of the many companies that sported bruises after the flourish of corporate action among ambitious small cap companies in the late Nineties.
In Primeserv’s case it was acquiring The Learning Corporation (TLC) that left the company limping for many a year. Things have got better operationally, though you’d really like to see Primserv fatten its trad-
MARKET CAP = R79m
CEO Merrick Abel says there’s scope for acquisitions “as we have cash on the balance sheet but we’re not prepared to overpay”. Abel also contends that Primeserv presents investors with a more sophisticated option, saying: “We’re the only company with an integrated human resources offering.” If its next set of results can see bottom line growth complemented by an improving margin, plus reassuring cash flows, then perhaps we’re looking at 100c/ share.