Our opinion on the current state of PRIMESERV(PMV)

Primeserv (PMV) describes itself as a "provider of integrated business support services focused on providing client-centric human capital services, spanning staffing and recruitment services, productivity and functional outsourcing services, and training and consulting services." In its results for the six months to 30th September 2023, the company reported revenue up 15% and headline earnings per share (HEPS) up 21%. The company said, "Focus was further intensified on margin management and cost containment, resulting in gross profit increasing by 20 percent from R46.5 million to R56.0 million, albeit that the group’s operating expenses increased period-on-period by 17 percent from R36.7 million to R43.0 million in line with investment in organic and acquisition-driven business activities. Interest income has also continued to increase, improving by 57 percent from R1.4 million to R2.2 million due to solid operational cash generation and improved working capital management."

In a trading statement for the year to 31st March 2024, the company estimated that HEPS would increase by between 31% and 41%. The main problem with this share is that it is extremely thinly traded, with most days having no trade at all. This makes it impractical for private investors.

While Primeserv appears to be performing well financially and has shown significant growth, the lack of liquidity in its shares presents a challenge for private investors. The thin trading volume can result in difficulty buying or selling shares at favorable prices and may lead to increased volatility. Potential investors should consider these factors and may want to look for more liquid investment opportunities unless they are comfortable with the risks associated with low liquidity.