| JSE-listed Adcorp Holdings Limited, a leading workforce solutions company, today announced its interim financial results for the six months ended 31 August 2023, reflecting robust revenue growth and operational resilience in both South Africa and Australia. The results highlight the group’s steadfast commitment to its strategic vision amidst challenging macroeconomic conditions and external challenges faced by both economies. |
| CEO John Wentzel comments: “In the face of macro-economic challenges, Adcorp Group has not only demonstrated resilience but also a relentless drive to adapt and grow. We will continue with our comprehensive approach to cost containment and effective working capital management to ensure the Group’s ongoing stability and profitability. Our recent performance is a testament to our team’s dedication and strategic vision. I am proud of what we’ve achieved. ” |
| Despite the margin pressure experienced across all sectors, primarily due to a decline in permanent placements and subdued demand for higher-margin services, the group remains confident in its ability to navigate these challenges. A series of strategic initiatives are underway to optimise cost structures, diversify revenue streams, and enhance operational efficiency. Leveraging innovative solutions and data analytics, the group aims to bolster profit margins by identifying growth opportunities and implementing cost-saving measures. |
| Adcorp Group’s financial performance showcased a commendable trajectory. The Group reported revenue growth of 10.2% to R6.5 billion from R5.9 billion in the previous period. This uptick was primarily driven by the positive strides of the Contingent Staffing divisions in both regions. A gross profit of R628 million reflected the financial resilience of the group even as the gross profit margin declined. Operating expenses saw a controlled rise of just 2.8%, staying beneath the inflation rates of the Group’s operational regions. Notably, earnings per share from continuing operations surged by 34.4% to 33.1 cents. |
| Contingent Staffing delivered revenue and gross profit growth, with a renewed focus on the mining, renewable energy, and hospitality sectors. The division’s diverse client base remains resilient despite macroeconomic challenges. In South Africa, this performance was delivered despite the negative impact of extensive load shedding which dampened revenue growth. Outsourcing faced challenges due to macroeconomic conditions in South Africa, with delayed contract start-ups. However, new contracts are expected to commence in the second half of the financial year and the division has entered new higher-margin sectors to boost performance. |
| Professional Services saw revenue growth but experienced margin pressures due to decreased demand for permanent placements and RPO solutions. This downturn is temporary, as a recovery is anticipated when the economy recovers. In challenging markets, the IT brand Paracon remained solid, while Quest excelled in its domains. Post the voluntary administration of the non-core aaX brand in December 2022, Australia pivoted to emphasise core brands Paxus and LSA. LSA reported significant revenue growth from the prior period, and Paxus demonstrated resilience amidst a decline in permanent placements. |
| Wentzel concludes: “Our interim results underscore our ability to deliver a solid financial performance, even in challenging market conditions. Our strategic focus, customer centricity, and commitment to shareholder value position the group strongly for continued success.” |
| The board of directors approved and declared an interim gross dividend of 16,1 cents per ordinary share (2022: 12,2 cents) for the six months ended 31 August 2023. |
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| Adcorp Holdings Limited |
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