Leveraging ongoing demand for specialist skills despite a slowing economy, black empowered Paracon Holdings on Monday reported strong growth in full-year earnings.

The JSE-listed information communication and technology (ICT) resourcing and solutions group reported earnings of R86-million for the year ended September 31, which was up 17% from a year earlier.

Headline earnings rose from R66-million recorded to R70,9-million.

Paracon Holdings also reported that it had acquired 36,3-million Paracon ordinary shares at 135c a share from black empowerment shareholder WDB Investment Holdings for R49,3-million, with an additional R4,9-million secondary tax on companies charge.

The transaction, the company stated, continued to recognise the success of its empowerment strategy. The repurchase enabled WDB to settle its debt with the original transaction funder, and held its remaining 60-million shares in Paracon uencumbered.

Paracon CEO Mark Jurgens said that while the nationwide skills shortage was a challenge for the company, it also offered opportunities. “Our established reputation and strong market positioning enable Paracon particularly to attract career-minded candidates, giving the group an advantage over competitors.”

The Resources division, which supplied permanent and contract staff, remained the most significant contributor to the results. Jurgens said the vendor-on-premise model had proven very successful by providing quality service on site, while entrenching Paracon’s presence and enabling cross selling of services.

Jurgens added that demand for skills continued to outstrip supply, with a large number of vacancies which still needed to be filled. “In addition, permanent placements are taking longer to close as clients are becoming more selective.”

The Business Solutions division also delivered robust performance during the year. Demand for project management solutions and testing services also boosted results. Jurgens noted that Paracon’s black graduate programme had been so successful in providing new skills, that training had expanded from testing to other roles, including business analysts, project administrators, and software developers.

Jurgens added that it was too early to comment on the effects the global financial crisis would have on the group. “From a skills perspective, we are insulated to a degree in South Africa. Skills released into the market, as a result of growth contracting in one sector, can quickly be redeployed into another sector in light of the scarcity of skills generally.”

Jurgens concluded that Paracon had a number of advantages that positioned the group to overcome adverse conditions in the year ahead. “Our business model is scaleable and a large percentage of our revenue is annuity based. We are also supported by a healthy balance sheet, which is a key strength.”