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Human capital management group Adcorp on Wednesday posted headline earnings a share of 236.7c for the year ended February 28, 2013 – a 13% improvement on the 209.1c a share for 2012.
Group revenue increased by 34% to R8.6-billion, while normalised earnings before interest, tax and depreciation of R423-million were 37% ahead of the prior year figure.
Similarly, operating profit for the year increased by 40% to R286-million.
The company said these results were “extremely positive” when viewed in the context of a volatile labour environment, legislative uncertainty relating to labour broking as well as global economic instability.
Adcorp’s blue-collar operations demonstrated good revenue and profit growth, with normalised earnings before interest, tax, depreciation and amortisation of R292-million, a 29% jump from the prior year.
“Much of this growth is attributable to market share gains as the industry consolidates, favouring the bigger players. The division also benefited greatly from its expansion into other African markets, specifically in the areas of exploration, mining, energy and related infrastructural development,” Adcorp CEO Richard Pike said at the group’s results presentation on Thursday.
Further, Pike said the white-collar operations had been bolstered by the acquisition of specialist information technology (IT) resourcing and solutions business, Paracon, which became effective on December 1, 2011, and which contributed a full year of profit to the 2013 results.
“Paracon has successfully integrated into the group, performed ahead of expectations, and has significantly transformed the group’s delivery capability in this area,” said Pike.
Further, Adcorp’s acquisition of Australian specialist IT resourcing and solutions specialist Paxus, for R616-million, gave it access to a significant new market.
Meanwhile, the white-collar operations of the group’s operating company Quest also rebounded after some troubled years, following weak trading conditions in the financial services sector – its major industrial sector.
However, Adcorp saw its weakest performance in its business process outsourcing and training operations, which both experienced a difficult trading environment.
In particular, the training operations delivered far fewer learnerships than in prior years as a result of problems experienced with the relevant sector education training authority-related administration.
“As a result, the training operations reflected a far lower level of profitability than in prior years,” Pike said.
The group also expressed concern that proposed legislation aimed at further regulating labour broking in South Africa continued to be held up in the Parliamentary process.
“It now appears unlikely that such legislation will be promulgated by the end of the year,” the CEO commented.