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South Africa – Workforce Holdings reports revenue growth across all business segments

26 August 2015

South African recruitment and outsourcing company Workforce Holdings (WKF: JSE) today reported revenue for the six months ending 30 June 2015 of ZAR 904.6 million (USD 68.8 million), an increase of 3.8% compared with ZAR 871.8 million (USD 66.3 million) during the same period last year. 

  H1 2015 H1 2014 Change
Revenue ZAR 904.6 million ZAR 871.8 million +3.8%
USD 68.8 million USD 66.3 million
Gross Profit ZAR 208.3 million ZAR 192.6 million +8.1%
USD 15.9 million USD 14.7 million
EBITDA ZAR 38.9 million ZAR 38.4 million +1.4%
USD 3.0 million USD 2.9 million

The company reports revenue in five segments, as follows:

  H1 2015  2014 Change
Staffing & Recruitment ZAR 772.0 million ZAR 758.3 million +1.8%
USD 58.8 million USD 57.7 million
Training & Consulting ZAR 23.6 million ZAR 18.5 million +27.7%
USD 1.8 million USD 1.4 million
Finance & Lifestyle Products ZAR 32.7 million ZAR 27.2 million +20.4%
USD 2.5 million USD 2.1 million
Employee Health Management ZAR 17.4 million ZAR 13.4 million +29.3%
USD 1.3 million USD 1.0 million
Process Outsourcing ZAR 60.5 million ZAR 57.7 million +4.8%
USD 4.6 million USD 4.4 million

The company’s Staffing & Recruitment segment comprises staff outsourcing, which provides human resources to clients on both a short and long-term basis; recruitment and specialist staffing, which includes permanent and temporary placements, ad-response handling, executive search, call centre staffing, and the importing and exporting of skills.

The segment’s blue-collar businesses performed well in difficult conditions, while the white-collar businesses reported growth compared with the second half of 2014. Turnover was flat compared with last year as a result of the changes to the labour legislation and the uncertainty that surrounded these changes.

The implementation of new labour legislation has impacted buyer behaviour as many clients delayed making decisions about their flexible staffing requirement in anticipation of the changes.

According to Workforce’s financial statement, the new laws are expected to benefit the group’s blue-collar businesses as employers tend to favour larger, more reputable providers with a proven track record, who better positioned to advise employers on regulatory and legislative compliance.

Looking forward, the Workforce’s management is confident that its strategy of focused growth and diversification will result in sustained future profits. Numerous acquisition opportunities are currently being explored. The acquisition opportunities fall across the group’s portfolio of businesses.

In addition, the group is also seeking opportunities to expand its footprint across Africa, with the company management confident that the group is well positioned to grow beyond South Africa’s borders.

In trading today, the company’s share price was unchanged at ZAR 148 (USD 11.26), an increase of 146.7% compared with a year ago. Based on its current share price, the company has a market value of ZAR 355.2 million (USD 27 million).