South Africa-based workforce management solutions group Adcorp Holdings Ltd. (ADR: JSE) reported revenue increased by 2.8% to ZAR 7.9 billion (USD 551.3 million) for the six months ended 31 August 2018.

During the full year ended 28 February 2018 the group discontinued operations in the Rest of Africa.

Results for H1 2018 are as follows. Underlying EBITDA is defined in the current period as EBITDA adjusted for cutback costs (layoffs) and restructure costs.

“The group said its half-year results reflect the early stage positive outcomes of the work performed by the leadership team over the past year to stabilise the group in preparation for a strategic transformation.

“This transitional phase has enabled us to effect a financial turnaround while at the same time mapping out a strategy that will stabilise and grow the business and thus achieve the ambitious targets we have set for ourselves over the next three years,” the group stated. “By refocusing on the core, reducing costs through the deployment of lean and agile business processes, strengthening our brand and transforming our culture we believe that we have set the platform for the Adcorp of the future. “

In July 2018, a constitutional court in South Africa ruled in a landmark case that labour brokers (formerly known as Temporary Employment Services) can no longer be entitled to a portion of a recruit’s earnings after their third month in employment. Adcorp said the initial response to the ruling from its clients has been largely positive and there has been minimal impact on half-year results.

“Temporary Employment Services is only one of the many workplace solutions provided by Adcorp. We take to heart our responsibility to continue to engage with our clients, assignees and government to enhance employment creation in South Africa,” the group stated.

Revenue for the group’s operations in South Africa and Australia was broken down as follows.

In South Africa, Industrial Services and Professional Services reported growth of 4% and 6%, respectively. However, Support Services (-6%), Training Services (-4%) and Financial Services (8%) all reported decreases during H1 2018. Overall revenue in South Africa was up 2.6% over last year.

In Australia, Industrial Services reported an increase of 3% while Professional Services was up 4%.

Looking ahead, the company said the key strategic capabilities on which the future of Adcorp will be built operate in four key areas: resourcing, training, consulting and outsourcing of people-intensive processes and HR functions.

“The clean-up of the group in FY2018 enabled the leadership team to gain an understanding of its true financial position and reset performance. This represented the first phase of the Group's strategic transformation,” the group said. “The focus in the current year is on stabilising operations, stemming losses from our Training business and unlocking short-term wins as we develop a blueprint for the future of Adcorp.”

As of last trade Adcorp Holdings traded at ZAR 1,785.00 (USD 123.4), up 5% on the day and 6.05% below its 52-week high of ZAR 1,900.00 (USD 131.4), set on 6 Jun 2018. Based on its current share price the company has a market value of ZAR 1.87 billion (USD 129.3 million).