South African staffing firm, Workforce Holdings has announced that, during the six months ended 30 June 2023, the company faced various business challenges due to a high interest rate environment, suppressed economic growth, generally low levels of business confidence, loadshedding and muted demand for its services.

The combination of the aforementioned factors resulted in nominal revenue growth, together with a reduction in gross margin percentages.

The decrease in profitability was exacerbated by an increase in operating expenses as the company had established an overhead structure designed for anticipated business levels and growth that ultimately did not materialise.

In March 2023, the company recognised the imbalance and immediately initiated corrective measures, including restructuring and right-sizing. The primary focus was on reducing operating expenses and implementing margin enhancement strategies. The positive financial impact of these initiatives, which has been evident since June 2023 and, taking into account the seasonal factors in the business, should result in the company improving its profitability during the second six months of the financial year.

Workforce Holdings provides employment, training, healthcare, wellness, financial services and lifestyle benefits to individuals and their employers. The company's staffing and outsourcing segment comprises temporary employment services, functional outsourcing, permanent recruitment, executive search, specialist staffing, payroll management, HR and IR consulting and turnkey staffing solutions.

The group’s earnings per share is expected to decrease between 78.44% to 98.44% compared to the earnings per share of ZAR 14.7 cents (USD 0.008) for the six months ended 30 June 2022

The headline earnings per share is expected to decrease between 78.36% to 98.36% compared to the headline earnings per share of ZAR 14.6 cents (USD 0.0079) for the six months ended 30 June 2022.

Workforce’s financial results are expected to be published on or about 24 August 2023.

Workforce Holdings shares last traded at ZAR 142.00 (USD 7.73), no change on the day and 18.33% above the 52-week low of ZAR 120.00 (USD 6.53) set on 15 June 2023. The company has a market cap of ZAR 346.10 million (USD 18.8 million).