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South African recruitment firm ADH ADvTech (ADH: SJ) reported half year revenue of ZAR 882 million (USD 85.9 million) for the six months to 30 June 2013. Revenue for the half year increased +4% from ZAR 850.4 million (USD 82.8 million) a year ago.
Frank Thompson, CEO of ADvTech, commented “The improved revenue, margin, and operating profit achieved during the first half shows clearly the turnaround of our business. These results demonstrate the scale and strength of our business model and the relevance of our strategy amid challenging market conditions. We continue to strengthen our foundation for future growth. Since the last report the board has approved further capital expenditure of ZAR 235 million (USD 22.9 million), bringing long term capital commitments to ZAR 1.2 billion (USD 116.8 million)."
The ADvTECH Group reports the performance of Schools and Tertiary as two separate education divisions, and Resourcing as the third division. The Resourcing division’s activities include permanent and temporary staffing solutions as well as recruitment advertising, e-recruitment and advertising response handling. The portfolio of Resourcing brands includes Brent Personnel, Cassel & Company, Communicate Personnel, Inkokheli HR Appointments, Insource.ICT, IT Edge, Network Recruitment, Tech-Pro Personnel and The Working Earth.
Resourcing revenue, which accounts for 12% of total Group revenue declined by -9% from ZAR 112.7 million (USD 11 million) during H1 2012 to ZAR 102.9 million (USD 10 million) for H1 2013. Operating profit fell by -24% compared with a year ago, to ZAR 10 million (USD 973,520) from ZAR 13.2 million (USD 1.3 million) last year.
The severe decline in staffing markets reported last year due continued in 2013. Slight improvement has been noted in the latter part of the period and performance improved in the second quarter.
Thompson added: “Although the first six months of 2013 presented some challenges, the Group again demonstrated solid financial and operational performance and delivered solid returns to shareholders. The Group plans to continue the roll-out of significant investments in response to strong demand across the Schools division and in the upper market segments of the Tertiary division.”
“We have made good progress against our commitment of offering high quality, leadership and innovation in the fields of education and resourcing. Our cash generation remains strong and we continue to have a robust balance sheet to support the strategy and invest in our future growth,” Thompson concluded.
In trading today, the company’s share price fell -4.44% to ZAR 645 (USD 62.79), an increase of +14.55% compared with a year ago. Based on its current share price, the company has a market value of ZAR 2.8 billion (USD 272.6 million).