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Staffing firm Kelly Group (KEL: JNB) yesterday reported revenue for the year ending 30 September 2013, dropping by -1.4% to ZAR 1.42 billion (USD 139.6 million) from ZAR 1.44 billion (USD 141.5 million) in 2012. Gross profit for the year fell by -3.8% to ZAR 297.2 million (USD 29.2 million) from ZAR 308.7 million (USD 30.3 million) a year ago.
The South African firm is not to be confused with the US staffing firm with the same name.
Despite fallen revenue and gross profit, Kelly Group reported a net income of ZAR 21.1 million (USD 2.1 million) for the full year, compared with a net loss of ZAR 26.2 million (USD 2.6 million) for the year ending 30 September 2012.
Kelly Group advised in a statement that: “[We are] pleased to advise that the turnaround strategy implemented under [the] current management is now starting to yield benefits, as reflected in the improved year-on-year results of the Group. The Group concluded the strategic sale of its US operations for USD 11 million during the course of the year.”
“Notwithstanding continued pressures on revenues and margins across the South African staffing businesses, there are encouraging signs of good revenue growth on Kelly's large corporate accounts resulting from improved servicing strategies. These strategies are now being rolled out to the next tier of clients. The blue collar businesses, InnStaff and Kelly Industrial, continued to grow and both businesses reported improved results, despite this area of the labour market being characterised by unrest and strikes.”
“Success was achieved in controlling overhead costs with the South African operations achieving a ZAR 35.1 million (USD 3.4 million) or -11% saving in costs year-on-year. Continued focus on streamlining of processes, cost containment and working capital management is a part of the Group's strategy going forward. As a result, the South African operations reverted from a prior year loss to a ZAR 12 million (USD 1.2 million) operating profit for the year and cash generated from operations increased substantially to total ZAR 57.6 million (USD 5.7 million) for the year,” the statement concluded.
In trading yesterday, the company’s share price closed up +0.6% at ZAR 176 (USD 17.30), an increase of +10% compared with a year ago. Based on its current share price, the company has a market value of ZAR 176 million (USD 17.3 million).