Adcorp unscathed by labour law changes
Adcorp Holdings says the changes to labour laws in SA have not had a lasting effect on its figures.
|||Johannesburg - Listed workforce management group, Adcorp Holdings, says the changes to labour laws in SA have not had a lasting effect on its figures.
In the year to February, the group grew revenue 17 percent to R15.6 billion. In a statement issued on Tuesday, it said normalised earnings per share were 365.3 cents, 4 percent ahead of a year ago.
Adcorp notes this year saw the introduction of the long-awaited, substantial changes to South African labour laws.
“Initially, these new laws impacted volumes negatively in Adcorp’s core South African market where a number of contract staff were either taken on as permanent employees by clients or simply had their contracts of employment terminated,” says Adcorp Group CEO, Richard Pike.
“In response to this net loss of volumes, the group successfully embarked on a major operational restructure during the year, focused on shedding costs and attracting new business which offset much of the negative impact of these lost volumes,” he says.
Yet, says Pike, the group’s “cash performance has once again been extremely positive”.
Pike says the new labour laws led to uncertainty, which related to the status of contract workers. This was clarified in September during a Labour Court ruling.
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However, normalised earnings before interest, tax, depreciation and amortisation (EBITDA) of R621.5 million were 7 percent below the prior year’s comparable figure of R668.5 million, which Adcorp says reflects a tougher trading environment and lower sales volumes during the financial year.
Adcorp also acquired the business of Kelly Group in the prior financial year.
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“The integration of the operations of the Kelly Group is now complete and, although Kelly’s white collar operations were similarly, negatively affected by the recent changes to South African labour laws, the acquisition will benefit the group going forward,” he says.
Adcorp’s international operations, in Australia, were buoyed by deals.
Pike says Adcorp remains positive, despite the continuing tough times.
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