05/29/2023 | News release | Distributed by Public on 05/30/2023 10:21
Adcorp Holdings Limited
("Adcorp" or "the Company" or "Group")
29 May 2023
Adcorp delivers strong growth and increased dividends amid challenges
Adcorp Holdings Limited, a workforce solutions provider listed on the Johannesburg Stock Exchange, proudly presented its annual financial results for the year ended 28 February 2023 today. The results featured a dividend declaration and a special dividend, heralding encouraging outcomes for its shareholders.
In a display of resilience, the company exhibited a 6.5% increase in Group revenue from continuing operations, successfully growing from R11.3 billion to R12.0 billion. This progress signifies the first annual revenue increase in half a decade, reflecting a successful year of sustained business growth. Also contributing to this positive outlook, headline earnings per share from continuing operations rose to 147.8 cents, eclipsing the previous year's figure of 99.7 cents. In addition to strong financial performance, Adcorp lifted employee engagement and reported record customer satisfaction scores.
Despite a slight reduction in Group EBITDA (excluding impairment) from continuing operations by 3.8% to R284 million, the Group's overall financial prowess persisted. This performance evidences the Group's market strength and aptitude to proficiently overcome difficulties. CEO Dr John Wentzel expressed, "The past year stands as a strong testament to our adaptable nature and capacity to prosper in the face of adversity. Our strategic acumen, unwavering commitment to customer satisfaction, and robust resilience have not only enabled us to surmount challenges but also to grasp growth opportunities."
Through judicious management of working capital, cash generated by operations swelled from R260 million to R378 million, underlining the company's strong financial position. The company's consolidated net cash experienced a noteworthy surge from R198 million to R312 million. These developments, coupled with a reduction in days sales outstanding from 38 days to 36 days, highlight Adcorp's operational efficiency and effective financial management. Adcorp's balance sheet thus maintained its strength amid a high interest rate cycle.
The Board declared a final ordinary dividend of 16.5 cents per share, taking the total ordinary dividend to 28.7c for the year. The Board also declared a special dividend of 91.3c cents per ordinary share, bringing the total ordinary plus special dividends declared to 120.0 cents per share. This development came as a result of the execution of the Group's robust capital allocation framework. Although there were considerable contract losses at allaboutXpert Australia and an impairment loss at the Paracon business, measures have been expediently instituted to counter these drawbacks.
Despite difficult macroeconomic conditions in South Africa, Adcorp's Contingent Staffing and Functional Outsourcing divisions demonstrated impressive resilience and adaptability, witnessing growth in revenue year-on-year, despite significant exposure to the volatile FMCG and manufacturing sectors. In the Training division, substantial changes and enhancements are expected to yield positive outcomes in FY24, aligning the training brands more closely with core workforce recruitment brands. Professional Services stabilised its performance while returning much loved brands to the market.
The Australian division emerged as an exemplar of exceptional growth, delivering commendable results despite supply side constraints and rising inflation. Thanks to Adcorp's unwavering dedication to customer satisfaction, quality and innovation its Australian contingent staffing business delivered outstanding growth.
Looking forward, Dr Wentzel conveyed confidence in the Group's vision and strategic direction, stating, "Our strategic shift is yielding results, affirming that even in trying times, we continue to deliver a robust performance and generate value for our shareholders."
At Adcorp, our purpose is to enable agile, focused and skilled workforces for the future for our clients across two continents. Adcorp is passionate about connecting human potential and through that helping businesses, companies and economies grow.
Connect with us through our website adcorpgroup.com or social channels:
Singular Systems - IR
010 003 0700 / 082 497 9827
On behalf of Adcorp Holdings Limited
Dr John Wentzel, CEO