Workforce Holdings down but on road to recovery
DURBAN - WORKFORCE Holdings said yesterday that it shrugged off the impact of Covid19 in the second half of its financial year, although overall earnings were still down by 45.5 percent.
Its earnings before interest, tax, depreciation and amortisation (Ebitda) increased by 77.7 percent in the second half, boosted by the healthcare, staffing and outsourcing and training investment clusters.
But overall Ebitda was down by 45.5 percent to R76.9 million in the year to end December.
Workforce is a human capital services company that operates across four focused investment clusters in South Africa and other parts of Africa.
Chief executive Ronny Katz said one of the reasons for the good second half recovery was that the staffing and outsourcing investment cluster was able to pivot quickly and seek new opportunities for business.
“A significant boost to performance from July 2020 onwards was due to diversification into sectors such as transport, warehousing, power generation, oil and gas, e-commerce, distribution, renewable energy, and technical mining,” he said.
However, its revenue declined by 13.9 percent to R2.7 billion and headline earnings per share fell by 71.7 percent to 12 cents a share while earnings per share was down by 67.3 percent to 13.9c.
The group decided not to declare a dividend in order to conserve cash resources in light of the current economic environment.
Katz said the group was pleased with the results which confirms Workforce’s resilience and agility.
“While the impact of Covid-19 is visible during the first six months of 2020, the good recovery post July is reflected in the much-improved second half,” Katz said.
He added the group’s investment clusters like staffing and outsourcing, training, recruitment, and financial services were particularly knocked by Covid-19 in the first half.
“There was, however, a visible step change after July 2020, as lockdown levels eased, and our clients reopened for business.
“This was carried through the results in the last six months of our financial year,” he said.
Workforce acquired OpenSource, which operates in the SAP space, effective post year-end to further support the ability of the recruitment investment cluster to provide services to specialised areas within the recruitment market.
Looking ahead, Katz said the recent budget speech had been encouraging and was business friendly rather than heavily weighted towards ideology.
“We eagerly await the rollout of infrastructure projects as a growth driver for the economy, understanding that although South Africa will only reach pedestrian growth in the coming years, the country still needs infrastructure spend to achieve a higher economic growth path.
“We keep a watchful eye on similar large projects being developed in the geographies we operate in outside of South Africa where Workforce can add tremendous value as a relevant and significant supplier,” he said.
Workforce’s share price was unchanged at R1.11 at the close on the JSE yesterday.