Listed staffing and marketing advisory company Adcorp Holdings has reported a 28% rise in its headline earnings per share for the six months to the end of June 2005, to 87,5 cents from 68,7 cents a year earlier.
The company declared an interim dividend of 35 cents, representing a 40% increase from the 25 cents declared at the halfway point in 2004. The group’s 2004 results have been restated in line with the adoption of International Financial Reporting Standards for 2005.
Announcing its interim results on Wednesday, Adcorp said turnover rose by 18% to R1,1-billion from a restated R933,8-million a year earlier, while its operating profit was 30% higher at R53,6-million versus R41,3-million previously.
Profit after tax rose to R37,3-million from R29,4-million the prior year, and profit attributable to ordinary shareholders improved by 32,1% to R36,3-million from R27,5-million, largely as a result of the 18% rise in turnover coupled with the 0,5% improvement in operating profit margin.
Adcorp’s operating profit margin rose to 4,9% during the six months from 4,4% a year earlier, helped by the company’s focus on cash and margin management.
Net cash generated amounted to R32,8-million, with a two-day reduction in debtors’ days contributing positively to cash flow.
The company said both its Permanent Recruitment and Flexible Staffing divisions recorded outstanding results, reflecting positive growth in the South African economy and, specifically, high demand in the financial-services, retail, telecommunications, engineering and public sectors.
Its Flexible Staffing division also benefited from growth in the call-centre industry, the trend to outsourcing and growth in learnerships.
The Marketing Research division also had an outstanding start to the year, Adcorp revealed, benefiting from the growth in the South African economy, particularly in the retail and fast-moving consumer goods sectors.
The Corporate Communications division, which was a relatively minor contributor to overall group profitability, experienced a difficult start to the year. Having reported a loss for the first half of the year, Adcorp expects the business to return to profitability for the full year.
Looking ahead, the group said it expects the positive trends it experienced in the first six months of the financial year to continue for the remainder of the year. — I-Net Bridge