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Summary of the unaudited interim financial results for the six months ended 31 August 2021

Adcorp Holdings Limited

(Incorporated in the Republic of South Africa)

Registration number 1974/001804/06)

Share code: ADR

ISIN: ZAE000000139

(“Adcorp” or “Adcorp Group” or “the group”)




  • Revenue from continuing operations reduced by 5.4% to R5.8 billion (2020: R6.1 billion)
  • Gross profit from continuing operations increased by 6.7% to R599.4 million (2020: R561.6 million)
  • Operating profit from continuing operations improved by 10.3% to R71.6 million (2020: R65.0 million)*
  • Profit after tax from continuing operations increased by 123.2% to R27.4 million (2020: R12.3 million)*
  • Cash generated by operations of R68.9 million (2020: R860.9 million)
  • Net unrestricted cash position improved to R97.6 million (2020: R52.0 million before deferred payables of R437.1 million)
  • Interest-bearing debt, excluding leases, reduced to R250.0 million (2020: R629.2 million)
  • Headline earnings per share from continuing operations increased to 27.2 cents per share (2020: 12.5 cents per share)*
  • Earnings per share from continuing operations increased to 25.2 cents per share (2020: 11.4 cents per share)*
  • Total headline earnings per share decreased to 31.8 cents per share (2020: 37.3 cents per share)*
  • Total earnings per share decreased to 29.8 cents per share (2020: 36.2 cents per share)*


Performance overview

In the six months ended 31 August 2021, Adcorp has continued to focus on improving the quality of its earnings, tight management of its operating costs, and optimising its working capital. Recovery to pre-pandemic levels of economic activity in both South Africa and Australia remained slow and has weighed on some parts of the business. Despite these conditions, we are pleased to report results that show an improvement over the prior year on a continuing operations basis.

Financial overview

Gross profit from continuing operations increased by 6.7% despite a decline in revenue of 5.4%. Temporary disruptions brought on by lockdown regulations in both territories and the civil unrest in South Africa, experienced in the latter part of the period under review, adversely affected operations.  South Africa’s 0.6% revenue decline is attributable to the shortfalls in the industrial and professional segments of 0.7% and 4.0% respectively and were offset with a 40.8% uptick in performance by the training segment.  Revenue from continuing operations in Australia decreased 11.3% to the comparable period, primarily due to ZAR appreciation.

Operating profits from continuing operations improved by 10.3% to the comparative period.  This is largely attributable to improved gross profit, the further containment of operating expenses and lower interest and amortisation costs.  In the first half of the 2021 financial year there were several once-off income and costs items that affected the operating performance. Earnings per share from continuing operations is significantly up to 25.2 cents (2020: 11.4 cents).

Net cash was R97.6 million at 31 August 2021, reflecting gearing of negative 7.3% (excluding restricted cash and finance leases). The proceeds from the sale of Adcorp Support Services Proprietary Limited, received in March 2021, were used to strengthen our financial position and further improve the balance sheet.


This portfolio, comprising both industrial contingent staffing and functional outsourcing brands, retained prior year revenues. Prior period cost efficiencies have been maintained and stringent cash management controls have delivered positive sustainable outcomes in the current period. The functional outsourcing brands continued to deliver higher gross profit margins on rising demand.


The professional portfolio contracted by 4.0% in revenue when compared to the prior period. The brands within this portfolio each delivered contrasting results. The contingent nursing brand, Charisma, has returned to pre-COVID-19 revenue levels while the higher-end contingent IT and permanent placement brands, Paracon and talentCRU, are still impacted by slow client return to pre-pandemic levels of IT projects and permanent recruitment.


Training has had a strong performance with revenue growth of 40.8% compared to the prior period.  Successful online training delivery models have generated greater gross profit margins and enabled product expansion. Management changes and a change in product mix have contributed to revenue and margin growth.


The business posted a solid first half with constant currency revenues largely comparable to the prior period where operating profit had the assistance of the Australian government JobKeeper funding. Margins have increased in the professional skills market where demand is high and supply constrained. Margin increases were also attained in LSA however the supply of labour to meet demand is currently constrained due to border restrictions.


Adcorp’s short term focus remains on prudent working capital management, and consequently the board has decided that an interim dividend will not be declared.


Adcorp has made significant progress in improving both the sustainability and quality of its earnings. At a normalised operating profit level we expect that the performance we have delivered in H1 will be sustained into H2 with more upside potential than downside risk. Whilst the risk of further lockdowns in South Africa and Australia remains, we are satisfied that the progress we made in the 2021 financial year, and enhanced over the past six months, will ensure a stable platform for profitable growth going forward.

This short-form announcement is the responsibility of the directors and is only a summary of the information contained in the full announcement and does not contain full or complete details. The full announcement is available on the JSE website and on the group’s website at Copies of the full announcement may also be requested from the group’s registered office and at the office of the group’s sponsors during office hours 8:00 – 16:00, Monday – Friday at no cost at the contact details below. Any investment decision should be based on the contents of the full announcement available on the JSE’s website and the group’s website.

These interim results have not been audited or reviewed by the Group’s auditors.

GT Serobe                                           Dr JP Wentzel                         N Prendergast

Chairman                                            Chief Executive Officer           Chief Financial Officer

By order of the board

28 October 2021


Dr John Wentzel (Chief Executive Officer)

Noel Prendergast (Chief Financial Officer)

Gloria Serobe* (Chairman)

Cecil Maswanganyi*

Monde Nkosi*

Sam Sithole*

Clive Smith*

Melvyn Lubega**

Dr Phumla Mnganga**

Tshidi Mokgabudi**

Prof Herman Singh**

Michael Spicer**

Ronel van Dijk**


**Independent non-executive

JSE Sponsor

PSG Capital 1st Floor Ou Kollege 35 Kerk Street Stellenbosch

Registered office

Adcorp Holdings Limited Adcorp Place 102 Western Service Road Gallo Manor Ext 6

Company Secretary

Lisa Laporte Adcorp Place 102 Western Service Road Gallo Manor Ext 6

Transfer secretaries

4 Africa Exchange Registry Proprietary Limited Hill On Empire, 4th Floor, Building A, 16 Empire Road, Parktown

Investor relations

Singular Systems Michèle Mackey: +27 (0)10 003 0700


Deloitte & Touche 5 Magwa Crescent Midrand 2066

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