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KEL - Kelly Group Limited - Diversification into vertical markets positions
Kelly Group for growth
KELLY GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1999/026249/06)
Share code: KEL
ISIN: ZAE000093373
DIVERSIFICATION INTO VERTICAL MARKETS POSITIONS KELLY GROUP FOR GROWTH
Johannesburg, 27 January 2011 - Efforts to diversify and enhance its product
set have placed listed employment services provider the Kelly Group in a
strong position to take advantage of a rebound in the market and to capitalise
on any growth opportunity, says chairman Moss Ngoasheng in the company`s 2010
annual report published today.
Ngoasheng says that the past year was another challenging one for the group
and the South African labour market, which has shed an estimated one million
jobs since the onset of the recession late in 2008. He says despite a slight
improvement in economic conditions from the third quarter of 2009, employment
trends tend to lag general economic activity and have been further hampered by
continuing job losses and wage increases that have outpaced both the rate of
inflation and GDP growth.
"Against this background the Kelly Group managed to grow revenue marginally by
2% to R2.05 billion but earnings before interest, tax, depreciation and
amortisation (EBITDA) were down by 55% on the previous year. Net profit after
tax and earnings per share were also down by 55%," he says.
In the same report, chief executive Grenville Wilson says that the downturn in
the markets had paradoxically brought some benefit to the Kelly Group. "While
it had taken its toll on the group`s results, it has highlighted areas in need
of attention both within our business and the services we provide, which were
not identified before the recession hit in 2008. Over the past two years,
management has vigorously addressed these areas and thanks to the
effectiveness of this wide-ranging effort, the Kelly Group is in far better
shape than it was before."
Wilson says this refocusing of the group, which included leveraging technology
to manage costs down, optimise workforces and improve productivity, has
created a solid platform for future growth and, in the process, developed
systems which could easily be externalised to add value to the operations of
the clients it serves.
"One such product, K-log, has proved to be an effective people resource
planning system and one of the easiest ways to improve productivity. It
measures, monitors, and analyses human resource metrics and feeds this data
into a company`s top decision-making framework through up-to-date management
reports. It allows companies to align their human resources with their
strategic objectives by knowing exactly and immediately which departments or
operations or even employees, no matter their number or location, are
performing optimally or below standard, and taking the necessary action,"
Wilson says.
"In fact K-log has produced payroll savings of up to 15% where it has been
implemented and a 40% reduction in costs associated with workforce
administration. Wherever the group has deployed these solutions, it has
benefited from a significant reduction in the cost to serve large accounts.
Efficiency is enhanced, human error and rework is eliminated and managers and
frontline staff are freed-up to focus on value-adding activities. These
benefits resonate with our clients, who are also trying to grow in an
environment characterised by rising costs."
With regards to the group`s operations, Wilson says that the South African
brands returned a mixed bag of results with those business units deriving most
of their revenue from permanent recruitment bearing the brunt of the downturn.
Kelly Industrial and Torque IT were the group`s top South African performers,
while M Squared Consulting and Collabrus in the US continued on their growth
path started in mid-2009 with record revenue achieved in October 2010. "The
sales pipeline for M Squared is strong and the company is returning to
profitability levels last seen before the global financial crisis," he says.
Shareholders are advised that the financial information contained in this
announcement has not been reviewed and reported on by the group`s external
auditors and it does not constitute an earnings forecast.
For further information call Grenville Wilson, CEO Kelly Group, on 011 722
8009
Issued by du Plessis Associates on behalf of Kelly Group Limited dPA contact
Helen McKane Tel: +27 11 728 4701, Fax: +27 11 728 2547, Mobile: 082 330 2034
or e-mail: kellygroup@dpapr.com website: www.kellygroup.co.za
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 27/01/2011 12:01:01 Supplied by www.sharenet.co.za
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