Sharenet Sites 
Sharenet Sites
KEL - Kelly Group Limited - New strategy to drive Kelly Group turnaround KELLY GROUP LIMITED (Incorporated in the Republic of South Africa) (Registration number 1999/026249/06) (Share code: KEL) (ISIN: ZAE000093373) ("Kelly Group" or "the group") NEW STRATEGY TO DRIVE KELLY GROUP TURNAROUND Johannesburg, 22 November 2011 - Comprehensive employment services provider Kelly Group said today a new strategy of greater inter-divisional cooperation, coupled with an aggressive sales and marketing drive, was expected to lift the group`s results in future periods. Reporting on the results for the year to September, recently appointed chief executive Gareth Tindall said despite challenging trading conditions and the significant internal changes required to position the group going forward, the group`s substantial revenue base remains intact. Group revenue for the year of R1 99 billion was 3% down on 2010 and operating profit of R16.8 million was 52% down on the prior year. In addition, the group recorded a net loss of R21.7 million), after accounting for R33.2 million in impairment charges finance charges and taxation. Revenue from high margin permanent placements contracted by 20% to R68.1 million and now comprises less than 4% of total group revenue compared to 8% in 2008. The group also recorded a decline of 2% in annuity revenue derived from outsourcing, largely due to the loss of two large contracts. The group now manages just over 17 000 associates on average in any given month but managed to maintain gross margins in a market where clients demand more for less. Skill development reflected healthy growth of 15% and is now the second largest revenue contributor to the South African operations from a segmental perspective. The USA subsidiaries also continued on their strong growth path and increased revenue by 9% and operating profit by 314% in US dollar terms, offset however by the strength of the rand which traded at the R7.00 mark against the dollar for most of the year. K-log, the group`s online people resource planning system, doubled its revenue, albeit off a low base, and continued on its rapid growth path. The Kelly and PAG divisions came under strong pressure during the year with Kelly showing a 7% decline in revenue and a 37% decrease in earnings before interest and tax, while PAG recorded an EBIT loss of R0.9 million. Both businesses have now been restructured with a greater focus on their traditional areas of strength and specialisation and an acute emphasis on client interaction. Torque IT, Kelly Industrial and InnStaff all performed well in a challenging market. "While trading conditions are expected to remain depressed for the foreseeable future, our new strategy will help us to regain lost market share. The sharpened external focus supported by operational improvements and the continued use of enabling technologies will benefit the group going forward and we expect to see a better performance over time," Tindall said. For further information contact: Gareth Tindall, chief executive, on 083 326 1203 or Ferdie Pieterse, financial director, on 082 905 2820 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: 22/11/2011 12:16:01 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.
