Wrap Text
Reviewed condensed consolidated provisional results for the year ended 28 February 2014
Adcorp Holdings Limited
(“Adcorp” or “Adcorp Group” or “the Group”)
Registration number 1974/001804/06
Share code: ADR
ISIN number: ZAE000000139
Reviewed Condensed Consolidated Provisional Results
For the year ended 28 February 2014
Revenue for the year increased by 37% to R11,8 billion
Organic normalised EBITDA margin increased from 5,0% to 5,1%
Normalised EBITDA for the year increased by 29% to R544,4 million
Normalised earnings per share increased by 13% to 384,3 cents per share
Labour Solutions Australia (Pty) Ltd acquired for R256,5 million
Debtors days at 48 days
Scrip distribution awarded to shareholders with an 80 cents per share
dividend election
New BBBEE shareholding deal finalised, reported on and implemented during
the year
Successful funding raised under R2 billion
Domestic Medium-term Note Programme
Reviewed consolidated and separate statement of comprehensive income
for the year ended 28 February 2014
Group Company
Reviewed Audited Reviewed Audited
2014 2013 2014 2013
R’000 R’000 R’000 R’000
Revenue 11 802 415 8 616 842 5 459 2 362
Cost of sales (9 891 844) (7 056 563) (5 013) (2 362)
Gross profit 1 910 571 1 560 279 446 –
Other income 81 603 65 472 – –
Administrative expenses (888 352) (620 525) (108 833) (17 622)
Marketing and selling
expenses (616 566) (532 298) (50) –
Other operating expenses (185 383) (186 954) – –
Operating profit/(loss) 301 873 285 974 (108 437) (17 622)
Interest received 9 881 2 890 96 651 56 313
Interest paid (78 324) (59 491) (91 407) (87 412)
Dividends received – – 185 157 230 000
Share of profits from
associates 33 718 14 762 – –
Impairment of intangible
assets and goodwill (10 718) (12 078) – –
Impairment of loans – – – (1 093)
Revaluation of foreign
exchange denominated inter-
company – – – (3 551)
Profit on the sale of shares – 195 – 195
(Loss)/profit on disposal of
property and equipment (297) 178 – –
Profit before taxation 256 133 232 430 81 964 176 830
Taxation (93 629) (53 069) 98 261
Profit for the year 162 504 179 361 82 062 177 091
Other comprehensive income*
Exchange differences on
translating foreign
operations 6 301 (2 668) – –
Exchange differences arising
on the net investment of a
foreign operation 2 107 – 5 659 –
Fair value adjustment of
derivative financial
instrument 545 385 545 385
Non-controlling interest 2 515 (4 350) – –
Other comprehensive
profit/(loss) for the year,
net of tax 11 468 (6 633) 6 204 385
Total comprehensive income
for the year 173 972 172 728 88 266 177 476
Profit attributable to:
Owners of the parent 165 019 175 011 82 062 177 091
Non-controlling interest (2 515) 4 350 – –
Total comprehensive income
attributable to:
Owners of the parent 173 972 172 728 88 266 177 476
Non-controlling interest (2 515) 4 350 – –
Earnings per share
Basic (cents) 176,9 221,6 – –
Diluted (cents) 165,5 207,0 – –
Distribution to shareholders
during the year 140 140 – –
Interim dividend (cents) 60 60 – –
Final dividend (cents) in
respect of prior year 80 80 – –
Calculation of headline earnings
Profit for the year 165 019 175 011 – –
Loss/(profit) on sale of
property, plant and
equipment 297 (178) – –
Taxation (83) 50 – –
Impairment of investments in
associates and goodwill 10 718 12 078 – –
Headline earnings 175 951 186 961 – –
Headline earnings per share
– cents 188,6 236,7 – –
Diluted headline earnings
per share – cents 176,4 221,1 – –
Weighted average number of
shares – 000’s 93 299 78 989 – –
Diluted weighted average
number of shares – 000’s 99 723 84 558 – –
* All items below will be reclassified to profit and loss upon derecognition.
Reviewed consolidated and separate statement of financial position
as at 28 February 2014
Group Company
Reviewed Audited Reviewed Audited
2014 2013 2014 2013
R’000 R’000 R’000 R’000
Assets
Non-current assets 2 164 262 1 860 470 1 574 642 1 517 368
Property and equipment 80 794 65 376 – –
Intangible assets 559 522 511 669 – –
Goodwill 1 335 266 1 152 762 – –
Investment 3 530 – – –
Investment in subsidiaries – – 1 574 642 1 517 368
Investment in associates 86 954 53 236 – –
Deferred taxation 98 196 77 427 – –
Current assets 2 527 794 2 267 426 1 312 050 1 127 825
Trade and other receivables
and prepayments 2 041 069 1 638 810 4 622 3 780
Amounts due by subsidiary
companies – – 1 307 341 1 119 801
Taxation prepaid 15 154 7 848 – 3 925
Cash resources 471 571 620 768 87 319
Total assets 4 692 056 4 127 896 2 886 692 2 645 193
Equity and liabilities
Capital and reserves 2 097 580 1 895 661 1 747 971 1 609 773
Share capital 2 502 2 295 2 923 2 716
Share premium 1 487 124 1 227 213 1 487 124 1 227 213
Treasury shares (12 891) (12 891) – –
Non-distributable reserve – – 119 918 119 918
Share-based payment reserve 107 375 183 914 107 375 183 914
Foreign currency translation
reserve 2 046 (4 255) – –
Cash flow hedging reserve (25) (570) (25) (570)
Accumulated profit 513 544 492 946 30 656 76 582
Equity attributable to equity
holders of the parent 2 099 675 1 888 652 1 747 971 1 609 773
Non-controlling interest (3 016) 6 088 – –
BEE shareholders’ interest 921 921 – –
Non-current liabilities 1 013 242 169 575 497 580 9 000
Other non-current liabilities 2 106 2 575 – –
Long-term loan – interest-
bearing 723 754 8 334 496 736 8 334
Redeemable preference shares
– interest-bearing 40 000 70 000 – –
Derivative financial
instrument 25 570 25 570
Share-based payment liability 148 037 – – –
Obligations under finance
lease 1 709 4 292 – –
Operating lease liability – 108 – –
Deferred taxation 97 611 83 696 819 96
Current liabilities 1 581 234 2 062 660 641 141 1 026 420
Non-interest-bearing current 1 099 630 1 056 854 265 236 351 808
liabilities
Trade and other payables 832 964 765 031 2 404 11 773
Amounts due to subsidiary
companies – – 262 832 340 035
Provisions 213 941 183 429 – –
Other vendor payables 26 801 85 320 – –
Taxation 25 924 23 074 – –
Interest-bearing current
liabilities 481 604 1 005 806 375 905 674 612
Current portion of other non-
current liabilities 10 635 9 477 – –
Short-term loans 231 588 522 311 207 571 253 428
Current portion of redeemable
preference shares 30 403 27 688 – –
Current portion of long-term
loans 8 334 78 333 8 334 78 333
Bank overdrafts 200 644 367 997 160 000 342 851
Total equity and liabilities 4 692 056 4 127 896 2 886 692 2 645 193
Reviewed consolidated and separate statement of cash flows
for the year ended 28 February 2014
Group Company
Reviewed Audited Reviewed Audited
2014 2013 2014 2013
R’000 R’000 R’000 R’000
Operating activities
Profit/(loss) before taxation
and dividends 256 133 232 430 (103 191) (53 169)
Adjusted for:
Dividends received – – 185 157 230 000
Depreciation 28 596 23 436 – –
Impairment of investments,
goodwill and loans 10 718 12 078 – 1 093
Amortisation of intangible
assets 65 630 60 515 – –
Amortisation of intangible
assets – acquired in a
business combination 47 795 42 178 – –
Amortisation of intangible
assets – other than these
acquired in a business
combination 17 835 18 337 – –
Loss/(profit) on disposal of
property and equipment 297 (178) – –
Share-based payments 136 969 36 550 – –
Share-based payment expense 143 945 36 550 – –
Share-based payment - adjustment
to fair value (6 976) – – –
Cash settlement of share
options exercised (40 884) (12 320) (40 884) (12 320)
Revaluation of foreign
exchange denominated inter-
company loan 2 926 – 6 478 3 551
Non-cash portion of operating
lease rentals 561 838 – –
Foreign currency translation
reserve 6 301 (2 668) – –
Interest received (9 881) (2 890) (96 651) (56 313)
Interest paid 78 324 59 491 91 407 87 412
Cash generated/(utilised) by
operating activities before
working capital changes 535 690 407 282 42 316 200 254
Increase in trade and other
receivables and prepayments (368 303) (225 006) (842) (2 955)
Increase/(decrease) in trade
and other payables and
provisions 70 135 197 043 (9 368) 10 838
Net movement in pre-acquisition
and fellow subsidiaries’
inter-company accounts – – (153 642) (184 644)
Cash generated by operations 237 522 379 319 (121 536) 23 493
Interest received 9 881 2 890 96 651 56 313
Interest paid (78 324) (59 491) (91 407) (87 412)
Taxation paid (125 790) (55 698) 3 928 (3 286)
Dividend paid (132 868) (108 702) (133 647) (109 799)
Net cash generated/(utilised)
by operating activities (89 579) 158 318 (246 011) (120 692)
Investing activities
Additions to property, equipment
and intangible assets (78 119) (34 543) – –
Proceeds from sale of
property and equipment 1 976 1 338 – –
Additions to goodwill (5 717) – – –
Acquisition of businesses (258 681) (628 079) (204 030) (350 883)
Acquisition of investment (3 530) – – –
Investment in associates (33 718) (3 529) – –
Non-controlling interest (40 926) – – –
Net cash utilised by
investing activities (418 715) (664 813) (204 030) (350 883)
Financing activities
Issue of shares under
employee share option scheme 5 274 420 5 274 420
Issue of shares pursuant to
acquisitions 254 844 361 212 254 844 361 212
Long-term loan raised 723 754 7 500 496 736 7 500
Long-term loans repaid (38 333) (97 819) (8 333) (77 819)
Short-term loans repaid (588 999) – (323 432) –
Other non current liabilities
– interest-bearing (3 159) – – –
Increase in other interest-
bearing liabilities 231 588 266 396 207 571 –
(Decrease)/increase in other
payables (85 320) 85 320 – –
Increase in other payables 26 801 – – –
Net cash generated by
financing activities 526 450 623 029 632 660 291 313
Net increase/(decrease) in
cash and cash equivalents 18 156 116 534 182 619 (180 261)
Net cash and cash equivalents
at the beginning of the year 252 771 136 237 (342 532) (162 271)
Net cash and cash equivalents
at the end of the year 270 927 252 771 (159 913) (342 532)
Total consolidated interest-bearing liabilities of the Group
for the year ended 28 February 2014
Group
Reviewed Audited
2014 2013
R’000 R’000
Net gearing 37% 25%
Net bank balances (270 927) (252 771)
Other long-term loans 2 106 2 575
Long-term loan 723 754 8 334
Redeemable preference share 40 000 70 000
Obligations under finance lease 1 709 4 292
Operating lease liability – 108
Current portion of other non-current liabilities 10 635 9 477
Current portion of long-term loans 8 334 78 333
Current portion of redeemable preference shares 30 403 27 688
Short-term loans 231 588 522 311
Total interest-bearing liabilities 777 602 470 347
Total long-term debt 98% 18%
Total short-term debt 2% 82%
Total 100% 100%
Fair values of financial instruments
Some of the Group’s financial assets and financial liabilities are
measured at fair value at the end of each reporting period. The following
table gives information about how the fair values of these financial
assets and financial liabilities are determined (in particular, the
valuation technique(s) and inputs used).
Fair value as
at 28 February
Reviewed Audited Fair value
2014 2013 hierarchy
R’000 R’000
Financial assets/
financial liabilities
Trade and other receivables 2 041 069 1 638 810 Level 3
Redeemable preference shares
(including current portion) 70 403 97 688 Level 2
Derivative financial instrument 25 570 Level 2
Trade and other payables (excluding
VAT) 728 918 677 221 Level 3
Short-term loans 231 588 522 311 Level 2
Relationship of
Valuation Significant unobservable
Financial assets/ technique(s) unobservable inputs to
financial liabilities and key inputs input(s) fair value
Trade and other receivables Face value less n/a n/a
specific related
provision
Redeemable preference Discounted cash flow n/a n/a
shares(including current at a coupon rate of
portion) 82,5% of prime that
reflects the issuer’s
current borrowing rate
at the end of the
reporting period
Derivative financial Discounted cash flow. n/a n/a
instrument Future cash flows
are estimated based
on forward interest
rates (from observable
yield curves at the
end of the reporting
period) and contract
interest rates,
discounted at a rate
that reflects the
credit risk of
the counterparty
Trade and other payables Expected settlement n/a n/a
(excluding VAT) value
Short-term loans Amortised cost plus n/a n/a
accrued interest
Reviewed consolidated and separate statement of changes in equity
for the year ended 28 February 2014
Share Share Treasury
capital premium shares
R’000 R’000 R’000
Group
Balance as at 29 February 2012 (audited) 1 934 865 942 (12 891)
Issue of ordinary shares 325 366 015 –
Capitalisation of transaction costs – (5 128) –
Issue of ordinary shares under employee
share option plan 36 384 –
Dividend distributions – – –
Recognition of BBBEE and staff share-based
payments – – –
Share options exercised during the year – – –
Share options cash settled – – –
Profit for the year – – –
Other comprehensive income/(loss) for the
year – – –
Balance as at 28 February 2013 (audited) 2 295 1 227 213 (12 891)
Issue of ordinary shares 203 255 838 –
Capitalisation of transaction costs – (1 197) –
Issue of ordinary shares under employee
share option plan 4 5 270 –
Dividend distributions – – –
Recognition of BBBEE and staff share-based
payments – – –
Share options exercised during the year – – –
Share options cash settled – – –
Revaluation of share-based payments – – –
Transfer of share-based payment reserve to
share-based payment liability – – –
Profit for the year – – –
Other comprehensive income/(loss) for the
year – – –
Reserves acquired – – –
Balance as at 28 February 2014 2 502 1 487 124 (12 891)
Company
Balance as at 29 February 2012 (audited) 2 355 865 942 –
Issue of ordinary shares – Paxus acquisition 325 366 015 –
Capitalisation of transaction costs – Paxus
acquisition – (5 128) –
Issue of ordinary shares under employee
share option plan 36 384 –
Dividend distributions – – –
Recognition of BBBEE and staff share-based
payments – – –
Share options exercised during the year – – –
Share options cash settled – – –
Profit for the year – – –
Other comprehensive income for the year – – –
Balance as at 28 February 2013 (audited) 2 716 1 227 213 –
Issue of ordinary shares 203 255 838 –
Capitalisation of transaction cost – (1 197) –
Issue of ordinary shares under employee
share option plan 4 5 270 –
Dividend distributions – – –
Recognition of BBBEE and staff share-based
payments – – –
Share options exercised during the year – – –
Revaluation of share based payments – – –
Transfer of share-based payment reserve to
share-based payment liability – – –
Share options cash settled – – –
Profit for the year – – –
Other comprehensive income for the year – – –
Balance as at 28 February 2014 2 923 1 487 124 –
Share- Foreign
Non- based currency
distributable payment translation
reserve reserve reserve
R’000 R’000 R’000
Group
Balance as at 29 February 2012
(audited) – 189 534 (1 587)
Issue of ordinary shares – – –
Capitalisation of transaction costs – – –
Issue of ordinary shares under
employee share option plan – – –
Dividend distributions – – –
Recognition of BBBEE and staff
share-based payments – 36 550 –
Share options exercised during the
year – (42 170) –
Share options cash settled – – –
Profit for the year – – –
Other comprehensive income/(loss)
for the year – – (2 668)
Balance as at 28 February 2013
(audited) – 183 914 (4 255)
Issue of ordinary shares – – –
Capitalisation of transaction costs – – –
Issue of ordinary shares under
employee share option plan – – –
Dividend distributions – – –
Recognition of BBBEE and staff
share-based payments – 136 969 –
Share options exercised during the
year – (40 884) –
Share options cash settled – – –
Revaluation of share-based payments – (24 587) –
Transfer of share-based payment
reserve to
share-based payment liability – (148 037) –
Profit for the year – – –
Other comprehensive income/(loss)
for the year – – 6 301
Reserves acquired – – –
Balance as at 28 February 2014 – 107 375 2 046
Company
Balance as at 29 February 2012
(audited) 119 918 189 534 –
Issue of ordinary shares – Paxus
acquisition – – –
Capitalisation of transaction costs
– Paxus acquisition – – –
Issue of ordinary shares under
employee share option plan – – –
Dividend distributions – – –
Recognition of BBBEE and staff
share-based payments – 36 550 –
Share options exercised during the
year – (42 170) –
Share options cash settled – – –
Profit for the year – – –
Other comprehensive income for the
year – – –
Balance as at 28 February 2013
(audited) 119 918 183 914 –
Issue of ordinary shares – – –
Capitalisation of transaction cost – – –
Issue of ordinary shares under
employee share option plan – – –
Dividend distributions – – –
Recognition of BBBEE and staff
share-based payments – 136 969 –
Share options exercised during the
year – (40 884) –
Revaluation of share based payments – (24 587) –
Transfer of share-based payment
reserve to share-based payment
liability – (148 037) –
Share options cash settled – – –
Profit for the year – – –
Other comprehensive income for the
year – – –
Balance as at 28 February 2014 119 918 107 375 –
Attributable
to equity
Cash flow Accumu- holders
hedging lated of the
reserve profit parent
R’000 R’000 R’000
Group
Balance as at 29 February 2012 (audited) (955) 396 787 1 438 764
Issue of ordinary shares – – 366 340
Capitalisation of transaction costs – – (5 128)
Issue of ordinary shares under employee
share option plan – – 420
Dividend distributions – (108 702) (108 702)
Recognition of BBBEE and staff share-
based payments – – 36 550
Share options exercised during the year – 42 170 –
Share options cash settled – (12 320) (12 320)
Profit for the year – 175 011 175 011
Other comprehensive income/(loss) for
the year 385 – (2 283)
Balance as at 28 February 2013 (audited) (570) 492 946 1 888 652
Issue of ordinary shares – – 256 041
Capitalisation of transaction costs – – (1 197)
Issue of ordinary shares under employee
share option plan – – 5 274
Dividend distributions – (132 868) (132 868)
Recognition of BBBEE and staff share-
based payments – – 136 969
Share options exercised during the year – 40 884 –
Share options cash settled – (40 884) (40 884)
Revaluation of share-based payments – 20 926 (3 661)
Transfer of share-based payment reserve
to share-based payment liability – – (148 037)
Profit for the year – 165 019 165 019
Other comprehensive income/(loss) for
the year 545 2 107 8 953
Reserves acquired – (34 586) (34 586)
Balance as at 28 February 2014 (25) 513 544 2 099 675
Company
Balance as at 29 February 2012 (audited) (955) (20 560) 1 156 234
Issue of ordinary shares – Paxus
acquisition – – 366 340
Capitalisation of transaction costs –
Paxus acquisition – – (5 128)
Issue of ordinary shares under employee
share option plan – – 420
Dividend distributions – (109 799) (109 799)
Recognition of BBBEE and staff share-
based payments – – 36 550
Share options exercised during the year – 42 170 –
Share options cash settled – (12 320) (12 320)
Profit for the year – 177 091 177 091
Other comprehensive income for the year 385 – 385
Balance as at 28 February 2013 (audited) (570) 76 582 1 609 773
Issue of ordinary shares – – 256 041
Capitalisation of transaction cost – – (1 197)
Issue of ordinary shares under employee
share option plan – – 5 274
Dividend distributions – (133 647) (133 647)
Recognition of BBBEE and staff share-
based payments – 136 969
Share options exercised during the year – 40 884 –
Revaluation of share based payments – – (24 587)
Transfer of share-based payment reserve
to share-based payment liability – – (148 037)
Share options cash settled – (40 884) (40 884)
Profit for the year – 82 062 82 062
Other comprehensive income for the year 545 5 659 6 204
Balance as at 28 February 2014 (25) 30 656 1 747 971
Non- BEE
controlling shareholders’
interest interest Total
R’000 R’000 R’000
Group
Balance as at 29 February 2012
(audited) 1 302 921 1 440 987
Issue of ordinary shares – – 366 340
Capitalisation of transaction costs – – (5 128)
Issue of ordinary shares under
employee share option plan – – 420
Dividend distributions – – (108 702)
Recognition of BBBEE and staff
share-based payments – – 36 550
Share options exercised during the
year – – –
Share options cash settled – – (12 320)
Profit for the year – – 175 011
Other comprehensive income/(loss)
for the year 4 786 – 2 503
Balance as at 28 February 2013
(audited) 6 088 921 1 895 661
Issue of ordinary shares – – 256 041
Capitalisation of transaction costs – – (1 197)
Issue of ordinary shares under
employee share option plan – – 5 274
Dividend distributions – – (132 868)
Recognition of BBBEE and staff
share-based payments – – 136 969
Share options exercised during the
year – – –
Share options cash settled – – (40 884)
Revaluation of share-based payments – – (3 661)
Transfer of share-based payment
reserve to
share-based payment liability – – (148 037)
Profit for the year – – 165 019
Other comprehensive income/(loss)
for the year (2 515) – 6 438
Reserves acquired (6 589) – (41 175)
Balance as at 28 February 2014 (3 016) 921 2 097 580
Company
Balance as at 29 February 2012
(audited) – – 1 156 234
Issue of ordinary shares – Paxus
acquisition – – 366 340
Capitalisation of transaction costs
– Paxus acquisition – – (5 128)
Issue of ordinary shares under
employee share option plan – – 420
Dividend distributions – – (109 799)
Recognition of BBBEE and staff
share-based payments – – 36 550
Share options exercised during the
year – – –
Share options cash settled – – (12 320)
Profit for the year – – 177 091
Other comprehensive income for the
year – – 385
Balance as at 28 February 2013
(audited) – – 1 609 773
Issue of ordinary shares – – 256 041
Capitalisation of transaction cost – – (1 197)
Issue of ordinary shares under
employee share option plan – – 5 274
Dividend distributions – – (133 647)
Recognition of BBBEE and staff
share-based payments – – 136 969
Share options exercised during the
year – – –
Revaluation of share based payments – – (24 587)
Transfer of share-based payment
reserve to share-based payment
liability – – (148 037)
Share options cash settled – – (40 884)
Profit for the year – – 82 062
Other comprehensive income for the
year – – 6 204
Balance as at 28 February 2014 – – 1 747 971
Reviewed consolidated segment report
for the year ended 28 February 2014
Staffing Independent
Blue collar White collar contracting
Revenue
– 2014 (R’000) 6 258 271 1 314 067 3 892 860
– 2013 (R’000) 5 501 998 1 377 417 1 501 570
Internal revenue
– 2014 (R’000) 11 352 40 617 197
– 2013 (R’000) 21 419 4 386 –
Operating profit/(loss)
– 2014 (R’000) 317 545 38 112 130 616
– 2013 (R’000) 253 423 18 713 95 014
Normalised* EBITDA excluding share-
based payments, lease smoothing and
Transaction costs
– 2014 (R’000) 350 778 42 632 190 160
– 2013 (R’000) 291 743 42 526 114 056
Normalised* EBITDA margin excluding
share-based payments and lease
smoothing
– 2014 (%) 5,6 3,2 4,9
– 2013 (%) 5,3 3,1 7,6
Normalised* EBITDA excluding share-
based payments and lease-smoothing
contribution % to Group normalised*
EBITDA
– 2014 (%) 64,6 7,8 34,9
– 2013 (%) 69,0 10,1 27,0
Depreciation and amortisation
– 2014 (R’000) 20 392 30 935 31 360
– 2013 (R’000) 20 279 23 585 19 042
Interest income+++
– 2014 (R’000) 28 444 10 159 12 586
– 2013 (R’000) 13 525 12 625 4 769
Interest expense+++
– 2014 (R’000) (29 704) (866) (21 465)
– 2013 (R’000) (6 976) (8 358) (1 630)
Taxation expense/(income)+++
– 2014 (R’000) 36 494 5 769 27 773
– 2013 (R’000) 23 521 2 359 15 396
Asset carrying value
– 2014 (R’000) 1 984 863 411 362 1 940 242
– 2013 (R’000)++ 2 212 887 369 146 1 255 254
Liabilities carrying value
– 2014 (R’000) 611 709 158 497 727 172
– 2013 (R’000) 573 866 472 844 681 949
Additions to property, plant
and equipment
– 2014 (R’000) 14 140 13 350 252
– 2013 (R’000) 13 498 1 636 2 275
BPO,
training
and
financial Emergent
services business Sub-total
Revenue
– 2014 (R’000) 317 586 14 172 11 796 956
– 2013 (R’000) 220 389 13 106 8 614 480
Internal revenue
– 2014 (R’000) 23 747 6 580 82 493
– 2013 (R’000) 38 962 863 65 630
Operating profit/(loss)
– 2014 (R’000) 41 356 (19 816) 507 813
– 2013 (R’000) 34 385 (17 996) 383 539
Normalised* EBITDA excluding share-
based payments, lease smoothing and
Transaction costs
– 2014 (R’000) 50 872 (19 877) 614 565
– 2013 (R’000) 58 406 (16 605) 490 126
Normalised* EBITDA margin excluding
share-based payments and lease
smoothing
– 2014 (%) 16,0 – 5,2
– 2013 (%) 26,5 – 5,7
Normalised* EBITDA excluding share-
based payments and lease-smoothing
contribution % to Group normalised* EBITDA
– 2014 (%) 9,3 (3,7) 112,9
– 2013 (%) 13,8 (3,9) 116,0
Depreciation and amortisation
– 2014 (R’000) 7 986 1 512 92 185
– 2013 (R’000) 19 496 76 82 478
Interest income+++
– 2014 (R’000) 12 423 20 63 632
– 2013 (R’000) 10 297 17 41 233
Interest expense+++
– 2014 (R’000) (3 258) (6 498) (61 791)
– 2013 (R’000) (1 294) (3 427) (21 683)
Taxation expense/(income)+++
– 2014 (R’000) 3 544 (855) 72 725
– 2013 (R’000) (1 511) 184 39 949
Asset carrying value
– 2014 (R’000) 300 519 18 271 4 655 257
– 2013 (R’000)++ 240 479 8 308 4 086 074
Liabilities carrying value
– 2014 (R’000) 47 735 7 723 1 552 836
– 2013 (R’000) 28 346 3 967 1 760 972
Additions to property, plant and equipment
– 2014 (R’000) 1 490 5 478 34 710
– 2013 (R’000) 2 773 103 20 285
Group central costs
Central Shared
costs services Total
Revenue
– 2014 (R’000) 5 459 – 11 802 415
– 2013 (R’000) 2 362 – 8 616 842
Internal revenue
– 2014 (R’000) – – 82 493
– 2013 (R’000) – – 65 630
Operating profit/(loss)
– 2014 (R’000) (210 434) 4 494 301 873
– 2013 (R’000) (81 775) (15 790) 285 974
Normalised* EBITDA excluding share-based
payments, lease smoothing and
Transaction costs
– 2014 (R’000) (75 811) 5 627 544 381
– 2013 (R’000) (53 638) (13 947) 422 541
Normalised* EBITDA margin excluding
share-based payments and lease smoothing
– 2014 (%) – – 4,6
– 2013 (%) – – 4,9
Normalised* EBITDA excluding share-based
payments and lease-smoothing
contribution % to Group normalised* EBITDA
– 2014 (%) (13,9) 1,0 100,0
– 2013 (%) (12,7) (3,3) 100,0
Depreciation and amortisation
– 2014 (R’000) 2 041 – 94 226
– 2013 (R’000) 1 473 – 83 951
Interest income+++
– 2014 (R’000) (53 926) 175 9 881
– 2013 (R’000) (38 856) 513 2 890
Interest expense+++
– 2014 (R’000) (13 471) (3 062) (78 324)
– 2013 (R’000) (36 553) (1 255) (59 491)
Taxation expense/(income)+++
– 2014 (R’000) 20 904 – 93 629
– 2013 (R’000) 13 120 – 53 069
Asset carrying value
– 2014 (R’000) 13 931 22 868 4 692 056
– 2013 (R’000)++ 20 136 21 686 4 127 896
Liabilities carrying value
– 2014 (R’000) 989 644 51 996 2 594 476
– 2013 (R’000) 427 581 43 682 2 232 235
Additions to property, plant and equipment
– 2014 (R’000) 4 478 3 926 43 114
– 2013 (R’000) 3 781 2 352 26 418
Rest of the
world++++ South Africa Total
REVENUE
– 2014 (R’000) 3 470 309 8 332 106 11 802 415
– 2013 (R’000) 652 332 7 964 510 8 616 842
Internal revenue
– 2014 (R’000) – 82 493 82 493
– 2013 (R’000) – 65 630 65 630
Operating profit/(loss)
– 2014 (R’000) 111 808 190 065 301 873
– 2013 (R’000) 26 461 259 513 285 974
Normalised* EBITDA excluding share-
based payments, lease smoothing and
Transaction costs
– 2014 (R’000) 141 746 402 635 544 381
– 2013 (R’000) 34 328 388 213 422 541
Normalised* EBITDA margin excluding
share-based payments and lease
smoothing
– 2014 (%) 4,1 4,8 4,6
– 2013 (%) 5,3 4,9 4,9
Normalised* EBITDA excluding share-
based payments and lease-smoothing
contribution % to Group normalised* EBITDA
– 2014 (%) 26,0 74,0 100,0
– 2013 (%) 8,1 91,9 100,0
Depreciation and amortisation
– 2014 (R’000) 14 203 80 023 94 226
– 2013 (R’000) 6 435 77 516 83 951
Interest income+++
– 2014 (R’000) 11 107 (1 226) 9 881
– 2013 (R’000) 11 2 879 2 890
Interest expense+++
– 2014 (R’000) (22 584) (55 740) (78 324)
– 2013 (R’000) 2 151 (61 642) (59 491)
Taxation expense/(income)+++
– 2014 (R’000) (2 730) 96 359 93 629
– 2013 (R’000) 983 52 086 53 069
Asset carrying value
– 2014 (R’000) 1 430 496 3 261 560 4 692 056
– 2013 (R’000)++ 1 117 970 3 009 926 4 127 896
Liabilities carrying value
– 2014 (R’000) 1 934 965 659 511 2 594 476
– 2013 (R’000) 625 953 1 606 282 2 232 235
Additions to property, plant and
equipment
– 2014 (R’000) 2 678 40 436 43 114
– 2013 (R’000) 6 632 19 786 26 418
* The pro forma financial information, as shown in the statement of
normalised earnings, should be read in conjunction with the unqualified
Deloitte & Touche independent reporting accountants’ report thereon, which
is available for inspection at Adcorp’s registered office.
+ 2014 figures are reviewed and 2013 are audited.
++ Goodwill was reallocated from blue collar to the various other segments
to which it relates.
+++ Interest income/expense and taxation has been reallocated to better
reflect the manner in which the business is managed.
++++ Rest of the world represents operations in Africa and Australia and
have been separately identified to enhance disclosure.
Pro Forma Financial Information
The pro forma financial information below has been prepared for
illustrative purposes only to provide information on how the normalised
earnings adjustments might have impacted on the financial results of the
Group. Because of its nature, the pro forma financial information may not
be a fair reflection of the Group’s results of operation, financial
position, changes in equity or cash flows.
The underlying information used in the preparation of the pro forma
financial information has been prepared using the accounting policies that
comply with International Financial Reporting Standards. These are
consistent with those applied in the published reviewed condensed consolidated provisional group results of the Group and Company for the year ended 28 February 2014.
Notwithstanding the events subsequent to the reporting period disclosed
below, no other adjustments have been made to the pro forma financial
information.
The directors are responsible for compiling the pro forma financial
information on the basis of the applicable criteria specified in the JSE
Listings Requirements.
*The pro forma financial information as shown in the statement of
normalised earnings should be read in conjunction with the unqualified
Deloitte & Touche independent reporting accountants’ report thereon, which
is available for inspection at Adcorp’s registered office.
Statement of consolidated normalised earnings
for the year ended 28 February 2014
Proforma Proforma
Year to Year to
28 February 28 February %
Note 2014 2013 change
R’000
Revenue 1 11 802 415 8 616 842 37
Cost of sales 1 (9 891 844) (7 056 563) (40)
Gross profit 1 1 910 571 1 560 279 22
Other income 1 81 603 65 472 25
Administrative marketing,
selling and
operating expenses 1 (1 690 301) (1 339 777) (26)
Operating profit 1 301 873 285 974 6
Adjusted for:
Depreciation 2 28 596 23 436 22
Amortisation of intangible asset
acquired in business combination 2 47 795 42 178 13
Amortisation of intangibles other
than those acquired in business
combination 2 17 835 18 337 (3)
Share-based payments 2 143 945 36 550 –
Lease smoothing 2 561 838 (33)
Transaction costs – Acquisition of
Labour Solutions Australia (Pty)
Ltd/Paxus Holdings (Pty) Ltd 5 3 776 15 228 (75)
Normalised EBITDA (excluding
share-based payments, lease
smoothing and transaction costs) 544 381 422 541 29
Adjusted for:
Depreciation 2 (28 596) (23 436) (22)
Amortisation of intangibles other
than those acquired in a business
combination 2 (17 835) (18 337) (3)
Normalised operating profit 497 950 380 768 31
Net interest paid (68 443) (56 601) (21)
Normalised profit before taxation 429 507 324 167 32
Normalised taxation 3 (107 168) (65 113) (65)
Normalised profit for the year 322 339 259 054 24
Share of profits from associates 33 718 14 762 –
Non-controlling interest 2 515 (4 350) –
Total normalised profit for the year 358 572 269 466 33
Normalised effective tax rate 25% 20%
Normalised earnings per share –
cents 4 384,3 341,1 13
Diluted normalised earnings
per share – cents 4 359,9 318,7 13
Weighted average number of shares –
000’s 1 93 299 78 989 18
Diluted weighted average number of
shares – 000’s 1 99 723 84 558 18
Notes:
1 As per the reviewed statement of comprehensive income for the year
ended 28 February 2014.
2 As per the reviewed statement of cash flows for the year ended
28 February 2014.
3 The taxation expense has been adjusted for the adjusted items above.
4 Per share calculation is based on normalised earnings.
5 Being once-off transaction costs incurred pursuant to the acquisition
of Labour Solutions Australia Proprietary Limited(LSA). The prior year
transaction costs refer to the acquisition of Paxus Holdings Proprietary
Limited (Paxus) as per the notes to the audited annual financial
statements for the year ended 28 February 2013.
Comments
Overview
The financial year ended 28 February 2014 delivered a year of solid profit
growth.
In this regard, Group revenues increased by 37% to R11,8 billion, while
normalised earnings before interest, tax and depreciation (EBITDA) of
R544,4 million were 29% ahead of the prior year’s figure. Normalised
earnings per share of 384,3 cents were 13% ahead of the prior year.
South Africa
The blue-collar operations continued to perform particularly well.
Specifically, SUN had an exceptional year. While COG and Capacity
performed in line with expectations, there were mixed fortunes. Both
businesses lost volume to certain clients automating and mechanising
previously labour-intensive processes but were able to more than recover
these lost volumes elsewhere by way of market share gains.
This move to automation and mechanisation is reflective of employers
responding to a turbulent labour market which is characterised by militant
strike action in pursuit of above-inflationary wage demands, the threat of
new, cumbersome labour legislation and economic uncertainty in a
relatively lacklustre economy.
The white-collar contracting and permanent recruitment businesses were
generally flat year on year, while business process outsourcing (BPO)
businesses reflected an overall year-on-year decline in profits which was
largely as a result of the pricing pressure in the business of FMS. This
decline was partially offset by the solid performance of the financial
services business which offers relevant and affordable financial and
wellness products and services to contract workers.
Training was adversely affected by a dramatic decline in the volume of
learnerships registered due to administrative challenges experienced by
the responsible Sector Education and Training Authority (SETA).
Rest of Africa, Asia and Australia
The Group’s African operations, which focus predominantly in the areas of
mining, oil, gas, exploration and related infrastructure development,
achieved exceptional growth in profitability to the extent of now being a
material contributor to overall Group profit.
The January 2013 acquisition of Australian IT contracting business, Paxus,
has bedded down well and performed in line with expectations in a
relatively flat employment market.
Recent blue-collar acquisition, Labour Solutions Australia (LSA), has also
settled into the Group well although it has only been included in the
Group’s financial results since 3 December 2013.
LSA’s particular focus is on the buoyant Australian agricultural sector,
which should stand it in good stead for the future.
Indian associate IT solutions business, Nihilent, in which the Group owns
a 35% stake through subsidiary, Paracon, had an outstanding year also
making a meaningful contribution to overall profitability.
General
During the year, the Group successfully implemented a significant upgrade
of
its Microsoft Dynamics AX ERP system. This followed the outsourcing of the
shared service centre to Indian-based Genpact during FY2013.
Both of these initiatives are aimed at improving the cost competitiveness
of the Group, ensuring optimised, standardised, automated and cost-
competitive transactional processing across all business lines as well as
enhancing controls and governance standards.
These initiatives have each been major under-takings in their own right.
The focus has been on limiting implementation risk as well as on ensuring
they are correctly bedded down and integrated within the business. While
not yet delivering the cost advantage we seek, with some fine tuning and
as these new practices and procedures become fully embedded in the
organisation, meaningful benefits should be realised.
During the year, the Group implemented a new Broad-Based Black Economic
Empowerment (BBBEE) deal ensuring compliance with the South African
Department of Trade and Industry’s revised BBBEE Codes of Good Practice.
Compliance with BBBEE and transformation best practices is both a key
strategic objective and imperative of the Group.
Financial overview
Headline earnings per share of 188,6 cents per share for the year ended 28
February 2014 were 20% lower than the 236,7 cents per share for the
comparative period. As disclosed in the interim results, as a consequence
of the 2013 BBBEE deal being finalised and implemented with effect 27
August 2013, International Financial Reporting Standards (IFRS) require
that R87 million be expensed as a one-off, non cash flow, share-based
payment charge to profits.
Given the above accounting treatment and other IFRS non-cash flow charges
to profit and loss, the Group has consistently disclosed that its primary
measure of performance is normalised earnings. In this regard,
shareholders are referred to the statement of consolidated normalised
earnings contained in this announcement.
Normalised earnings per share of 384,3 cents for the year ended 28
February 2014 were 13% ahead of the 341,1 cents per share for the
comparative period as a result of increased contributions from the blue-
and white-collar businesses and the first full year inclusion of the
Australian business Paxus and the three-month inclusion of LSA. Gross
profit margins are lower than the prior year due mainly to changes in
business mix. As a direct consequence of such mix changes, normalised
EBITDA margins decreased marginally to 4,6% (FY2013: 4,9%). The Group’s
normalised EBITDA margin, exclusive of the Australian contribution, was
5,1% (2013: 5,0%). Operating cost control remained robust as evidenced by
an improvement in the expense ratio (operating cost to revenue) to 14,3%
(FY2013: 15,5%).
The Group’s overall normalised effective tax rate has increased to 25%
(2013: 20%). This is in line with management’s expectations and was mainly
attributable to decreased deductions claimed in respect of registered
learnerships in compliance with the Income Tax Act.
Cash management is a key part of the business model and an ongoing focus
area for management. Cash generated from operations before working capital
increased 32% mainly due to the higher level of profitability and other
non-cash flow adjustments. The cash-to-cash cycle (working capital)
remains a priority and in this regard the days settlement outstanding
(DSO) totalled 48 days (FY2013: 41 days). This disappointing result was
achieved in the context of the continued challenging collections
environment. Subsequent to year-end, given ongoing management attention,
the DSO has improved.
During the current year, the Group incurred a 21% increase in respect of
net finance charges, mainly as a result of the higher levels of business
activity and the first full-year, annualised effect of the interest
arising on the Paxus acquisition-related debt.
While the Group’s cash position would support a cash dividend, the Group
is in a growth cycle and, as such, the board believes it appropriate to
retain cash resources so as to take advantage of opportunities.
Accordingly, the board has opted to issue a scrip distribution that allows
for an incremental increase in capital. This scrip distribution provides
shareholders with the flexibility to opt for a cash dividend alternative.
Acquisition of business
As referred to above, the acquisition of LSA was concluded with effect 3
December 2013. As such, it has been included in Group profits for three
months of this financial year. In terms of IAS 34 requirements, the profit
before tax from LSA included in Group net profit before tax for the year
ended February 2014 is R11,7 million after taking account of non-cash flow
IFRS charges and acquisition-related transaction costs. Had the business
combination been effective from 1 March 2013, the revenue of the Group
would have been R12,2 billion and net profit after tax would have totalled
R187 million. The directors of the Group consider these numbers to
represent an approximate measure of the performance of the combined Group
on an annualised basis and provide a reference point for comparison in
future periods. In addition, the Group undertook other minor transactions,
inter alia the acquisitions of the balance of 30% share in All About
Project Management Proprietary Limited and made an increased investment in
Envisionme. All of these transactions were funded out of working capital
and their contributions to Group revenues and profits are considered
immaterial.
Total purchase consideration for all business
Reviewed Audited
2014 2013
Total Total
R’000 R’000
combinations 268 691 682 033
Previously held investment in associate – (1
425)
268 691 680 608
Less: Cash and cash equivalents acquired (10 010) (52
529) Net purchase consideration for all business
combinations 258 681 628 079
Cash movement on acquisition of businesses
Net purchase consideration for all business
combinations 258 681 628 079
Net proceeds from issue of shares (254 844) (361
212) Issue of ordinary shares (256 041)
(366 340) Capitalisation of transaction costs – raising of
equity on acquisition 1 197 5 128
Cash outflow on acquisition of business 3 837 266
867
In complying with the IFRS statement on purchase accounting (IFRS 3),the
Group determined the fair value of the assets and liabilities acquired on
the acquisition of the businesses is as follows:
2014 2013
R’000 LSA Other Total Total
Property, plant and equipment 3 083 90 3 173 5 155
Intangible assets 64 243 14 236 78 479 205 038
Deferred tax asset 1 680 – 1 680 –
Trade and other receivables 35 426 – 35 426 334 969
Doubtful debts provisions – – – (673)
Non-controlling interest 249 – 249 (436)
Cash and cash equivalents 10 010 – 10 010 52 529
Non-current liabilities (998) – (998) –
Trade and other payables (27 311) (1 470) (28 781) (135 507)
Provisions – – – (20 432)
Deferred taxation (12 481) (5 570) (18 051) (9 136)
73 901 7 286 81 187 431 507
Resulting goodwill on acquisition* 182 562 4 942 187 504 249 101
Previously held investment in
associate – – – 1 425
Total consideration 256 463 12 228 268 691 682 033
* The goodwill in LSA arose because the cost of the combination included a
control premium. In addition, the consideration paid for the
combination effectively includes amounts in relation to expected
benefits, revenue growth and future market developments.
Basis of preparation
The condensed consolidated financial results are prepared in accordance
with the Listings Requirements for provisional reports and the
requirements of the Companies Act of South Africa. The Listings
Requirements require that the provisional financial statements are
prepared in accordance with the conceptual framework, the measurement and
recognition requirements of the International Financial Reporting
Standards (IFRS), the SAICA Financial Reporting Guides as issued by the
Accounting Practices Committee, the Financial Reporting Pronouncements as
issued by the Financial Reporting Standards Council and, as a minimum,
requires that they contain the information required by IAS 34 Interim
Financial Reporting. The accounting policies applied in the preparation of
the consolidated financial statements from which the condensed
financial statements were derived are in terms of IFRS and are consistent
with those accounting policies applied in the preparation of the previous
consolidated annual financial statements, even after the adoption of
applicable new standards which had no impact.
The financial results have been prepared by the Group Financial Manager, A
Viljoen (BCom Honours), and supervised by the Chief Financial Officer, AM
Sher (CA(SA), CFA).
Contingent liabilities and commitments
The bank has guaranteed R7,6 million (FY2013: R9,3 million) on behalf of
the Group to creditors. As at the balance sheet date the Group has
outstanding operating lease commitments totalling R171,7 million (FY2013:
R152,5 million) in non-cancellable property leases. The Group has IT
capital commitments contracted for, of R2,9 million (FY2013: R15,5
million) relating to the Microsoft Dynamix AX 2012 upgrade.
Changes to the board of Adcorp
Mr M Spicer was appointed as an independent non-executive director on
Wednesday, 21 August 2013 and has joined the Group Audit and Risk
Committee and Remuneration and Nominations Committee.
Mr B Bulunga was appointed as an executive director on Wednesday, 27
February 2014.
Payment of a scrip distribution with a cash dividend election
Notice is hereby given that the directors have resolved, subject to
shareholder approval at the annual general meeting (AGM) to be held on or
about Wednesday, 6 August 2014, to issue fully paid shares in the Company
as a scrip distribution to ordinary shareholders. Fully paid ordinary
shares of 2,5 (two and a half) cents each will be issued as a scrip
distribution payable to ordinary shareholders recorded in the register of
Adcorp Holdings Limited on the record date, being Friday, 29 August 2014.
Ordinary shareholders will be entitled, in respect of all or part of their
shareholding, to elect to receive a cash dividend of 80 cents per ordinary
share in lieu of the scrip distribution, which will be paid only to those
ordinary shareholders who elect in respect of all or part of their
shareholding, on or before 12:00 on Friday, 29 August 2014, to receive the
cash dividend. The cash dividend will be paid out of profits of Adcorp,
while the new ordinary shares to be issued pursuant to the scrip
distribution will be issued as a capitalisation issue by way of
capitalisation of part of Adcorp’s share premium.
The number of new ordinary shares to which ordinary shareholders
participating in the scrip distribution will become entitled, will be
determined in the ratio that 80 cents multiplied by 1,10 bears to the
volume-weighted average price (VWAP) of ordinary shares in Adcorp on the
JSE Limited (JSE) during the five-day trading period ending Thursday, 31
July 2014.
Details of the ratio will be released on the Stock Exchange News Service
of the JSE (SENS) by no later than 11:00 on Friday, 1 August 2014 and
published in the South African press the following day.
In terms of the SENS announcement in respect of this corporate action, as
referred to above, the receipt of the new ordinary shares in terms of the
scrip distribution alternative will not constitute a dividend in terms of
the current legislation which is in force. The scrip distribution will
constitute a receipt of a capital nature and will not be subject to
dividends tax. The new ordinary shares which are acquired under the scrip
distribution alternative will be treated as having been acquired for nil
consideration. Pursuant to the ratio referred to above, where shareholder
entitlement to new ordinary shares gives rise to a fraction of a new
ordinary share, such fraction of a new ordinary share will be rounded up
to the nearest whole number where the fraction is greater than or equal to
0,5 and rounded down to the nearest whole number where the fraction is
less than 0,5.
In determining the dividends tax (DT) of 15% to withhold in terms of the
Income Tax Act for those shareholders who elect to receive the cash
dividend and who are not exempt from the DT, no secondary tax on companies
(STC) credits have been utilised. Shareholders who are not exempt from the
DT will therefore receive a net dividend of 68 cents per share net of DT.
The Company has 100 091 776 ordinary shares in issue and its income tax
reference number is 9233/680/71/0.
The above dates are subject to change. Any changes will be released on
SENS and published in the South African press.
A circular relating to the scrip distribution and the cash dividend
alternative will be posted to shareholders on or about Friday, 27 June
2014. The proposed salient dates and times of the scrip distribution with
a cash dividend election appears in a SENS announcement dated 28 May 2014.
Events after the reporting period
Subsequent to the end of the financial year ended 28 February 2014 and
prior to the approval of these reviewed consolidated provisional Group
results, the Group entered into a transaction. As announced on SENS, the
Group acquired approximately 29% of the issued shares in Kelly Group
Limited for a consideration of R73,8 million and submitted an expression
of interest to the board of Kelly to acquire the balance of the issued
shares.
Auditor’s report
The results have been reviewed by the independent auditors, Deloitte &
Touche, and a copy of their unmodified review report is available for
inspection at the registered office of the Company, Adcorp Office Park,
corner William Nicol and Wedgewood Link, Bryanston. The review was
performed in accordance with ISRE2410 Review of Interim Financial
Information Performed by the Independent Auditor of the Entity. Any
reference to future financial performance included in this announcement
has not been reviewed or reported on by the Company’s auditors.
Outlook
The outlook for growth in employment in South Africa and Australia remains
relatively lacklustre, while the rest of Africa and Asia hold far more
promise with regard to general employment prospects. These macro trends
aside, the Group is well positioned strategically and should benefit from
the following industry-specific and micro trends.
Many large employers have tended to engage with fewer staffing providers
opting for a more strategic approach to their resourcing requirements.
Typically, this has favoured the Master Service Provider (MSP) model with
regard to the sourcing of contract staff and the Recruitment Process
Outsourcing (RPO) model with regard to the sourcing of permanent staff.
These resourcing models require a far higher degree of sophistication,
innovation, financial stability, technical capability, geographic reach
and, in the South African context, acceptable BBBEEE credentials on the
part of the staffing providers than in the past. This has tended to favour
the larger, more sophisticated providers such as Adcorp and has led to a
trend to consolidation in the industry with resultant market share gains
for the Adcorp Group. This trend is expected to continue for the
foreseeable future and also offers opportunities to acquire quality assets
at realistic prices.
For quite some time, the Group’s South African staffing operations have
been the subject of much speculation regarding proposed changes to labour
legislation aimed at restricting the use of contract workers.
It now appears that legislative certainty may finally be a reality with
regard to the promulgation of the new Labour Relations Act (LRA). The
proposed changes to the LRA should generally be positive for the business
although potentially negative for employment prospects in South Africa.
With youth unemployment in South Africa being a major focus area for
Government, the recently introduced Employment Tax Incentive (ETI) will
also benefit the Group for so long as the scheme remains in place.
The Group’s appropriate strategic positioning, its geographic focus on
Africa and the Asia Pacific regions, the diversification of its product
and service range, its financial strength and sophistication of offerings,
the potential for consolidation and market share gains in the South
African market, prospective legislative certainty with regard to the new
LRA and the potential for further optimisation back office operations all
bode well for the future prospects of the Adcorp Group.
By order of the board
MJN Njeke RL Pike AM Sher
Chairman Chief Executive Officer Chief Financial Officer
28 May 2014
Corporate information
Executive directors
C Bomela, BE Bulunga, RL Pike (Chief Executive Officer), AM Sher, PC Swart
Non-executive directors
GP Dingaan, NS Ndhlazi, MR Ramaite
Independent non-executive directors
MJN Njeke (Chairman), ME Mthunzi, TDA Ross, SN Mabaso-Koyana, M Spicer
Alternate non-executive directors
C Maswanganyi, L Mojela
Physical address
Adcorp Office Park
Nicolway Bryanston
Cnr William Nicol Drive and Wedgewood Link
Bryanston, 2021
PO Box 70635, Bryanston, 2021
Tel: 011 244 5300
Fax: 011 244 5310
Email: cfo@adcorp.co.za
Registration number 1974/001804/06
Acting Company Secretary
AM Sher
Transfer secretaries
Link Market Services SA (Pty) Ltd
Rennie House
13th floor
19 Ameshoff Street
Braamfontein
Sponsor
Deloitte & Touche Sponsor Services (Pty) Ltd
Building 6, Deloitte Place
The Woodlands
20 Woodlands Drive
Woodmead, Sandton
2146
Date: 28/05/2014 03:00:00 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.
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