Wrap Text
Unaudited condensed interim financial results for the six months ended 30 June 2015
Workforce Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 2006/018145/06)
JSE code: WKF
ISIN: ZAE000087847
('Workforce' or 'the group')
Unaudited condensed interim financial results for the six months ended 30 June 2015
Highlights
Net asset value per share increased to 127 cents per share.
Diluted earnings per share increased by 21% to 11,6 cents per share.
Headline earnings per share ('HEPS'), and earnings per share ('EPS') increased by 27% to
12,2 cents per share.
Cash conversion ratio increased to 96%.
Condensed consolidated statement of comprehensive income
for the six months ended 30 June 2015
Six months Six months Year to
to 30 June to 30 June 31 December
2015 2014 2014
Notes R'000 R'000 R'000
Continuing operations
Revenue 7 904 594 871 840 1 801 895
Cost of sales (696 306) (679 204) (1 403 346)
Gross profit 208 288 192 636 398 549
Other income 1 000 - 927
Operating costs (170 418) (154 285) (319 708)
Earnings before impairment,
depreciation, amortisation,
interest and taxation ('EBITDA') 38 870 38 351 79 768
Depreciation and amortisation
of non-financial assets (5 673) (5 087) (10 501)
Operating profit 7 33 197 33 264 69 267
Finance income 978 771 148
Finance costs (8 025) (9 276) (18 194)
Profit before taxation 26 150 24 759 51 221
Taxation credit/(expense) 8 2 008 (619) 8 313
Profit for the period from
continuing operations 28 158 24 140 59 534
Loss from discontinued operations - (1 924) -
Profit for the period 28 158 22 216 59 534
Other comprehensive
(loss)/income
for the period 1 200 (184) 185
Fair value gains/(losses) on
available-for-sale financial
instruments 1 200 (184) 185
Total comprehensive income
for the period 29 358 22 032 59 719
Profit for the period attributable to:
Owners of the parent 27 524 21 628 59 209
Non-controlling interests 634 588 325
28 158 22 216 59 534
Total comprehensive income
attributable to:
Owners of the parent 28 724 21 444 59 394
Non-controlling interests 634 588 325
29 358 22 032 59 719
Earnings per share (cents) 9
Basic 12,2 9,6 26,2
Diluted 11,6 9,6 26,2
Condensed consolidated statement of financial position
for the six months ended 30 June 2015
Six months Six months Year to
to 30 June to 30 June 31 December
2015 2014 2014
Notes R'000 R'000 R'000
Assets
Non-current assets 114 579 97 931 109 391
Property, plant and equipment 5 8 451 7 910 7 052
Goodwill 41 280 41 280 41 280
Intangible assets 6 23 991 19 800 23 694
Deferred tax assets 37 641 27 294 35 349
Other financial assets 3 216 1 647 2 016
Current assets 460 562 447 557 453 506
Trade and other receivables 449 774 441 478 440 039
Inventories 3 076 2 855 3 085
Taxation - 330 38
Cash and cash equivalents 10 7 712 2 894 10 344
Total assets 575 141 545 488 562 897
Equity and liabilities
Equity 301 981 234 593 272 313
Share capital and premium 236 867 236 867 236 867
Treasury shares (7 616) (7 616) (7 616)
IFRS 3 reverse acquisition
adjustment (125 499) (125 499) (125 499)
Available-for-sale reserve 969 (600) (231)
Equity-settled employee
benefits reserve 1 208 355 898
Retained earnings 195 789 130 684 168 265
Equity attributable to owners
of the parent 301 718 234 191 272 684
Non-controlling interests 263 402 (371)
Non-current liabilities 14 026 14 840 14 233
Financial liabilities 8 529 8 998 8 822
Deferred tax liabilities 5 497 5 842 5 411
Current liabilities 259 134 296 055 276 351
Trade and other payables 89 785 102 686 84 117
Financial liabilities 169 108 192 826 192 210
Taxation 236 543 -
Bank overdrafts 10 5 - 24
Total equity and liabilities 575 141 545 488 562 897
Condensed consolidated statement of changes in equity
for the six months ended 30 June 2015
Attributable to owners of the parent
Share Reverse
capital and acquisition Treasury
premium reserve shares
R'000 R'000 R'000
Balance at 1 January 2015 236 867 (125 499) (7 616)
Recognition of share-based payments - - -
Total comprehensive income for the period - - -
Balance at 30 June 2015 236 867 (125 499) (7 616)
Balance at 1 January 2014 236 867 (125 499) (7 616)
Total comprehensive income for the period - - -
Balance at 30 June 2014 236 867 (125 499) (7 616)
Balance at 1 January 2014 236 867 (125 499) (7 616)
Payment of dividends - - -
Recognition of share-based payments - - -
Total comprehensive income for the year - - -
Balance at 31 December 2014 236 867 (125 499) (7 616)
Attributable to owners of the parent
Equity-
settled
employee
Available for Retained benefits
sale reserve earnings reserve
R'000 R'000 R'000
Balance at 1 January 2015 (231) 168 265 898
Recognition of share-based payments - - 310
Total comprehensive income for the period 1 200 27 524 -
Balance at 30 June 2015 969 195 789 1 208
Balance at 1 January 2014 (416) 109 056 355
Total comprehensive income for the period (184) 21 628 -
Balance at 30 June 2014 (600) 130 684 355
Balance at 1 January 2014 (416) 109 056 355
Payment of dividends - - -
Recognition of share-based payments - - 543
Total comprehensive income for the year 185 59 209 -
Balance at 31 December 2014 (231) 168 265 898
Non-
controlling
Total interest Total
R'000 R'000 R'000
Balance at 1 January 2015 272 684 (371) 272 313
Recognition of share-based payments 310 - 310
Total comprehensive income for the period 28 724 634 29 358
Balance at 30 June 2015 301 718 263 301 981
Balance at 1 January 2014 212 747 (186) 212 561
Total comprehensive income for the period 21 444 588 22 032
Balance at 30 June 2014 234 191 402 234 593
Balance at 1 January 2014 212 747 (186) 212 561
Payment of dividends - (510) (510)
Recognition of share-based payments 543 - 543
Total comprehensive income for the year 59 394 325 59 719
Balance at 31 December 2014 272 684 (371) 272 313
Condensed consolidated statement of cash flows
for the six months ended 30 June 2015
Six months Six months Year to
to 30 June to 30 June 31 December
2015 2014 2014
Notes R'000 R'000 R'000
Cash generated from operations
before net working capital changes 31 899 27 046 58 751
Cash generated from operations 16.1 38 870 35 951 77 750
Finance income 978 771 148
Finance costs (8 025) (9 276) (18 194)
Taxation paid 76 (400) (953)
(Increase) in net working capital 16.2 (3 748) (21 532) (38 621)
Cash flows from operating activities 28 151 5 514 20 130
Cash flows from investing activities (7 369) (4 544) (10 432)
Property, plant and equipment
acquired - maintaining operations 5 (3 209) (1 765) (2 802)
Proceeds on disposal of property,
plant and equipment - - 586
Intangible assets acquired
- maintaining operations 6 (4 160) (2 779) (7 166)
Acquisition of other financial assets - - (1 050)
Cash flows from financing activities (23 395) (11 724) (13 026)
Repayment of borrowings (23 395) (11 724) (12 516)
Dividends paid - - (510)
Net change in cash and
cash equivalents (2 613) (10 754) (3 328)
Cash and cash equivalents
at beginning
of the period 10 320 13 648 13 648
Cash and cash equivalents
at end of the period 10 7 707 2 894 10 320
Notes to the condensed consolidated interim financial statements
for the six months ended 30 June 2015
1. Nature of operations and general information
Workforce Holdings Limited is a holding company. Its subsidiaries carry on the business of
staff outsourcing, recruitment and specialist staffing, training and consulting, employee health
management, process outsourcing and financial and lifestyle products.
The consolidated interim financial statements are presented in South African Rand ('ZAR'),
which is also the functional currency of the parent company.
The consolidated interim financial statements were approved for issue by the Board of Directors
on 25 August 2015.
2. Basis of preparation and significant accounting policies
The condensed consolidated interim financial statements have been prepared in accordance
with the Listings Requirements of JSE Limited ('JSE') for interim financial statements,
International Accounting Standard ('IAS') 34, Interim Financial Reporting and the South African
Companies Act, 2008 (Act 71 of 2008), as amended, the SAICA Financial Reporting Guides, as
issued by the Accounting Practice Committee, as well as the SAICA Financial Reporting
Pronouncements as issued by the Financial Reporting Standards Council.
The condensed interim financial statements for the six months ended 30 June 2015 were
compiled under the supervision of W van Wyk CA(SA), the Group Financial Director. The
condensed consolidated interim financial statements have been prepared in accordance with
International Financial Reporting Standards and have been applied consistently with the
accounting policies applied in the Annual Financial Statements for the year ended
31 December 2014.
3. Events after reporting date
No material events occurred between the reporting date and the date of approval of these
condensed financial statements.
4. Auditor's responsibility
These condensed consolidated interim financial results have not been audited nor reviewed
by the group's auditors. This is not a requirement of the JSE Listings Requirements. The
auditors are responsible for monitoring compliance with the disclosure requirements of the JSE.
5. Property, plant and equipment
Com-
puter Industrial Office
Motor equip- equip- equip-
vehicles ment ment ment
R'000 R'000 R'000 R'000
Six months to June 2015
Carrying amount at
1 January 2015 2 105 1 865 463 1 263
Additions - 1 224 1 534 417
Depreciation (477) (573) (150) (327)
Carrying amount at
30 June 2015 1 628 2 516 1 847 1 353
Six months to June 2014
Carrying amount at
1 January 2014 2 387 1 800 234 1 797
Additions 620 576 304 81
Depreciation (479) (612) (59) (360)
Carrying amount at
30 June 2014 2 528 1 764 479 1 518
Year to 31 December 2014
Carrying amount at
1 January 2014 2 387 1 800 234 1 797
Additions 714 1 283 372 189
Disposals (1) - - -
Depreciation (995) (1 218) (143) (723)
Carrying amount at
31 December 2014 2 105 1 865 463 1 263
Lease-
hold
improve- Training
ments manuals Total
R'000 R'000 R'000
Six months to June 2015
Carrying amount at 1 January 2015 227 1 129 7 052
Additions 20 14 3 209
Depreciation (62) (221) (1 810)
Carrying amount at 30 June 2015 185 922 8 451
Six months to June 2014
Carrying amount at 1 January 2014 338 1 445 8 001
Additions 18 166 1 765
Depreciation (67) (279) (1 856)
Carrying amount at 30 June 2014 289 1 332 7 910
Year to 31 December 2014
Carrying amount at 1 January 2014 338 1 445 8 001
Additions 24 220 2 802
Disposals - - (1)
Depreciation (135) (536) (3 750)
Carrying amount at 31 December 2014 227 1 129 7 052
6. Intangible assets
Work in Computer
progress Brands software Total
R'000 R'000 R'000 R'000
Six months to June 2015
Carrying amount at
1 January 2015 2 527 2 870 18 297 23 694
Additions 3 282 - 878 4 160
Amortisation - (535) (3 328) (3 863)
Carrying amount at
30 June 2015 5 809 2 335 15 847 23 991
Six months to June 2014
Carrying amount at
1 January 2014 - 156 20 096 20 252
Additions - - 2 779 2 779
Amortisation - (25) (3 206) (3 231)
Carrying amount at
30 June 2014 - 131 19 669 19 800
Year to 31 December 2014
Carrying amount at
1 January 2014 - 156 20 096 20 252
Additions 2 527 - 4 639 7 166
Acquired through
business combination - 3 027 - 3 027
Amortisation - (313) (6 438) (6 751)
Carrying amount at
31 December 2014 2 527 2 870 18 297 23 694
7. Segment analysis
The group's segment analysis is based on the following five core business segments:
- Staffing and Recruitment comprises staff outsourcing, which provides human resources to
clients on both a short and long-term basis; recruitment and specialist staffing, which includes
permanent and temporary placements, ad-response handling, executive search, call centre
staffing and importing and exporting of skills;
- Training and Consulting is a registered training provider focused on delivering industry and
job-specific skills assessments and training interventions to business and their employees
across all industry sectors. Our training programmes are aligned with SAQA (South African
Qualifications Authority) and accredited with SETA Quality Assurance departments.
- Financial and Lifestyle Products, which offers a range of lifestyle products and support services
to employees.
- Employee Health Management, which offers a comprehensive range of occupational and
primary health management services; and
- Process Outsourcing, which focuses on delivering productive and functional business process
outsourcing solutions, including the statutory and legal elements associated therewith.
These operating segments are monitored and strategic decisions are made on the basis of
adjusted segment operating results.
Revenues, profit, assets and liabilities generated for each of the group's business segments are
summarised as follows:
Staffing Financial Employee
and Training and Health
Recruit- and Lifestyle Manage-
ment Consulting Products ment
R'000 R'000 R'000 R'000
Six months to June 2015
Segment revenues 772 039 23 581 32 709 17 375
Cost of sales (607 873) (12 545) (9 248) (7 221)
Operating costs (101 771) (9 702) (17 926) (8 989)
Other income - - 1 000 -
EBITDA 62 395 1 334 6 535 1 165
Depreciation and amortisation
of non-financial assets (1 400) (338) (1 296) (284)
Segment operating profit 60 995 996 5 239 881
Capital expenditure 1 135 104 1 684 1 921
Segment total assets 251 975 6 835 154 746 12 419
Segment total liabilities (44 201) (18 144) (137 155) (7 432)
Net segment assets/(liabilities) 207 774 (11 309) 17 591 4 987
Six months to June 2014
Segment revenues 758 250 18 466 27 178 13 439
Cost of sales (601 853) (7 731) (8 201) (5 106)
Operating costs (92 390) (9 908) (16 808) (6 899)
EBITDA 64 007 827 2 169 1 434
Depreciation and amortisation
of non-financial assets (1 028) (410) (1 482) (157)
Segment operating profit 62 979 417 687 1 277
Capital expenditure 899 256 312 445
Segment total assets 282 171 12 821 129 092 8 283
Segment total liabilities (67 026) (13 323) (118 161) (5 367)
Net segment assets/(liabilities) 215 145 (502) 10 931 2 916
Year to 31 December 2014
Segment revenues 1 570 885 32 893 59 835 26 096
Inter-segment revenues 338 6 512 - 830
Cost of sales (1 247 702) (17 826) (16 711) (10 412)
Operating costs (196 113) (19 382) (33 578) (13 972)
Other income 927 - - -
EBITDA 128 335 2 077 9 546 2 542
Depreciation and amortisation
of non-financial assets (2 210) (827) (2 975) (325)
Segment operating profit 126 125 1 250 6 571 2 229
Capital expenditure 9 686 367 774 488
Segment total assets 255 465 8 721 145 595 7 411
Segment total liabilities (35 409) (14 666) (149 723) (6 685)
Net segment assets/(liabilities) 220 056 (5 945) (4 128) 726
Consoli-
Process Central dation
Outsourcing cost entries Total
R'000 R'000 R'000 R'000
Six months to June 2015
Segment revenues 60 480 - (1 590) 904 594
Cost of sales (59 419) - - (696 306)
Operating costs (3 656) (29 964) 1 590 (170 418)
Other income - - - 1 000
EBITDA (2 595) (29 964) - 38 870
Depreciation and amortisation
of non-financial assets (33) (2 322) - (5 673)
Segment operating profit (2 628) (32 286) - 33 197
Capital expenditure 7 2 518 - 7 369
Segment total assets 24 298 124 868 - 575 141
Segment total liabilities (22 863) (43 365) - (273 160)
Net segment assets/(liabilities) 1 435 81 503 - 301 981
Six months to June 2014
Segment revenues 57 712 - (3 205) 871 840
Cost of sales (56 313) - - (679 204)
Operating costs (1 901) (29 584) 3 205 (154 285)
EBITDA (502) (29 584) - 38 351
Depreciation and amortisation
of non-financial assets (42) (1 968) - (5 087)
Segment operating profit (544) (31 552) - 33 264
Capital expenditure 7 2 625 - 4 544
Segment total assets 17 796 95 325 - 545 488
Segment total liabilities (26 638) (80 735) - (311 250)
Net segment assets/(liabilities) (8 842) 14 590 - 234 238
Year to 31 December 2014
Segment revenues 112 186 - - 1 801 895
Inter-segment revenues - - (7 680) -
Cost of sales (109 029) - - (1 403 346)
Operating costs (5 842) (58 201) 7 680 (319 408)
Other income - - - 927
EBITDA (2 685) (58 201) - 79 768
Depreciation and amortisation
of non-financial assets (96) (4 068) - (10 501)
Segment operating profit (2 781) (62 269) - 69 267
Capital expenditure 12 1 668 - 12 995
Segment total assets 18 536 127 169 - 562 897
Segment total liabilities (18 895) (65 205) - (290 583)
Net segment assets/(liabilities) (359) 61 964 - 272 314
8. Taxation
The effective tax rate of (7,7%) (2014: 2,5%) for the period was based on the anticipated
average tax rate for the full financial year. The low tax rate is due to learnership
allowances as well as employment tax incentive income.
Six months Six months Year to
to 30 June to 30 June 31 December
2015 2014 2014
R'000 R'000 R'000
9. Earnings per share
Basic earnings per share
Profit attributable to equity
shareholders of the parent
company (R'000) 27 524 21 628 59 209
Weighted average number of shares
in issue ('000) 225 630 225 630 225 630
Diluted weighted average number
of shares in issue ('000) 236 514 225 630 225 630
Basic earnings per share (cents) 12,2 9,6 26,2
Diluted earnings per share (cents) 11,6 9,6 26,2
Headline earnings per share
The earnings used in the calculation
of headline earnings per share are
as follows:
Profit after taxation (R'000) 27 524 21 628 59 209
Headline earnings adjustment (R'000) - - (1 088)
- Gain on disposal of property, plant
and equipment - - (584)
- Gain on bargain purchase - - (927)
- Tax effect of adjustments - - 423
Total headline earnings (R'000) 27 524 21 628 58 121
Weighted average number of shares
in issue ('000) 225 630 225 630 225 630
Headline earnings per share (cents) 12,2 9,6 25,8
Headline earnings per share from
continuing operations
The earnings used in the calculation
of headline earnings from continuing
operations are as follows:
Headline earnings (R'000) 27 524 21 628 58 121
- Loss from discontinued operation - 1 924 -
Total headline earnings (R'000) 27 524 23 552 58 121
Weighted average number of shares
in issue ('000) 225 630 225 630 225 630
Headline earnings per share (cents)
from continuing operations 12,2 10,4 25,8
10.Cash and cash equivalents
Cash and cash equivalents include
the following components:
Cash at bank and on hand 7 712 2 894 10 344
Bank overdraft (5) - (24)
7 707 2 894 10 320
11.Dividends
No dividend was declared relating to the period under review.
12.Business combinations
There were no business combinations during the period under review.
13.Related party transactions
The group, in the ordinary course of business, entered into various sale and purchase
transactions on an arm's length basis at market rates with related parties.
14.Changes to the Board
There have been no changes to the Board in the current period.
15.Other significant matter
The employment tax incentive introduced in January 2014 incentivises companies that employ
young job seekers. The effect of this incentive on the group's results has been substantial and
has been treated as a deduction of the relevant wage expense in terms of IAS20: Accounting
for government grants and disclosure of government assistance.
Six months Six months Year to
to 30 June to 30 June 31 December
2015 2014 2014
R'000 R'000 R'000
16. Notes to the condensed
consolidated statement of cash flows
16.1 Cash generated from operations
Profit before taxation from
continuing operations 26 150 24 759 51 221
Loss before taxation from
discontinued operations - (2 672) -
Interest and dividend income (978) (771) (148)
Finance costs 8 025 9 276 18 194
Adjustment for non-cash items:
Gain on disposal of property,
plant and equipment - - (584)
Depreciation and amortisation of
non-financial assets 5 673 5 087 10 501
Equity-settled share-based payments - 272 543
Gain on bargain purchase - - (927)
Increase in contingent consideration
payment - - (1 050)
38 870 35 951 77 750
16.2 Working capital changes
Change in trade and other receivables (9 735) (23 444) (22 005)
Change in inventories 9 (274) (504)
Change in share-based payment 310 (272) -
Change in trade payables 5 668 2 458 (16 112)
(3 748) (21 532) (38 621)
Six months Six months Year to
to 30 June to 30 June 31 December
2015 2014 2014
R'000 R'000 R'000
17.Group net asset value per share
(cents per share)
The net asset value per share and
weighted average number of ordinary
shares used in the calculation of basic
earnings per share are as follows:
Group net asset value 302 024 233 836 272 685
Weighted average number of ordinary
shares in issue ('000) 237 530 225 630 225 630
127 104 121
Directors' commentary
Group overview
Workforce Holdings has been at the forefront of industrial permanent and contract staffing
solutions in Southern Africa since 1972, helping organizations find ways to reduce their
operating costs, streamline their manpower processes, and improve operational efficiencies.
Over the past decade the group has expanded its business offering to include training,
healthcare and project capabilities. In so doing, the group and its portfolio of businesses
ensure that contract workers receive fair remuneration for their work, are adequately trained
and continuously upskilled, and are offered benefits such as financial services, funeral policies,
medical aid and life cover that are normally only associated with permanent employment.
Our continued growth during 2015 is built on the diversification strategy that we have had in
place for some time now, which has equipped Workforce to offer its clients a turnkey staffing
solution. Our core business remains that of staffing solutions, and we expect this to grow in
spite of recent regulatory changes, because our company focuses on the people it places in
temporary employment as much as it focuses on our clients that provide them with a decent
wage.
Financial overview
The Workforce Group results for the first six months of 2015 reflect tough trading conditions
as a result of slower than expected economic activity across most sectors, and the impact of
the recently implemented amendments to the labour legislation which has put a damper on
buyer behaviour within the flexible staffing segment of our business.
Group revenue increased by 4% to R905 million whilst earnings before interest, tax, depreciation
and amortisation ('EBITDA') of R38,9 million was mostly unchanged on the previous period in
2014. Headline earnings per share ('HEPS') and Earnings per share ('EPS') increased by 27%
to 12,2 cents per share.
Cash generated from operating activities before working capital changes increased to
R38,9 million (June 2014: 5,9 million). Net cash generated from operating activities improved to
R28,2 million, up from R5,5 million in the comparative period. In this regard, the Group's Days
Sales Outstanding ('DSO') improved to 44 days (June 2014: 49 days).
The group's gross margin increased to 23% (2014: 22%). This improved margin is in part
reflective of the increased benefit received through the Employee Tax Incentive ('ETI'), which
amounted to R30,8 million for the period under review.
The consolidated group profit for the half year is R28,2 million, an increase of 27% compared
to last year this time. As a result of the group's share incentive scheme and the share price
trebling, the diluted weighted average number of shares increased to 236 514 000 shares. Diluted
earnings per share increased to 11,6 cents (2014: 9,6 cents). Furthermore, the group continues
to benefit from reduced taxation as a consequence of its learnerships rollout, as well as the ETI
programme both of which resulted in a tax credit of R2 million.
Segmental overview
Staffing and recruitment - The group's blue-collar businesses performed well in difficult
conditions, while the white collar businesses were up compared to the prior period, delivering
consolidated EBITDA for this segment of business of R6,4 million (2014: R800 000).Turnover
reflected was flat on the previous year, primarily as a result of the changes to the labour legislation
and the uncertainty that surrounded these changes. However, management is confident that its
customised solutions to the labour legislation amendments, together with the group's maturing
diversification strategy will pay off, and our focus will remain on protecting current market share
and positioning the business for growth over the next period.
The implementation of the new labour legislations has impacted buyer behaviour as many clients
have stalled decisions on their flexible staffing requirements in anticipation of declarators. The
group continues to engage with the market on its solutions which have been developed over
the past few years, enabling clients to mitigate any risk that the amendments may pose. On the
upside, new labour laws will continue to benefit the group's blue collar businesses as employers
tend to favour larger, more reputable providers with a proven track record, who are better
positioned to advise employers on regulatory and legislative compliance.
Training and consulting - Our training business, Training Force, continued to be an area of
growth and investment and accordingly, delivered an increase in earnings of 50% on the
previous year. The group believes that with additional focus this segment of the business will
become more of a material contributor to earnings in the coming periods.
Financial services and employee benefits - The group's financial and lifestyle services segment
contributed earnings of R5,5 million (2014: R2,2 million). Continued focus on collection
methodology and systems within Babereki has resulted in better collection rates. However, cash
flow from this segment is still expected to be negative for the latter part of the year as we
increase our lending book. Our employee benefits business has been well received in the
market and we are excited about the opportunities in this space.
Employee health management - Workforce Healthcare, provider of occupational health and
wellness services, increased revenue by 29% on the previous year by securing major national
contracts. The roll out of these contracts will deliver increased profitability over the next
reporting period.
Process outsourcing - Programmed Process Outsourcing, the group's project capabilities
segment continued to be challenged by its exposure to tough trading conditions within the
steel industry. This is expected to continue for the balance of the 2015 fiscal year. The segment
is focussing on securing contract wins in other industries where its value proposition is relevant.
Workforce Africa - Workforce is delivering on its stated growth and diversification strategy with
the expansion of its African business, Workforce Africa. This business focuses on providing
staffing, recruitment, training, healthcare and project capability solutions for employers needing
turnkey people solutions in any location on the African continent, from artisans to knowledge
workers. With the African continent currently acting as the hub of mining, oil and gas,
construction and renewable energy projects, the time is right to grow this business, and will be
a strong focus for management going forward.
Outlook and prospects
Management is confident that its strategy of focused growth and diversification will result in
sustained future profits and cash generation. Numerous acquisition opportunities are currently
being explored which will augment its current solid base of businesses. These acquisition
opportunities fall across the group's portfolio of businesses, with a view to extending its share
of the market and increasing its profitability.
In addition, the group continues to strengthen its geographic presence and aims to seek out
opportunities across Africa where it is currently growing its footprint. Management believes
that the group is well positioned for this growth phase beyond the South African borders.
Operationally, the focus on managing costs and operational efficiencies is of primary
importance to leverage profitable growth, and management expects material progress in this
area over the coming months.
Workforce has demonstrated robust growth in revenue over the past six months and is
considered a significant competitor in the staffing, training and employee health management
industries. Management believes that the group is only at the beginning of this growth trajectory
and that there are multiple opportunities to capture significant commercial value from
Workforce and its diverse business portfolio in the future.
For and on behalf of the Board
RS Katz
Chairman
LH Diamond
Chief executive officer
WP van Wyk
Group financial director
Johannesburg
25 August 2015
Executive directors
RS Katz
LH Diamond
WP van Wyk
Non-executive directors
NM Anderson
JR Macey
L Letlape
K Vundla
Designated adviser
Merchantec Capital
Company secretary
S van Schalkwyk
Registered office
The registered office, which is also its principal place of business, is:
11 Wellington Road
Parktown
2193
Transfer secretaries
Link Market Services South Africa Proprietary Limited
11 Diagonal Street
Johannesburg
2001
Date: 26/08/2015 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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