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ADCORP HOLDINGS LIMITED - Unaudited Group results for the six months ended 31 August 2015

Release Date: 21/10/2015 12:46
Code(s): ADR     PDF:  
Wrap Text
Unaudited Group results for the six months ended 31 August 2015

Adcorp Holdings Limited
(“Adcorp” or “Adcorp Group” or “the Group”) 
Registration number 1974/001804/06
Share code: ADR   ISIN number: ZAE000000139

Unaudited Group results
for the six months ended 31 August 2015

Salient features

* Revenue increased by 23% to R7,8 billion
* Normalised EBITDA for the period increased by 2% to R304,6 million
* Normalised earnings per share decreased by 6% to 180,0 cents per share
* Interim dividend of 60 cents per share declared
* Cash conversion ratio at 102%
* Gearing at 31% (target 30%)
* Debtors' days improved to 43 days from previous financial year end level 
  of 47 days
* Kelly Group integrated
* International strategy on track
* Dare (Australia) acquisition finalised
* New South African labour law promulgated

Abridged statement of comprehensive income 
for the six months ended 31 August 2015

                                     Unaudited   Unaudited      
                                           Six         Six      Audited
                                     months to   months to      Year to
                                     31 August   31 August  28 February
                                          2015        2014         2015
                                         R’000       R’000        R’000
Revenue                              7 802 561   6 364 090   13 322 398
Cost of sales                       (6 586 178) (5 346 887) (11 126 945) 
Gross profit                         1 216 383   1 017 203    2 195 453
Other income                            45 604      34 358      101 895
Administrative expenses               (561 912)   (417 854)    (968 366) 
Marketing and selling expenses        (354 656)   (311 571)    (664 791) 
Other operating expenses              (136 952)    (96 116)    (209 204) 
Operating profit                       208 467     226 020      454 987
Interest received                       12 025       2 831       12 536
Interest paid                          (70 150)    (46 377)    (103 352) 
Gain on bargaining purchase              3 999           –            – 
Impairment of intangible assets
and goodwill                           (16 253)          –     (65 014)
Impairment of loans                       (300)          –            – 
Share of profits from associates        12 740      12 248       29 778
Profit on sale of shares                     –         371          371
Loss on the sale of business           (28 690)          –            – 
Profit on sale of property and
equipment                                  129         615        1 173
Profit before taxation                 121 967     195 708      330 479
Taxation                               (27 481)    (44 976)     (86 277) 
Profit for the period/year              94 486     150 732      244 202
Other comprehensive income*
Exchange differences on
translating foreign operations          25 990      (1 317)      (5 488) 
Exchange differences arising on
the net investment of a foreign
operation                               14 539       8 224      (15 122) 
Fair value adjustment of
derivative financial instrument           (107)         25       (2 366)
Non-controlling interest                   715         526          342
Other comprehensive income for
the period/year, net of tax             41 137       7 458      (22 634)
Total comprehensive income for
the period/year                        135 623     158 190      221 568
Profit attributable to:
Owners of the parent                    95 201     151 258      244 544
Non-controlling interest                  (715)       (526)        (342) 
Total comprehensive income
attributable to:
Owners of the parent                   135 623     158 190      221 568
Non-controlling interest                  (715)       (526)        (342) 
Earnings per share
Basic (cents)                             87,4       151,3        236,5
Diluted (cents)                           84,3       143,1        222,7
Approved dividends to
shareholders                               148         140          140
Interim dividend (cents)                    60          60           60
Final dividend (cents) in respect
of prior year                               88          80           80
Calculation of headline earnings
Profit for the period/year              95 201     151 258      244 544
Profit on sale of property and
equipment                                 (129)       (615)      (1 173) 
Taxation on property and
equipment                                   36         172          328
Impairment of intangible assets
and goodwill                            16 253           –       65 014
Gain on bargaining purchase             (3 999)          –            – 
Impairment of loans                        300           –            – 
Loss on the sale of business            28 690           –            – 
Headline earnings                      136 352     150 815      308 713
Headline earnings per share
Headline earnings per share
(cents)                                  125,2       150,9        298,5
Diluted headline earnings per
share (cents)                            120,7       142,7        281,2
Weighted average number of shares
(000’s)                                108 905      99 954      103 415
Diluted weighted average number
of shares (000’s)                      112 933     105 698      109 788

* All items below will be reclassified to profit and loss upon 
derecognition.

Abridged statement of financial position 
as at 31 August 2015

                                     Unaudited   Unaudited     
                                           Six         Six      Audited
                                     months to   months to      Year to
                                     31 August   31 August  28 February
                                          2015        2014         2015
                                         R’000       R’000        R’000
Assets
Non-current assets                   2 638 660   2 241 020    2 326 188
Property and equipment                 120 924      82 649      112 425
Goodwill                             1 452 469   1 335 166    1 304 170
Intangible assets                      748 588     543 707      611 752
Investments                                  –      77 330        7 800
Other financial assets                  45 292           –       42 288
Investment in associates               114 911      92 165      102 171
Deferred taxation                      156 476     110 003      145 582
Current assets                       3 492 707   2 535 546    3 018 440
Trade, other receivables and
prepayments                          2 578 878   1 921 163    2 315 813
Taxation prepaid                        43 952      20 006       22 526
Cash resources                         869 877     594 377      680 101
Total assets                         6 131 367   4 776 566    5 344 628
Equity and liabilities
Capital and reserves                 2 621 760   2 340 693    2 465 032
Share capital                            2 748       2 563        2 733
Share premium                        1 738 110   1 569 254    1 718 856
Treasury shares                        (12 990)    (12 990)     (12 990) 
Share based payment reserve            118 184     110 978      114 581
Foreign currency translation
reserve                                 22 548         729       (3 442) 
Cash flow hedging reserve               (2 498)          –       (2 391) 
Retained earnings                      760 546     673 026      650 806
Equity attributable to equity
holders of the parent                2 626 648   2 343 560    2 468 153
Non-controlling interest                (5 809)     (3 788)      (4 042) 
BEE shareholders’ interest                 921         921          921
Non-current liabilities              1 394 251   1 087 249    1 150 262
Other non-current liabilities –
interest bearing                           791       1 395        1 210
Long-term loan – interest bearing    1 138 773     852 775      859 417
Derivative financial instruments         3 569           –        3 416
Share based payment liability           92 147     134 064      151 672
Obligation under finance lease           4 107       3 014        2 448
Deferred taxation                      154 864      96 001      132 099
Current liabilities                  2 115 356   1 348 624    1 729 334
Non-interest-bearing current
liabilities                          1 574 189   1 061 174    1 209 818
Trade and other payables             1 207 589     768 933      933 123
Provisions                             280 876     222 793      245 313
Other vendor payables                   51 828      21 905       12 619
Taxation                                33 896      47 543       18 763
Interest-bearing current
liabilities                            541 167     287 450      519 516
Current portion of other non-
current liabilities                      8 756       7 789       12 077
Short term loans                       353 977     221 665      398 463
Bank overdraft                         178 434      57 996      108 976
Total equity and liabilities         6 131 367   4 776 566    5 344 628
Number of ordinary shares in issue
(000’s)                                109 955     102 585      109 371
Net asset value per share (cents)        2 384       2 282        2 254

Abridged statement of cash flows
for the six months ended 31 August 2015

                                     Unaudited   Unaudited     
                                           Six         Six      Audited
                                     months to   months to      Year to
                                     31 August   31 August  28 February
                                          2015        2014         2015
                                         R’000       R’000        R’000
Operating activities
Profit before taxation and
dividends                              121 967     195 708      330 479
Adjustment for:
Depreciation                            16 766      15 345       32 815
Impairment of investments, 
intangible assets, goodwill and
loans                                   16 553           –       65 014
Amortisation of intangibles             46 945      37 350       80 815
Amortisation of intangibles –
acquired in a business combination      37 664      28 495       61 083
Amortisation of intangibles –
other than those acquired in a
business combination                     9 281       8 855       19 732
Profit on disposal of property and
equipment                                 (129)       (615)      (1 173) 
Share-based payments                    18 755      15 178       80 724
Share-based payment expense             13 495      35 283       64 801
Revaluation of share-based payment
liability                                5 260     (20 105)      15 923
Cash settlement of share options
exercised                              (74 678)    (25 548)     (69 883) 
Revaluation of foreign exchange
denominated inter company loan          14 539       8 224      (15 122)
Non-cash portion of operating
lease rentals                             (627)        661          322
Exchange differences on
translating foreign operations          25 990      (1 317)      (5 488) 
Foreign currency adjustment to
goodwill                                (9 410)          –       15 389
Other movement in distributable
reserves                                     –           –       (1 404) 
Interest received                      (12 025)     (2 831)     (12 536) 
Interest paid                           70 150      46 377      103 352
Cash generated from operations
before working capital changes         234 796     288 532      603 304
(Increase)/decrease in trade and
other receivables and prepayments     (115 121)    123 559       38 764
Decrease in bad debt provision         (10 398)     (3 653)     (45 561) 
Increase/(decrease) in trade and
other payables and provisions          140 607     (64 030)     (58 233)
Increase in provisions                  34 288       8 851       19 372
Cash generated from operations         284 172     353 259      557 646
Interest received                       12 025       2 831       12 536
Interest paid                          (70 150)    (46 377)    (103 352) 
Taxation paid                          (39 770)    (41 624)     (90 678) 
Dividend paid                                –           –      (87 971) 
Net cash generated by operating
activities                             186 277     268 089      288 181
Investing activities
Additions to property, equipment
and intangible assets                  (54 253)    (38 582)     (69 390) 
Proceeds on the sale of property
and equipment                            3 362         469        3 852
Acquisition of businesses             (297 964)          –     (180 027) 
Acquisition of investment                    –     (73 803)      (4 270) 
Conversion of investment to
subsidiary                               7 800           –            –
Investment in associates               (12 740)    (12 248)     (29 778) 
Deferred tax on financial
derivatives                                  –           –        1 025
Dividends received from associates           –       7 037       14 561
Non controlling interest                (1 052)       (246)        (684) 
Investment available for sale                –           –      (42 288) 
Foreign currency adjustment to
investment available-for-sale           (3 004)          –            –
Net cash utilised from investing
activities                            (357 851)   (117 373)    (306 999) 
Financing activities
Issue of shares under employee
share option scheme                     19 269       8 504       19 038
Issue of shares pursuant to
acquisitions                                 –      73 687      212 925
Equity due to change in control              –           –       (2 783) 
Long term loans raised                 279 356     129 019      135 662
Long term loans repaid                       –     (40 000)           – 
Short term loan raised                       –     190 920       66 130
Short term loan repaid                 (47 184)   (243 090)     (97 117) 
Other non-current liabilities –
interest bearing                         1 242         592         (657)
Increase/(decrease) in other
payables                                39 209      (4 894)     (14 182)
Net cash generated by financing
activities                             291 892     114 738      319 016
Net increase in cash and cash
equivalents                            120 318     265 454      300 198
Cash and cash equivalents at the
beginning of period/year               571 125     270 927      270 927
Cash and cash equivalents at the
end of the period/year                 691 443     536 381      571 125

Total interest bearing liabilities of the Group
as at 31 August 2015
                                     Unaudited   Unaudited     
                                           Six         Six      Audited
                                     months to   months to      Year to
                                     31 August   31 August  28 February
                                          2015        2014         2015
                                         R’000       R’000        R’000
Net gearing                                31%         24%          28% 
Net bank balances                     (691 443)   (536 381)    (571 125) 
Other long term loans                      791       1 395        1 210
Long term loan                       1 138 773     852 775      859 417
Obligations under finance lease          4 107       3 014        2 448
Current portion of other non-
current liabilities                      8 756       7 789       12 077
Short term loans                       353 977     221 665      398 463
Total interest bearing liabilities
(gross of net cash set off)          1 506 404   1 086 638    1 273 615
Total long term debt                       76%         79%          68% 
Total short term debt                      24%         21%          32% 
Total                                     100%        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).

Financial assets/financial liabilities
 
                                          Fair       Fair         Fair 
                                         value      value        value
                                         as at      as at        as at
                                     31 August  31 August  28 February
                                          2015       2014         2015
                                         R’000      R’000        R’000
Investment available-for-sale           45 292          –       42 288
Trade and other receivables          2 578 878  1 921 163    2 315 813
Derivative financial instrument          3 569          –        3 416
Share based payment liability           92 147    134 064      151 672
Trade and other payables (excluding
VAT)                                   974 896    635 993      793 834
Short-term loans                       353 977    221 665      398 463

                                    Fair 
Financial assets/                  value  Valuation technique(s) 
financial liabilities          hierarchy  and key inputs
Investment available-for-sale    Level 3  Face value – owing to recency of 
                                          investment
Trade and other receivables      Level 3  Face value less specific 
                                          related provision
Derivative financial             Level 2  Discounted cash flow. Future cash 
instrument                                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
Share based payment liability    Level 2  Black-Scholes pricing model
Trade and other payables         Level 3  Expected settlement value
(excluding VAT)
Short-term loans                 Level 2  Amortised cost plus accrued 
                                          interest

                                                           Relationship
                                       Significant      of unobservable
Financial assets/                     unobservable            inputs to
financial liabilities                     input(s)           fair value
Investment available-for-sale                  n/a                  n/a 
Trade and other receivables                    n/a                  n/a 
Derivative financial instrument                n/a                  n/a 
Share based payment liability                  n/a                  n/a 
Trade and other payables
(excluding VAT)                                n/a                  n/a
Short-term loans                               n/a                  n/a

Abridged statement of changes in equity 
for the six months ended 31 August 2015

                                              Share     Share  Treasury 
                                            capital   premium    shares 
                                              R’000     R’000     R’000
Balance as at 1 March 2014 (audited)          2 502 1 487 124  (12 891) 
Issue of ordinary shares pursuant to
acquisition                                      55    73 632         –
Issue of ordinary shares under employee
share option plan                                 6     8 498         – 
Recognition of BBBEE and staff share-based
payments                                          –         –         –
Adcorp Empowerment Share Incentive Trust
shares written-off                                –         –       (99) 
Profit for the period                             –         –         – 
Other comprehensive income for the period         –         –         – 
Minority distribution                             –         –         – 
Balance as at 31 August 2014 (unaudited)      2 563 1 569 254   (12 990) 
Issue of ordinary shares pursuant to
acquisition                                     111   139 623         –
Capitalisation of transaction costs               –      (496)        – 
Issue of ordinary shares under employee
share option plan                                 8    10 526         –
Dividend distributions                            –         –         –
Scrip distribution                               51       (51)        – 
Recognition of BBBEE and staff share-based
payments                                          –         –         –
Profit for the year                               –         –         – 
Other movement in distributable reserves          –         –         – 
Other comprehensive income for the period         –         –         – 
Minority distribution                             –         –         – 
Equity due to change in control                   –         –         – 
Balance as at 28 February 2015 (audited)      2 733 1 718 856   (12 990) 
Issue of ordinary shares under employee
share option plan                                15    19 254         –
Recognition of BBBEE and staff share-based
payments                                          –         –         – 
Profit for the period                             –         –         – 
Other comprehensive income for the period         –         –         – 
Minority distribution                             –         –         – 
Balance as at 31 August 2015 (unaudited)      2 748 1 738 110   (12 990)

                                           Share     Foreign
                                           based    currency  Cash flow 
                                         payment translation    hedging 
                                         reserve     reserve    reserve 
                                           R’000       R’000      R’000
Balance as at 1 March 2014 (audited)     107 375       2 046       (25) 
Issue of ordinary shares pursuant to
acquisition                                    –           –          –
Issue of ordinary shares under
employee share option plan                     –           –          – 
Recognition of BBBEE and staff share-
based payments                             3 603           –          –
Adcorp Empowerment Share Incentive
Trust shares written-off                       –           –          – 
Profit for the period                          –           –          – 
Other comprehensive income for the
period                                         –      (1 317)        25
Minority distribution                          –           –          – 
Balance as at 31 August 2014
(unaudited)                              110 978         729          –
Issue of ordinary shares pursuant to
acquisition                                    –           –          – 
Capitalisation of transaction costs            –           –          – 
Issue of ordinary shares under
employee share option plan                     –           –          –
Dividend distributions                         –           –          – 
Scrip distribution                             –           –          – 
Recognition of BBBEE and staff share-
based payments                             3 603           –          –
Profit for the year                            –           –          – 
Other movement in distributable
reserves                                       –           –          –
Other comprehensive income for the             –      (4 171)    (2 391)
period
Minority distribution                          –           –          – 
Equity due to change in control                –           –          – 
Balance as at 28 February 2015
(audited)                                114 581      (3 442)    (2 391)
Issue of ordinary shares under
employee share option plan                     –           –          – 
Recognition of BBBEE and staff share-
based payments                             3 603           –          –
Profit for the period                          –           –          – 
Other comprehensive income for the
period                                         –      25 990       (107)
Minority distribution                          –           –          – 
Balance as at 31 August 2015
(unaudited)                              118 184      22 548     (2 498)

                                            Attributable to        Non- 
                                   Retained  equity holders controlling   
                                   earnings   of the parent    interest 
                                      R’000           R’000       R’000
Balance as at 1 March 2014
(audited)                           513 544       2 099 675      (3 016) 
Issue of ordinary shares pursuant
to acquisition                            –          73 687           –
Issue of ordinary shares under
employee share option plan                –           8 504           – 
Recognition of BBBEE and staff
share-based payments                      –           3 603           –
Adcorp Empowerment Share
Incentive Trust shares written-
off                                       –             (99)          – 
Profit for the period               151 258         151 258           – 
Other comprehensive income for
the period                            8 224           6 932        (526)
Minority distribution                     –               –        (246) 
Balance as at 31 August 2014
(unaudited)                         673 026       2 343 560      (3 788)
Issue of ordinary shares pursuant
to acquisition                            –         139 734           –
Capitalisation of transaction
costs                                     –            (496)          – 
Issue of ordinary shares under
employee share option plan                –          10 534           –
Dividend distributions              (87 973)        (87 973)          – 
Scrip distribution                        –               –           – 
Recognition of BBBEE and staff
share-based payments                      –           3 603           –
Profit for the year                  93 286          93 286           – 
Other movement in distributable
reserves                             (1 404)         (1 404)          –
Other comprehensive income for                      
the period                          (23 346)        (29 908)        184
Minority distribution                     –               –        (438) 
Equity due to change in control      (2 783)         (2 783)          – 
Balance as at 28 February 2015
(audited)                           650 806       2 468 153      (4 042)
Issue of ordinary shares under
employee share option plan                –          19 269           – 
Recognition of BBBEE and staff
share-based payments                      –           3 603           –
Profit for the period                95 201          95 201           – 
Other comprehensive income for
the period                           14 539          40 422        (715)
Minority distribution                     –               –      (1 052) 
Balance as at 31 August 2015
(unaudited)                         760 546       2 626 648      (5 809)

                                                        BEE
                                               shareholders’
                                                    interest       Total
                                                       R’000       R’000
Balance as at 1 March 2014 (audited)                     921   2 097 580
Issue of ordinary shares pursuant to
acquisition                                                –      73 687
Issue of ordinary shares under employee share
option plan                                                –       8 504
Recognition of BBBEE and staff share-based
payments                                                   –       3 603
Adcorp Empowerment Share Incentive Trust
shares written-off                                         –         (99) 
Profit for the period                                      –     151 258
Other comprehensive income for the period                  –       6 406
Minority distribution                                      –        (246) 
Balance as at 31 August 2014 (unaudited)                 921   2 340 693
Issue of ordinary shares pursuant to
acquisition                                                –     139 734
Capitalisation of transaction costs                        –        (496) 
Issue of ordinary shares under employee share
option plan                                                –      10 534
Dividend distributions                                     –     (87 973) 
Scrip distribution                                         –           – 
Recognition of BBBEE and staff share-based
payments                                                   –       3 603
Profit for the year                                        –      93 286
Other movement in distributable reserves                   –      (1 404) 
Other comprehensive income for the period                  –     (29 724) 
Minority distribution                                      –        (438) 
Equity due to change in control                            –      (2 783) 
Balance as at 28 February 2015 (audited)                 921   2 465 032
Issue of ordinary shares under employee share
option plan                                                –      19 269
Recognition of BBBEE and staff share-based                 –       3 603
payments
Profit for the period                                      –      95 201
Other comprehensive income for the period                  –      39 707
Minority distribution                                      –      (1 052) 
Balance as at 31 August 2015 (unaudited)                 921   2 621 760

Abridged segment report (unaudited)
for the six months ended 31 August 2015

                                                    Staffing
                                           Blue      White Professional 
                                         collar     collar     services
Revenue
31 August 2015 (R’000)                3 641 704  1 813 797    2 143 355
31 August 2014 (R’000)                3 497 726    672 359    2 036 025
28 February 2015 (R’000)              7 230 582  1 723 567    4 026 745
Internal revenue
31 August 2015 (R’000)                   29 854     16 433            –
31 August 2014 (R’000)                    4 976     16 556            –
28 February 2015 (R’000)                 38 624     38 614            – 
Operating profit/(loss)
31 August 2015 (R’000)                  170 255     80 907       46 538
31 August 2014 (R’000)                  197 683     30 891       50 674
28 February 2015 (R’000)                407 156     90 346      102 760
Normalised* EBITDA excluding share- 
based payments lease smoothing, 
establishment and transaction costs
31 August 2015 (R’000)                  179 341     95 628       82 269
31 August 2014 (R’000)                  218 525     27 731       73 279
28 February 2015 (R’000)                455 478     99 430      150 493
Normalised* EBITDA margin excluding 
share-based payments lease smoothing, 
establishment and transaction costs
31 August 2015 (R’000)                     4,9%       5,3%         3,8%
31 August 2014 (%)                         6,2%       4,1%         3,6%
28 February 2015 (R’000)                   6,3%       5,8%         3,7% 
Normalised* EBITDA excluding share-
based payments lease smoothing,
establishment and transaction costs,
contribution % to Group normalised* 
EBITDA
31 August 2015 (R’000)                    58,9%      31,4%        27,0%
31 August 2014 (%)                        72,9%       9,3%        24,4%
28 February 2015 (R’000)                  68,1%      14,9%        22,5% 
Depreciation and amortisation
31 August 2015 (R’000)                   18 574     19 786       20 653
31 August 2014 (R’000)                   20 580      4 638       21 560
28 February 2015 (R’000)                 41 625     16 391       43 023
Interest income
31 August 2015 (R’000)                   10 912     21 748        1 264
31 August 2014 (R’000)                    6 644      6 314        2 999
28 February 2015 (R’000)                 15 246     25 398        3 333
Interest expense
31 August 2015 (R’000)                  (24 569)   (23 685)      (5 236)
31 August 2014 (R’000)                  (22 339)    (2 749)      (8 280)
28 February 2015 (R’000)                (41 815)   (22 257)     (12 622) 
Taxation expense/(income)
31 August 2015 (R’000)                    8 036     14 795        2 127
31 August 2014 (R’000)                   19 998        503        7 759
28 February 2015 (R’000)                 37 475      2 496        8 626
Net asset values
31 August 2015 (R’000)                1 763 162    802 261    1 450 690
31 August 2014 (R’000)                1 625 502    140 268      959 883
28 February 2015 (R’000)              1 721 199    387 531      952 499
Asset carrying value
31 August 2015 (R’000)                2 438 766  1 229 717    1 858 236
31 August 2014 (R’000)                2 196 002    264 938    1 648 324
28 February 2015 (R’000)              2 286 243    812 812    1 578 078
Liabilities carrying value
31 August 2015 (R’000)                  675 604    427 456      407 546
31 August 2014 (R’000)                  570 500    124 670      688 441
28 February 2015 (R’000)                565 044    425 281      625 579
Additions to property and equipment
31 August 2015 (R’000)                    8 665      3 988        4 391
31 August 2014 (R’000)                    8 265        555        2 930
28 February 2015 (R’000)                 43 128      2 738        4 571
Property and equipment
31 August 2015 (R’000)                   68 696     22 035       10 228
31 August 2014 (R’000)                   39 716      9 892       12 930
28 February 2015 (R’000)                 65 828     19 069       11 310

                                                      BPO, 
                                              Training and
                                   Financial      Emergent
                                    services   business***   Sub total
Revenue
31 August 2015 (R’000)               183 014        19 421   7 801 291
31 August 2014 (R’000)               139 403        11 603   6 357 116
28 February 2015 (R’000)             307 674        29 950  13 318 518
Internal revenue
31 August 2015 (R’000)                17 933             –      64 220
31 August 2014 (R’000)                13 124         3 709      38 365
28 February 2015 (R’000)              38 684         3 737     119 659
Operating profit/(loss)
31 August 2015 (R’000)                 8 428        (4 315)    301 813
31 August 2014 (R’000)                19 274        (3 743)    294 779
28 February 2015 (R’000)              49 966       (12 374)    637 854
Normalised* EBITDA excluding
share-based payments lease 
smoothing, establishment and 
transaction costs
31 August 2015 (R’000)                14 562        (4 000)    367 800
31 August 2014 (R’000)                24 507        (2 456)    341 586
28 February 2015 (R’000)              59 324        (8 320)    756 405
Normalised* EBITDA margin 
excluding share-based payments 
lease smoothing, 
establishment and transaction costs
31 August 2015 (R’000)                  8,0%             –        4,7%
31 August 2014 (%)                     17,6%             –        5,4%
28 February 2015 (R’000)               19,3%             –        5,7% 
Normalised* EBITDA excluding
share-based payments lease
smoothing, establishment and
transaction costs, contribution % 
to Group normalised* EBITDA
31 August 2015 (R’000)                  4,8%         (1,3%)     120,8%
31 August 2014 (%)                      8,2%         (0,8%)     114,0%
28 February 2015 (R’000)                8,9%         (1,2%)     113,2% 
Depreciation and amortisation
31 August 2015 (R’000)                 3 474           167      62 654
31 August 2014 (R’000)                 3 254         1 525      51 557
28 February 2015 (R’000)               6 676         3 651     111 366
Interest income
31 August 2015 (R’000)                 7 504            20      41 448
31 August 2014 (R’000)                 6 200            18      22 175
28 February 2015 (R’000)              13 148            37      57 162
Interest expense
31 August 2015 (R’000)                (3 623)       (4 472)    (61 585)
31 August 2014 (R’000)                (3 937)       (4 993)    (42 298)
28 February 2015 (R’000)              (6 043)       (8 372)    (91 109) 
Taxation expense/(income)
31 August 2015 (R’000)                 6 640           (51)     31 547
31 August 2014 (R’000)                 3 658        (8 582)     23 336
28 February 2015 (R’000)               9 051           295      57 943
Net asset values
31 August 2015 (R’000)               262 026         2 521   4 280 660
31 August 2014 (R’000)               238 491        24 472   2 988 616
28 February 2015 (R’000)             238 773         8 659   3 308 661
Asset carrying value
31 August 2015 (R’000)               334 340        10 808   5 871 867
31 August 2014 (R’000)               271 553        30 733   4 411 550
28 February 2015 (R’000)             282 880        14 934   4 974 947
Liabilities carrying value
31 August 2015 (R’000)                72 314         8 287   1 591 207
31 August 2014 (R’000)                33 062         6 261   1 422 934
28 February 2015 (R’000)              44 107         6 275   1 666 286
Additions to property and equipment
31 August 2015 (R’000)                 1 924             5      18 973
31 August 2014 (R’000)                 3 192         1 274      16 216
28 February 2015 (R’000)               3 858         1 361      55 656
Property and equipment
31 August 2015 (R’000)                 9 681           642     111 282
31 August 2014 (R’000)                 6 390         4 834      73 762
28 February 2015 (R’000)               5 540         3 775     105 522

                                                 Group Central
                                           Central   Shared
                                             costs services      Total
Revenue
31 August 2015 (R’000)                           –    1 270  7 802 561
31 August 2014 (R’000)                       6 974        –  6 364 090
28 February 2015 (R’000)                     4 090     (210)13 322 398
Internal revenue
31 August 2015 (R’000)                           –        –     64 220
31 August 2014 (R’000)                           –        –     38 365
28 February 2015 (R’000)                         –      378    120 037
Operating profit/(loss)
31 August 2015 (R’000)                     (75 735) (17 611)   208 467
31 August 2014 (R’000)                     (56 276) (12 483)   226 020
28 February 2015 (R’000)                  (163 767) (19 100)   454 987
Normalised* EBITDA excluding share- 
based payments lease smoothing, 
establishment and transaction costs
31 August 2015 (R’000)                     (46 117) (17 045)   304 638
31 August 2014 (R’000)                     (33 478)  (8 382)   299 726
28 February 2015 (R’000)                   (81 386)  (6 551)   668 468
Normalised* EBITDA margin excluding 
share-based payments lease smoothing, 
establishment and transaction costs
31 August 2015 (R’000)                           –        –       3,9%
31 August 2014 (%)                               –        –       4,7%
28 February 2015 (R’000)                         –        –       5,0% 
Normalised* EBITDA excluding share-
based payments lease smoothing,
establishment and transaction costs, 
contribution % to Group normalised* 
EBITDA
31 August 2015 (R’000)                      (15,1%)   (5,6%)      100%
31 August 2014 (%)                          (11,2%)   (2,8%)      100%
28 February 2015 (R’000)                    (12,2%)   (1,0%)      100% 
Depreciation and amortisation
31 August 2015 (R’000)                       1 057        –     63 711
31 August 2014 (R’000)                       1 138        –     52 695
28 February 2015 (R’000)                     2 264        –    113 630
Interest income
31 August 2015 (R’000)                     (29 426)       3     12 025
31 August 2014 (R’000)                     (19 419)      75      2 831
28 February 2015 (R’000)                   (44 775)     149     12 536
Interest expense
31 August 2015 (R’000)                      (1 669)  (6 896)   (70 150)
31 August 2014 (R’000)                         644   (4 723)   (46 377)
28 February 2015 (R’000)                    (3 729)  (8 514)  (103 352) 
Taxation expense/(income)
31 August 2015 (R’000)                      (4 066)       –     27 481
31 August 2014 (R’000)                      21 640        –     44 976
28 February 2015 (R’000)                    28 334        –     86 277
Net asset values
31 August 2015 (R’000)                  (1 621 510) (37 390) 2 621 760
31 August 2014 (R’000)                    (623 273) (24 650) 2 340 693
28 February 2015 (R’000)                  (811 200) (32 429) 2 465 032
Asset carrying value
31 August 2015 (R’000)                     239 329   20 171  6 131 367
31 August 2014 (R’000)                     346 032   18 984  4 776 566
28 February 2015 (R’000)                   364 092    5 589  5 344 628
Liabilities carrying value
31 August 2015 (R’000)                   1 860 839   57 561  3 509 607
31 August 2014 (R’000)                     969 305   43 634  2 435 873
28 February 2015 (R’000)                 1 175 292   38 018  2 879 596
Additions to property and equipment
31 August 2015 (R’000)                           –    5 682     24 655
31 August 2014 (R’000)                         664      168     17 048
28 February 2015 (R’000)                       760      530     56 946
Property and equipment
31 August 2015 (R’000)                       3 593    6 049    120 924
31 August 2014 (R’000)                       5 405    3 482     82 649
28 February 2015 (R’000)                     4 545    2 358    112 425

                                                      South
                                  International**    Africa       Total
Revenue
31 August 2015 (R’000)                  2 494 005 5 308 556   7 802 561
31 August 2014 (R’000)                  1 984 616 4 379 474   6 364 090
28 February 2015 (R’000)                3 986 797 9 335 601  13 322 398
Internal revenue
31 August 2015 (R’000)                          –    64 220      64 220
31 August 2014 (R’000)                          –    38 365      38 365
28 February 2015 (R’000)                        –   120 037     120 037
Operating profit/(loss)
31 August 2015 (R’000)                     43 658   164 809     208 467
31 August 2014 (R’000)                     58 186   167 834     226 020
28 February 2015 (R’000)                  117 265   337 722     454 987
Normalised* EBITDA excluding 
share-based payments lease
smoothing, establishment and 
transaction costs
31 August 2015 (R’000)                     65 283   239 355     304 638
31 August 2014 (R’000)                     81 812   217 914     299 726
28 February 2015 (R’000)                  160 348   508 120     668 468
Normalised* EBITDA margin 
excluding share-based payments 
lease smoothing, 
establishment and transaction 
costs
31 August 2015 (R’000)                       2,6%      4,5%        3,9%
31 August 2014 (%)                           4,1%      5,0%        4,7%
28 February 2015 (R’000)                     4,0%      5,4%        5,0% 
Normalised* EBITDA excluding
share-based payments lease
smoothing, establishment and 
transaction costs, contribution
% to Group normalised* EBITDA
31 August 2015 (R’000)                      21,4%     78,6%        100%
31 August 2014 (%)                          27,3%     72,7%        100%
28 February 2015 (R’000)                    24,0%     76,0%        100% 
Depreciation and amortisation
31 August 2015 (R’000)                     26 033    37 678      63 711
31 August 2014 (R’000)                     21 879    30 816      52 695
28 February 2015 (R’000)                   43 083    70 547     113 630
Interest income
31 August 2015 (R’000)                      1 504    10 521      12 025
31 August 2014 (R’000)                      2 158       673       2 831
28 February 2015 (R’000)                    2 655     9 881      12 536
Interest expense
31 August 2015 (R’000)                    (10 954)  (59 196)    (70 150)
31 August 2014 (R’000)                     (7 502)  (38 875)    (46 377)
28 February 2015 (R’000)                  (17 840)  (85 512)   (103 352) 
Taxation expense/(income)
31 August 2015 (R’000)                      9 449    18 032      27 481
31 August 2014 (R’000)                      6 710    38 266      44 976
28 February 2015 (R’000)                    6 673    79 604      86 277
Net asset values
31 August 2015 (R’000)                    921 843 1 699 917   2 621 760
31 August 2014 (R’000)                    736 542 1 604 151   2 340 693
28 February 2015 (R’000)                  704 235 1 760 797   2 465 032
Asset carrying value
31 August 2015 (R’000)                  2 154 068 3 977 299   6 131 367
31 August 2014 (R’000)                  1 358 801 3 417 765   4 776 566
28 February 2015 (R’000)                1 631 538 3 713 090   5 344 628
Liabilities carrying value
31 August 2015 (R’000)                  1 232 225 2 277 382   3 509 607
31 August 2014 (R’000)                    622 259 1 813 614   2 435 873
28 February 2015 (R’000)                  927 303 1 952 293   2 879 596
Additions to property and equipment
31 August 2015 (R’000)                      2 827    21 828      24 655
31 August 2014 (R’000)                      3 907    13 141      17 048
28 February 2015 (R’000)                    7 126    49 820      56 946
Property and equipment
31 August 2015 (R’000)                     30 120    90 804     120 924
31 August 2014 (R’000)                     19 412    63 237      82 649
28 February 2015 (R’000)                   17 532    94 893     112 425

* Normalised earnings is defined as operating profit adjusted for 
  depreciation, amortisation of intangibles, share-based payments, lease 
  smoothing,  business  establishment  and  once-off  transaction  costs 
  relating to acquisitions.
** International represents operations in Africa, Australia and Asia
   Pacific regions.
*** Relate to businesses being developed in order to address changing 
    global trends and the Group’s strategic objectives (example: ADfusion).

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 interim consolidated 
results of the Group for the period ended 31 August 2015.

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.

For the six months ended 31 August 2015

                                                 Six           Six 
                                           months to     months to
                                           31 August     31 August
                                                2015          2014      % 
                                   Note        R’000         R’000 Change
Revenue                               1    7 802 561     6 364 090     23
Cost of sales                         1   (6 586 178)   (5 346 887)   (23) 
Gross Profit                          1    1 216 383     1 017 203     20
Other income                          1       45 604        34 358     33
Administrative marketing, selling     1   (1 053 520)     (825 541)   (28)
and operating expenses
Operating profit                      1      208 467       226 020     (8) 
Adjusted for:
Depreciation                          2       16 766        15 345      9
Amortisation of intangible asset
acquired in business combination      2       37 664        28 495     32
Amortisation of intangibles other 
than those acquired in business
combination                           2        9 281         8 855      5
Share-based payments                  2       18 755        15 178     24
Lease smoothing                       2         (627)          661      - 
Transaction costs                     5       14 332         5 172      - 
Normalised EBITDA (excluding
share-based payments, and lease
smoothing)                                   304 638       299 726      2
Adjusted for:
Depreciation                          2      (16 766)      (15 345)    (9) 
Amortisation of intangibles other
than those acquired in a business
combination                           2       (9 281)       (8 855)    (5) 
Normalised operating profit                  278 591       275 526      1
Net interest paid                            (58 125)      (43 546)   (33) 
Normalised profit before taxation            220 466       231 980     (5) 
Normalised taxation                   3      (37 852)      (53 140)   (29) 
Normalised profit for the period             182 614       178 840      2
Share of profits from associates              12 740        12 248      4
Non-controlling interests                        715           526      - 
Total normalised profit for the
period                                       196 069       191 614      2
Normalised earnings per share 
(cents)                               4        180.0         191.7     (6) 
Diluted normalised earnings per
share (cents)                         4        173.6         181.3     (5)
Weighted average No of shares 
(000’s)                               1      108 905        99 954      9
Diluted weighted average No of
shares (000’s)                        1      112 933       105 698      7

Notes:
1 As per the statement of comprehensive income for the six months ended
  31 August 2015.
2 As per the statement of cash flows for the six months ended 31 August
  2015.
3 The taxation expense has been adjusted for the adjusted items above.
4 Per share calculation is based on total normalised profit.
5 Being once-off establishment and transaction costs incurred pursuant to 
  the establishment of international corporate offices and the acquisition 
  of Dare Holdings Proprietary Limited.

Unaudited statement of consolidated normalised earnings*
for the six months ended 31 August 2015
 
                                  Six          Six
                            months to    months to      Year to
                            31 August    31 August  28 February
                                 2015         2014         2015      % 
                                R’000        R’000        R’000 change
Revenue                     7 802 561    6 364 090   13 322 398     23
Cost of Sales              (6 586 178)  (5 346 887) (11 126 945)   (23) 
Gross profit                1 216 383    1 017 203    2 195 453     20
Other income                   45 604       34 358      101 895     33
Administrative, 
marketing, selling and
operating expenses         (1 053 520)    (825 541)  (1 842 361)   (28)
Operating profit              208 467      226 020      454 987     (8) 
Adjusted for:
Depreciation                   16 766       15 345       32 815      9
Amortisation of
intangible assets              46 945       37 350       80 815     26
Amortisation of                37 664       28 495       61 083     32
intangible assets – 
acquired in a business 
combination
Amortisation of 
intangibles – other than 
those acquired in a
business combination            9 281        8 855       19 732      5
Share-based payments           18 755       15 178       80 724     24
Share-based payment
expense                        13 495       35 283       64 801      – 
Revaluation of share-
based payment liability         5 260      (20 105)      15 923      –
Lease smoothing                  (627)         661          322      – 
Transaction costs              14 332        5 172       18 805      – 
Normalised EBITDA
(excluding share based
payments, lease smoothing 
and transaction costs)        304 638      299 726      668 468      2
Adjusted for:
Depreciation                  (16 766)     (15 345)     (32 815)    (9) 
Amortisation of
intangibles other than
those acquired in a
business combination           (9 281)      (8 855)     (19 732)    (5) 
Normalised operating
profit                        278 591      275 526      615 921      1
Net interest paid             (58 125)     (43 546)     (90 816)   (33) 
Normalised profit before
taxation                      220 466      231 980      525 105     (5)
Normalised taxation           (37 852)     (53 140)    (103 471)   (29) 
Normalised profit for
the period/year               182 614      178 840      421 634      2
Share of profits from
associates                     12 740       12 248       29 778      4
Non controlling interest          715          526          342      – 
Total normalised profit
for the period/year           196 069      191 614      451 754      2
Normalised earnings per
share – cents                   180,0        191,7        436,8     (6)
Diluted normalised earnings 
per share (cents)               173,6        181,3        411,5     (5) 
Weighted average no of
shares (000’s)                108 905       99 954      103 415      9
Diluted weighted average
no of shares (000’s)          112 933      105 698      109 788      7

* Normalised earnings is defined as operating profit adjusted for 
  depreciation, amortisation of intangibles, share-based payments, lease 
  smoothing, business establishment and once-off transaction costs relating 
  to acquisitions.

Comments
Overview
The interim period ended 31 August 2015 marked the introduction of the 
long awaited, sweeping changes to South African labour legislation. Of 
relevance, these new laws impacted volumes negatively in Adcorp’s core 
South African market.

Despite this, Group revenues for the period increased by 23% to R7,8 
billion due largely to the inclusion of recent acquisitions, Kelly Group 
and Dare. Despite the challenges facing the South African business, the 
Group was able to post normalised earnings before interest, tax, 
depreciation and amortisation (normalised EBITDA) of R304,6 million
which represented a modest 2% increase on the prior year’s comparable 
figure. Normalised earnings per share of 180,0 cents were 6% down on the 
prior year’s figure.

The Group’s cash performance has once again been extremely positive. In 
this regard, the Group’s cash conversion ratio was a creditable 102% 
compared to the Group’s target conversion ratio of 85%.

South Africa
The passing of the new Labour Relations Act (LRA) initially led to a high 
degree of uncertainty in the South African market resulting in a knee jerk 
reaction from a number of prominent clients.

The resultant negative impact on volumes whereby a significant number of 
contract staff were either taken on as permanent employees of the client 
or simply had their contracts of employment terminated, was far higher 
than was anticipated.

One of the reasons for this is that initially, many prominent labour 
authorities and practitioners communicated an arguably, incorrect 
interpretation of the new labour laws on broad platforms which elicited a 
negative response from employers and clients.

Their interpretation of these laws required that contract workers employed 
by Temporary Employment Service providers (TES), earning below a certain 
threshold, were deemed to be the sole and permanent employee of the client 
of the TES after an initial contracting period of three months.

In an extremely positive development and in contradiction of this 
interpretation, a recent judgement handed down by the Labour Court has 
provided clarity with regard to the employment status of contract workers.

The judge in this case ruled that the TES retains the employment contract 
after three months and that the client becomes a concurrent employer with 
the TES for the purposes of the LRA. Accordingly, both parties need to 
ensure compliance with the LRA in a co-employment relationship.

This judgement and the clarity it provides have been an extremely 
important and stabilising factor in the market.

Importantly, it is totally in accordance with Adcorp’s original
interpretation of these laws.

Subsequent to this judgement, volumes have stabilised albeit at a level 
approximately 20% lower than prior to the introduction of these revised 
labour laws.

Another reason for the sizeable decline in contractor volumes is that, in 
certain sectors, a number of employers have succumbed to intense trade 
union and political pressure to take contract workers on as permanent 
employees.

In reaction to these lower volumes, the gross profit impact of which 
literally flows directly through to the bottom line, management has 
initiated a number of decisive actions to minimise the profit impact of 
these volume losses.

This has involved major restructuring, significant cost cutting, intensive 
consultation with clients as well as offering employers alternative 
outsourced labour solutions.

These initiatives have significantly limited the bottom line impact of 
this major loss in gross profits and have resulted in a far better picture 
than would have been the case had these bold steps not been embarked upon.

The integration of the operations of Kelly Group (Kelly) is now 
essentially complete.

The white collar operations of Kelly have been similarly negatively 
affected by these changes to labour laws whilst the rest of the operations 
have been successfully absorbed into the existing operations of Adcorp.

Rest of Africa, Asia and Australia
The Group’s Australian operations have been bolstered by the recent 
acquisition of Dare in May 2015.

Paxus is performing largely in line with management expectations and has 
settled into the Group well.

IT contracting business, Paxus, has recently won some sizeable contracts 
and has seen its contractor headcount grow accordingly.

Agricultural specialist, LSA, has also recently been successful in 
increasing its contractor headcount and, although behind its half year 
targets, is currently on track to achieve its full year budget and growth 
projections.

Oil & Gas specialist, Dare, has been a valuable addition to the Group and, 
together with the Group’s African operations, positions Adcorp as a player 
of consequence in this important and skills intensive industry vertical.

Whilst contractor volumes have been tracking against budget, gross
profits have been offset by margin pressure emanating from a lower oil 
price.

The Group’s African operations which focus predominantly in the areas of 
mining, oil, gas, exploration and related infrastructure development, have 
been negatively affected by low commodity prices. Resultant lower volumes 
have, however, been substantially offset by currency translation gains.

Associate profits from Indian associate IT solutions business, Nihilent, 
in which the Group owns a 35% stake, were 4% ahead of the prior year.

The business has indicated its intention to seek an Initial Public Offer 
(IPO) on the National Stock Exchange of India which is planned for the 
second half of next year.

As previously reported, the Group has established a physical presence in 
Singapore which now serves as the hub for the Group’s international 
expansion.

Although not yet conclusive, much progress has been made in terms of 
raising capital in the Singapore entity necessary to fund the Group’s 
international growth strategy with a view to potentially listing the 
Group’s international portfolio assets in three to four years’ time.

This strategy should advantage Adcorp’s existing shareholders as it has 
the potential to unlock meaningful value from the Group’s non-South 
African assets. These currently attract a relatively low market rating 
compared to their significantly higher rated international peer group, 
possibly the result of the rating’s drag associated with uncertainty 
created by recent changes to labour legislation in South Africa.

This strategy is in line with the Group’s intended objective of becoming a 
player of consequence, focused on emerging markets and the Southern 
Hemisphere and, in particular, Africa, Asia, Australia and the Middle 
East.

General
Continued progress has been achieved in developing a cost effective and 
efficient shared service capability with the ability to service the 
Group’s operations on the same back office platform anywhere in the world.

Whilst still investing in certain aspects of this initiative, the back 
office architecture has settled down well and is starting to deliver with 
regard to economies of scale, cost control, operational efficiencies, cash 
management, procurement, enhanced corporate governance, better accounting 
and internal controls and now offers the Group a compelling strategic 
advantage.

Financial overview
Headline earnings per share of 125,2 cents are 17% lower than the 150,9 
cents per share for the comparative prior period. As described above, this 
is primarily due to the negative revenue impact emanating from clients’ 
reactions to the new legislative landscape. The first full period 
inclusion of the contribution from Kelly and the four month
inclusion of the contribution from Dare, coupled with the restructuring 
and cost cutting initiatives partially offset this negative impact of 
significantly lower volumes.

Earnings per share of 87,4 cents per share are 43% lower than the 151,3 
cents per share for the comparative period. In addition to the negative 
revenue impact referred to above, this is also attributable to the 
recognition in profit and loss of an impairment to goodwill and a loss 
on sale of business.

Given the accounting treatment of IFRS non cash flow charges to profit and 
loss, the Group has consistently disclosed that it’s 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 180,0 cents for the period ended 
31 August 2015 were 6% lower than the 191,7 cents per share for the 
comparative period. Gross profit margins declined marginally due to the 
challenging market conditions and changes in business mix.

The Group’s Normalised EBITDA margin was 3,9% (2014: 4,7%). Normalised 
EBITDA margins in the traditional blue and white collar staffing 
businesses were affected by the lower volumes while a higher expense 
ratio attributable to Kelly and a disappointing performance from our 
training division also put downward pressure on margins.

The Group’s overall normalised effective tax rate reduced to 17% (2014:
23%) mainly as a result of increased utilisation of assessed losses.

Cash management remains a continuous high priority for management and as 
such the cash conversion ratio was 102% (2014: 128%). Days settlement 
outstanding (DSO) totalled 43 days which improved from the 47 days 
reported for the previous financial year end. This result was achieved
in the context of the continued challenging collections’ environment. 
Given the improved working capital management, the overall level of 
gearing of 31% is considered to be manageable and within management’s 
expectations. During the period under review, the Group incurred a 33% 
increase in respect of net finance charges, mainly as a result of 
acquisition related funding, higher prevailing interest rates and tighter 
credit markets.

In light of a strengthened financial position, while remaining fully 
compliant with debt covenants, the Board has resolved to declare an 
interim cash dividend of 60 cents per share (2014: 60 cents per share), 
the details of which appear more fully below.

Acquisition of business
As referred to above, the acquisition of Dare was concluded with effect 
from 7 May 2015. As such, it has been included in Group profits for four 
months of this financial period. In terms of IAS 34 Interim Financial 
Reporting requirements, the profit before tax from Dare included in
Group net profit before tax for the period ended 31 August 2015 is R9,3
million after taking account of non-cash flow IFRS charges and acquisition 
related transaction costs. Had the business combination been
effective from 1 March 2015, the revenue of the Group would have been R8 
billion and net profit after tax would have totalled R97,5 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 to provide a reference point for comparison in future 
periods.

                                                     Unaudited   Audited
                                                      Aug 2015  Feb 2015
                                                         R’000     R’000
Total purchase consideration for all business
combinations                                           307 096   250 642
Less: previously held associate                              –    (1 019) 
Less: Cash and cash equivalents acquired                (9 132)  (69 596) 
Net purchase consideration for all business
combinations                                           297 964   180 027
Cash outflow on acquisition of businesses              297 964   180 027
Net proceeds from issue of shares                            –  (212 925) 
Raising of equity on acquisition                             –  (213 421) 
Capitalisation of transaction costs                          –       496
Cash outflow/(inflow) on acquisition of businesses     297 964   (32 898)

The fair value of the assets and liabilities acquired in respect of the 
various acquisitions in the year is as follows:

                                         Aug 2015             Feb 2015
                                     DARE    Other     Total     Total
                                    R’000    R’000     R’000     R’000
Property and equipment                318    3 524     3 842    10 033
Intangible assets                 154 481        –   154 481   142 530
Investment in associate                 –        –         –     1 019
Deferred taxation asset                 –   11 283    11 283    22 554
Trade and other receivables       135 597    1 949   137 546   287 410
Doubtful debts provisions               –        –         –   (19 463) 
Cash and cash equivalents           8 138      994     9 132    69 596
Interest bearing liabilities            –        –         –  (120 746) 
Trade and other payables         (130 454)  (3 405) (133 859) (158 393) 
Provisions                           (929)    (346)   (1 275)  (12 000) 
Deferred taxation liability       (28 635)       –   (28 635)        – 
Taxation                             (562)       –      (562)      478
                                  137 954   13 999   151 953   223 018
Resulting goodwill on 
acquisition/gain on bargaining
purchase                          159 142   (3 999)  155 143    27 624
Total consideration               297 096   10 000   307 096   250 642

Basis of preparation
The Group’s unaudited summary consolidated interim financial statements 
(financial results) are prepared in accordance with the requirements of 
the JSE Limited Listings Requirements for provisional reports, the 
requirements of the Companies Act applicable to summary financial 
statements, the framework, measurement and recognition requirements of
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 the requirements of IAS 34
Interim Financial Reporting. The accounting policies applied in the 
preparation of the financial results are in terms of IFRS and are 
consistent with the accounting policies applied in the preparation of the 
group’s previous consolidated interim financial statements.

The financial results have been prepared by the Group Financial Manager, 
A Viljoen (B.Comm Honours) and supervised by the Chief Financial
Officer, AM Sher (CA(SA), CFA).

Contingent liabilities and commitments
The bank has guaranteed R8,1 million (2014: R8,2 million) on behalf of the 
Group to creditors. As at the balance sheet date the Group has outstanding 
operating lease commitments totalling R145,3 million (2014: R111,4 
million) in non-cancellable property leases. The Group has IT capital 
commitments contracted for of R2,3 million (2014: R2,1 million) relating 
to the Microsoft Dynamix AX 2012 upgrade.

A client of the South African blue-collar business has indicated that they
believe they may not have been billed in accordance with the original 
client Service Level Agreement over the past three years. The client has 
indicated that they are currently conducting their own internal 
investigation into the matter, the outcome of which has not been 
concluded. As such, the client has not as yet initiated any claim
against Adcorp or any of its subsidiaries in this regard. Should such a 
claim arise, Adcorp will defend the claim.

Changes to the board of Adcorp
There were no changes to the board during the period under review.

Declaration of interim dividend
Notice is hereby given that an interim gross cash dividend of 60 cents per 
share (2014: 60 cents per share) for the interim period ended 31
August 2015 was declared on Wednesday, 21 October 2015 payable to 
shareholders recorded in the share register of the Company at the close of 
business on the record date appearing below. The salient dates pertaining 
to the interim cash dividend are as follows:

Last date to trade “cum” dividend               Friday, 27 November 2015
Date trading commences “ex” dividend            Monday, 30 November 2015
Record date                                      Friday, 4 December 2015
Date of payment                                  Monday, 7 December 2015

Ordinary share certificates may not be dematerialised or rematerialised 
between Monday, 30 November 2015 and Friday, 4 December 2015, both days 
inclusive.

Shareholders who are not exempt from the dividend withholding tax of 15% 
will therefore receive a net cash dividend of 51 cents per share. The 
Company has 109 954 675 ordinary shares in issue and its income tax 
reference number is 9233/68071/06. The source of the dividend shall be 
from distributable reserves and shall be paid in cash.
The above dates are subject to change. Any changes will be released on
SENS and published in the South African press.

Where applicable, dividends in respect of certificated shares will be 
transferred electronically to shareholders’ bank accounts on the payment 
date. In the absence of specific mandates, dividend cheques will be posted 
to shareholders at their risk. Ordinary shareholders who hold 
dematerialised shares will have their accounts at their CSDP or broker 
credited on Monday, 7 December 2015.

Events after the reporting date
Subsequent to the closure of the interim financial period ended 31
August 2015 and the date of the approval of these unaudited interim
financial statements, namely 21 October 2015, save for the payment of the 
final dividend in respect of the year ended 28 February 2015 on 
7 September 2015, no events or transactions took place subsequent to the
reporting date.

Outlook and prospects
In South Africa, a downturn in the commodities cycle, electricity supply 
constraints, onerous immigration and visa requirements as well as 
restrictive new labour laws all contribute to an extremely challenging 
employment environment.

Against this background, stability seems to be creeping back into the TES 
market and, all things considered, the Group has weathered an extremely 
difficult storm reasonably well.

Whilst trading conditions in the core South African market are expected to 
remain challenging for some time, the South African business has recently 
been buoyed by a number of positive developments. 

The strategy to diversify internationally has certainly paid off as has 
the Group’s decisive cost, efficiency and market response to the reality 
of lower volumes in the South African TES business.

Despite these headwinds, South Africa remains a key and important market 
for the Group given the scale advantage it provides, the exportable 
industry knowledge and competitive know-how generated in this market,
the strong position the Group commands in South Africa and the many market 
opportunities that still exist despite an overall sluggish employment 
market.

The recent favourable Labour Court ruling with regard to the 
interpretation of the LRA has also brought much needed clarity and 
stability to the South African market and has consequently improved the 
Group's prospects.

The Group’s international strategy holds much promise. Significant 
progress has been made in the establishment and resourcing of this 
strategy which has the potential to unlock meaningful value for Adcorp’s 
shareholders in future.

Management’s attention remains focused on progressing the Group’s 
international strategy, bedding down the Dare acquisition, promoting 
inter-Group cross-selling opportunities, further enhancing cost and 
operational efficiencies. Management is also focused on minimising the
negative volume impact of the revised South African labour laws, further 
enhancing cash collections and optimising margin management.

This general forecast has not been reviewed or reported on by the
Group’s auditors.

By order of the board
MJN Njeke   RL Pike                    AM Sher
Chairman    Chief Executive Officer    Chief Financial Officer
21 October 2015

Corporate information
Executive directors
RL Pike (Chief Executive Officer), BE Bulunga, AM Sher, PC Swart

Non-executive directors
GP Dingaan, NS Ndhlazi, MR Ramaite

Independent non-executive directors
MJN Njeke (Chairman), SN Mabaso-Koyana, ME Mthunzi, TDA Ross, MW Spicer

Alternate non-executive directors
C Maswanganyi, N Sihlangu

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
Website: www.adcorp.co.za

Registration number 1974/001804/06

Company Secretary
KH Fihrer

Transfer secretaries
Link Market Services SA (Pty) Ltd
Rennie House
13th Floor
19 Ameshoff Street
Braamfontein
2001

Sponsor
Deloitte & Touche Sponsor Services (Pty) Ltd
Building 8, Deloitte Place
The Woodlands
20 Woodlands Drive
Woodmead, Sandton
2196
Date: 21/10/2015 12:46:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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