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WORKFORCE HOLDINGS LIMITED - Unaudited Condensed Interim Financial Results for the Six Months Ended 30 June 2016

Release Date: 24/08/2016 07:30
Code(s): WKF     PDF:  
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Unaudited Condensed Interim Financial Results for the Six Months Ended 30 June 2016

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 2016

Highlights
- Revenue increased by 32% from 2015.
- EBITDA increased by 70% from 2015.
- Headline earnings per share ("HEPS") increased by 45% to 17,7 cents, and earnings 
  per share ("EPS") increased by 48% to 18,0 cents.
- Diluted earnings per share increased by 48% to 17,2 cents.
- Net asset value per share increased to 175 cents.

Condensed consolidated statement of comprehensive income
for the six months ended 30 June 2016

                                                      Six months  Six months                Year to
                                                      to 30 June  to 30 June  Increase/ 31 December
                                                            2016        2015 (decrease)        2015
                                                Notes      R'000       R'000         %        R'000
Revenue                                             8  1 192 824     904 594      31,8    1 949 771
Cost of sales                                           (904 024)   (696 306)     29,8   (1 494 934)
Gross profit                                             288 800     208 288      38,7      454 837
Other income                                                   -       1 000                  1 700
Operating costs                                         (222 865)   (170 418)     30,8     (349 951)
Earnings before impairment, depreciation,
amortisation, interest and taxation ("EBITDA")            65 935      38 870      69,6      106 586
Depreciation and amortisation of 
non-financial assets                                      (8 008)     (5 673)     41,2      (12 910)
Operating profit                                    8     57 927      33 197      74,5       93 676
Finance income                                               308         978     (68,5)         297
Finance costs                                            (13 789)     (8 025)     71,8      (17 250)
Profit before taxation                                    44 446      26 150      69,9       76 723
Taxation (expense)/credit                           9     (3 811)      2 008                    758
Profit for the period                                     40 635      28 158      44,3       77 481
Other comprehensive (loss)/income for the period             (46)      1 200                    917
Fair value (losses)/gains on available-for-sale
financial assets to be reclassified subsequently
to profit or loss                                            (46)      1 200                    917
Total comprehensive income for the period                 40 589      29 358                 78 398
Profit for the period attributable to:
Owners of the parent                                      40 671      27 524                 76 785
Non-controlling interests                                    (36)        634                    696
                                                          40 635      28 158                 77 481
Total comprehensive income attributable to:
Owners of the parent                                      40 625      28 724                 77 702
Non-controlling interests                                    (36)        634                    696
                                                          40 589      29 358                 78 398
Earnings per share (cents)                          10
Basic                                                       18,0        12,2                   34,1
Diluted                                                     17,2        11,6                   32,5

Condensed consolidated statement of financial position
at 30 June 2016

                                                           Six months     Six months        Year to
                                                           to 30 June     to 30 June    31 December
                                                                 2016           2015           2015
                                                  Notes         R'000          R'000          R'000
Assets
Non-current assets                                            198 156        114 579        152 097
Property, plant and equipment                         5        17 318          8 451         15 176
Goodwill                                              6       102 287         41 280         62 501
Intangible assets                                     7        40 953         23 991         32 911
Deferred tax assets                                            34 711         37 641         38 576
Other financial assets                                          2 887          3 216          2 933
Current assets                                                671 126        460 562        535 436
Trade and other receivables                                   638 609        449 774        517 788
Inventories                                                     4 264          3 076          4 111
Taxation                                                            -              -            447
Cash and cash equivalents                                      28 253          7 712         13 090
Total assets                                                  869 282        575 141        687 533
Equity and liabilities                                                                 
Equity                                                        395 498        301 981        354 247
Share capital and premium                                     241 867        236 867        241 867
Treasury shares                                                (8 748)        (7 616)        (9 488)
Reverse acquisition reserve                                  (125 499)      (125 499)      (125 499)
Available for sale reserve                                        640            969            686
Equity-settled employee benefits reserve                        1 158          1 208          1 659
Retained earnings                                             285 721        195 789        245 050
Equity attributable to owners of the parent                   395 139        301 718        354 275
Non-controlling interests                                         359            263            (28)
Non-current liabilities                                        77 197         14 026         34 791
Financial liabilities                                          66 581          8 529         24 076
Deferred tax liabilities                                       10 616          5 497         10 715
Current liabilities                                           396 587        259 134        298 495
Trade and other payables                                      142 630         89 785         88 480
Financial liabilities                                         251 379        169 108        209 989
Taxation                                                        2 578            236              -
Bank overdrafts                                                     -              5             26
Total equity and liabilities                                  869 282        575 141        687 533

Condensed consolidated statement of changes in equity
for the six months ended 30 June 2016

                                                              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 2016                                       241 867      (125 499)       (9 488)
Recognition of share-based payments                                   -             -             -
Issue of ordinary shares under employee share option plan             -             -           740
Additional non-controlling interest arising on the                   
acquisition of a business                                             -             -             -
Total comprehensive income for the period                             -             -             -
Balance at 30 June 2016                                         241 867      (125 499)       (8 748)
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 2015                                       236 867      (125 499)       (7 616)
Payment of dividends                                                  -             -             -
Recognition of share-based payments                                   -             -             -
Buy-back of shares                                                    -             -        (1 872)
Issue of ordinary shares arising on the acquisition                  
of a business                                                     5 000             -             -
Total comprehensive income for the year                               -             -             -
Balance at 31 December 2015                                     241 867      (125 499)       (9 488)

Condensed consolidated statement of changes in equity
for the six months ended 30 June 2016

                                                               Attributable to owners of the parent
                  
                                                                                            Equity-
                                                                                            settled
                                                             Available-                    employee
                                                               for-sale      Retained      benefits
                                                                reserve      earnings       reserve
                                                                  R'000         R'000         R'000
Balance at 1 January 2016                                           686       245 050         1 659
Recognition of share-based payments                                   -             -           357
Issue of ordinary shares under employee share option plan             -             -          (858)
Additional non-controlling interest arising on the                              
acquisition of a business                                             -             -             -
Total comprehensive income for the period                           (46)       40 671             -
Balance at 30 June 2016                                             640       285 721         1 158
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 2015                                          (231)      168 265           898
Payment of dividends                                                  -             -             -
Recognition of share-based payments                                   -             -           761
Buy-back of shares                                                    -             -             -
Issue of ordinary shares arising on the acquisition of                           
a business                                                            -             -             -
Total comprehensive income for the year                             917        76 785             -
Balance at 31 December 2015                                         686       245 050         1 659

Condensed consolidated statement of changes in equity
for the six months ended 30 June 2016
                                                                                 Non-
                                                                          controlling
                                                                  Total      interest         Total
                                                                  R'000         R'000         R'000
Balance at 1 January 2016                                       354 275           (28)      354 247
Recognition of share-based payments                                 357             -           357
Issue of ordinary shares under employee share option plan          (118)            -          (118)
Additional non-controlling interest arising on the 
acquisition of a business                                             -           423           423
Total comprehensive income for the period                        40 625           (36)       40 589
Balance at 30 June 2016                                         395 139           359       395 498
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 2015                                       272 684          (371)      272 313
Payment of dividends                                                  -          (353)         (353)
Recognition of share-based payments                                 761             -           761
Buy-back of shares                                               (1 872)            -        (1 872)
Issue of ordinary shares arising on the acquisition 
of a business                                                     5 000             -         5 000
Total comprehensive income for the year                          77 702           696        78 398
Balance at 31 December 2015                                     354 275           (28)      354 247

Condensed consolidated statement of cash flows
for the six months ended 30 June 2016

                                                               Six months   Six months      Year to
                                                               to 30 June   to 30 June  31 December
                                                                     2016         2015         2015
                                                         Note       R'000        R'000        R'000
Cash generated from operations before net working 
capital changes                                                    51 505       31 899       88 638
Cash generated from operations                           14.1      64 314       38 870      104 899
Finance income                                                        308          978          297
Finance costs                                                     (12 076)      (8 025)     (17 250)
Taxation paid                                                      (1 041)          76          692
Increase in net working capital                          14.2     (43 889)      (3 748)     (66 067)
Cash flows from operating activities                                7 616       28 151       22 571
Cash flows from investing activities                              (33 587)      (7 369)     (26 098)
Property, plant and equipment acquired -                                    
maintaining operations                                      6      (3 050)      (3 209)      (6 929)
Proceeds on disposal of property, plant and equipment                 210            -        1 562
Dividend income                                                         -            -        1 700
Intangible assets acquired - maintaining operations         7      (3 815)      (4 160)      (7 791)
Net cash flow on acquisition of business combinations      15     (26 932)           -      (14 640)
Cash flows from financing activities                               41 160      (23 395)       6 271
Increase/(repayment) of borrowings                                 40 420      (23 395)       8 496
Payment for buy-back of share costs                                   740            -       (1 872)
Dividends paid                                                          -            -         (353)
Net change in cash and cash equivalents                            15 189       (2 613)       2 744
Cash and cash equivalents at the beginning of the period           13 064       10 320       10 320
Cash and cash equivalents at the end of the period                 28 253        7 707       13 064

Notes to the condensed consolidated interim financial statements
for the six months ended 30 June 2016

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 unaudited condensed interim financial results are presented in South African rands ("ZAR"), 
    which is the functional currency of the parent company.
    
    The unaudited condensed interim financial results were approved for issue by the board of 
    directors of Workforce ("the Board") on 24 August 2016.
    
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 unaudited condensed interim financial results for the six months ended 30 June 2016 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 2015.
    
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 unaudited condensed interim financial results have not been audited nor reviewed by the 
    group's auditors.
    
                                                         Motor    Computer   Industrial      Office
                                                      vehicles   equipment    equipment   equipment
                                                         R'000       R'000        R'000       R'000
5.  Property, plant and equipment    
    Six months to 30 June 2016
    Carrying amount at 1 January 2016                    3 393       2 524        2 026       1 361
    Additions                                                4       1 525          373       1 116
    Disposals                                             (236)        (66)           -           -
    Acquired through business combination                1 311          28           52          58
    Depreciation                                          (461)       (862)        (314)       (341)
    Carrying amount at 30 June 2016                      4 011       3 149        2 137       2 194
    Six months to 30 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
    Year to 31 December 2015                            
    Carrying amount at 1 January 2015                    2 105       1 865          463       1 263
    Additions                                            1 668       2 251        1 975         916
    Disposals                                             (570)       (225)           -         (14)
    Acquired through business combination                1 212          35            -          33
    Depreciation                                        (1 022)     (1 402)        (412)       (837)
    Carrying amount at 31 December 2015                  3 393       2 524        2 026       1 361
   
                                                     Leasehold    Training     Land and
                                                  improvements     manuals    buildings       Total
                                                         R'000       R'000        R'000       R'000
5.  Property, plant and equipment                                             
    Six months to 30 June 2016                                                
    Carrying amount at 1 January 2016                      183       2 989        2 700      15 176
    Additions                                                7          25            -       3 050
    Disposals                                                -           -            -        (302)
    Acquired through business combination                    -           -            -       1 449
    Depreciation                                           (47)        (30)           -      (2 055)
    Carrying amount at 30 June 2016                        143       2 984        2 700      17 318
    Six months to 30 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
    Year to 31 December 2015                                                  
    Carrying amount at 1 January 2015                      227       1 129            -       7 052
    Additions                                               78          41            -       6 929
    Disposals                                                -           -            -        (809)
    Acquired through business combination                    -       3 030        2 700       7 010
    Depreciation                                          (122)     (1 211)           -      (5 006)
    Carrying amount at 31 December 2015                    183       2 989        2 700      15 176
 
                                                                                              R'000
6.  Goodwill    
    Six months to 30 June 2016
    Carrying amount at 1 January 2016                                                        62 501
    Acquired through business combinations (refer to note 15)                                39 786
    Carrying amount at 30 June 2016                                                         102 287
    Six months to 30 June 2015
    Carrying amount at 1 January 2015                                                        41 280
    Acquired through business combinations                                                        -
    Carrying amount at 30 June 2015                                                          41 280
    Year to 31 December 2015
    Carrying amount at 1 January 2015                                                        41 280
    Acquired through business combinations                                                   21 221
    Carrying amount at 31 December 2015                                                      62 501 
 
                                                                                             Client
                                                                  Computer                relation-
                                                                  software       Brands       ships
                                                                     R'000        R'000       R'000
7.  Intangible assets
    Six months to 30 June 2016
    Carrying amount at 1 January 2016                               16 555        1 800       9 078
    Acquired through business combinations                               -            -      10 180
    Additions                                                        1 385            -           -
    Amortisation                                                    (3 257)        (535)     (2 161)
    Carrying amount at 30 June 2016                                 14 683        1 265      17 097
    Six months to 30 June 2015                                    
    Carrying amount at 1 January 2015                               18 297        2 870           -
    Additions                                                          878            -           -
    Amortisation                                                    (3 328)        (535)          -
    Carrying amount at 30 June 2015                                 15 847        2 335           -
    Year to 31 December 2015                                      
    Carrying amount at 1 January 2015                               18 297        2 870           -
    Acquired through business combinations                               -            -       9 330
    Additions                                                        4 840            -           -
    Amortisation                                                    (6 582)      (1 070)       (252)
    Carrying amount at 31 December 2015                             16 555        1 800       9 078

                                                                                Work in
                                                                               progress       Total
                                                                                  R'000       R'000
7.  Intangible assets
    Six months to 30 June 2016
    Carrying amount at 1 January 2016                                             5 478      32 911
    Acquired through business combinations                                            -      10 180
    Additions                                                                     2 430       3 815
    Amortisation                                                                      -      (5 953)
    Carrying amount at 30 June 2016                                               7 908      40 953
    Six months to 30 June 2015
    Carrying amount at 1 January 2015                                             2 527      23 694
    Additions                                                                     3 282       4 160
    Amortisation                                                                      -      (3 863)
    Carrying amount at 30 June 2015                                               5 809      23 991
    Year to 31 December 2015
    Carrying amount at 1 January 2015                                             2 527      23 694
    Acquired through business combinations                                            -       9 330
    Additions                                                                     2 951       7 791
    Amortisation                                                                      -      (7 904)
    Carrying amount at 31 December 2015                                           5 478      32 911
 
8.  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 businesses and their employees 
      across all industry sectors. Our training programmes are aligned with South African 
      Qualifications Authority ("SAQA") and accredited with Sector Education and Training Authority 
      ("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:
                                                                                     Financial and
                                                       Staffing and   Training and       Lifestyle
                                                        Recruitment     Consulting        Products
                                                              R'000          R'000           R'000
    Six months to June 2016                          
    Segment revenues                                      1 006 316         47 830          43 343
    Inter-segment revenues                                        -          6 026               -
    Cost of sales                                          (794 696)       (18 531)        (15 615)
    Operating costs                                        (125 943)       (23 504)        (22 671)
    EBITDA                                                   85 677         11 821           5 057
    Depreciation and amortisation                    
    of non-financial assets                                  (1 610)          (449)         (1 174)
    Segment operating profit                                 84 067         11 372           3 883
    Capital expenditure                                      12 260            104           1 684
    Segment total assets                                    396 782         81 305         189 105
    Segment total liabilities                               (51 120)       (52 948)       (188 901)
    Net segment assets                                      345 662         28 357             204
    Six months to June 2015                          
    Segment revenues                                        772 039         23 581          32 709
    Cost of sales                                          (607 873)       (12 545)         (9 248)
    Operating costs                                        (101 771)        (9 702)        (17 926)
    Other income                                                  -              -           1 000
    EBITDA                                                   62 395          1 334           6 535
    Depreciation and amortisation of                 
    non-financial assets                                     (1 400)          (338)         (1 296)
    Segment operating profit                                 60 995            996           5 239
    Capital expenditure                                       1 135            104           1 684
    Segment total assets                                    251 975          6 835         154 746
    Segment total liabilities                               (44 201)       (18 144)       (137 155)
    Net segment assets/(liabilities)                        207 774        (11 309)         17 591
    Year to 31 December 2015                         
    Segment revenues                                      1 665 232         48 210          69 710
    Inter-segment revenues                                        3          5 969           9 414
    Cost of sales                                        (1 314 678)       (23 606)        (21 855)
    Inter-segment cost of sales                                   -              -          (6 778)
    Operating costs                                        (213 790)       (26 693)        (37 093)
    Other income                                              1 700              -               -
    EBITDA                                                  138 467          3 880          13 398
    Depreciation and amortisation                    
    of non-financial assets                                  (2 799)          (741)         (2 622)
    Segment operating profit                                135 668          3 139          10 776
    Capital expenditure                                       2 084         17 059           3 343
    Segment total assets                                    311 680         76 034         166 435
    Segment total liabilities                               (18 873)       (62 162)       (174 910)
    Net segment assets/(liabilities)                        292 807         13 872          (8 475)

8.  Segment analysis (continued)
    Revenues, profit, assets and liabilities generated for each of the group's business segments 
    are summarised as follows:
                                                           Employee
                                                             Health        Process         Central
                                                         Management    Outsourcing            cost
                                                              R'000          R'000           R'000
    Six months to June 2016
    Segment revenues                                         19 856         75 479               -
    Inter-segment revenues                                        -              -               -
    Cost of sales                                            (6 472)       (68 710)              -
    Operating costs                                         (11 961)        (4 142)        (40 670)
    EBITDA                                                    1 423          2 627         (40 670)
    Depreciation and amortisation of 
    non-financial assets                                       (444)           (48)         (2 280)
    Segment operating profit                                    979          2 579         (42 950)
    Capital expenditure                                       1 921              7           2 518
    Segment total assets                                      3 523         28 633         169 934
    Segment total liabilities                                (2 778)       (21 078)       (156 959)
    Net segment assets                                          745          7 555          12 975
    Six months to June 2015
    Segment revenues                                         17 375         60 480               -
    Cost of sales                                            (7 221)       (59 419)              -
    Operating costs                                          (8 989)        (3 656)        (29 964)
    Other income                                                  -              -               -
    EBITDA                                                    1 165         (2 595)        (29 964)
    Depreciation and amortisation of 
    non-financial assets                                       (284)           (33)         (2 322)
    Segment operating profit                                    881         (2 628)        (32 286)
    Capital expenditure                                       1 921              7           2 518
    Segment total assets                                     12 419         24 298         124 868
    Segment total liabilities                                (7 432)       (22 863)        (43 365)
    Net segment assets/(liabilities)                          4 987          1 435          81 503
    Year to 31 December 2015
    Segment revenues                                         36 591        130 028               -
    Inter-segment revenues                                        -              -               -
    Cost of sales                                           (14 915)      (119 880)              -
    Inter-segment cost of sales                                   -              -               -
    Operating costs                                         (18 894)        (7 306)        (54 783)
    Other income                                                  -              -               -
    EBITDA                                                    2 782          2 842         (54 783)
    Depreciation and amortisation of 
    non-financial assets                                       (671)           (93)         (5 984)
    Segment operating profit                                  2 111          2 749         (60 767)
    Capital expenditure                                       2 251             46           6 277
    Segment total assets                                      3 208         17 152         113 024
    Segment total liabilities                                (2 776)       (16 692)        (57 873)
    Net segment assets/(liabilities)                            432            460          55 151

8.  Segment analysis (continued)
    Revenues, profit, assets and liabilities generated for each of the group's business segments 
    are summarised 
    as follows:
                                                                      Consolidation
                                                                            entries          Total
                                                                              R'000          R'000
    Six months to June 2016                                                              
    Segment revenues                                                              -      1 192 824
    Inter-segment revenues                                                   (6 026)             -
    Cost of sales                                                                 -       (904 024)
    Operating costs                                                           6 026       (222 865)
    EBITDA                                                                        -         65 935
    Depreciation and amortisation of non-financial assets                    (2 003)        (8 008)
    Segment operating profit                                                 (2 003)        57 927
    Capital expenditure                                                           -         18 494
    Segment total assets                                                          -        869 282
    Segment total liabilities                                                     -       (473 784)
    Net segment assets                                                            -        395 498
    Six months to June 2015                                                              
    Segment revenues                                                         (1 590)       904 594
    Cost of sales                                                                 -       (696 306)
    Operating costs                                                           1 590       (170 418)
    Other income                                                                  -          1 000
    EBITDA                                                                        -         38 870
    Depreciation and amortisation of non-financial assets                         -         (5 673)
    Segment operating profit                                                      -         33 197
    Capital expenditure                                                           -          7 369
    Segment total assets                                                          -        575 141
    Segment total liabilities                                                     -       (273 160)
    Net segment assets/(liabilities)                                              -        301 981
    Year to 31 December 2015                                                             
    Segment revenues                                                              -      1 949 771
    Inter-segment revenues                                                  (15 386)             -
    Cost of sales                                                                 -     (1 494 934)
    Inter-segment cost of sales                                               6 778              -
    Operating costs                                                           8 608       (349 951)
    Other income                                                                  -          1 700
    EBITDA                                                                        -        106 586
    Depreciation and amortisation of non-financial assets                         -        (12 910)
    Segment operating profit                                                      -         93 676
    Capital expenditure                                                           -         31 060
    Segment total assets                                                          -        687 533
    Segment total liabilities                                                     -       (333 286)
    Net segment assets/(liabilities)                                              -        354 247

9.  Taxation
    The effective tax rate of 8,6% (2015: [7,7%]) for the period was based on the anticipated 
    weighted 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
                                                                   2016         2015          2015
10. Earnings per share                                                                
    Basic earnings per share                                                          
    Profit attributable to equity shareholders of the                                 
    parent company (R'000)                                       40 671       27 524        76 785
    Weighted average number of shares in issue ('000)           228 534      225 630       225 328
    Diluted weighted average number of shares in issue ('000)   222 208      236 514       236 619
    Basic earnings per share (cents)                               18,0         12,2          34,1
    Diluted earnings per share (cents)                             17,2         11,6          32,5
    Headline earnings per share                                                       
    The earnings used in the calculation of headline                                  
    earnings per share are as follows:                                                
    Profit after taxation (R'000)                                40 671       27 524        76 785
    Headline earnings adjustment (R'000)                           (217)           -        (1 806)
    - (Gain) on disposal of property, plant and equipment          (302)           -          (809)
    - Gain on bargain purchase                                        -            -        (1 700)
    - Tax effect of adjustments                                      85            -           703
    Total headline earnings (R'000)                              40 453       27 524        74 979
    Weighted average number of shares in issue ('000)           228 534      225 630       225 328
    Headline earnings per share (cents)                            17,7         12,2          33,3
 
11. Dividends
    No dividend was declared relating to the period under review.
 
12. 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.

13. Changes to the Board
    Ms Lulu Letlape resigned on 1 June 2016 as an Independent Non-Executive Director and member 
    of the Audit and Risk Committee as well as the Social and Ethics Committee with effect from 
    31 May 2016. The Board are in the process of finding a suitable replacement and shareholders 
    will be advised once an appointment has been made.
 
    As announced on SENS on 26 July 2016, Mr Philip Froom was appointed as Chief Executive Officer 
    with effect from 15 August 2016. Following Mr Froom's appointment to the Board:
    - Mr Ronny Katz will no longer serve as acting Chief Executive Officer and will resume his 
      role as Executive Chairman of the Board and;
    - Mr John Macey will cease acting as Chairman of the Board and he will resume his role as lead
      independent director and Chairperson of the Audit and Risk Committee; and
    - Ms Kyansambo Vundla will cease acting as Chairperson of the Audit and Risk Committee and 
      she will resume her role as Independent Non-Executive Director and member of the Audit and 
      Risk Committee.
   
                                                           Six months    Six months        Year to
                                                           to 30 June    to 30 June    31 December
                                                                 2016          2015           2015
14.  Notes to the condensed consolidated statement 
     of cash flows
     14.1    Cash generated from operations
             Profit before taxation                            44 446        26 150         76 723
             Interest and dividend income                        (308)         (978)        (1 997)
             Finance costs                                     12 076         8 025         17 250
             Adjustment for non-cash items:
             Loss/(gain) on disposal of property, plant 
             and equipment                                         92             -           (809)
             Depreciation and amortisation of 
             non-financial assets                               8 008         5 673         12 910
             Equity-settled share-based payments                    -             -            761
             Other                                                  -             -             61
                                                               64 314        38 870        104 899
     14.2    Working capital changes
             Change in trade and other receivables            (80 896)       (9 735)       (69 404)
             Change in inventories                               (153)            9         (1 026)
             Change in share-based payment                       (501)          310              -
             Change in trade and other payables                37 661         5 668          4 363
                                                              (43 889)       (3 748)       (66 067)
                                                               
                                                                         Portion of
                                                                           business
                                                              Date of      acquired
                                                          acquisition             %          R'000
15.  Business combinations
     15.1.1  Business acquired
             Quyn Group                               1 February 2016           100         76 851
             Principal activity
             Provision of outsourced human resources ("HR") services including 
             Temporary Employment Services ("TES"), HR outsourcing, payroll bureau 
             services, HR and industrial relations ("IR") consulting and permanent 
             placements. 
    
             The Quyn Group was acquired to give Workforce an increased presence in 
             the provision of outsourced technical skills. The entities comprising 
             the Quyn Group are Quyn International Outsourcing Proprietary Limited, 
             Molapo Quyn Outsourcing Proprietary Limited, Sizuluntu Staffing 
             Solutions Proprietary Limited, Quyn Payroll Services Proprietary Limited 
             and Quyn HR Consulting Proprietary Limited.
    
     15.1.2  Consideration transferred
             Cash                                                                           38 101
             Contingent consideration arrangement                                           38 750
             Total                                                                          76 851
     
     15.1.3  Contingent consideration
             Third payment                                                                   6 250
             Fourth payment                                                                  6 250
             Fifth payment                                                                  18 750
             Sixth payment                                                                   7 500
             Total additional amount                                                        38 750
    
             Under the contingent consideration arrangement, the group is required 
             to pay the balance of R38,75 million in 4 installments over a 19 month 
             period commencing from 1 August 2016. The third, fourth, fifth and sixth 
             payments fall due on 1 August 2016, 1 November 2016, 1 February 2017, 
             and 1 February 2018 respectively.

     15.1.4  Assets acquired and liabilities recognised at the date of acquisition
             Non-current assets
             Property, plant and equipment                                                   1 421
             Intangible assets                                                               6 180
             Current assets
             Trade and other receivables                                                    39 909
             Cash and cash equivalents                                                      11 169
             Current tax                                                                     1 074
             Equity
             Non-controlling interest                                                         (423)
             Current liabilities                                                              
             Trade and other payables                                                      (16 489)
             Taxation payable                                                               (2 245)
             Deferred tax liability                                                         (1 730)
             Financial liability                                                            (1 148)
             Total                                                                          37 718
    
             The receivables acquired (principally trade receivables) in this 
             transaction with fair value of R39 909 000 is equivalent to the gross 
             contractual amount. All contractual cash flows are expected to 
             be collected.
    
     15.1.5  Net cash outflow on acquisition of subsidiaries
             Consideration paid in cash                                                     38 101
             Less: Cash and cash equivalent balance acquired                               (11 169)
             Total                                                                          26 932
             Goodwill arising on acquisition
             Consideration transferred                                                      76 851
             Less: Fair value of identifiable net assets                                   (37 718)
             Goodwill arising on acquisition                                                39 133
    
             Goodwill arose on the acquisition of The Quyn Group because the cost of the 
             combination included a control premium. In addition, the consideration paid for the 
             combination effectively included amounts in relation to the benefit of expected 
             synergies, revenue growth and future market share. These benefits are not recognised 
             separately from goodwill because they do not meet the recognition criteria for 
             identifiable intangible assets. The intangible asset attributable to this business 
             combination comprises of client relationships. None of the goodwill arising in the
             above acquisition is expected to be deductible for tax purposes.
    
     15.1.6  Impact of acquisitions on results of the group.
             Included in the profit for the year is R2,6 million, attributable to the additional 
             business generated by the Quyn Group. Revenue for the period includes R93 million in 
             respect of the Quyn Group.
             
                                                                         Portion of
                                                                           business
                                                              Date of      acquired
                                                          acquisition             %          R'000
     15.2.1  Business acquired
             Gcubed Boutique Recruitment                   1 May 2016           100          3 900
             Principal activity
             Gcubed is a boutique permanent placement recruitment business that also
             provides executive search services
             Gcubed was acquired to give Workforce an increased presence in the
             permanent placement recruitment sector of outsourcing.
     
     15.2.2  Consideration transferred
             Cash                                                                            2 500
             Contingent consideration arrangement                                            1 400
             Total                                                                           3 900
    
             The cash component above was paid on 5 August 2016. Under the
             contingent consideration arrangement, the group is required to pay up to
             R1,4 million at the end of a one-year period commencing from 1 May
             2016, subject to the achievement of PAT of between R714 000 and R1 500
             000 during this period. The PBIT for the 12-month period ending 29
             February 2016 was R998 000, and the directors do consider it probable
             that the additional payments will be required.

     15.2.3  Contingent consideration
             Second payment                                                                  1 400
             Total additional amount                                                         1 400
    
     15.2.4  Assets acquired and liabilities recognised at the date of acquisition
             Non-current assets                                                             
             Property, plant and equipment                                                      28
             Intangible assets                                                               4 000
             Current assets
             Trade and other receivables                                                       340
             Current liabilities
             Deferred tax liability                                                         (1 121)
             Total                                                                           3 247
    
     15.2.5  Net cash outflow on acquisition of subsidiaries
             Consideration paid in cash                                                          -
             Less: Cash and cash equivalent balance acquired                                     -
             Total                                                                               -
             Goodwill arising on acquisition
             Consideration transferred                                                       3 900
             Less: Fair value of identifiable net assets                                    (3 247)
             Goodwill arising on acquisition                                                   653
    
             The intangible asset attributable to this business combination comprises continuing 
             client relationships which are underpinned by restraint of trade agreements in place 
             with key Gcubed staff. The remaining differential in purchase price and identifiable 
             tangible and intangible assets has been ascribed to goodwill. This goodwill is not 
             deductible for tax purposes.

Directors' commentary
Turnover for the six-month period under review reflects an increase of 32% to R1,12 billion (2015: 
R905 million). Nineteen percentage points of this increase is attributable towards organic growth 
whilst the remainder of the increase is due to the two acquisitions, Prisma Training Solutions 
Proprietary Limited ("Prisma Training Solutions") effective 1 October 2015, and the Quyn group of 
companies, effective 1 February 2016. A smaller acquisition, Gcubed, was made towards the end of 
the reporting period, but did not have a material impact on the results.

The organic growth is mainly attributable to the staffing and recruitment business which has been 
able to build on momentum gained towards the end of the 2015 financial year. This growth is driven 
by a broad-based improvement in turnover across all regions and especially buoyed by the group's 
continued involvement in energy and telecommunication-related infrastructure projects. The training, 
financial and lifestyle, employee health management and process outsourcing segments all made 
positive contributions and contributed to growth in earnings.

Gross margins improved to 24,2% (2015: 23,0%), primarily due to the acquisition of Prisma Training 
Solutions which operates in the high margin training space, as well as slightly higher margins in 
the staffing and recruitment business.

The employment tax incentive remains a contributor to the group's results, albeit at lower levels 
than 2015.

Whilst the possibility of extending this incentive has been raised in the recent budget speech, 
it may be discontinued as from the end of 2016. Strategies are in place to replace this 
income stream.

Total operating expenses as a percentage of total turnover is flat at 18,6% (2015: 18,8%). 
Management is of the opinion that operating expenses are too high compared to the industry and 
efforts continued to be made to reduce this, including further unlocking of organisational and 
technological opportunities.

Prisma Training Solutions, acquired effective 1 October 2015, performed to expectation, as 
mirrored by the training segment results. The Quyn group of companies, acquired effective 
1 February 2016, whilst still contributing positively, had a slow start as bigger projects they 
are involved in, will only take off during the second half of the financial year.

EBITDA increased by 69,6% to R65,9 million (2015: R38,9 million) resulting in EBITDA to sales 
of 5,5% (2015: 4,3%).

An increase in depreciation and amortisation costs to R8,0 million (2015: R5,7 million), is 
almost exclusively due to the amortisation of intangible assets, derived from the 
two acquisitions.

Net finance costs increased to R13,5 million (2015: R7,0 million). R3,4 million of this amount 
reflects imputed interest as a result of acquisitions made. The differential is due to the 
increase in the prime lending rate from the previous year as well as slightly higher levels of 
borrowings as a result of funding acquisitions. In spite of this, the interest cover ratio 
improved to 5,1 (2015: 4,5).

Earnings per share increased by 48% to 18,0 cents (2015: 12,2 cents), and headline earnings per 
share increased by 45% to 17,7 cents.

The increase in goodwill and intangible assets is mostly due to the acquisition of the Quyn 
group of companies effective 1 February 2016.

The substantial increase in trade and other receivables also reflects the Quyn acquisition. 
Days sales outstanding ("DSO") has, however, deteriorated from 45 days in December 2015 to 
49 days as at the reporting date. This reflects an increase in debtor levels typical of 
infrastructure projects, and the tougher collection environment. In spite of this the net overdue 
book over 90 days still reflects 8% of the total which is in line with December 2015.

Included in non-current and current liabilities are amounts due to sellers of the acquired 
companies to the value of R62 million which is payable between reporting date and the 2018 
financial year.

The relatively low cash flows generated from operating activities is indicative of the higher 
DSO as described above, but also the growth in turnover during the last couple of months of the 
reporting period. Debtor management remains a key priority for management.

Looking forward
The group expects the current momentum in the business to be maintained throughout the second 
half of the financial year, albeit from a higher base established during the fourth quarter 
of 2015. Consideration should also be given to the fact that the temporary employment industry 
typically performs better during the second half of the calendar year due to seasonal factors. 
Philip Froom was appointed Chief Executive Officer with effect from 15 August and we look forward 
to his contributions to the group.

For and on behalf of the Board

RS Katz 
Chairman 

WP van Wyk
Group Financial Director

Johannesburg
24 August 2016

Executive directors
RS Katz
PM Froom
WP van Wyk

Non-executive directors
NM Anderson
JR Macey
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

www.workforce.co.za
Date: 24/08/2016 07:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
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