Wrap Text
Summarised consolidated results for the year ended 28 February 2021
Adcorp Holdings Limited
Incorporated in the Republic of South Africa
Registration number: 1974/001804/06
Share code: ADR
ISIN: ZAE000000139
("Adcorp" or "Adcorp Group" or "the Group")
SHORT FORM ANNOUNCEMENT
Summarised consolidated results for the year ended 28 February 2021
SALIENT HIGHLIGHTS
• Revenue from continuing operations decreased by 9.3% to R11,7 billion (2020: R12,9
billion)*
• Operating profit from continuing operations before finance income and finance costs
increased by 124.4% to R118 million (2020: R486 million loss)*
• Cash generated by operations increased by 337.3% to R914 million (2020: R209
million)*
• Unrestricted cash and cash equivalents from continuing operations increased to R407
million (2020: R314 million)
• Interest-bearing debt, excluding leases, reduced to R456 million (2020: R1,002 million)
• Net debt position improved to R49 million (2020: R688 million)**
• Total earnings per share increased to 35.6 cents per share (2020: 561.6 cents loss per
share)*
• Total headline earnings per share increased to 34.2 cents per share (2020: 17.2 cents
loss per share)*
• BBBEE transaction successfully completed with Adcorp Workforce Solutions
achieving Level 1 rating
*Restated
** Net debt defined as interest-bearing debt excluding leases less unrestricted cash and cash equivalents from
continuing operations
Shareholders are advised that the Group’s results contain prior year adjustments and that
comparative balances accordingly differ to those previously reported. The prior year results
have been adjusted for reinstatement of restricted cash and bonds in Angola, discontinued
operations and a headline earnings adjustment due to a deferred tax adjustment related to a
right-of-use asset impairment previously recognised. Details are contained in the full
announcement on the JSE and Adcorp websites.
We start by recognising that the Covid-19 pandemic is a human tragedy that has significantly
impacted our clients and our people in both of Adcorp’s principal geographies, South Africa
and Australia. Notwithstanding these challenges, Adcorp is in a stronger position than a year
ago, with significantly lower debt, improved earnings and empowerment credentials as well as
a clear strategy to grow profitably. This is testament to the resilience of our business model,
our clients and our people.
Liquidity and cash flow
Following the liquidity management measures and interventions introduced to mitigate the
impact of Covid-19, the second half of FY2021 has continued to demonstrate good working
capital management and effective debt reduction.
Cash generated by operations increased to R914 million from R209 million in 2020. The
group's consolidated cash and cash equivalents (excluding restricted cash in Angola and cash
in assets held-for-sale) totalled R407 million, increasing by R93 million from the prior year
(2020: R314 million). The group's Days Sales Outstanding (DSO) reduced from 43 days to 38
days.
Significant improvement in collections throughout the group and other cash positive initiatives
resulted in group debt excluding finance leases decreasing to R456 million from R1 billion in
2020, with both South Africa and Australia contributing to the substantial degearing of the
business. Furthermore, the conclusion of the DARE disposal has enabled the Australian
operations to repatriate the equivalent of R33 million to South Africa.
Group net debt excluding finance leases was R688 million as of 29 February 2020 and has
reduced by R639 million to R49 million as of 28 February 2021**.
Dividends
The board has decided that no dividend will be declared as the prevailing economic
circumstances demand prudent cash resource management (2020: Nil).
Prospects and outlook
During the 2021 financial year, Adcorp made significant strides in stabilising and enhancing
liquidity. The Group now has a strong balance sheet from which to drive future growth.
During the 2021 financial year, the Group successfully completed a BBBEE transaction and
Adcorp Workforce Solutions achieved a Level 1 rating. This has greatly enhanced our
competitiveness in the South African market. Furthermore, the Group made material upgrades
to IT systems and processes, which will lead to a better customer experience and reduced cost.
Finally, Adcorp has stable divisional management teams with clear strategies to drive profitable
growth in their respective areas – supported by a lean central office.
Adcorp is a formidable workplace solutions company with blue-chip clients in South Africa
and Australia. The work done in 2021 has left Adcorp with a stable platform for profitable
growth going forward.
This short-form announcement is the responsibility of the directors and is only a summary of the
information contained in the full announcement and does not contain full or complete details. The full
announcement is available on the JSE website
https://senspdf.jse.co.za/documents/2021/jse/isse/ADR/ye2021.pdf and on the group's website at
https://www.adcorpgroup.com/wp-content/uploads/2021/05/Adcorp-Booklet-FY2021.pdf. Copies of the
full announcement may also be requested from the group's registered office and at the office of the
group's sponsors during office hours 8:00 - 16:00, Monday - Friday at no cost at the contact details
below. Any investment decision should be based on the contents of the full announcement available on
the JSE's website and the group's website.
Deloitte & Touche expressed an unmodified audit opinion on the audited consolidated financial
statements in their report dated 31 May 2021. The report also includes communication of key audit
matters. This announcement is extracted from audited results but is itself not audited. The full audit
report and the full audited consolidated financial statements are available on the company’s website at
https://www.adcorpgroup.com/wp-content/uploads/2021/05/Consolidated-Adcorp-Annual-Financial-
Statements-FY2021.pdf .
On behalf of the board
GT Serobe J Wentzel N Prendergast
Chairman Chief Executive Officer Chief Financial Officer
31 May 2021
Directors
Dr John Wentzel (chief executive officer), Noel Prendergast (chief financial officer), Gloria
Serobe^ (chairman), Monde Nkosi^, Sam Sithole^, Clive Smith^, Cecil Maswanganyi^,
Melvyn Lubega^^, Ronel van Dijk^^, Prof Herman Singh^^, Tshidi Mokgabudi^^, Dr Phumla
Mnganga^^,Michael Spicer^^
^Non-executive
^^Independent non-executive
JSE Sponsor
PSG Capital 1st Floor Ou Kollege 35 Kerk Street Stellenbosch
Registered office
Adcorp Holdings Limited Adcorp Place 102 Western Service Road Gallo Manor Ext 6
Company Secretary
Lisa Laporte Adcorp Place 102 Western Service Road Gallo Manor Ext 6
Transfer secretaries
4 Africa Exchange Registry Proprietary Limited Hill On Empire, 4th Floor, Building A, 16
Empire Road, Parktown
Investor relations
Singular Systems Michèle Mackey: +27 (0)10 003 0700 michele@singular.co.za
Auditors
Deloitte & Touche 5 Magwa Crescent Midrand 2066
Date: 31-05-2021 09:30:00
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