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Audited AFS for the year ended 31 December 2023, distribution of annual report and notice of annual general meeting
Workforce Holdings Limited
Incorporated in the Republic of South Africa
(Registration number 2006/018145/06)
Share code: WKF ISIN: ZAE000087847
("Workforce" or "the company" or "the group")
Audited annual financial statements for the year ended 31 December 2023, distribution of annual
report and notice of annual general meeting
Shareholders are advised that Workforce's integrated annual report for the year ended 31 December 2023
("annual report") has been distributed to shareholders today, 28 March 2024 and is also available on the
company's website at www.workforce.co.za.
The audited annual financial statements for the year ended 31 December 2023 ("annual financial statements")
which are incorporated in the annual report, are available on the JSE cloudlink:
https://senspdf.jse.co.za/documents/2024/jse/isse/wkf/YE23.pdf
Crowe JHB, the company's independent auditor, has audited the annual financial statements and has expressed
an unmodified audit opinion thereon. The audit opinion is incorporated in the annual report and is also available
for inspection at the registered office of the company during normal trading hours.
As the information in this announcement does not contain full details, any investment decision should be based
on a consideration of the annual financial statements as a whole, which is available on the links set out above.
Non-financial achievements:
- Level 1 B-BBEE contributor
- 99 181 average number of payslips processed every month
- 89 289 training instances
- 11 883 learners on learnership programmes
- 94 registered learnerships
- 120 learners on the Bachelor of Business Administration ("BBA") degree
- 101 127 medical examinations conducted
- 54 248 funeral and medical policies issued
- 64 onsite clinics managed and supported
- 5 walk-in and 9 mobile health screening facilities
Financial summary:
- Revenue improved by 4% to R4,5 billion (2022: R4,3 billion);
- EBITDA decreased to R151,3 million (2022: R201,1 million);
- EPS decreased to -13,5 cents per share (2022: 46,7 cents per share);
- HEPS decreased to -13,3 cents per share (2022: 46,8 cents per share);
- The directors elected not to declare a final dividend in order to conserve cash resources in light of current
economic circumstances and to ensure sufficient capital for acquisitions; and
- Days outstanding improved to 51 days (2022: 54 days).
Background and financial performance
Our primary market, South Africa, faced several impediments to economic growth in 2023. Aside from
experiencing the highest ever level of loadshedding, the country was greylisted by the Financial Action Task
Force ("FATF"), experienced a near collapse of logistics and ports infrastructure and high interest rates, which
led to a drop in overall business and consumer confidence. This was exacerbated by several South African
companies laying off permanent staff, reducing temporary staff or cutting training and education budgets.
According to the Quarterly Employment Statistics from Statistics South Africa (Stats SA), 97 000 jobs were lost
between March 2022 and March 2023. In the public sector we have become accustomed to budget and spending
cuts.
This harsh operating environment was the central theme of 2023. As a result, growth in turnover from R4,3 billion
in 2022 to R4,5 billion in the current period, was insufficient to meet the rate of the increase in overheads, with
reduced EBITDA and HEPS being delivered. Given the tremendous economic pressure, margin erosion was
also experienced. Realising that we needed to act quickly, the group embarked on a project in March 2023 to
reduce overheads, re-scaling the business to more appropriate levels and structures, to reverse the trend.
The project was completed in the second half of the year by September 2023, after which we implemented a
programme specifically designed to drive a greater sales and market penetration. This helped to stabilise the
business further. We are thus well positioned to reap the benefits of this more focused sales and marketing
approach, as well as the reduced overheads, in the current financial year.
Performance of investment clusters
• The Staffing and Outsourcing cluster delivered a solid top-line performance. This was on the back of
a strong brand presence in the primary market, which is South Africa, and expansion in jurisdictions
outside of South Africa, supported by an experienced management and operational team. This cluster
result includes an amount of R66,6 million, which is attributable to the ETI. The 2023 financial year proved
to be quite challenging due to poor economic growth and a general tightening of budgets and spending,
loadshedding, high interest rates and higher overhead costs, all contributing to margin contraction. To
counteract this, emphasis was placed on controlling costs, promptly collecting payments from debtors,
and discontinuing low-margin services and products. Revenue increased by 6% to R3,6 billion (2022:
R3,4 billion), and an EBITDA of R159,4 million (2022: R198,0 million) was produced. The reduction was
caused mainly by severe margin pressures, as described above. The cluster contributed 58% to group
EBITDA.
• Despite all businesses in the Training and Education cluster remaining profitable across the year and
a pick-up in activity in the second half of the year, the cluster suffered the impact of macroeconomic
difficulties in South Africa. Overall revenue was flat at R386,0 million compared to R388,1 million in the
prior year. The harsh realities of poor economic performance manifested in reduced SETA and B-BBEE
levied spending, exacerbated by staff layoffs across the economy. Margin pressure and higher operating
overheads resulted in a decrease in EBITDA of 12%. Despite this, the cluster contributed 18% to the
group's EBITDA.
• The Financial Services cluster showed an improvement in revenue for the 2023 financial year, building
upon positive changes initiated in 2022 and delivering an 11% improvement to R121,7 million. An
EBITDA of R23,3 million was recorded. Due to economic pressures significant write-offs will impact
expected credit losses (ECL). This is in turn expected to impact the micro-lending book of this cluster
due to the continued financial pressure that consumers are expected to face in the coming year. All this
resulted in eroding EBITDA from R32,7 million in 2022 to R23,3 million in the current year.
• The Healthcare cluster's revenue declined from R454,9 million to R360,0 million in the current financial
year. This resulted in an EBITDA decline of 33% to R41,0 million from R61,5 million in the previous
financial year. This is mainly due to reduced spending by the Government on health care personnel.
Strict cash preservation measures remain in place and debtors' days were maintained in the 35 to 37
days range, contributing positively to the cluster's cash flow.
Outlook
The group has a robust, diverse and relevant foundation in place upon which expertise, experience, skills,
digitisation and knowledge can be expanded on to optimise the product offering within and across investment
clusters and geographies. We are confident that we can harness this experience as we fulfil the theme of our
annual report to look beyond the horizon, to ensure our products and services are delivered diligently to
customers in both current and future areas of operation. We have been thoughtful and careful in our geographic
expansion.
There are many unforeseen factors, not only in South Africa, but across the globe, all of which can impact
Workforce in the coming year. If our assumptions of growth remain consistent, each one of the investment
clusters will make a better contribution to the group.
With South Africa remaining our main market, we are hopeful that despite being an election year, the
Government will focus on Operation Vulindlela, the joint initiative of the Presidency and National Treasury to
accelerate the implementation of structural reforms and support economic recovery. The project outline focuses
on electricity, water, transport/logistics and digital communications, which are critical to ensure economic growth,
which in turn supports human capital and the prosperity of businesses to close the circle so that people thrive.
In conclusion, Workforce has made some bold structural moves over the past six years. The foundation is strong
and able to take the group beyond the horizon because of our dedication and investment in people, technology
and partnerships. This is supported by deep knowledge and expertise and our ability to disperse this in selected
sectors needing this support at the moment.
Notice of annual general meeting
Notice is hereby given that the annual general meeting of the company's shareholders will be held via Microsoft
Teams on Friday, 17 May 2024 at 10:00 ("annual general meeting"). The purpose of the meeting is to transact
the business set out in the notice of annual general meeting ("notice of annual general meeting") included in the
annual report (which annual report is available on the company's website at www.workforce.co.za), by
considering and, if deemed fit, passing, with or without modification, the ordinary and special resolutions
contained therein.
The salient information pertaining to the annual general meeting is set out below:
Issuer name Workforce Holdings Limited
Type of instrument Ordinary Shares
ISIN number ZAE000087847
JSE code WKF
Meeting type annual general meeting
Meeting venue Microsoft Teams
Record date in order to be eligible to receive the notice of annual general Friday, 22 March 2024
meeting
Notice of annual general meeting distributed to shareholders Thursday, 28 March 2024
Last date to trade in order to be eligible to vote at the annual general Tuesday, 7 May 2024
meeting
Record date in order to be eligible to vote at the annual general meeting Friday, 10 May 2024
Last day to lodge forms of proxy for the annual general meeting (by 10:00) Wednesday, 15 May 2024
for administration purposes
Annual general meeting (at 10:00) Friday, 17 May 2024
Results of the annual general meeting released on SENS Friday, 17 May 2024
Website link www.workforce.co.za
By order of the board
JR Macey RS Katz WP van Wyk
Chairman Chief Executive Officer Financial Director
Johannesburg
28 March 2024
Executive directors
RS Katz
WP van Wyk
Non-executive directors
JR Macey
S Naidoo
S Thomas
KN Vundla
Company Secretary
S van Schalkwyk
Registered office
The registered office, which is also the principal place of business, is:
11 Wellington Road
Parktown, 2193
PO Box 11137
Johannesburg
2193
Designated Adviser
Merchantec Capital
Transfer Secretary
JSE Investor Services Proprietary Limited
One Exchange Square
2 Gwen Lane
Sandown, Santon, 2196
Commercial bankers
ABSA Business Bank
www.workforce.co.za
Date: 28-03-2024 01:00:00
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