Adcorp reports a 4% increase in headline earnings to 94.9c a share
Adcorp, the South African -listed staffing group, reported a 4% increase in headline earnings to 94.9c a share in the six months to August as a recovery in white-collar recruitment was dampened by difficult trading conditions in nursing, blue-collar recruitment and in recruitment advertising.Adcorp chief executive Richard Pike said the company's results continued to reflect a relatively sluggish trading environment. He said that in nursing, margins were tight and recruitment advertising was affected by a slowdown in public sector advertising. Cost-cutting measures in these divisions included retrenching about 30 people and consolidating back office operations. The fall in blue-collar recruitment had been expected after it had held up well during the recession.He also said although employment trends had tended to lag the slow recovery in the economy, there were some encouraging signs that employment was starting to pick up. Besides a pick-up in white-collar recruitment, although off a low base, business process outsourcing operations continued to show solid growth.But the company said the industry continued to be affected by uncertainty over labour broking legislation.The parliamentary portfolio committee on labour announced earlier this year that there would be no ban on labour broking, but that additional laws would be introduced to regulate the industry.But still no draft legislation has been tabled after undertakings from the Department of Labour to do so over a year ago.Pike said that "this has had the intolerable effect of relegating the entire staffing industry to a state of limbo for an unacceptably prolonged period with little indication as to the precise nature of these proposed regulations and when we can expect them".
Undoubtedly, the confusion created by this situation had had a negative effect on flexible staffing volumes, he said.The group's revenue rose 7 percent to R2.6 billion.