Workforce Holdings has issued a press release with their financial results for the year ending 31st December 2016. The company includes training, recruiting and outsourced management divisions, and posted a 29,4% increase in revenue with Headline Earning Per Share up 20,1%.
- Revenue up by 29.4% to over R2.52 billion
- EBITDA up 29.4% to R137.9 million
- Headline Earnings per share up 20.1% to 40 cents per share
- Cash flow from operating activities up 206.6% to R69.2 million
- Net interest bearing debt to total assets improved to 27% (2015:36%)
- Appointment of Philip Froom as Group CEO in August 2016
- Market cap exceeds R500 million for the first time
- Acquisitive growth continues
Workforce Holdings and its group of companies is a leading, trusted provider of employment, training, healthcare, wellness and financial and lifestyle services and benefits to individuals and their employers. Workforce’s human capital solutions include: temporary employment services, permanent placement recruitment, training and skills development, healthcare and wellness, disability solutions, financial and lifestyle services and business process outsourcing.
Workforce employs 1 186 people and pays 32 304 temporary contractors on a weekly basis. In addition, during 2016 the group trained over 14 500 people, (3 109 on learnership and internship programmes), issued over 24 000 lifestyle benefit insurance policies and conducted over 50 000 medical examinations through its 27 operating brands, network of 93 branches and 9 training centres across South Africa.
Solid organic and acquisitive growth has underpinned the group’s financial results which has shown significant improvement on previous years. This has been achieved against the backdrop of a sluggish economy, increasing levels of unemployment, and amended labour legislation. The business’s diversified and integrated business model has afforded it resilience despite these factors.
The results were achieved primarily due to a strong performance in the group’s two largest operating segments – staffing and recruitment, led by the core blue collar Workforce Staffing business, and the training segment, which benefited from the acquisition of Prisma Training Solutions Proprietary Limited (“Prisma”) in October 2015 and which was included in the results for a full twelve months for the first time during this financial year.
Turnover for the 2016 fiscal year reflects an increase of 29.4% to R2,52 billion (2015: R 1.95 billion). Turnover grew organically by 16.7% whilst the remainder of the increase is attributable to the two acquisitions made, namely Prisma, and the Quyn group of companies, which was effective 1 February 2016.
In total the companies acquired during the 2015 and 2016 financial years contributed R25.4 million (2015: R1.5 million) to total group EBITDA of R137.9 million. However due to the IFRS charges of imputed interest, intangible impairments, and incremental interest paid on the increased debt to fund the acquisitions, the contribution of the acquired companies to Workforce’s earnings per share has been minimal.
Headline earnings per share increased by 20.1% to 40.0 cents (2015 :33.3 cents).
The training, employee health management, financial services and lifestyle benefits, and process outsourcing segment all contributed to growth.
“Our diversification strategy is starting to bear fruit with our businesses – outside of our core staffing segment – now contributing 21% of group EBITDA. Our training segment in particular, buoyed by our acquisition of Prisma, has grown significantly and now contributes R24.3 million to EBITDA,” says Philip Froom, group CEO of Workforce. This segment is poised to grow further with the recent 2017 acquisition of KBC Holdings (“KBC”), a training business that provides induction training and safety, health and environment training as well as contractor on-boarding and management services primarily to the mining and minerals sectors, where KBC enjoys meaningful market share and brand equity.
“We will continue to drive growth in our training division both organically and acquisitively. The staff outsourcing division of our group is also a strategic growth area for us and, coupled with the consolidation opportunities in this industry, we will continue to pursue potential acquisitions in this regard,” says Froom.
With the activities and services that the group undertakes, Workforce creates shared value by making a meaningful and sustainable difference in peoples’ lives by providing people with employment, training, healthcare, wellness and access to financial services and lifestyle benefits, and regards itself as a substantial contributor to the socio-economic development of the communities in which it operates.
A number of initiatives and partnerships between government and business are underway to spur growth and create jobs, and government’s progress on its delayed infrastructure development plans should result in further demand for the group’s services.
Workforce looks forward to building on it sales momentum and growing brand, leveraging off its delivery platform to generate further organic growth and concluding accretive acquisitions, thereby adding value to its stakeholders.
<a href=”http://www.workforce.co.za” target=”_new”>Visit the company website at www.workforce.co.za</a>