Adcorp Holdings Limited · JSE:ADR
Adcorp — H1 FY2025 Earnings Presentation
34 slides from Adcorp's earnings presentation, October 2024
Slide 1: Interim Results H1 FY2025
INTERIM RESULTS Six months ended 31 August H1 FY2025 1
Slide 2: Disclaimer
Disclaimer The statements contained herein may contain certain forward-looking statements relating to the Group that are based on the beliefs of the Group’s management as well as assumptions made by and information currently available to the Group’s management. These forward-looking statements are,
Slide 3: Agenda
Agenda Overview Key indicators Dr John Wentzel General business environment Chief Executive Officer Performance overview Dividend declaration Financial and Operational Overview Income statement Noel Prendergast Segmental overview Chief Financial Officer Balance sheet Cash flow Closing Dr John Wentze
Slide 4: Overview
Overview Dr John Wentzel Chief Executive Officer Interim results Six months ended 31 August 2024 4
Slide 5: Key indicators
Key indicators Revenue Gross Gross growth profit margin Debt HEPS Dividend free & EPS declared Interim results Six months ended 31 August 2024 5
Slide 6: General business environment in South Africa
General business environment in South Africa Interest High Load- Recovering Falling Rates Unemployment Shedding Economy Inflation Declining Persists Reduced South Africa's Inflation eased to The Reserve Bank Unemployment No load-shedding economy showed 4.4% in August 2024, maintained its rate remain
Slide 7: General business environment in Australia
General business environment in Australia High Government Weak Low Inflation Low Interest Policy Economy but rising Unemployment Rates Changes Australia Inflation increased The Reserve Bank Unemployment The Labour experienced slow to 3.8% in Q2 2024, maintained high edged up to 4.1% government growt
Slide 8: Adcorp overview
Adcorp overview Australia: Realigned Professional Services from state-based to sector-based operations, enhancing service offerings in IT and adjacent sectors, positioning Paxus for Sector Realignment 1 for Growth growth in high-demand areas South Africa: Restructuring involved optimizing resources
Slide 9: Dividend declaration
Dividend declaration INTERIM CASH DIVIDEND DECLARED 13,4 cps Through share buybacks, ordinary and special dividends, Adcorp has returned R260m to shareholders since 2021* Interim results Six months ended 31 August 2024 * Including the interim cash dividend declared to be paid in Jan 2025 9
Slide 10: Financial and Operational Overview
Financial and Operational Overview Noel Prendergast Chief Financial Officer Interim results Six months ended 31 August 2024 10
Slide 11: Financial snapshot
Financial snapshot REVENUE GROSS PROFIT OPERATING PROFIT # R6,8 bn 4.8% R648,1 m 3.3% R42,3 m (28.9%) Aug 2023 R6,5bn Aug 2023 R627,7m Aug 2023 R59,5m CASH GENERATED NET CASH POSITION OF PROFIT AFTER TAX FROM OPERATIONS* R97,6 m** R206 m R29,4 m (16.9%) Aug 2023 Cash utilised excluding restricted ca
Slide 12: Group Revenue and Gross Profit
Group Revenue and Gross Profit Revenue – R million 5.4% 6 458 6 769 5 861 5 781 Aug 21 Aug 22 Aug 23 Aug 24 Gross profit – R million 628 2.6% 627 648 599 Aug 21 Aug 22 Aug 23 Aug 24 Interim results Six months ended 31 August 2024 12
Slide 13: Summarised consolidated statement of profit and loss
Summarised consolidated statement of profit and loss Unaudited Unaudited Interim Interim R’000 Aug 2024 Aug 2023 Var % Revenue 6 769 014 6 458 108 4.8% Cost of sales (6 120 883) (5 830 389) (5.0%) Revenue growth of 4.8% Gross profit 648 131 627 719 3.3% - Strong performance from Staffing Gross profi
Slide 14: EBITDA movement analysis Aug 2024 vs Aug 2023
EBITDA movement analysis Aug 2024 vs Aug 2023 Interim results Six months ended 31 August 2024 14
Slide 15: Operating expenses
Operating expenses R million 1 000 932 900 887 833 800 791 746 767 700 600 617 577 576 579 528 500 400 Aug 2019 Aug 2020 Aug 2021 Aug 2022 Aug 2023 Aug 2024 Operating expenses Inflation adjusted - since Aug 2019 Interim results Six months ended 31 August 2024 15
Slide 16: Segmental performance
Segmental performance Revenue Gross profit Gross profit margin EBITDA Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Interim Interim Interim Aug Interim Interim Aug Interim Interim Aug Interim R’000 Aug 2024 Aug 2023 2024 Aug 2023 2024 Aug 2023 2024 Aug 2023 Total So
Slide 17: Contingent Staffing Australia
Contingent Staffing Australia Offering tailored workforce solutions across Operating in Australia's healthcare sector Australia specialising in blue-collar, industrial providing reliable, compliant, and suitably and food processing recruitment, striving to qualified healthcare professionals. Offerin
Slide 18: Contingent Staffing Australia
Contingent Staffing Australia Revenue – R million 1 118 923 Impressive year-on-year growth 21.1% Consistent demand in PALM H1 F24 H1 F25 Strategic initiatives in industrial and healthcare sectors contributing positively Gross profit – R million Continued investment in workforce expansion with strate
Slide 19: Contingent Staffing South Africa
Contingent Staffing South Africa A leading provider of flexible A private higher education Specialises in providing front Specialises in providing staffing solutions, specialising in institution that specialises in and back of house staffing disability placement services blue-collar temporary staffi
Slide 20: Contingent Staffing South Africa
Contingent Staffing South Africa Revenue – R million 1 860 1 860 4% 5% Robust performance 96% <1% 95% Margin upliftment during the period of 0.3% H1 F24 H1 F25 Gross profit – R million Alignment of blue-collar staffing and training brands 215 219 23% 26% Relaunch of hospitality brand – ZEST 77% 74%
Slide 21: Staffing Solutions South Africa
Staffing Solutions South Africa Specialising in outsourced A Business Process Outsourcing Specialises in high-performance, business solutions that leverage provider offering customised specialised cleaning services technology to enhance solutions to enhance customer tailored to meet the stringent op
Slide 22: Staffing Solutions South Africa
Staffing Solutions South Africa Revenue – R million 625 546 2% 4% 4% Double digit revenue growth 94% 96% 14.5% Improved gross profit H1 F24 H1 F25 Margin contraction in some key clients Gross profit – R million Telvuka demonstrating growth during the period Solid performance from Capability 42 45 7%
Slide 23: Professional Services Australia
Professional Services Australia A leading IT recruitment agency, providing extensive services in IT contract recruitment, permanent staffing, and talent solutions. They offer specialised services across various sectors including AI, cybersecurity, and software development. www.paxus.com.au Interim r
Slide 24: Professional Services Australia
Professional Services Australia Revenue – R million 2 131 2 168 Positive revenue trend 1.7% Significant transformation of the division – moving from an ICT model to a sector-based white collar professional structure H1 F24 H1 F25 Focusing on Financial & Professional services, Emerging Technologies a
Slide 25: Professional Services South Africa
Professional Services South Africa A leading IT staffing specialising in Focused on connecting top talent Kelly provides comprehensive A premier South African technology solutions and staffing with leading employers. It offers recruitment solutions from general recruitment agency specialising servic
Slide 26: Professional Services South Africa
Professional Services South Africa Revenue – R million 998 998 5% 5% 15% 14% Stable revenue 16% 17% 20% 20% <1% Gross margin managed prudently 44% 44% Solid results from Paracon, Charisma and Torque IT H1 F24 H1 F25 DAV and Kelly received 16 PMR awards Gross profit – R million Restructuring in certa
Slide 27: Summarised statement of financial position
Summarised statement of financial position Unaudited Audited Interim Year end R'000 Aug 2024 Feb 2024 Var % Assets Property and equipment 23 292 24 678 (5.6%) Right-of-use lease assets 240 864 249 800 (3.6%) Strong balance sheet, remains ungeared Intangible assets and Goodwill 601 823 624 829 (3.7%)
Slide 28: Cash flow movements
Cash flow movements R million Cash generated: R98 million over the period Cash conversion of 120.4% Net financing activities includes an ordinary dividend of R25.2 million Interim results Six months ended 31 August 2024 28
Slide 29: Working capital management
Working capital management R million Days 800 60 719 700 600 50 500 40 400 38 37 36 35 35 300 30 200 100 4 20 0 (19) -100 (72) 10 -200 (176) -300 0 Aug 20 Aug 21 Aug 22 Aug 23 Aug 24 Net working capital movement Days Sales Outstanding (DSO) Annual results Year ended 29 February 2024 29
Slide 30: Net cash/(debt) trend
Net cash/(debt) trend R million 400 312 300 198 204 206 200 100 0 -100 (49) Feb 21 Feb 22 Feb 23 Feb 24 Aug 24 Distribution to external Nil Nil R62m R128m R25m shareholders Share Nil 4 R20m R7m Nil buy-back Annual results Year ended 29 February 2024 30
Slide 31: Closing
Closing Dr John Wentzel Chief Executive Officer Interim results Six months ended 31 August 2024 31
Slide 32: Outlook
Outlook Strategic Margin Focus on Expanding in Restructuring Expansion of Stability Working High-Growth Benefits Paxus in Initiatives in Capital Sectors Realised Australia South Africa Management H2 will focus on Following the Margin improvement Restructuring in With a debt-free capitalising on succ
Slide 33: Q&A
Q&A Interim results Six months ended 31 August 2024 33
Slide 34: Adcorp - Connecting Human Potential
QOcorp Connecting Human Potential