| Thu 7 Feb 2008, 12:00 | | KEL - Kelly Group Limited - Chief Executive`s Newsletter |
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KEL
KEL
KEL - Kelly Group Limited - Chief Executive`s Newsletter
KELLY GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1999/026249/06)
ISIN: ZAE000093373
Share Code: KEL
("the Kelly Group" or "Kelly")
CHIEF EXECUTIVE`S NEWSLETTER
The quarter to December provided a steady start to the Kelly Group`s new
financial year with group revenue just ahead of budget and 13% up on the
previous year. The South African operations` revenue rose by 20% while revenue
from US operations was 10% down on the previous year but ahead of budget. The
decline in the USA is still the result of the completion of a major contract, as
we have explained before.
All business units performed in line with expectations, with Kelly once again
the star performer and PAG showing a healthy turnaround from the loss they
posted in that quarter.
The operating margin for the quarter was also nicely up on last year`s 3.8% and
just ahead of budget. The main contributor to this improvement is a change in
our business mix, with permanent placements growing by 49% over the previous
year, conversions increasing by 64% and the lower-margin outsource revenue
rising by 17%.
The Kelly Group started the new calendar year on a strong note with a high level
of activity and a significant order base for permanent placements. The power
crisis of recent weeks has undoubtedly darkened the mood of the market but at
this stage it is too early to tell what effect it will ultimately have on
economic growth and hence on our prospects. It`s my personal belief that the
South African business community are resilient with a long history of coping
with adversity and that we`ll manage this problem as we have so many others.
Kelly`s expectation of strong growth for the year to September therefore remains
unchanged.
Annual report and interim results
Our first annual report was published last month and may be read in its entirety
on our website kellygroup.co.za. Our interim results for the six months to
March will be published on 7 May. There will be a presentation on the results
in Johannesburg that day and in Cape Town the next. If you would like to attend
either of these, please contact our investor relations office at
kellygroup@dpapr.com for an invitation.
Brand Champion roll-out
The Kelly Group`s Brand Champion programme, an internal training initiative
designed to produce a quantifiable improvement in client, candidate and employee
satisfaction levels, is now being offered to the market as part of our
comprehensive range of employment and outsourcing services.
The programme aligns employee behaviour with their employer`s vision and culture
by demonstrating how the personal behaviour of employees has a material effect
on how a company performs and how it is perceived by its stakeholders.
The thinking behind it is that service businesses have become increasingly
commodified, with little difference in the type, quality and price of the
services they offer. In such an environment, customers will choose one company
over another because of the experience they have at the human interface.
Consequently, employee behaviour represents the last frontier where service
companies can achieve a real and sustainable competitive edge.
Since its introduction at Kelly last year, productivity has improved in real
terms (see our annual report for details) while client and candidate
satisfaction levels, measured by an independent research company, have increased
from 77% to 84% and from 81% to 87% respectively.
Micro-payroll service launched
Paxsal Business Process Outsourcing, a member of the Kelly Group, has introduced
a micro-payroll product tailored to the needs of small businesses with up to 50
employees and households with domestic staff.
Known as PayZone, it is a secure web-based system that offers these employers an
efficient, cost-effective and legally compliant payroll administration tool. It
calculates the employees` salaries or wages, pays these into their bank
accounts, provides them with payslips and also pays their UIF on the employer`s
behalf.
We are very excited about the prospect of this product because it is the first
fully automated offering in the market with complete payroll functionality. Over
time, we will look at expanding this product by forming strategic partnerships
with external companies and offering users the opportunity to purchase other
value added products for their employees such as insurances, retirement savings,
endowments and medical aid.
I look forward to seeing you at one of our results presentations.
Grenville Wilson
Chief executive
Sandton
7 February 2008
Merchant bank and sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 07/02/2008 12:00:01 Produced by the JSE SENS Department.
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