| Fri 24 Jul 2009, 12:00 | | KEL - Kelly Group Limited - CEO newsletter and trading statement |
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KEL
KEL
KEL - Kelly Group Limited - CEO newsletter and trading statement
KELLY GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1999/026249/06)
Share code: KEL
ISIN: ZAE000093373
("Kelly Group" or "the group")
CEO NEWSLETTER AND TRADING STATEMENT
The Kelly Group wishes to advise shareholders that earnings per share and
headline earnings per share are expected to decrease by between 30% and 40% for
the year to September 2009 when compared to that of the previous corresponding
reporting period.
The third quarter has proved to be the toughest of the year so far as we start
feeling the full impact of the cut backs and employment freezes implemented by
the big corporates earlier this year.
Group revenue for the quarter was down 7.5% with revenues from both South Africa
and the United States down 7.5% in rand terms and US revenues down 14% in dollar
terms. EBIT for the quarter was down 56% with EBIT from our South African
operations decreasing by 51.9% and EBIT from our American operations decreasing
by 82%. The decline in group revenue was limited to 7.5% thanks to acquisitive
growth from Torque IT which produced revenue of R19.8 million that was absent in
the same quarter last year.
All segments of the business have come under pressure with the greatest impact
being felt on the permanent placement side with placements for the third quarter
down 40.3% compared to the same period last year. Revenue from permanent
placements was down slightly less at 36.1%.
Outsource revenue fared better than the perm segment with only a 12.5% decline
in the outsource headcount resulting in a 9.4% decline in outsource revenue
compared to the same quarter last year.
Trading conditions will remain tough for the foreseeable future. Nevertheless
we have seen that one or two of the major corporates have started to lift the
freeze on permanent recruitment and some orders are filtering through to our
perm business.
Some of our brands have secured lucrative tenders but we will only start to
benefit from these in the new financial year. We also have some exciting
projects in the pipeline concerning time and attendance systems and productivity
management which should start to bear fruit in the new year. In the meantime,
the group will continue its rigorous pursuit of cost control, receivables and
cash flow management, productivity enhancement and margin improvement.
The financial information on which this announcement is based has not been
reviewed and reported on by Kelly Group`s auditors.
Kelly turns 40, takes gold at the EMEA World Contact Centre World Awards
Our flagship brand Kelly last month celebrated 40 years of service excellence in
the provision of staffing solutions to South African companies. Founded in 1969
by Neville McKay, Kelly was the first recruitment company in the country to
offer temporary employment services. Today, its national database of screened
candidates has topped the 270 000 mark and, in 2008, it placed over 25 000
candidates and produced turnover in excess of R1 billion.
Kelly`s leadership position in the market was again underlined when it was
presented with the Gold Award at the 2009 Contact Centre World Awards for the
Europe, Middle East and Africa (EMEA) for "Best Community Spirit" and the Silver
Award for "Best Recruitment Campaign". It is the second time in as many years
that Kelly has received international recognition at the Contact Centre World
Awards for its social responsibility projects. These awards have been likened
to the Olympics of the international contact centre industry and are highly
contested among the world`s leading service providers and contact centres.
New FD for the Kelly Group
Ferdinand Pieterse was appointed financial director of the Kelly Group on 13
July 2009 and has joined our board as an executive director. Pieterse, who
qualified as a chartered accountant in 1999, is the former chief executive of
Louis Dreyfus Commodities (Africa) and former chief financial officer of
Citigroup Africa. He has also held various senior positions at Nedbank Group
Limited including chief financial officer of Nedbank Africa, divisional chief
internal auditor and senior manager: group and central operations of Nedcor.
Mthunzi Mdwaba appointed to ILO Governing Body
Mthunzi Mdwaba, deputy chief executive of the Kelly Group and vice president of
Business Unity South Africa (BUSA), has been appointed a member of the
International Labour Organisation`s governing body representing SADC business.
In his role as a governing body member, he shall represent the interests of SADC
business and participate in formulating policies that influence the world of
work.
Mdwaba, who has been a key member of South Africa`s business delegation for the
last three conferences, led BUSA at the ILO`s 98th Session of the International
Labour Conference held in June this year.
The group is pleased to report that government has reaffirmed that labour
broking will be regulated and that current provisions of labour laws will be
amended with emphasis on the attainment of the ILO`s decent work agenda.
Decent work consists of four strategic objectives: fair wage, job security,
benefits and a safe environment.
Year-end results announcement
Our results for the year-ending 30 September will be published in November.
There will be a presentation on the results in Johannesburg and in Cape Town.
If you would like to attend either of these please contact our investor
relations office at kellygroup@dpapr.com for an invitation.
Yours sincerely
Grenville Wilson
Chief executive
Sandton
24 July 2009
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
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