| Tue 23 Nov 2010, 12:16 | | KEL - Kelly Group Limited - Kelly group grows revenue in tough market |
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KEL
KEL
KEL - Kelly Group Limited - Kelly group grows revenue in tough market
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")
KELLY GROUP GROWS REVENUE IN TOUGH MARKET
Johannesburg, 23 November 2010 - Listed employment services provider the Kelly
Group reported revenue growth of 2% to R2 050 million for the year ended 30
September 2010 in a market that lost close to a quarter of a million jobs over
the same period.
A fragile local economy that continues to shed jobs impacted the group`s
performance at most levels. Operating profit of R32.2 million was 67% down on
the previous year, while net profit after tax and EPS for the year decreased by
55% and 54% respectively. Operating expenditure increased by 10.1%, partly due
to the group`s continued investment in new and diversified business ventures
such as K-log and TalentOcean.
Revenue from high-margin permanent placements remained under pressure and was
down 26% to R85.1 million. Annuity revenue from the group`s outsourced business
increased slightly by 1% at similar gross margins to 2009, while skills
development reflected healthy growth of 6%.
The group`s US operations posted a strong performance but the 26.0% revenue
growth in US Dollar terms was materially offset by the Rand`s appreciation,
resulting in 4% growth in Rand terms. Torque IT increased its revenue by 6% and
net profit before tax by 138%. Kelly Industrial grew revenue by 4.0% and EBIT
by 38.9% during the year.
During the year, the group concluded 1 075 learnerships at an exit rate of 82%,
well above the industry average of 38%. This enabled it to access tax
allowances of more than R70 million while simultaneously enhancing the skills
set of its temp staff contingent.
Chief executive Grenville Wilson said the group`s focus on diversifying the
business through the development of new, high-margin technology products and
services should help to lessen its exposure to the staffing market which, he
said, was likely to remain depressed for some time to come. "The employment
industry tends to lag broader economic trends and the fact that the economy is
growing without creating jobs means that trading conditions will remain tough
for the foreseeable future," he said.
"However, we were quick to respond to the global economic downturn by shifting
our focus from being just another staffing company to one that adds value to
every link of the human capital management chain: assisting our clients in
optimising their workforces; developing the systems and processes to improve
productivity levels; and keeping payroll and administration costs down.
While these new products and services are still in their infancy and have not
yet started contributing to the group`s bottom line, they are pure margin
businesses that will not only help during this difficult period but will also
place the group in a strong position when trading conditions improve," he said.
For further information call Grenville Wilson, CEO Kelly Group, on 011 722 8009
Issued by du Plessis Associates on behalf of Kelly Group Limited dPA contact
Helen McKane Tel : +27 11 728 4701, Fax: +27 11 728 2547, Mobile: 082 330 2034
or e-mail: kellygroup@dpapr.com website : www.kellygroup.co.za
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 23/11/2010 12:16:00 Produced by the JSE SENS Department.
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