Summary of the unaudited interim financial results and dividend declaration for the six months ended 31 August 2023

ADCORP HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 1974/001804/06
Share code: ADR
ISIN: ZAE000000139
("Adcorp" or "the Company" or "the Group")


SUMMARY OF THE UNAUDITED INTERIM FINANCIAL RESULTS AND DECLARATION
OF INTERIM CASH DIVIDEND FOR THE SIX MONTHS ENDED 31 AUGUST 2023


SALIENT HIGHLIGHTS

-  Revenue from continuing operations increased by 10.2% to R6.5 billion (2022: R5.9 billion)
-  Gross profit from continuing operations marginally increased by 0.2% to R627.7 million
   (2022: R626.8 million)
-  Operating profit from continuing operations decreased by 14.0% to R59.5 million (2022:
   R69.2 million)
-  Profit after tax from continuing operations increased by 31.6% to R35.3 million (2022: R26.9
   million)
-  Net unrestricted cash position of R82.1 million (2022: R144.8 million)
-  Earnings per share from continuing operations increased to 33.1 cents per share (2022:
   24.6 cents per share)
-  Earnings per share from total operations increased to 33.1 cents per share (2022: 11.6
   cents per share)
-  Headline earnings per share from continuing operations increased to 33.1 cents per share
   (2022: 24.6 cents per share)
-  Headline earnings per share from total operations increased to 33.1 cents per share (2022:
   11.6 cents per share)
-  Interim dividend of 16.1 cents per share declared (2022: 12.2 cents per share)
-  B-BBEE level 1 rating in South Africa maintained

PERFORMANCE OVERVIEW

Adcorp demonstrated robust revenue growth in both South Africa and Australia, showcasing
the resilience and ongoing commitment in implementing the Group's strategy amidst adverse
macroeconomic conditions in South Africa and external challenges impacting both economies.

We acknowledge the margin pressure experienced across all sectors, primarily attributable to
a decline in permanent placements and subdued demand for higher margin services. We are
not just confident that this is a transient phase, but we are actively addressing these
challenges. A series of strategic initiatives are underway to optimise our cost structure,
enhance operational efficiency and diversify our revenue streams to fortify our profit margins.
Our teams are employing innovative solutions and leveraging data analytics to identify and
capitalise on cost-saving and growth opportunities.

Our comprehensive approach to cost containment and effective working capital management
is devised to ensure the Group's ongoing stability and profitability. Despite current challenges,
the Group's resolute focus on executing its strategy underpins the objectives of securing
enduring success. We are well-positioned and equipped to navigate the complexities of the
current economic landscape, focusing on enhanced value for our shareholders.

FINANCIAL OVERVIEW

The Group achieved revenue of R6.5 billion for the six months ended 31 August 2023
("current period"), which was an increase of 10.2% compared to the six months ended 31
August 2022 ("prior period") of R5.9 billion. This growth can be primarily attributed to the
positive performance of the Contingent Staffing divisions in both South Africa and Australia.
Gross profit for the current period amounted to R627.7 million, slightly above the prior period's
performance of R626.8 million. Although the gross profit margin decreased to 9.7% from
10.7% in the prior period, the financial performance remains resilient, given the prevailing
economic conditions.

Operating expenses saw a modest increase of 2.8% compared to the results from the prior
period. This achievement is noteworthy, considering the rise is below the inflation rates in the
geographical areas where we operate. This resulted in an operating profit of R59.5 million
(2022: R69.2 million), with the operating profit margin at 0.9% compared to 1.2% in the
previous period.

Profit before taxation decreased by 8.8% to R41.4 million (2022: R45.4 million), primarily due
to reduced gross margins across many of our brands in the first half of the financial year. Net
finance costs decreased to R18.1 million (2022: R23.8 million) due to the improved leverage
position of the Group. Earnings per share from continuing operations significantly increased
by 34.4% to 33.1 cents (2022: 24.6 cents), aided by the reduced tax expense of R6.0 million
(2022: R18.5 million).

The Group's effective tax rate from continuing operations was an encouraging 14.6%, largely
attributed to effective tax planning, assessed loss utilisation and reduced tax exposure to a
tax liability in Angola. As of 31 August 2023, total tax losses not recognised amounted to R751
million (2022: R798 million), and those recognised were R174 million (2022: R238 million).

Although cash from operations closed at a utilisation position of R57.7 million compared to the
previous period's generation of R89.1 million, this aligns with the Group's strategic focus on
organic top-line growth. The Group closed with a net cash position of R82.2 million, lower than
the prior period's R144.8 million, primarily due to the payment of a dividend of R111.1 million,
including a special dividend of 91.3 cents per share, demonstrating the commitment to
delivering value to shareholders.

DIVIDEND DECLARATION

Shareholders are hereby advised that the board of directors of Adcorp has approved and
declared an interim gross dividend of 16.1 cents per ordinary share (2022: 12.2 cents per
ordinary share), from income reserves, for the six months ended 31 August 2023.

The dividend is subject to a South African dividend withholding tax rate of 20%, resulting in a
net dividend of 12.88 cents per ordinary share (2022: 9.76 cents per ordinary share), unless
the shareholder is exempt from paying dividend tax or is entitled to a reduced rate of dividend
tax in terms of an applicable double-taxation agreement.

As at the date of this announcement, the Company has 109 954 675 ordinary shares of no
par value in issue.

The Company's income tax reference number is 9233680710.

Salient dates and times

Shareholders are hereby advised of the following salient dates and times for the payment of
the dividend:

  Publication of declaration data and finalisation information        Monday, 30 October 2023
  Last day to trade cum dividend                                     Tuesday, 16 January 2024
  Securities commence trading ex dividend                          Wednesday, 17 January 2024
  Record date for purposes of determining the registered
  holders of ordinary shares to participate in the dividend at
  close of business on                                                Friday, 19 January 2024
  Payment date                                                        Monday, 22 January 2024

Share certificates may not dematerialised or rematerialised between Wednesday,
17 January 2024 and Friday, 19 January 2024, both dates inclusive.

OUTLOOK

The outlook for our South African operations has worsened due to persistent high levels of
load shedding, compounded by infrastructure failure, sector-specific impacts and a high
inflationary and interest environment. These challenges have soured the business mood, with
clients hesitant to expand operations in the current economic climate. GDP growth is expected
to be marginal, continuing to impede job creation. We anticipate these factors will lead to lower
demand, negatively impacting performance.

While the outlook in Australia has softened due to cost-of-living pressures and rising interest
rates, the business environment remains favourable. The labour market has moderated, but
sectoral demand variations provide a cushion while inflation continues declining.

Adcorp's challenge lies in investing in profitable growth whilst controlling costs and preserving
robust cash flow. Our management remains steadfast in its commitment to safeguarding
investor value and navigating these challenges with strategic agility and resilience.

SHORT-FORM ANNOUNCEMENT

This short-form announcement is the responsibility of the directors and is only a summary of
the information contained in the full unaudited interim results for the six months ended 31
August 2023 ("Full Interims") and does not contain full or complete details. The Full Interims
are available on the JSE cloudlink at https://senspdf.jse.co.za/documents/2023/JSE/ISSE/ADR/HY2024.pdf 
and on the Group's website at https://www.adcorpgroup.com/fy2024-unaudited-adcorp-group-interim-results/.

Copies of the Full Interims may also be requested from the Group's registered office and at
the office of the Group's sponsors during office hours 8:00 - 16:00, Monday - Friday at no cost
at the contact details below. Any investment decision should be based on the contents of the
Full Interims available on the JSE's cloudlink and the Group's website.

This short-form announcement and the Full Interims, for the six months ended 31 August 2023, 
from which the information contained in this short-form announcement was extracted, have not 
been audited or reviewed by the Company's auditors.

On behalf of the board

GT Serobe               Dr JP Wentzel                N Prendergast
Chairman                Chief Executive Officer      Chief Financial Officer

30 October 2023

Directors

Executive
Dr John Wentzel (Chief Executive Officer)
Noel Prendergast (Chief Financial Officer)

Non-executive
Gloria Serobe (Chairman)
Clive Smith
Timothy Olls

Independent non-executive
Melvyn Lubega
Dr Phumla Mnganga (Lead Independent)
Tshidi Mokgabudi
Prof Herman Singh
Ronel van Dijk

Alternative non-executive
Sam Sithole

JSE Sponsor
Valeo Capital Proprietary Limited, Unit 12 Paardevlei Specialist Centre, Somerset West, 7130

Registered office
Adcorp Holdings Limited, Adcorp Place, 102 Western Service Road, Gallo Manor Ext 6

Company Secretary
Lisa Laporte, Adcorp Place, 102 Western Service Road, Gallo Manor Ext 6

Transfer secretaries
CTSE Registry Services (Pty) Ltd, 5th Floor, Block B, The Woodstock Exchange Building, 66-
68 Albert Road, Woodstock Cape Town South Africa, 7915

Investor relations
Singular Systems, Michèle Mackey: +27 (0)10 003 0700 michele@singular.co.za

External auditors
KPMG Inc., KPMG Crescent, 58 Empire Road, Parktown, Johannesburg, 2193

Date: 30-10-2023 09:00:00
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