Earnings at Adcorp took a 13.3% knock in the 6 months to end-August - a drop the recruitment and human resources company has blamed entirely on negative economic conditions.
CEO Richard Pike said the earnings decline is not expected to stabilise before Adcorp's year-end in February 2010. Normalised earnings for the period were 157.8 cents per share, down from 182c/share in the same period last year.
Operating profit fell 19% to R86.3-mn. The normalised operating profit margin was 5.3% during the period, compared to 6.2% in the previous year's 1st half. Adcorp declared an interim dividend of 50c/share, in line with decreased profitability. This compares to a distribution of 62c/share in the 2008 interim period. Big business, especially in manufacturing and mining, has laid off workers over the past year because the cost of a permanent workforce base is not substantiated by decreased working hours.
Adcorp has benefited because these companies have opted for a more flexible labour supply. Pike said Adcorp recruitment agencies focusing on financial services skills bore the brunt of the crisis. However, these operations are now showing signs of stabilising.
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