Human resources firm Adcorp has forecast a decline in its earnings for the first half of the year, primarily due to one-off restructuring costs totaling R25.6 million. The company expects its headline earnings per share (HEPS) for the six months ending in August to fall between 26.6 cents and 29.9 cents, marking a decrease of 9.7% to 19.7%.
In a statement released on Tuesday, Adcorp highlighted that its Staffing Solutions and Contingent Services divisions performed well, achieving robust revenue and gross profit growth. Conversely, the Professional Services sector faced softer demand. However, the division’s ability to manage costs and adapt to changing client needs resulted in stable overall performance and positive year-on-year growth in group revenue and gross profit.
Adcorp noted that the first half of the year was challenging due to market conditions in both South Africa and Australia. In response, the company implemented key restructuring initiatives aimed at reducing costs and enhancing efficiency.
Although the restructuring costs impacted short-term earnings, Adcorp anticipates that these measures will yield significant long-term efficiencies. The company also reported effective working capital management, leading to strong cash generation, with a net cash position of R266 million at the end of the reporting period.
Adcorp plans to release its financial results on October 31.