Press Release – Workforce continues to show steady growth despite economic gloom

Highlights of the year

  • Revenue increased by 7.4% to R3.0 billion
  • Gross profit increased by 8,8%
  • EBITDA increased by 26,9% to R156.9 million
  • Profit after tax increased by 8.0% to R104.6 million
  • Headline earnings per share increased by 6.1% to 45,4 cents
  • NAV per share increased by 11.4% to 264 cents per share
  • Dividend declared

27 March 2019, Johannesburg – Workforce Holdings, the human capital services company, today released results for the year ended 31 December 2018.

The results continued to show steady growth through tough economic times, with revenue for the year increasing by 7.0% to R3.0 billion (2017: R2.8 billion). EBITDA for the year increased by 26.9% to R156.9 million (2017: R123.5 million) on the back of this.

“Pleasingly, we made considerable progress in realising our vision of becoming a diversified services company with various subsidiaries providing an extensive range of innovative, integrated and diversified people solutions to all industry sectors in southern Africa,” said Ronny Katz, the CEO of Workforce.

“The increase in operating margins was mostly due to the significant growth experienced in our training cluster, as this sector typically operates at much higher net margins than the staffing businesses,” Katz went onto explain.

The group secured an acquisition funding facility of R30 million, enabling the acquisition of the Dyna group training businesses in June 2018. “During the year under review, we obtained additional funding of R15 million, secured by our micro-lending book, allowing us to expand the business of Babereki in Botswana. We remain encouraged that external funders support our acquisitive and organic growth strategies.”

Operational structure and financial review

Organisationally, the group realigned its diversification and growth strategy and formed clusters of the different business activities, placing each cluster under the leadership of a cluster executive. In addition, a group executive committee was established to support the CEO in strategic decision-making.

“The non-staffing subsidiaries made remarkable progress in positioning themselves for significant growth to realise and support this strategy. Especially pleasing was the significant growth achieved by our training cluster, as already mentioned. Our non-staffing clusters now represent 37% of total EBITDA contribution to the group’s results.”

Katz said that from Workforce’s point of view, operating in the current environment was challenging, with an economy that is stagnating with close to zero growth, the shedding of jobs, a shortage of capital and the beginning of an increasing interest rate cycle internationally.

“In addition, our core businesses operated under uncertainty stemming from the interpretation of Section 198A of the Labour Relations Act, better known as the ‘deeming provision’, which led to a cautiousness in the use of certain of our services.”

According to Katz, this came to a head with the Constitutional Court ruling which ultimately endorsed the legitimacy of the Temporary Employment Services (“TES”) industry and supported the concept of the client becoming the employer of outsourced staff after a period of three months for the purposes of the Labour Relations Act only.

Katz added that from a regulatory point of view, the group welcomed the introduction of the minimum wage legislation. “Although it initially created a degree of uncertainty, we believe it will, in the longer term, improve the stability of labour in the country and will provide fairer and more sustainable pay structures.”

The Employment Tax Incentive (“ETI”) remains a significant contributor to group financial results and Workforce is pleased that Government has proposed a ten-year extension to 28 February 2029. This programme incentivises companies that employ previously disadvantaged unemployed youth between the ages of 18 and 29.

The EBITDA contribution from the training cluster increased to R49.9 million (2017: R19.4 million), R8.4 million of which came from the Dyna group of companies purchased on 1 June 2018, with the rest being purely organic in nature.

The staffing and outsourcing cluster experienced a slow year, due to economic and legislative challenges as outlined. The net result was a reduction in EBITDA contribution of 6.2% to R152.3 million (2017:
R162.4 million).

The healthcare cluster invested in additional infrastructure and human capital, resulting in a 20% increase in operating expenses. This initiative is yielding results with a growth in EBITDA contribution of 22.3% to R23.9 million (2017: R19.6 million).

The financial services cluster invested in new resources with EBITDA contribution increasing by 11.2% to R14.2 million (2017: R12.8 million).

The shared services and central costs improved by 8.0% to R83.5 million (2017: R90.7 million) attributable to management interventions.


“We believe we are firmly in the process of establishing a structure that will enable sustainable growth in all our segments and which will enable Workforce Holdings Limited to act as a holding company of investments in different segments in the people services sector of the economy. We look forward to the numerous infrastructure projects, both in South Africa and neighbouring countries, in which Workforce is able to become a meaningful, relevant and significant player,” said Katz.

“Technology developments will set us apart in the acquisition of contracts and benefit the group in the management of our clients’ business in terms of productivity and welfare.”

He concluded that Workforce remains optimistic that it will fare well in the current economy, and is hopeful of a smooth election and leadership transition to follow. “This will stabilise the country’s political environment, diminish uncertainty and in this context, the outlook is for satisfactory growth for the group.”

For the full SENS announcement and detailed financial results please visit




About Workforce Holdings Limited (

Workforce Holdings and its group of companies is a leading, trusted provider of employment, training, healthcare, wellness, financial services and lifestyle benefits to individuals and their employers. Our human capital solutions include: temporary employment services, permanent placement recruitment, training and skills development, healthcare and wellness, disability solutions, financial services and lifestyle benefits and business process outsourcing. Workforce Holdings Limited is listed on the AltX board of the JSE.

Issued on behalf of:                       Workforce Holdings Limited
Compiled by:                                     Keyter Rech Investor Solutions
Contact:                                               Vanessa Rech
Tel:                                                         Tel: 087 351 3814 or 083 307 5600
Distributed by:                                 Turquoise PR & Marketing Communications
Contact:                                               Despina Harito
Tel:                                                         Tel: 084 453 1755
JSE code:                                             WKF

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