Workforce Holdings foresees renewal of the permanent placement industry

WORKFORCE Holdings, a provider of employment, training and wellness services, said yesterday that it expects a pick up in the demand for labour contracting as it swung back to profitability during the six months ended June 2021 in line with the rebounding economy.

Chief executive Ronny Katz said the level 4 lockdown and the current level 3 of the Covid-19 pandemic had affected the economy and the business, and had created a stop-start situation, which inevitably would affect the results of their investments.

“Workforce believes that the third wave is being contained and as a result business activity will reach levels higher than the 2020 financial year.

“We foresee a reinvigoration of the permanent placement industry, coupled with a change in emphasis in the areas in which staffing will be required,” Katz said, adding that the demand should be further supported by the necessary infrastructure rollout and policies which the government must follow.

Workforce generated revenue of R1.6 billion, up 29 percent from R1.3 billion a year earlier as the majority of the group’s divisions recovered from the Covid-19 pandemic and others improved their financial positions.

Katz said the training cluster posted a much-improved performance compared to the same period in 2020, primarily due to the opening of the economy while the recruitment cluster was hampered by companies slashing staff and not re-employing when lockdown levels eased.

The healthcare cluster, which provides occupational healthcare services and healthcare personnel solutions, generated R157 million revenue, up 14 percent from R138m a year earlier.

Katz said the healthcare cluster faced several dynamics including the reduction in hospital demand for elective

procedures due to the continued lockdown, and the lower demand for additional nursing staff as the Covid19 waves eased.

“Covid-19 will likely still result in significant uncertainty, particularly as clients experience budget constraints. To counteract this, this part of the cluster will continue to grow the new clinic network,” said Katz.

However the profitability of the financial services cluster was impacted by the decision to adopt a conservative approach by reducing the amount of lending, due to instability in the work environment.

“However, during the last three months of the interim period, collections improved, allowing lending to resume,” said Katz.

The group said its investment cluster, which is the main contributing investment cluster of the group, experienced an extremely positive start to the new financial year, with revenue increasing by 32 percent to R1.3bn from R978m in 2020.

Katz said that the share price continues to be impacted by the insignificant appetite for small cap shares and by the perceived risks for the economy.

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