Kelly Group is beating the economic downturn with revenues increasing 8% for the six months to March 2009 – largely on the back of improved performance from Torque IT.
Chief executive Grenville Wilson says that, under the circumstances, the group did well to maintain margins and EBIT at levels close to those of the previous year.
He attributes the group's creditable performance to an improvement in productivity by its South African staffing division with the average temp headcount per permanent employee up 10% on the previous reporting period; a slight improvement in the outsource margin; and Torque IT, which contributed to EBIT in its first half-year reporting period.
Overall, the group`s South African operations posted a 4,5% growth in revenue with the group`s flagship brands Kelly and PAG showing an improvement in EBIT over the previous reporting period.
In the US, the group's M Squared operation felt the pinch of the recession with revenue declining 11,3% in dollar terms.
Average outsource headcounts for the first six months were down 6% on the same period last year but outsource revenues showed growth of 2,6% for the first six months due to an increase in revenue recovered per headcount employed.
Permanent placements made by the group decreased by 33,4% for the reporting period, reflecting the trend by companies to cut back on fixed overhead. This was, however, offset by an increase of 25% in the group`s average placement fee resulting in a net decline of 16,7% in permanent placement revenues for the first six months.
Wilson says that, despite a particularly weak April, he expects to see a slight improvement in trading conditions in the second half of the year with certain sectors of the economy, such as tourism, hospitality, sporting events and those relating to infrastructure showing some growth.
"Internally, we intend to counter the effects of the economic slowdown through a continued focus on margin improvement, market share gains, the penetration of new market sectors and the development of new services," he says.