Human capital services company Workforce Holdings has released results for six months ended 30 June 2019, showing growth despite a difficult operating environment, with revenue increasing by 7,7% to R1,53-billion (2018: R1,42-billion).

EBITDA for the period increased by 5,2% to R80-million (2018: R76,1-million) on the back of this. The period saw many Workforce clients experience financial pressure as a result of the economy but, despite this, the company improved its cash flow from operating activities to R48,5-million (2018: R37,7-million). Operating cash conversion improved to 0:61 (2018: 0:58).

Ronny Katz, CEO of Workforce, comments: “Workforce continues to make excellent progress in realising its vision of being a diversified services company with various subsidiaries that provide an extensive range of innovative, integrated and diversified people solutions to all industry sectors in southern Africa.

“Overall performance was also negatively affected by the overall subdued economic climate, the election effect and a general contraction in government spend on infrastructure.”

Despite these challenges and supported by the group’s diversification strategy, the non-staffing components continue to represent a larger contribution than prior years. “This is, in the current period, still the largest contributor to revenue and EBITDA, albeit off the back of a lower result in our staffing and outsourcing businesses,” Katz says.

Uncertainty in the deeming provision had a negative knock-on effect on the staffing and outsourcing cluster’s growth in the first six months of the year.

The staffing and outsourcing cluster (which includes the recruitment and Africa clusters) experienced low growth in turnover and a reduction in EBITDA of 15% to R65-million (2018: R76-million) due to economic and legislative challenges.

The training cluster improved EBITDA by 42% to R27,3-million as a result of a higher gross margin and organic growth in turnover. Dyna Group, which was acquired by Workforce, contributed R2,8-million to the increase in EBITDA. The Training cluster now contributes 25% to total EBITDA, compared to 17% in the previous year.

The healthcare cluster invested in new business growth resulting in an increase in EBTIDA of 54% to R15,9-million (2018: R10,3-million). The additional investment in infrastructure and human capital benefitted the healthcare cluster, which has continued to focus on new service offerings, including expanding its presence at wellness days and establishing various healthcare solutions such as multidisciplinary healthcare practices.

Although the healthcare landscape remains competitive, Workforce managed to increase market share through building brand awareness, creating on-line visibility, coupled with an aggressive growth strategy that has yielded positive results.

Fair value adjustments and depreciation resulting from acquisitions amounted to R9,9-million.

No interim dividend was declared.