Workforce Holdings released results for the year ended 31 December 2022.
According to CEO Ronny Katz, the performance of the investment clusters are very pleasing. “Given the positive contribution from all clusters at an EBITDA level, this tangibly demonstrates that our strategic interventions, along with improved technology and systems, are working.”
He adds that this year was particularly notable for additional global expansion undertaken by the group, with Workforce now operational in 10 countries outside of South Africa. “This involves 32 active trading brands, all offering products and services in the human capital space.”
Katz comments that this had also been a year in which the culmination of the cluster strategy had come to the fore, with Workforce well positioned for additional future growth as a result.
Revenue grew by 24% to R4,3-billion (2021: R3,5-billion), which is a record for the group, supported by a strong result from the Staffing and Outsourcing cluster offering human capital, staffing and outsourcing solutions. This performance was supported by a robust recovery from the other clusters.
EBITDA increased by 10% to R168,3-million (2021: R152,6-million). The lower increase, compared to revenue, is a result of the decline in gross margin. “Margin pressure was felt across the business, particularly in the second half of the year, and net margins were disappointing,” says Katz, indicating that measures are in place to rectify this going forward.
A combination of substantial turnover growth and less than optimal debtor management resulted in a reduced cash flow from operating activities, which fell to negative R65,3-million (2021: negative R29,2-million). “Our biggest priority is to claw back the debtors in the coming financial year through increased monitoring and discipline and better use of technology and monitoring.”
The board of directors decided not to declare a dividend due to the company’s need for debtor funding and future expansion plans.