Adcorp resumes dividend payments to shareholders
Workforce-management company turns loss of previous year into profit
Workforce-management company Adcorp says it will resume dividend payments after returning to profits in the year to end-February.
The group, which is under new management and that last paid a final dividend in 2016, said on Monday it will pay shareholders 96.1c per share for the year.
It plans to target a dividend cover ratio of 1.5-times, “but this will be confirmed at the interim results for the 2020 financial year”.
Adcorp said it made a net profit after tax of R262.1m in the year to end-February, versus a loss of R561m the previous year.
“This reflects the early successes resulting from the implementation of a turnaround strategy aimed at achieving a sustainably lean and agile business, defining and focusing on our core, strengthening our brand and transforming our culture,” CEO Innocent Dutiro said.
“This positions the group favourably for growth over the next three years and investment opportunities that will enable the group to extend the scope of the business,” Dutiro said.
While revenue was marginally lower at R15.1bn, profits were boosted by lower costs and a decline in once-off charges, depreciation and amortisation, funding costs and impairments.
The group said its gearing ratio improved to 27% from 55%.
“The drive to right-size the business and ensure an efficient operating structure and processes is yielding positive outcomes,” Adcorp said.
In the year to February 2020, “we will turn our attention to the implementation of our new operating model and growth strategy in SA and provide greater focus on the prospects for our Australia business”.
Adcorp CEO Innocent Dutiro joins Business Day TV to discuss the company's new growth trajectory.