Workforce gets a lift from employment tax incentive — but it might not last
No dividend was declared, and the gearing ratio rose as a result of the Dyna acquisition
Government’s employment tax incentive helped labour broker and training group Workforce weather SA’s sluggish economy in the half-year to June. However, the company warned that both this incentive and tax deductions for learnership allowances — which enabled Workforce to receive a tax credit of R3m in the review period — "could be deemed unsustainable". The tax deduction helped boost headline earnings per share, which grew 8% to 20c, Workforce said on Thursday. Net profit rose 11% to R46m. Revenue grew a more modest 4.2%, to R1.4bn, which the company attributed to limited economic growth. Debt increased substantially, with the ratio of net interest-bearing debt to total tangible assets rising to 42% from 36% a year earlier. That was due to the purchase of the Dyna group of companies, which it bought for about R80m in cash, to boost its training and consulting division. The company did not declare a dividend.
"The economy remained very strained in the post-Zuma era, with low ec...