Cost-cutting allows Adcorp to become profitable again
The company said it was on track to realise the balance of the R200m savings identified as part of the first phase of cost reduction
Adcorp returned to profitability in the six months to end-August, after the recruitment group cut costs as part of its restructuring.
Led by CEO Innocent Dutiro, who took over from Richard Pike a year ago, the company reported a net profit of R99m, swinging from a loss R36m in the matching period a year ago.
Group revenue rose a modest 3% to R8bn, reflecting the sluggish South African economy. Revenue from Australia was up 11% in constant currency terms. Operating expenses dropped 16% to R896m while net debt dropped to R646m from R1.3bn.
"The focus in the current year is on stabilising operations, stemming losses from our training business and unlocking short-term wins as we develop a blueprint for the future of Adcorp," the company said in a statement.
The company said it was on track to realise the balance of the R200m savings identified as part of the first phase of cost reduction.
Markets cheered the results, with the share price gaining 10% to R18.70 in early trade on the JSE, giving Adcorp a market value of R2bn.