Picture: REUTERS
Picture: REUTERS

Listed recruitment group Adcorp said on Friday it will report a huge drop in earnings for the year to February.

In a note to shareholders, the company said it will report a loss per share of 490.9c-589.1c compared with earning per share of 240.0c for the previous comparative period, a more than 200% drop.

Headline earnings per share are expected to be 13.9c-16.7c compared with 245.0c for the previous year, a decrease of 93.2%-94.3%. Operating profit for the company is expected to decrease 44.1%-53.4% to between R180.7m and R216.8m compared with R387.7m for previous financial year.

The human resources specialist recently said it would slash costs at its operations as SA’s weak economy takes its toll on job numbers.

The company swung into an after-tax loss of R447m during its six months to end-August, from a profit of R99m previously, hit by weak SA conditions and droughts and floods in Australia.

The focus in the second half of the financial year was finding ways to recover the losses incurred in the first half. Adcorp said trading conditions “have remained constrained”.

The group has started to review its portfolio and aims to streamline its operations and reduce debt.

In SA, the weak economy and high unemployment have caused Adcorp to reduce recruitment and the use of temporary employment services, the group said.

It is encouraged by the demand for its training services, particularly disability solutions provided by I-Can that remains high.

The group anticipates reduced earnings in the first half of its 2021 financial year in Australia despite the national reaction to Covid-19 having been less severe in that country.

Adcorp shares were 5.65% weaker on Friday at R4.01, giving it a R440.92m market value.

gavazam@businesslive.co.za

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