Johannesburg - Employment services group Kelly Group [JSE:KEL] on Monday reported a 16% decline in diluted headline earnings per share to 13.5 cents for the six months ended March 2011 from 15.9 cents a year ago.
Revenue was 4% higher at R1.023bn, while operating profit declined 17% to R18.15m. Earnings before interest and tax (EBIT) for the half year was down to R17.8m from R23.9m the year before.
The group's South African operations' combined revenue of R773m was 1% down on the corresponding period despite revenue growth of 18% from its skills training business Torque IT.
It said the prevailing economic climate, exacerbated by labour law uncertainties, continued to take its toll on the recruitment sector with the staffing operations contracting by 2%. Revenue from permanent placements and conversions reduced by 17% and 19% respectively while annuity revenue from outsourced business declined by 4% as a result of a 3% reduction in the group's managed headcount and some gross margin pressure.
Kelly Industrial continued to perform well, increasing revenue and EBIT by 12%. InnStaff managed to gain market share in the hospitality industry, increasing its annuity revenue by 10% off the back of a managed headcount growth of 4%.
The group's US operations posted revenue growth of 35% in dollar terms thanks to improving economic conditions and employment gains in that country. However, an 8% appreciation in the rand/US dollar exchange rate eroded some of this growth in rand terms.
Chief executive Grenville Wilson said the group had achieved continued productivity gains and cost curtailment, largely due to the implementation of a company transformation effort resulting in the development of a number of proprietary workforce management software systems.
The group also announced that Wilson has resigned as chief executive and a director of the board, effective 30 June, and that his position would be taken over by Gareth Tindall the next day.
Tindall was previously an executive director of Dimension Data, CEO of Hertz SA and the commissioner of the Southern African PGA Tour.
Revenue was 4% higher at R1.023bn, while operating profit declined 17% to R18.15m. Earnings before interest and tax (EBIT) for the half year was down to R17.8m from R23.9m the year before.
The group's South African operations' combined revenue of R773m was 1% down on the corresponding period despite revenue growth of 18% from its skills training business Torque IT.
It said the prevailing economic climate, exacerbated by labour law uncertainties, continued to take its toll on the recruitment sector with the staffing operations contracting by 2%. Revenue from permanent placements and conversions reduced by 17% and 19% respectively while annuity revenue from outsourced business declined by 4% as a result of a 3% reduction in the group's managed headcount and some gross margin pressure.
Kelly Industrial continued to perform well, increasing revenue and EBIT by 12%. InnStaff managed to gain market share in the hospitality industry, increasing its annuity revenue by 10% off the back of a managed headcount growth of 4%.
The group's US operations posted revenue growth of 35% in dollar terms thanks to improving economic conditions and employment gains in that country. However, an 8% appreciation in the rand/US dollar exchange rate eroded some of this growth in rand terms.
Chief executive Grenville Wilson said the group had achieved continued productivity gains and cost curtailment, largely due to the implementation of a company transformation effort resulting in the development of a number of proprietary workforce management software systems.
The group also announced that Wilson has resigned as chief executive and a director of the board, effective 30 June, and that his position would be taken over by Gareth Tindall the next day.
Tindall was previously an executive director of Dimension Data, CEO of Hertz SA and the commissioner of the Southern African PGA Tour.