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OVERVIEW

The financial year ended 28 February 2010 proved to be a particularly tough year for the Adcorp Group. In the context of the severe recessionary conditions that characterised the South African economy, trading results were, however, generally satisfactory albeit lower than the earnings reported for the prior year.

In this regard, normalised earnings for the year of 315,3 cents per share (FY2009: 390,1 cents per share) were some 19% lower than the comparable normalised earnings per share for the prior year.

Group revenue of R5 050 million reflected a 4% increase compared to revenues of R4 837 million achieved in the prior year.

Whilst different reporting entities within the Group experienced the effects of the recession in varying degrees, the dominant blue collar flexible staffing businesses continued to perform well, vindicating the Group’s decision in 2006 to significantly increase its exposure to this particular sector of the market.

The shift of the Group’s exposure toward blue collar flexible staffing was in response to the rapid growth that this sector was experiencing at the time and, as such, the strategy was therefore predominantly offensive in nature.

The growth in exposure to this sector was effected by the acquisitions of Capital
Outsourcing Group (“COG”) in 2007 and Staff-UNeed (“SUN”) in 2008. With the benefit of hindsight, this strategy has also proved to be robust and defensive in nature. Both of these acquisitions have integrated well into the Group and, together with legacy blue collar staffing business, Capacity, have performed extremely well in difficult circumstances.

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