34 STAFFING ????? AND OUTSOURCING Kelly Group continues to benefit from having positioned itself to service those sectors of the market where skills are scarce. Revenue growth of 15% to R2,2bn in the 12 months to September is reflective of the resilience of the South African staffing market, driven primarily by the shortage of skills. Kelly’s strategy is to continually develop new products and services, specifically for the scarce skills market.
The recent acquisition of Torque IT, plus establishing a new ICT division, are expected to provide good growth and revenue opportunities with the projected shortfall of ICT practitioners estimated at 70 000 people, more than 25% of the current ICT workforce. However, Kelly’s product offering isn’t limited
12 FEBRUARY 2009 to staff placements but has diversified to include business process outsourcing services and training. Kelly offers expert payroll, thirdparty and electronic funds payments solutions as well as microloan and automated attendance systems through its Paxsal and K-Log subsidiaries.
The group’s systems and its Kelly brand are highly regarded in the industry, thereby supporting sustainable earnings in the currently difficult economic environment. Kelly’s operating margin improved to 6% in 2008, despite slower second half revenue growth. That was largely attributable to enhanced productivity gains, technological advances and expansion into new market sectors.
Kelly had a solid operating performance in 2008, with cash generated from operations up 23% at R158m and net income up 64% at R97m. Despite that sound performance, SA’s staffing market was impacted by global economic jitters, high interest and inflation rates with the result that the sector’s share price came under fire. Kelly wasn’t excluded, with its average price falling from 866c in February 2008 to its current 463c/share. This is Kelly Group’s first full set of results since listing. A dividend yield of 7,7%, coupled with its reported sturdy financial performance, makes Kelly an attractive investment option. It was a winner on the reporting front, with Kelly Group’s 2007 annual report voted the best in the fledgling company category by the Chartered Secretaries of Southern Africa.