Shares drop 4 percent after chief executive quits

ADCORP Holdings share price slid by more than 4 percent on the JSE yesterday after the global workforce solutions company announced the resignation of its chief executive, Innocent Dutiro, with immediate effect.

Adcorp shares closed 4.32 percent lower at R15.50 on the JSE yesterday.

“The timing of Dutiro’s departure has been driven by his desire to review his own career after giving two eventful years to the group,” Adcorp said.

Adcorp said yesterday that Dutiro had led the group through the first phase of a strategic turnaround that achieved notable successes, including the repositioning of the Adcorp brand.

Dutiro joined Adcorp exactly two years ago and he soon implemented a turnaround strategy for the group, which involved: reducing costs, improving working capital management, unlocking cash generation and strengthening the balance sheet.

In the six months to end August 2018, the turnaround yielded positive results as the group reported R99 million profit, improving on the R36m loss reported a year earlier.

However, in a trading update last week, Adcorp said it expected to report a loss of between 375.5 cents a share and 450.6c for the six months to end August compared to earnings per share of 90.2c reported last year, as a result of R450m in impairments included in its earnings.

The group said it had appointed Cheryl-Jane Kujenga, its chief financial officer (CFO), to act as its interim chief executive as it continued to search for Dutiro’s successor.

Kujenga has been recognised by the African Women of Chartered Accountants organisation as CFO of the year in the private sector.

“We have every confidence that her leadership and guidance in the interim period will continue to assist the group to deliver,” the group said.

It also said that it was actively working with its management to put in place corrective measures after its recent trading outlook.

These measures included a substantive chief executive that would assist the group with its next chapter.

Adcorp would review its business strategy to ensure that focus was placed on the core competencies of the group, namely temporary employment services, IT resourcing, business process outsourcing and training.

Adcorp also planned to bring forward its interim results that were scheduled to be released on October 28.

The group said the results would be followed soon after by a roadshow to engage with the key stakeholders for the group and update them on the key short-, medium- and long-term plans for the business.