Our opinion on the current state of ADR

2 нояб. 2023 г.

Adcorp (ADR) is an employment company with subsidiaries operating in South Africa and Australia. Managerially, efforts have been made in (1) defining and focusing on the core business (2) reducing costs (3) strengthening the brand and (4) transforming the culture. In its results for the six months to 31st August 2023 the company reported revenue up 10,2% and headline earnings per share (HEPS) from continuing operations up 34,4%. The company said, "This growth can be primarily attributed to the positive performance of the Contingent Staffing divisions in both South Africa and Australia". Technically, the share has been drifting sideways and downwards for the past 20 months although the prospect of a special dividend saw the share jump in late May 2023. Obviously, the high unemployment level in the economy had negatively impacted on this business and COVID-19 made the situation worse. It has suffered from the difficult conditions in the South African economy, but the new management team appears to be making the right moves. We believe that the share has potential.