Training company Torque IT was one of Kelly Group's better performers in the year to September.
The company reported revenue up 2%, to R2 billion, despite the job market having shed almost a quarter of a million jobs over the same period. However, the fragile local economy impacted operating performance, and operating profit dropped 67%, to R32.2 million.
Operating expenditure increased 10.1%, partly due to the group's continued investment in new and diversified business ventures, such as K-log and TalentOcean. Pre-tax profit declined 84%, to R13 million, and net profit declined 55%, to R26 million.
Business units that performed above expectations during the year include Torque IT, Kelly Industrial, as well as M Squared Consulting. Torque IT increased its revenue by 6% and net profit before tax by 138%. Last year, the company achieved revenue of almost R76 million, but Kelly did not split out the unit's revenue in the results published yesterday.
Torque IT is made up of three divisions and offers Cisco, Microsoft and Novell training. It has branches in Johannesburg, Pretoria, Cape Town, Nairobi (Kenya) and Luanda (Angola), and provides training in over 24 countries in Africa.
Kelly Group CEO Grenville Wilson attributes Torque IT's performance to renewed spending on training by the company's larger clients. He explains Torque accounts for about 10% of Kelly's gross profit, which was R465.5 million.
However, the unit is without a CEO after the Kelly removed deputy group CEO Mthunzi Mdwaba from its board in August, and subsequently reached a confidential settlement agreement with him earlier this month.
In a joint statement, the parties indicated they had reached a confidential settlement after Mdwaba decided there was no prospect of continuing in the company's employ. Mdwaba joined the Kelly Group in October 2008 as deputy CEO, after the staffing company bought Torque IT for R38 million.
Wilson says the board is looking into the structure of the entire group, and appointing a new CEO will form part of any reorganisation.
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