Education and IT staffing group Advtech posted disappointing results for a year plagued by law suits, board reshuffling and "untimely, opportunistic offers for control of the group".
The Randburg based company ended its 2001 financial year with turnover down 6% to R516 million.
Hardest hit was its recruitment division, whose turnover dropped 33%, while EBITDA (earnings before taxation, depreciation and amortisation) dropped 32% to R13 million for the year to December.
The group says this was largely due to difficulties with its Australian operations, and according to management, the local operations in this arena faired little better.
After results for the first half of the year became available, Advtech management says they immediately took action and the recruitment division made some recovery in the latter half of the year.
Advtech CEO Hugh Brown says the recruitment division`s performance was extremely disappointing, but says the group will be looking to try salvage some profitability from the division as a whole, and the Australian operations in particular, before the group reviews its investments and takes a decision on future feasibility.
During the year, several non-performing and non-core activities where either shut down or sold, particularly in the recruitment division.
Losses arising from restructuring and discontinued operations during the year amounted to R9.4 million.
The education division, however, grew turnover for the year by 22% and operating profit before depreciation and amortisation by 21% to R44.6 million.
The results announcement pointed to Crawford schools as one of the star performers in the division, turning in what the group described as "impressive results".
Ongoing litigation
However, Advtech remains in litigation with the Crawford division, with claims being lodged against vendors of both the Crawford and Communicate divisions, both of which the group only expects to be resolved at the end of 2002.
Brown says the group fully expects to see money back as a result of the litigation, noting that both claims in the ongoing litigation are "very high".
The Crawford litigation arises over a restraint agreement between Advtech and Crawford founder Graham Crawford, which Advtech claims was breached. Advtech is also attempting to reclaim some of the cash from the purchase price of Communicate.
Exceptional costs of R10.2 million were incurred during the year as a result of vendor litigation and related expenses other than the above.
Another event which the management point to as having thrown a spanner in the works was the failed attempt by the Calejero consortium to acquire Advtech earlier in the year, which the group described in its presentation as "untimely, opportunistic offers for control of the group".
In addition, the group lost two helmsmen in the course of the 12-month period. MD, Renney Plit quit in May and CEO Rob Childs exited in November. Brown took over as temporary CEO and as a non-executive director.
Brown believes the company has turned the corner and is moving forward as a more streamlined organisation. He says the market can expect an announcement on a permanent CEO in the next couple of months.
Headline earnings for the year came in at 6.16c per share compared to the 7.26c reported for the comparable period.
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