Staffing solutions company Kelly Group aims to entrench itself in the ICT sector, as it faces declining earnings in the tough economic environment.
The group aims to offer training and recruitment services for contract and permanent staff.
Kelly moved into the ICT space in last August, with its purchase of Torque IT. The staffing solutions company acquired the ICT training solutions provider for a maximum price of R37.85 million.
Torque IT, which is 66% black-owned, is made up of three divisions: Torque Technical Training, Torque Career Campus and Torque Education Resources. The company has branches in Johannesburg, Pretoria, Cape Town, Nairobi, in Kenya, and Luanda, in Angola. It provides training in over 24 countries in Africa.
Kelly CEO Grenville Wilson says there are opportunities for the company to place contract workers into the sector. He says, although firms are cutting back on full-time staff, there are still projects that must be completed. This leaves openings for the group to place temporary staff into positions.
Deputy CEO Mthunzi Mdwaba says he cannot provide a target as to how much of the industry the group aims to garner. This is because the economic meltdown has slowed its plans to acquire companies that would aid its growth in the sector.
"I don`t have a full arsenal of attack. Without the global crisis, I may have been able to convince the board to make one or two more acquisitions to bolster Torque IT to get to the point where we can compete and take on the resident players," Mdwaba explains. Now, however, he says Kelly will have to "make do with what we have" to grow into the sector.
The recruitment company is a small player in the ICT sector and has not yet made an impression on the market, Mdwaba says. However, he believes that combining Torque IT`s skills with those offered by sister company, US-based consultancy firm M Squared, will offer it opportunities to grow.
Hard hit
On Friday, Kelly said earnings per share and headline earnings per share are expected to decrease by between 30% and 40% for the year to September compared with a year ago. Last year, headline earnings per share increased from 78.46c to 102.30c.
In his newsletter, Wilson says: "The third quarter has proved to be the toughest of the year so far, as we start feeling the full impact of the cutbacks and employment freezes implemented by the big corporates earlier this year."
Group revenue for the quarter was down 7.5%. SA and US revenue was down 7.5% in rand terms and US revenue down 14% in dollar terms, Wilson says.
However, the decline in group revenue was limited to 7.5% as a result of acquisitive growth from Torque IT, which produced revenue of R19.8 million that was absent in the same quarter last year.
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