Workforce management provider Adcorp Holdings Limited posted a 14.9 percent increase in net profit for the first half of fiscal 2026, leaning on sharp operating discipline and improved contract margins to offset subdued client hiring activity. The earnings growth prompted the board to raise the company’s interim cash payout to shareholders.

CEO John Wentzel steered the Johannesburg-based group to a profit of R62.6 million ($3.75 million) for the six months through Aug. 31, 2026. That improved from R54.5 million ($3.26 million) a year earlier, alongside a 24.9 percent jump in operating profit to R90.2 million.

Better margins offset softer volumes

Top-line revenue slipped 2.1 percent to R6.26 billion ($374.71 million) after the staffing provider deliberately stepped away from lower-yielding business. Still, operating expenses fell 4 percent to R534.5 million ($31.99 million), widening the group’s EBITDA-to-net revenue conversion ratio to 17.5 percent from 15.4 percent during the prior comparable period.

The widening operating margins supported stronger bottom-line figures across common shares. Basic earnings per share rose 14.3 percent to R0.6, while headline earnings per share moved up 14.2 percent to R0.6. The earnings gains pushed directors to declare an interim gross dividend of R0.28.46 ($0.017) a share, up 14.9 percent.

Australia drives uneven regional results

Performance diverged by region and segment. Australian professional staffing delivered stronger profitability, and South African contingent staffing posted higher revenue and gross profit. By contrast, operational drag in domestic professional services and Australian contingent labor prompted leadership to rework execution in those units.

Total gross profit held steady during the interim half, slipping just 0.6 percent to R620.2 million ($37.12 million). That resilient showing lifted Adcorp’s overall gross margin to 9.9 percent from 9.8 percent, while earnings before interest, taxes, depreciation, and amortization rose 15.4 percent to R124.2 million ($7.43 million).

Working capital outflows narrow sharply

Cash generation before working-capital requirements reached R130.5 million ($7.81 million), up 2.8 percent from R126.9 million ($7.6 million). Seasonal cash drains narrowed significantly to R183.5 million ($10.98 million) from R261.4 million ($15.65 million), helped by client collection cycles holding firm at 40 days across core operations.

Adcorp closed August with net unrestricted cash reserves of R174.2 million ($10.43 million), down from R201.5 million ($12.06 million) a year earlier. Chaired by Gloria Serobe, the company plans to use that liquidity cushion to fund its Horizon strategy, focusing on technological modernization and higher-margin workforce contracts.