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WORKFORCE HOLDINGS LIMITED - Audited summarised condensed results for the year ended 31 December 2018

Release Date: 27/03/2019 07:05
Code(s): WKF     PDF:  
 
Wrap Text
Audited summarised condensed results for the year ended 31 December 2018

Workforce Holdings Limited
(Incorporated in the Republic of South Africa) 
(Registration number 2006/018145/06)
(JSE Share Code: WKF ISIN: ZAE000087847) 
("Workforce" or "the group")

Audited summarised condensed results
for the year ended 31 December 2018

Financial highlights
- EBITDA increased by 26,9% to R156,9 million (2017: R123,5 million)                   
- Profit after tax increased by 8,0% to  R104 million (2017: R96,8 million)          
- Revenue up by 7,4% to R3,0 billion (2017: R2,8 billion) 
- Cash flows from operating activities R54,9 million (2017: R11,4 million)
- EPS up by 8,6% to 46,7 cents (2017: 43,0 cents)
- HEPS up by  6,1% to 45,4 cents  (2017: 42,8 cents)
- NAV up by 11,4% to 264 cents (2017: 237 cents)             
- Days sales outstanding 53 days (2017: 53 days)
- Acquisition during 2018 Dyna group of companies

Commentary
Vision becoming reality
During 2018, Workforce made considerable progress in realising its vision of becoming a diversified 
services company with various subsidiaries that provide an extensive range of innovative, integrated 
and diversified people solutions to all industry sectors in southern Africa. The group has a strong 
commitment to its core areas of competence yet remains cognisant of the need to identify and move 
into new areas for growth.

Organisationally, the group realigned its diversification and growth strategy and formed clusters of 
the different business activities within the group and placed each cluster under the leadership of a 
cluster executive. In addition, a group executive committee was established to support the CEO in 
strategic decision-making.

The non-staffing subsidiaries have made remarkable progress in positioning themselves for significant 
growth to realise and support this strategy. Especially pleasing was the significant growth achieved 
by our training cluster, mostly from organic growth but also aided by an acquisition effective 
1 June 2018, which grew their EBITDA contribution to R49,9 million (2017: R19,4 million). 
Our non-staffing clusters now represent 37% of total EBITDA contribution to the group's results.

External operating environment
From Workforce's point of view, operating in the current environment was challenging with an economy 
which is stagnating at close to zero growth, the shedding of jobs, a shortage of capital and the 
beginning of an increasing interest rate cycle internationally.

In addition, Workforce's core businesses operated under uncertainty stemming from the interpretation 
of section 198A of the Labour Relations Act, better known as the "deeming provision", which led to 
cautiousness in the use of certain of our services. This was finalised following the Constitutional 
Court ruling that ultimately endorsed the legitimacy of the Temporary Employment Services ("TES") 
industry and supported the concept of the client becoming the employer of the outsourced staff after 
a period of three months for the purposes of the Labour Relations Act only.

From a regulatory point of view, we welcomed the introduction of the minimum wage legislation and 
although it initially created a degree of uncertainty, we believe it will, in the longer term, 
improve the stability of labour in the country and will provide fairer and more sustainable 
pay structures.

The Employment Tax Incentive ("ETI") remains a significant contributor to group financial results 
and Workforce is pleased that Government has proposed a ten-year extension to 28 February 2029. 
This programme incentivises the employment of unemployed youth between the ages of 18 and 29.

Financial performance
EBITDA for the year increased by 26,9% to R156,9 million (2017: R123,5 million), on the back of 
a 7,4% increase in revenue to R3 014 million (2017: R2 807 million). As a result, EBITDA as a 
percentage of sales increased to 5,2% (2017: 4,4%). The increase in operating margins is mostly 
attributable to the significant growth experienced in the training cluster. The training sector 
typically operates at a much higher net margin compared to the staffing businesses.

The EBITDA contribution from the training cluster increased to R49,9 million (2017: R19,4 million). 
R8,4 million of this contribution was derived from the Dyna group of companies purchased on 
1 June 2018, whilst the balance was purely organic.

The staffing and outsourcing cluster experienced a slow year, due to economic and legislative 
challenges as outlined above. The net result was a reduction in EBITDA contribution of 6,2% to 
R152,3 million (2017: R162,4 million).

The healthcare cluster invested in additional infrastructure and human capital which resulted in an 
20% increase in operating expenses. This initiative is yielding results with a growth in EBITDA 
contribution of 22,3% to R23,9 million (2017: R19,6 million).

The financial services cluster invested in new resources with EBITDA contribution increasing by 11,2% 
to R14,2 million (2017: R12,8 million).

The shared services and central costs improved by 8,0% to R83,5 million (2017: R90,7 million) 
attributable to management interventions. Fair value adjustments netted a R5,4 million expense, 
mostly as a result of imputed interest recognised as a result of acquisitions.

This amount netted an income of R10,3 million in the previous year, due to adjustments of the 
contingent consideration payable on business combinations.

Depreciation and amortisation of non-financial assets remained largely on par with the previous year. 
R15,6 million (2017: R10,4 million) of this amount relates to the amortisation of intangible assets 
resulting from acquisitions.

Taxation
As with previous financial years, the group's low tax rate arises primarily from the income derived 
from the ETI Programme not being taxable, and the learnership allowances claimed in terms of 
section 12H of the Income Tax Act. ETI has been provisionally extended to 28 February 2029 whilst the 
12H learnership allowance will be in place until 1 April 2022. Ongoing initiatives are under way to 
employ more youth, as well as to train more learners. Going forward, the group's tax rate will 
continue to be a function of our ability to utilise these two initiatives.

Cash generation
In a financial year which saw South Africa slip into a technical economic recession, with certain 
clients experiencing financial pressure, Workforce was nevertheless able to deliver a cash conversion 
ratio of 61% (2017: 38%) and generated cash flows from operating activities of R54,9 million. 
A noteworthy achievement is the steady improvement in the interest cover ratio since 2015, despite 
paying R144,4 million in cash for acquisitions since 2015.

The group's strategy to improve cash flow continues to be driven by initiatives to improve the EBITDA 
to sales ratio on a sustainable basis, along with good working capital management. This translates 
into a healthy return on capital employed, underpinned by cash generation. The group's days sales 
outstanding remained at 53 days (2017: 53 days). Unimpaired overdue debtors as a percentage of the 
total debtors' book, after consideration of IFRS  9 adjustments, deteriorated slightly to  9%, 
(2017: 3%). Return on total capital employed improved to 18,2% (2017: 16,8%). Various strategies are 
being implemented by our cluster heads to improve gross margin management, reduce operating costs 
and better manage working capital.

Funding
The group secured an acquisition funding facility of R30 million, which enabled the acquisition of the 
Dyna group training businesses in June 2018. Additional funding of R15 million, secured by our 
micro-lending book, was obtained during the financial year under review allowing us to expand the 
business of Babereki in Botswana. Workforce remains encouraged that external funders support the 
group's acquisitive and organic growth strategies.

Gearing
Workforce has a debt to equity ratio of 0,54 compared to the previous year's 0,52. The marginal 
difference in this ratio occurred despite the R79,3 million increase in liabilities as a result of 
the Dyna group acquisition. Our interest cover ratio improved to 5,14 (2017: 4,17).

Change in accounting standards: IFRS 9
The group applied IFRS 9 for the first time in 2018. The new standard does not change the credit 
quality of trade and other receivables, but results in the earlier recognition of credit losses by 
the group. IFRS 9 has been applied retrospectively. The net effect of the above change, which was 
calculated together with the assistance of a JSE Limited ("JSE") accredited IFRS adviser, was a 
reduction of R43 million in opening retained earnings, and a corresponding reduction in the opening 
value of our trade and other receivables of R79,3 million, which represents a reduction of 8,4% in 
the value of the underlying assets.

Outlook
From what is set out above, the management of Workforce believe that the group is in the process of 
establishing a structure that will enable sustainable growth in all the segments of the business and 
which will enable Workforce Holdings Limited to act as a holding company of investments in different 
segments within the people services sector of the economy. We look forward to the numerous 
infrastructure projects, both in South Africa and in neighbouring countries, in which Workforce is 
able to become a meaningful, relevant and significant player.

Technology developments will set us apart in the acquisition of contracts and benefit the group in 
the management of our clients' business in terms of productivity and welfare.

We remain optimistic that the group will fare well in the current economy, hopeful of a smooth 
election and leadership transition to follow. This will stabilise the country's political environment, 
diminish uncertainty and in this context, the outlook is for satisfactory growth for the group.

Appreciation
We would like to thank all members of staff and their management as well as executive and 
non-executive directors for their significant contribution to the management of the company and 
its growth. We could not have achieved the year that we have, with all the difficult circumstances 
that prevailed, without the people involved in our business.

John Macey                    Ronny Katz                        Willie van Wyk
Independent chairman          Chief executive officer           Financial director

26 March 2019

Group statement of financial position
as at 31 December 2018
                                                                                    2018         2017
                                                                       Notes       R'000        R'000
Assets                                                                                      
Non-current assets                                                               350 687      251 912
Property, plant and equipment                                              7      20 266       23 559
Goodwill                                                                         191 230      134 480
Intangible assets                                                          8      74 128       44 247
Deferred tax assets                                                               58 757       44 251
Other financial assets                                                             6 306        5 375
Current assets                                                                   783 521      744 246
Trade and other receivables                                                      734 787      714 389
Inventories                                                                        4 965        3 546
Taxation                                                                           2 221          763
Cash and cash equivalents                                                  9      41 548       25 548
Total assets                                                                   1 134 208      996 158
Equity and liabilities                                                                      
Equity                                                                           603 020      542 345
Equity attributable to owners of the parent                                      605 829      543 806
Stated capital                                                                   234 051      234 051
Treasury shares                                                                  (11 158)     (7 658)
Fair value through other comprehensive income                                        752          923
Foreign exchange differences on translation of foreign operations                    549            -
Equity-settled employee benefits reserve                                           9 288        6 793
Retained earnings                                                                372 347      309 697
Non-controlling interests                                                        (2 809)       (1 461)
Non-current liabilities                                                          107 933       38 173
Financial liabilities                                                             87 585       26 407
Deferred tax liabilities                                                          20 348       11 766
Current liabilities                                                              423 255      415 640
Trade and other payables                                                         141 535      136 914
Financial liabilities                                                            281 720      278 726
Total equity and liabilities                                                   1 134 208      996 158

Group statement of comprehensive income
for the year ended 31 December 2018
                                                                                             Restated
                                                                                    2018         2017
                                                                       Notes       R'000        R'000
Revenue                                                                        3 014 446    2 807 890
Cost of sales                                                                 (2 323 153)  (2 172 461)
Gross profit                                                                     691 293      635 429
Other income                                                                         278        1 032
Operating costs                                                                 (534 634)    (512 887)
Earnings before interest, taxation, depreciation and                  
amortisation ("EBITDA")                                                          156 937      123 574
Fair value adjustments                                                            (5 360)      10 365
Depreciation and amortisation of non-financial assets                            (25 179)     (26 080)
Finance income                                                                     2 829        1 486
Finance costs                                                                    (25 626)     (23 360)
Profit on sale of subsidiary                                                       2 822            -
Profit before taxation                                                           106 423       85 985
Taxation                                                                          (1 854)      10 819
Profit after tax                                                                 104 569       96 804
Other comprehensive income after tax                                  
Items that are reclassified to profit or loss:                                       549            -
Exchange differences on translating foreign operations                               549            -
Items that are not reclassified to profit or loss:                                  (171)         461
Fair value gain through other comprehensive income financial assets                 (171)         461
Total comprehensive income for the year                                          104 947       97 265
Profit for the year attributable to:                                  
Owners of the parent                                                             105 917       98 542
Non-controlling interests                                                         (1 348)      (1 738)
                                                                                 104 569       96 804
Total comprehensive income attributable to:                           
Owners of the parent                                                             106 295       99 003
Non-controlling interests                                                         (1 348)      (1 738)
                                                                                 104 947       97 265
Earnings per share (cents per share)                                    
Basic earnings per share                                                  10        46,7         43,0
Diluted earnings per share                                                10        45,7         41,2

Group statement of changes in equity
for the year ended 31 December 2018

                                               Attributable to owners of the parent

                                                           Foreign     Equity-  
                             Share                        currency     settled                        
                           capital                 Fair     trans-    employee                        
                               and   Treasury     value     lation    benefits    Retained            
                           premium     shares   reserve    reserve     reserve    earnings      Total 
                             R'000      R'000     R'000      R'000       R'000       R'000      R'000 
Balance at
1 January 2017             241 867     (9 330)      462          -       2 337     211 155    446 491 
Recognition of                                                                                        
share-based payments        (7 816)         -         -          -       5 227           -     (2 589)
Buy-back of shares               -     (3 124)        -          -           -           -     (3 124)
Issue of ordinary shares                                                                              
under employee share                                                                                  
option plan                      -      4 796         -          -        (771)          -      4 025 
Total comprehensive                                                                                   
income for the year              -          -       461          -           -      98 542     99 003 
Balance at                                                                                            
1 January 2018 as                                                                                     
previously reported        234 051     (7 658)      923          -       6 793     309 697    543 806 
Recognition of IFRS 9                                                                                 
adjustment                                                                                            
(refer to note 14)               -          -         -          -           -     (43 267)   (43 267)
Balance at                                                                                            
1 January 2018 restated    234 051     (7 658)      923          -       6 793     266 430    500 539 
Recognition of                                                                                        
share-based payments             -          -         -          -       2 495           -      2 495 
Buy-back of shares               -     (3 500)        -          -           -           -     (3 500)
Sale of subsidiary                                                                                    
(refer to note 16)               -          -         -          -           -       1 383      1 383 
Total comprehensive                                                                                   
income for the year              -          -      (171)       549           -     104 534    104 912 
Balance at                                                                                            
31 December 2018           234 051    (11 158)      752        549       9 288     372 347    605 829 

                         
                                                                                      Non-
                                                                               controlling      Total
                                                                                 interests     equity
                                                                                     R'000      R'000
Balance at                                                                       
1 January 2017                                                                         277    446 768
Recognition of share-based payments                                                      -     (2 589)
Buy-back of shares                                                                       -     (3 124)
Issue of ordinary shares under employee share option plan                                -      4 025
Total comprehensive income for the year                                             (1 738)    97 265
Balance at 1 January 2018 as previously reported                                    (1 461)   542 345
Recognition of IFRS 9 adjustment (refer to note 14)                                      -    (43 267)
Balance at 1 January 2018 restated                                                  (1 461)   499 078
Recognition of share-based payments                                                      -      2 495
Buy-back of shares                                                                       -     (3 500)
Sale of subsidiary (refer to note 16)                                                1 439      2 822
Total comprehensive income for the year                                             (2 787)   102 125
Balance at 31 December 2018                                                         (2 809)   603 020

Group statement of cash flows
for the year ended 31 December 2018

                                                                                             Restated
                                                                                    2018         2017
                                                                       Notes       R'000        R'000
Cash generated from operations before net working capital changes                135 425      103 111
Cash generated from operations                                          11.1     158 858      128 860
Finance income                                                                     2 829        1 486
Finance costs                                                                    (25 626)     (23 360)
Settlement of share-based payments                                                     -       (4 513)
Taxation paid                                                           11.2        (636)         638
Increase in net working capital                                         11.3     (80 496)     (91 706)
Cash flows from operating activities                                              54 929       11 405
Cash flows from investing activities                                             (69 258)     (57 611)
Property, plant and equipment acquired - maintaining operations            7      (6 742)      (8 969)
Proceeds on disposal of property, plant and equipment                                132        1 109
Dividend income                                                                      278        1 032
Intangible assets acquired - maintaining operations                        8     (13 670)      (7 645)
Net cash flow on acquisition of business combinations                   11.4     (49 256)     (43 138)
Cash flows from financing activities                                              30 329       (3 375)
Repayment of borrowings                                                           (2 086)      (5 535)
Proceeds from borrowings                                                          35 915          488
Payment for buy-back of shares                                                    (3 500)      (3 124)
Proceeds on disposal of shares                                                         -        4 796
Net change in cash and cash equivalents                                           16 000      (49 581)
Cash and cash equivalents at the beginning of the year                            25 548       75 129
Cash and cash equivalents at the end of the year                                  41 548       25 548

Notes to the summarised consolidated results
for the year ended 31 December 2018

1.   Nature of operations and general information
     Workforce Holdings Limited ("the company") is a holding company incorporated in South Africa. 
     The registered address and principle place of business is disclosed under corporate information 
     in the integrated annual report. The principal activities of the group are human capital 
     solutions that include temporary employment services, permanent placement recruitment, training 
     and skills development, contractor on-boarding, healthcare and wellness, disability solutions, 
     financial services, lifestyle benefits and business process outsourcing solutions.
 
2.   Basis of preparation
     The summary group financial statements are prepared in accordance with the requirements of the 
     JSE Listings Requirements for preliminary financial statements and the requirements of the 
     Companies Act applicable to summary financial statements. The summary financial statements were 
     prepared in accordance with the framework concepts and the measurement and recognition 
     requirements of International Financial Reporting Standards ("IFRS") and the SAICA Financial 
     Reporting Guides as issued by the Accounting Practices Committee ("APC") and the Financial 
     Pronouncements as issued by the Financial Reporting Standard Council ("FRSC"), and to also, as a 
     minimum, contain the information required by IAS 34 Interim Financial Reporting.
 
     The summarised consolidated results for the year ended 31 December 2018 were compiled under 
     the supervision of Willie van Wyk, the group financial director. The summarised consolidated 
     results have been prepared in accordance with the IFRS and have been applied consistently with 
     the accounting policies in the annual financials statements for the year ended 31 December 2018.
 
3.   Audit opinion
     The group annual financial statements for the year ended 31 December 2018 have been audited by 
     the group's auditors, Crowe JHB, and their unqualified audit report is available for inspection 
     at the registered office of the group. This summarised report is extracted from audited 
     information but is not itself audited. The directors take full responsibility for the preparation 
     of these consolidated results and the financial information has been correctly extracted from the 
     underlying annual financial statements.
 
4.   Posting of integrated annual report and notice of annual general meeting
     The integrated report for the year ended 31 December 2018 will be available on the group's website 
     at www.workforce.co.za on 29 March 2019.
 
     Audited summarised condensed results for the year ended 31 December 2018 including notice of 
     annual general meeting is expected to be mailed to shareholders on 29 March 2019.

5.   Events after reporting date
     A dividend of R3 399 689 was declared before the financial statements were authorised for issue 
     but not recognised as a distribution to owners during the period under review.

     Dividend declaration
     A dividend of 1,5 cents per ordinary share was declared as follows for the year ended 
     31 December 2018:
 
                                                                                                  2019
     Declaration date                                                                Tuesday, 26 March
     Last day to trade cum dividend                                                      Monday, 6 May
     Ex dividend date                                                                   Tuesday, 7 May
     Record date                                                                        Friday, 10 May
     Payment date                                                                       Monday, 13 May
     
     Share certificates may not be dematerialised or rematerialised during the period Tuesday, 
     7 May 2019 to Friday, 10 May 2019, both days inclusive.
     
     In terms of the Listings Requirements of the JSE Limited the following additional information 
     is disclosed:
     - This is a dividend as defined in the Income Tax Act, 1962, and is payable from income reserves;
     - The South African dividend tax ("DT") rate is 20%;
     - The DT to be withheld by the company amounts to 0,3 cents per share;
     - Therefore, the net dividend payable to shareholders who are not exempt from DT is 1,2 cents per 
       share, while the gross dividend of 1,5 cents per share is payable to those shareholders who are 
       exempt from DT;
     - The issued share capital of the company at the declaration date comprises 243 731 343 ordinary 
       shares including 17 085 379 treasury shares. The issued share capital, excluding treasury shares, 
       at the declaration date is comprised of 226 645 964 shares;
     - The company's registration number is 2006/018145/06; and
     - The company's income tax reference number is 9210/286/16/8.

6.   Principal accounting policies
     The group has adopted all the new, revised or amended accounting pronouncements as issued by the 
     International Accounting Standards Board ("IASB") which were effective for the group from 
     1 January 2018. The following standards had an impact on the group:
     - IFRS 9: Financial Instruments ("IFRS 9"); and see note 14
     - IFRS 15: Revenue from Contracts with Customers ("IFRS 15"). See note 14.

                                                      2018                            2017
   
                                                Accumulated   Carrying           Accumulated  Carrying
                                         Cost  depreciation      value    Cost  depreciation     value
                                        R'000         R'000      R'000   R'000         R'000     R'000
7.   Property, plant and equipment     
     Computer equipment                10 067        (5 319)    4 748   28 328      (21 765)     6 563
     Industrial equipment               7 248        (4 765)    2 483    8 636       (6 057)     2 579
     Land and buildings                 2 700             -     2 700    2 700            -      2 700
     Leasehold improvements               866          (247)      619    1 736       (1 175)       561
     Motor vehicles                     5 540        (2 596)    2 944   10 005       (5 550)     4 455
     Office equipment                   7 216        (3 097)    4 119   18 265      (14 194)     4 071
     Training manuals                   5 405        (2 752)    2 653    9 807       (7 177)     2 630
                                       39 402       (18 776)   20 266   79 477      (55 918)    23 559

     The carrying value of property, plant and equipment can be reconciled as follows:
 
                                                  Computer     Industrial     Land and       Leasehold 
                                                 equipment      equipment    buildings    improvements 
                                                     R'000          R'000        R'000           R'000 
     Carrying value at 1 January 2017                4 140          1 872        2 700             130 
     Additions                                       5 166          1 060            -             534 
     Disposals                                         (22)             -            -              (6)
     Acquired through business combinations            718            686            -               - 
     Depreciation                                   (3 439)        (1 039)           -             (97)
     Carrying value at 31 December 2017              6 563          2 579        2 700             561 
     Additions                                       2 537          1 247            -             242 
     Disposals                                         (21)            (5)           -               - 
     Acquired through business combinations             76              -            -               - 
     Depreciation                                   (4 407)        (1 338)           -            (184)
     Carrying value at 31 December 2018              4 748          2 483        2 700             619 
 
                                                      Motor        Office     Training        
                                                   vehicles     equipment      manuals           Total
                                                      R'000         R'000        R'000           R'000
     Carrying value at 1 January 2017                 3 693         2 827        2 653          18 015
     Additions                                        3 099         1 177        1 032          12 068
     Disposals                                         (317)          (24)        (147)           (516)
     Acquired through business combinations             421           985            -           2 810
     Depreciation                                    (2 441)         (894)        (908)         (8 818)
     Carrying value at 31 December 2017               4 455         4 071        2 630          23 559
     Additions                                           88         1 666          962           6 742
     Disposals                                          (62)           (1)           -             (89)
     Acquired through business combinations               -            73            -             149
     Depreciation                                    (1 537)       (1 690)        (939)        (10 095)
     Carrying value at 31 December 2018               2 944         4 119        2 653          20 266


     All depreciation charges are included in "Depreciation and amortisation of non-financial assets" 
     in the statement of comprehensive income. No property, plant and equipment has been impaired 
     during the year (2017: Nil).
 
     The net book value of motor vehicles held under instalment credit agreements at 31 December 2018 
     amounted to R2 402 542 (2017: R3 785 842). Motor vehicles acquired under instalment credit 
     agreements amounted to R Nil (2017: R3 099 000). The instalment sales relate primarily to 
     motor vehicles.
 
     A 100% interest in Dyna group was acquired on 1 June 2018, in order to expand the group's skilled 
     artisan and technical segments in the engineering industry. Property, plant and equipment to the 
     value of R149 000 was acquired as part of the business combination.
 
     The directors have determined that the residual value of the buildings is equal to or exceeds the 
     carrying value, therefore no depreciation has been provided for this category.
 
     The group has no further contractual commitments to acquire property, plant and equipment at 
     reporting date.

                                                    2018                              2017

                                                Accumulated  Carrying            Accumulated  Carrying
                                         Cost  amortisation     value     Cost  amortisation     value
                                        R'000         R'000     R'000    R'000         R'000     R'000
8.   Intangible assets
     Brands                                82            (6)       76    3 209        (3 209)        -
     Client relationships              42 194       (27 842)   14 352   31 522       (15 260)   16 262
     Computer software                 74 733       (45 069)   29 664   62 146       (45 081)   17 065
     Training course accreditations    20 620        (2 406)   18 214        -             -         -
     Development costs                 11 822             -    11 822   10 920             -    10 920
                                      149 451       (75 323)   74 128  107 797       (63 550)   44 247
  
     The carrying amounts of intangible assets can be reconciled as follows:
      
                                                                       Training
                                             Client   Computer           course  Development
                              Brands  relationships   software   accreditations        costs     Total
                               R'000          R'000      R'000            R'000        R'000     R'000
     Carrying value at        
     1 January 2017              756         14 067     15 755                -        8 552    39 130
     Additions                     -              -      1 677                -        2 368     4 045
     Disposals                     -              -        (39)               -            -       (39)
     Acquired through        
     business combinations         -         12 012      2 761                -            -    14 773
     Additions from internal                                                            
     development                   -              -      3 600                -            -     3 600
     Amortisation               (756)        (9 817)    (6 689)               -            -   (17 262)
     Carrying value at                                                      
     31 December 2017                        16 262     17 065                -       10 920    44 247
     Additions                    82              -      1 355                -       12 233    13 670
     Additions from internal                                                
     development                   -              -     11 331                -      (11 331)        -
     Acquired through        
     business combinations         -         10 672          3           20 620            -    31 295
     Amortisation                 (6)       (12 582)       (90)          (2 406)           -   (15 084)
     Carrying value at        
     31 December 2018             76         14 352     29 664           18 214       11 822    74 128

     The above amortisation expense is included in "Depreciation and amortisation of non-financial 
     assets" in the statement of comprehensive income. No intangible assets have been impaired during 
     the year (2017: Nil). Computer software is mostly internally generated.
     
     A 100% interest in Dyna group was acquired on 1 June 2018, in order to expand the group's skilled 
     artisan and technical segments in the engineering industry. Intangibles to the value of 
     R31 295 000 was acquired as part of the business combination. 
 
     The group has no further contractual commitments to acquire intangible assets at reporting date. 
     No restrictions exists over intangibles assets.
 
9.   Cash and cash equivalents
     Cash and cash equivalents include the following components:
 
                                                                                      2018        2017
                                                                                     R'000       R'000
     Cash at bank and in hand                                                       41 525      25 488
     Short-term deposits                                                                23          60
                                                                                    41 548      25 548
10.  Earnings per share
     Basic earnings per share
     The earnings and weighted average number of ordinary shares used in the 
     calculation of basic earnings per share are as follows:
 
                                                                                      2018        2017
                                                                                     R'000       R'000
     Profit attributable to equity shareholders of the parent company (R'000)      105 917      98 542
     Weighted average number of ordinary shares in issue ('000)                    226 856     229 336
     Diluted weighted average number of shares in issue ('000)                     231 634     238 973
     Basic earnings per share (cents)                                                 46,7        43,0
     Diluted earnings per shares (cents)                                              45,7        41,2
     The weighted average number of ordinary shares for the purpose                           
     of diluted earnings                                                                      
     per share reconciles to the weighted average number of ordinary shares                   
     used in the calculation of basic earnings per share as follows:                          
     Weighted average number of ordinary shares in issue ('000)                    226 856     229 336
     Shares deemed to be issued for no consideration in respect of:                           
     Employee options                                                                4 778       9 637
     Weighted average number of ordinary shares in the calculation of                         
     diluted earnings per share                                                    231 634     238 973
     Headline earnings per share                                                              
     The earnings used in the calculation of headline earnings per share                      
     are as follows:                                                                          
     Profit attributable to equity shareholders of the parent company (R'000)      105 917      98 542
     Headline earnings adjustment (R'000)                                           (2 822)       (400)
     Gain on disposal of property, plant and equipment (R'000)                           -        (555)
     Sale of subsidiary (R'000)                                                     (2 822)          -
     Tax effects of adjustments (R'000)                                                  -         155
     Total headline earnings (R'000)                                               103 095      98 142
     Weighted average number of shares in issue ('000)                             226 856     229 336
     Headline earnings per share (cents)                                              45,4        42,8

11.  Notes to the statement of cash flows                                           
     11.1   Cash generated from operations                                          
            Profit before taxation                                                 106 423      85 985
            Interest income                                                         (2 829)     (1 486)
            Other income                                                              (278)     (1 032)
            Finance costs                                                           25 626      23 360
            Adjusted for non-cash items:
            Gain on disposal of property, plant and equipment                            -        (555)
            Depreciation and amortisation of non-financial assets                   25 179      26 080
            Loss/(gain) arising on financial liability at fair value through 
            profit or loss                                                           5 360     (10 385)
            Foreign exchange differences on translation of foreign operations          549           -
            Expense recognised in respect of cash-settled share-based payment       (3 667)      1 666
            Expense recognised in respect of equity-settled share-based payment      2 495       5 227
                                                                                   158 858     128 860
     11.2   Taxation paid
            Charged to profit or loss                                               (1 854)     10 819
            Adjusted for deferred tax                                                2 256      (9 210)
            Movement in taxation balance                                            (1 038)       (971)
                                                                                      (636)        638
     11.3   Working capital changes
            Change in trade and other receivables                                  (80 047)   (100 527)
            Change in inventories                                                   (1 419)       (486)
            Change in trade and other payables                                         970       9 307
                                                                                   (80 496)    (91 706)
     11.4   Net cash flow on acquisition of business combinations
            Net cash outflow on the acquisitions of business combination 
            - refer to note 13.1.5                                                 (28 888)    (21 959)
            Net cash outflow on the acquisitions of subsidiaries                   (20 368)    (21 179)
                                                                                   (49 256)    (43 138)
   
     11.5   Equity-settled share-based payments
            Employees received shares in settlement of the equity-settled share-based payment scheme. 
            The employees were given the option of retaining the shares they were granted, or selling 
            their shares on the open market. The company sold the shares on the employees' behalf and 
            paid to them the proceeds from the sale.
            
                                                        1 January      Cash    Non-cash    31 December
                                                             2018     flows       flows           2018
     11.6   Changes in liabilities arising from
            financing activities  
            Non-current treasury share loan                 7 783         -         262          8 045
            Interest-bearing borrowings                   258 037    (7 652)          -        250 385
            Instalment sales liabilities                    3 066      (721)          -          2 345
                                                          268 886    (8 373)        262        260 775

12.  Segment reporting
     During the reporting period, the group re-organised its segments and formed six business clusters 
     comprising the different business activities, and placed each cluster under an independent 
     management team. As the formation of these clusters has been in transition since late last year, 
     our financial segmental reporting for the 2018 year will not reflect the new cluster structure 
     identically, but is structured as follows:
     - Staffing and outsourcing (includes recruitment and Africa) - comprising temporary employment 
       services, functional outsourcing, permanent recruitment, executive search, specialist staffing, 
       payroll management, HR and IR consulting and turnkey staffing solutions.
     - Training - comprising accredited short courses, skills programmes, full qualifications, 
       learnerships and apprenticeship programmes, adult education training and contractor on-boarding.
     - Financial services - comprising death and disability cover, funeral cover, hospital cover, 
       day-to-day medical insurance and financial and mobile products and services.
     - Healthcare - comprising recruitment and placement of medical professionals for hospitals and 
       frail-care homes, primary and occupational healthcare services, employee health and wellness 
       programmes and health risk assessment.
 
     These reporting segments better represent the current core trading of the group and allows for 
     simple understanding and communication of the performance of the business.
     
     These segments are monitored and strategic decisions are made on the basis of adjusted segment 
     operating results.
     
     Due to the above change in reporting segments, the prior year's segment information has 
     been restated.
     
     Segment information can be analysed as follows for the reporting periods under review:

                                                         Staffing                                       
                                                              and              Financial                
                                                      outsourcing   Training    services    Healthcare  
                                                            R'000      R'000       R'000         R'000  
     2018                                             
     Segment revenues                                   2 437 008    230 909     101 873       244 461  
     Inter segment revenue                                 27 894     16 187           -         1 582  
     Cost of sales                                     (2 001 994)  (111 317)    (39 364)     (174 508) 
     Inter-segment cost of sales                          (25 875)         -           -           (62) 
     Operating costs                                     (282 880)   (69 833)    (48 242)      (45 938) 
     Inter-segment operating costs                         (1 958)   (16 186)          -        (1 582) 
     Other income                                             128        141           -            23  
     EBITDA                                               152 323     49 901      14 267        23 976  
     Fair value adjustment                                      -       (885)        884             -  
     Depreciation and amortisation                     
     of non-financial assets                               (2 742)    (3 082)     (1 221)       (1 511) 
     Finance income                                           853      1 908          42            24  
     Finance costs                                         (2 573)    (1 549)    (12 413)       (2 241) 
     Profit on sale of subsidiary                               -          -           -             -  
     Segment profit/(loss) before tax                     147 861     46 293       1 559        20 248  
     Capital expenditure                                    2 446      3 761         143         1 494  
     Segment total assets                                 447 020     89 475     240 358        23 202  
     Segment total liabilities                            (43 166)   (48 302)   (298 921)       (2 706) 
     Net segment assets/(liabilities)                     403 855     41 173     (58 562)       20 497  
                                                       
                                                                      Shared
                                                                    Services
                                                                         and    Consoli-
                                                                     Central      dation
                                                                       costs     entries         Total
                                                                       R'000       R'000         R'000
     2018                                                                                  
     Segment revenues                                                    195           -     3 014 446
     Inter segment revenue                                                 -     (45 663)            -
     Cost of sales                                                     4 030           -    (2 323 153)
     Inter-segment cost of sales                                           -      25 937             -
     Operating costs                                                 (87 741)          -      (534 634)
     Inter-segment operating costs                                         -      19 726             -
     Other income                                                        (14)          -           278
     EBITDA                                                          (83 530)          -       156 937
     Fair value adjustment                                            (5 359)          -        (5 360)
     Depreciation and amortisation                                                         
     of non-financial assets                                          (1 030)    (15 594)      (25 179)
     Finance income                                                        2           -         2 829
     Finance costs                                                    (6 850)          -       (25 626)
     Profit on sale of subsidiary                                          -       2 822         2 822
     Segment profit/(loss) before tax                                (96 767)    (12 772)      106 423
     Capital expenditure                                              12 719      31 293        51 856
     Segment total assets                                            519 538    (185 386)    1 134 208
     Segment total liabilities                                      (191 726)     53 632      (531 188)
     Net segment assets/(liabilities)                                327 812    (131 754)      603 020

                                                         Staffing                                       
                                                              and              Financial               
                                                      outsourcing   Training    services    Healthcare 
                                                            R'000      R'000       R'000         R'000 
     2017                                                                                              
     Segment revenues                                   2 357 165    169 400      83 778       195 733 
     Inter-segment revenue                                 23 085     17 681       1 474             - 
     Cost of sales                                     (1 928 908)   (73 374)    (29 207)     (137 958)
     Inter-segment cost of sales                          (22 400)    (8 566)          -             - 
     Operating costs                                     (266 799)   (76 621)    (41 740)      (38 175)
     Inter-segment operating costs                           (685)    (9 115)     (1 474)            - 
     Other income                                             940         92           -             - 
     EBITDA                                               162 398     19 497      12 831        19 600 
     Fair value adjustment                                      -     (3 465)      2 206             - 
     Depreciation and amortisation                                                                     
     of non-financial assets                               (2 583)    (3 372)     (1 838)       (1 960)
     Finance income                                           547        869          38            11 
     Finance costs                                         (1 242)    (2 605)       (991)         (480)
     Segment profit/(loss) before tax                     159 120     10 924      12 246        17 171 
     Capital expenditure                                    9 737      8 599       1 891         2 954 
     Segment total assets                                 519 019    110 711     220 262        24 587 
     Segment total liabilities                           (116 768)   (88 885)   (262 785)       (3 845)
     Net segment assets/(liabilities)                     402 251     21 826     (42 523)       20 742 

                                                                      Shared
                                                                    Services
                                                                         and    Consoli-    
                                                                     Central      dation    
                                                                       costs     entries         Total
                                                                       R'000       R'000         R'000
     2017                                                                                   
     Segment revenues                                                  1 814           -     2 807 890
     Inter-segment revenue                                                 -     (42 240)            -
     Cost of sales                                                    (3 014)          -    (2 172 461)
     Inter-segment cost of sales                                           -      30 966             -
     Operating costs                                                 (89 552)          -      (512 887)
     Inter-segment operating costs                                         -      11 274             -
     Other income                                                          -           -         1 032
     EBITDA                                                          (90 752)          -       123 574
     Fair value adjustment                                            11 624           -        10 365
     Depreciation and amortisation                                                          
     of non-financial assets                                          (5 866)    (10 435)      (26 080)
     Finance income                                                       21           -         1 486
     Finance costs                                                   (18 042)          -       (23 360)
     Segment profit/(loss) before tax                               (103 015)    (10 435)       85 985
     Capital expenditure                                               2 103      12 012        37 296
     Segment total assets                                            312 728    (191 149)      996 158
     Segment total liabilities                                       (21 992)     40 462      (453 813)
     Net segment assets/(liabilities)                                290 736    (150 687)      542 345    

     Geographical information
     The group's revenue from external customers and information regarding its segment assets 
     (non-current assets excluding financial instruments, deferred tax assets and other financial 
     assets) by geographical location are immaterial.
 
     Information about major customers
     No single customers contributed 10% or more to the group's revenue in either 2018 or 2017.
 
13.  Business combinations
     13.1.1   Business acquired                                                   
                                                                                               Consid-
                                                                                  Portion of   eration
                                                                                     business    trans-
                                                                         Date of    acquired    ferred
              2018             Principle activity                    acquisition           %     R'000
              Dyna Training    This entity designs, conceptualises,
              and Industrial   formulates and produces training
              Development      programmes and related materials 
              Proprietary      and owns all the intellectual 
              Limited          property that it licensed to the 
                               training providers within the Dyna 
                               group and Dyna franchises.            1 June 2018         100    30 532
              
              Dyna Training    This entity is a franchise involved 
              Proprietary      in marketing and selling the Dyna
              Limited          training programmes in the Western
                               Cape territory.                       1 June 2018         100     9 713
                               
              Dyna Training    This entity is a franchise involved 
              Namibia          in marketing and selling the Dyna 
              Proprietary      training programmes in Namibia and 
              Limited          the remaining SADC territory, 
                               excluding South Africa.               1 June 2018         100    22 822
   
              NQ Plus Networks This entity undertakes all the 
              Proprietary      training assessment and moderation 
              Limited          functions for the Dyna group and its 
                               franchises as well as conducting 
                               training learnerships.                1 June 2018         100    16 291
                                                                                                79 358
 
              Workforce has obtained control of the above mentioned entities by acquiring 100% of the 
              equity and voting rights in each of these entities. The Dyna group was acquired in order 
              to grow Workforce's training segment by providing leadership, supervisory and management 
              training programmes in addition to the existing training programmes currently offered.
  
                                                   Dyna                           
                                             Industrial                    Dyna   
                                           Training and        Dyna    Training     NQ Plus    
                                            Development    Training     Namibia    Networks      Total
                                                  R'000       R'000       R'000       R'000      R'000
     13.1.2   Consideration transferred                                                         
              Cash                               13 129       4 177       9 815       7 006     34 127
              Contingent consideration           17 401       5 536      13 008       9 286     45 231
              Total                              30 530       9 713      22 823      16 292     79 358
     13.1.3   Contingent consideration                                                         
              Second payment                      1 947         620       1 456       1 039      5 062
              Third payment                       3 486       1 109       2 606       1 860      9 061
              Fourth payment                      5 269       1 676       3 938       2 812     13 695
              Top-up payment                      6 699       2 131       5 008       3 575     17 413
              Total additional amount            17 401       5 536      13 008       9 286     45 231
              Interest raised on future                                                        
              payments                            1 239       1 237       1 239       1 239      4 954
                                                 18 640       6 773      14 247      10 525     50 185

              Under the contingent consideration arrangement for the Dyna group companies, Workforce 
              is obliged to pay an amount of up to R5 060 886 subject to the Dyna group of companies 
              achieving an agreed upon operating profit for the 12 months ending 31 May 2019, an amount 
              of up to R9 060 112 subject to the acquired Dyna group of companies achieving an agreed 
              upon operating profit for the 12 months ending 31 May 2020 and an amount of up to 
              R13 695 622 subject to the acquired Dyna group of companies achieving an agreed upon 
              operating profit for the three-year period exceeding R42 016 084, an additional payment 
              of up to R17 413 968 may also be payable. These payments are all calculated using agreed 
              upon formulae. The directors believe that these payments are probable.

                                                   Dyna    
                                             Industrial                    Dyna  
                                           Training and         Dyna   Training     NQ Plus   
                                            Development     Training    Namibia    Networks      Total
                                                  R'000        R'000      R'000       R'000      R'000
     13.1.4   Assets acquired and                                                             
              liabilities recognised                                                          
              at the date of                                                                  
              acquisition                                                                     
              Non-current assets                 20 815        8 266      2 618         126     31 825
              Property, plant and                                                             
              equipment                              33           74          9          33        149
              Intangible assets                  20 622        8 063      2 609           -     31 294
              Deferred tax asset                    160          129          -          93        382
              Current assets                      2 418          968      1 654       1 947      6 987
              Trade and other                                                                 
              receivables                           649          263        142         271      1 325
              Loans and other                                                                 
              receivables                             -            -          -           1          1
              Loan to shareholder                     -            -          -           2          2
              Taxation                                -            -        420           -        420
              Cash and cash                                                                   
              equivalents                         1 769          705      1 092       1 673      5 239
              Non-current liabilities            (6 845)      (2 665)    (2 372)     (1 051)   (12 933)
              Shareholders' loans                (1 071)        (386)    (1 641)     (1 051)    (4 149)
              Operating lease                                                                 
              liabilities                             -          (21)         -           -        (21)
              Deferred tax liability             (5 774)      (2 258)      (731)          -     (8 763)
              Current liabilities                (1 466)        (763)       (21)     (1 021)    (3 271)
              Trade and other payables             (606)        (598)       (21)       (665)    (1 890)
              Taxation                             (860)        (165)         -        (289)    (1 314)
              Provisions                              -            -          -         (67)       (67)
              Total                              14 922        5 806      1 879           1     22 608
   
              The receivables acquired (principally trade receivables) in this transaction with a fair 
              value of R1 325 000 for Dyna group is equivalent to the gross contractual amount. 
              All contractual cash flows are expected to be collected.
   
                                                   Dyna               
                                             Industrial                    Dyna   
                                           Training and         Dyna   Training     NQ Plus   
                                            Development     Training    Namibia    Networks      Total
                                                  R'000        R'000      R'000       R'000      R'000
     13.1.5   Net cash outflow on                                                             
              acquisition of                                                                  
              subsidiaries                                                                    
              Consideration paid in cash         13 129        4 177      9 815       7 006     34 127
              Less: Cash and cash                                                             
              equivalent                                                                      
              balances acquired                  (1 769)        (705)    (1 092)     (1 673)    (5 239)
              Total                              11 360        3 472      8 723       5 333     28 888
                                                                                              
     13.1.6   Goodwill arising on                                                             
              acquisition                                                                     
              Consideration transferred          30 530        9 713     22 823      16 292     79 358
              Less: Fair value of                                                             
              identifiable                                                                    
              net assets acquired               (14 922)      (5 806)    (1 879)         (1)   (22 608)
              Goodwill arising on                                                             
              acquisition                        15 608        3 907     20 944      16 291     56 750
                                                                                  
              Goodwill arose on the acquisition of the Dyna group because the cost of the combination 
              included a control premium. In addition, the consideration paid for the combination 
              effectively included amounts in relation to the benefit of the expected synergies, 
              revenue growth and future market share. These benefits are not recognised separately 
              from goodwill because they do not meet the recognition criteria for identifiable 
              intangible assets. None of the goodwill in the Dyna group acquisition is expected to be 
              deductible for tax purposes.
   
              Impact of acquisitions on the results of the group
              Revenue from the above acquisition amounted to R16 441 628 and profit before tax of 
              R8 474 556 for the period under review. Had these business combinations been effective at 
              1 January 2018, the revenue of the group from operations would have been R24 583 563 and 
              profit before tax would have been R8 912 486.

14.  Changes in accounting policies
     Adoption of new and revised International Financial Reporting Standards ("IFRS")
     New and amended standards adopted by the group
     IFRS 9: Financial Instruments ("IFRS 9")
     The group has adopted IFRS 9 with a date of application of 1 January 2018 which resulted in 
     changes in accounting policies. The company has applied transitional relief and opted not to 
     restate prior periods.
 
     IFRS 9 replaces IAS 39: Financial Instruments: Recognition and Measurement (IAS 39). It makes 
     major changes to the previous guidance on the classification and measurement of financial assets 
     and introduces an "expected credit loss" model for the impairment of financial assets.
 
     While there have been no changes to the measurement of the financial instruments with the 
     application of IFRS 9, the naming conventions have changed.
     
     The table below depicts the original measurement categories under IAS 39 and the new measurement 
     categories under IFRS 9 for each class of the group's financial assets and liabilities as
     at 1 January 2018:
 
                                                                   IAS 39                               
                                                                                       Classification 
     Financial instrument                  Measurement                                          R'000 
     Other financial assets:               Available-for-sale                                         
     listed shares                                                                              2 770 
     Other financial assets:               Fair value through                                         
     investment in cell captive            profit and loss                                      2 605 
     Trade and other receivables           Loans and receivables                              714 389 
     Cash and cash equivalents             Loans and receivables                               25 548 
     Trade and other payables              Other financial liabilities                        141 535 
                                                                                     
                                                                   IFRS 9              
                                                                                       Classification
     Financial instrument                  Measurement                                          R'000
     Other financial assets:               Financial assets at fair value            
     listed shares                         through other comprehensive income                   2 770
     Other financial assets:               Financial assets at fair value            
     investment in cell captive            through profit and loss                              2 605
     Trade and other receivables           Financial assets at amortised cost                 685 438
     Cash and cash equivalents             Financial assets at amortised cost                  25 548
     Trade and other payables              Financial liabilities at amortised cost            141 535

     The adoption of IFRS 9 has impacted the way impairment of financial assets is calculated by the 
     introduction of the expected credit loss model. This affects the group's loans as well as its 
     trade receivables and advances measured at amortised cost.
 
     Impairment of financial assets
     IFRS 9's impairment requirements use more forward-looking information to recognise expected credit 
     losses ("ECL") - the ECL model. This replaces IAS 39's incurred loss model. Instruments within the 
     scope of the new requirements included loans and other debt type financial assets measured at 
     amortised cost, debt instruments measured at fair value through other comprehensive income 
     ("FVOCI") and trade receivables measured under IFRS 15.
 
     Recognition of credit losses is no longer dependent on the company first identifying a credit loss 
     event. Instead, the company considers a broader range of information when assessing credit risk 
     and measuring expected credit losses, including past events, current conditions, reasonable and 
     supportable forecasts that affect the expected collectability of the future cash flows of 
     the instrument.
 
     Measurement of the expected credit losses is determined by a probability weighted estimate of 
     credit losses over the expected life of the financial instrument.
 
     Trade and other receivables
     The company makes use of a simplified approach in accounting for trade and other receivables and 
     records the loss allowance as lifetime (ECLs). These are the expected shortfalls in contractual 
     cash flows, considering the potential for default at any point during the life of the financial 
     instrument. The company uses its historical experience, external indicators and forward-looking 
     information to calculate the expected credit losses using a provision matrix.
 
     The company assesses impairment of trade receivables on a portfolio basis grouping those that 
     possess shared credit risk characteristics. These have then been grouped based on the days past 
     due. The company has therefore concluded that the expected loss rates calculated on the trade 
     receivables are a reasonable approximation of the loss rates.
 
     The group makes use of the general approach in accounting for the expected credit losses on 
     advances. The group assesses the ECLs on the advances through the use of a three-stage approach. 
     ECLs are determined for the next 12 months in stage 1, and over the lifetime of the advance 
     in stages 2 and 3.
     
     At 1 January 2018 the life time expected loss provision for trade receivables and advances is 
     as follows:
 
                                                                       Accounts                
     Amounts in R'000                                                receivable    Advances      Total
     IFRS 9 loss provision                                               48 023      93 273    141 296
     IAS 39 loss provision                                               19 072      62 515     81 587
     Difference*                                                         28 951      30 758     59 709
     Tax effect of difference                                             7 830       8 612     16 442
     Nett difference                                                     21 121      22 146     43 267
 
     * In our interim results, the amount recorded in the retained earnings due to the impairment 
       provision application was R30 758 000. During the year our impairment process was refined and 
       improved. The difference between the amount recorded as an adjustment in our interim results 
       and in our annual financial statements is due to the improved method of determining the 
       expected losses.
   
     As the accounting for financial liabilities remains largely the same under IFRS 9 compared to 
     IAS 39, the company financial liabilities were not impacted by the adoption of IFRS 9.
 
     IFRS 15: Revenue from contracts from customers ("IFRS 15")
     IFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue 
     is recognised. It replaces IAS 18: Revenue, IAS 11: Construction contracts and related 
     interpretations. Under IFRS 15, revenue is recognised when a customer obtains control of the goods 
     or services. Determining the timing of the transfer of control at a point in time 
     requires judgements.
 
     IFRS 15 introduced a five-step approach to revenue recognition. The requirement to recognise the 
     significant financing component separately from the transaction price did impact the contracts for 
     the sale of goods where the contracts exceed a period of 12 months. The group has elected to apply 
     the practical expedient model not to separate the significant financing components from contracts 
     where the expected period between the contract recognition and payment is less than 12 months for 
     all other contracts. The standard requires the group to recognise the performance obligation over 
     time or at a point in time, which did not affect the group's recognition, except as noted in the 
     table below.
 
     The group has adopted IFRS 15 using the cumulative effect method (without practical expedients), 
     with the effect of initially applying this standard recognised at the date of initial application 
     (ie 1 January 2018). Accordingly, the information presented for 2017  has not been restated - ie 
     it is presented as previously reported under IAS  18 and related interpretations. Additionally, 
     the disclosure requirements in IFRS 15 have not generally been applied to comparative figures.
     
     The impact on the group is as follows:
 
     Revenue type            Transfer of control                 Changed from IAS 18
     Services                Over time or point in time 
                             dependent on the                    No
                             service being delivered.
 
     Customer loans          Over time                           No
 
     Sale of goods           Point in time for delivery          Yes, significant financing component
                             of handsets and over                adjustments now separated
                             time for financing services         from the revenue.
                             as interest is earned.              
                                         
     Revenue now separated to be recognised at a point in time when the handset is delivered and over
     time for the financing provided on the sales.
     
     
15.  Financial instruments
     Recognition and derecognition
     Financial instruments are recognised when the group becomes a party to the contractual 
     provisions of the financial instrument. Financial assets and financial liabilities are initially 
     measured at fair value. Transaction costs that are directly attributable to the acquisition or 
     issue of financial instruments (other than those at fair value through profit or loss) are added 
     to or deducted from the fair value of the financial assets or financial liabilities, as 
     appropriate, on initial recognition. Transaction costs directly attributable to the acquisition 
     of financial assets or financial liabilities at fair value through profit or loss.
 
     All regular way purchases or sales of financial assets are recognised and derecognised on a trade 
     date basis. Regular way purchases or sales are purchases or sales of financial assets that 
     require delivery of assets within the time frame established by regulation or convention in 
     the marketplace.
 
     Financial assets are derecognised when the contractual rights to the cash flows from the 
     financial asset expire, or when the financial asset and substantially all the risks and rewards 
     are transferred. Where the group neither transfers nor retains substantially all the risks 
     and rewards of ownership and continues to control the transferred asset, the group recognises 
     its retained interest in the financial asset and an associated liability for amounts it may have 
     to pay. A financial liability is derecognised when it is extinguished, discharged, cancelled 
     or expires.
 
     15.1  Financial assets
           Classification and initial measurement of financial assets
           Financial assets, are classified into the following categories:
           - Amortised cost;
           - Fair value through profit or loss ("FVTPL"); and
           - Fair value through other comprehensive income ("FVTOCI").

           The classification is determined by both:
           - The group's business model for managing the financial asset; and
           - The contractual cash flow characteristics of the financial asset.

           All income and expenses relating to financial assets that are recognised in profit or 
           loss are presented within finance costs or finance income.
           
           Subsequent measurement
           Financial assets at amortised cost
           Financial assets are measured at amortised cost where the group's business model is to 
           hold the financial assets and collect its contractual cash flows and the contractual 
           terms of the financial assets give rise to cash flows that are solely payments of 
           principal and interest on the principal amount outstanding. 
   
           After initial recognition, these are measured at amortised cost using the effective 
           interest method.
   
           Discounting is omitted where the period between the service and the expected payment 
           date is less than 12 months and the effect of discounting is immaterial. The group's 
           advances, trade and receivables and cash and cash equivalents fall into this category 
           of financial instruments.
   
           Cash and cash equivalents comprise cash on hand, together with other short-term, highly 
           liquid investments that are readily convertible into known amounts of cash and which are 
           subject to an insignificant risk of changes in value.
           
           Advances
           Advances are non-derivative financial assets with fixed payments that are not quoted in 
           the active market. The advances arise when the group provides money or goods directly to 
           a debtor through the lending services and sale of goods. These advances are in the form 
           of personal unsecured loans and are paid back in fixed equal instalments. Origination 
           fees and monthly service fees that are integral to the effective interest rate are 
           capitalised to the value of the loan and amortised to profit or loss over the contractual 
           life of the loan using the effective interest rate method.
   
           Advances are measured at amortised cost using the effective interest rate method, less 
           any impairment losses through the use of an allowance account whereby the amount of the 
           losses are recognised in profit or loss.
   
           The significant financing component on the sale of goods is recognised using the effective 
           interest method over the period of the contract.
           
           Financial assets at fair value through profit or loss ("FVTPL") - mandatory
           The group holds an investment in an unconsolidated structured entity in the form of a 
           cell captive.
   
           This investment does not fall within the business model to "hold to collect" or "hold to 
           collect and sell" and its contractual cash flows are not solely payments of principal 
           and interest. It is therefore accounted for as a financial asset mandatorily measured 
           at FVTPL.
   
           Assets in this category are measured at fair value with gains or losses recognised in 
           profit or loss.
   
           Financial assets at fair value through other comprehensive income ("FVTOCI")
           The group has elected to designate its equity investments in listed shares at FVTOCI. 
           This is an irrevocable election permitted where the instruments meet the definition of 
           equity under IAS 32: Financial Instruments: Presentation and are not held for trading.
   
           Dividends received on these investments are recognised in profit or loss. Any gains or 
           losses recognised in other comprehensive income ("OCI") will not be reclassified to 
           profit or loss upon derecognition of the asset.
   
           Impairment of financial assets
           The group recognises an allowance for ECLs for all debt instruments not held at fair 
           value through profit or loss.
   
           ECLs are probability weighted estimates based on the difference between the contractual 
           cash flows due in accordance with the contract and all the cash flows that the group 
           expects to receive, discounted at an approximation of the original effective 
           interest rate.
   
           The carrying amount of the financial asset is reduced by the impairment loss directly for 
           all financial assets, with the exception of trade receivables and advances, where the 
           carrying amount is reduced through the use of an allowance account. When the trade 
           receivable is considered uncollectable, it is written off against the allowance account.
           Subsequent recoveries of amounts previously written off are credited to profit and loss. 
           Changes to the carrying amount of the allowance account are recognised in profit and loss.
   
           Trade and other receivables
           The group uses an allowance account to recognise its credit losses on trade and other 
           receivables. It applies the simplified approach of recognising lifetime ECLs for the 
           trade receivables. The group applied a practical expedient in measuring the expected 
           credit loss, using a provision matrix in determining the impairment. This matrix uses the
           historical credit loss, adjusted for factors that are specific to the debtors, general 
           economic conditions and an assessment of both the current and forecast conditions at the 
           reporting date. Historically, the recoverability of the accounts receivable has been 
           impacted by large losses in some of the acquired entities. We believe that these 
           historical losses have been cleared and do not expect the high loss rates to continue.
   
           These credit losses are the expected shortfalls in contractual cash flows, contractual 
           cash flows, considering the potential for default at any point during the life of the 
           financial instrument. In calculating, the company uses its historical experience, external 
           indicators and forward-looking information to calculate the expected credit losses using a 
           provision matrix.
   
           Advances
           The group uses an allowance account to record its credit losses on advances. It applies 
           the general impairment approach in determining the ECLs. ECLs are recognised in 
           two stages. For credit exposures for which there has not been a significant increase in 
           credit risk since initial recognition, ECLs are provided for credit losses that result 
           from default events that are possible within the next 12 months (a 12-month ECL). 
           For those credit exposures for which there has been a significant increase in credit risk 
           since initial recognition, a loss allowance is required for credit losses expected over 
           the remaining life of the exposure, irrespective of the timing of the default 
           (a lifetime ECL).

           Due to the nature of the advances, the group considers an advance in default when they 
           are handed over to the legal process. However, in certain cases, the group may also 
           consider an advance to be in default when internal or external information indicates 
           that the group is unlikely to receive the outstanding contractual amounts in full before
           taking into account any credit enhancements held by the group. An advance is written off 
           when there is no reasonable expectation of recovering the contractual cash flows.
   
           The group has established a policy to perform an assessment, at the end of each 
           reporting period, of whether an advance's credit risk has increased significantly since 
           initial recognition, by considering the change in the risk of default occurring over the 
           remaining life of the financial instrument.
   
           Based on the above process, the group groups its advances into stage 1, stage 2 and 
           stage 3, as described below(the advances can alternate between stages):
           - Stage 1: When advances are first recognised, the group recognises an allowance based 
             on 12-month ECLs. Stage 1 advances also include facilities where the credit risk has 
             improved, and the advance has been reclassified from Stage 2. The advances included 
             within Stage 1 are those for temporary employees that are currently working, and
             the payments are paid from their salaries consistently.
           - Stage 2: When a loan has shown a significant increase in credit risk since origination, 
             the group records an allowance for the life time ECLs. Stage 2 loans also include 
             facilities, where the credit risk has improved, and the loan has been reclassified 
             from Stage 3. The advances included within this stage are those that the group still 
             manages on a portfolio basis. Based on the history of the group, these might include 
             advances where the client has not made payments, mainly due to non-employment. This is 
             considered to increase the credit risk of the client, but advances are still expected 
             to be recovered through a debt management process.
           - Stage 3: Loans considered credit-impaired. The group records an allowance for the life 
             time ECLs. 

           The advances can move between stages based on their performance, ie an advance 
           in Stage 2 in the current year can move to a Stage 1 loan in the next period if the 
           lender's risk decreases, for example, the lender recovers and makes regular 
           payments again.
 
           The entity considers a financial instrument defaulted and therefore Stage 3 
           (credit-impaired) for ECL calculations in all cases when the borrower enters the legal 
           stage of the advance management process. At this time the loans are managed individually.
   
           The ECL calculations are performed on a portfolio basis, grouping the advances into those 
           with similar credit risks and within those portfolios, using statistics derived from a 
           five-year historical past performance of that portfolio, validated by external borrowers 
           and taking into account any changes to collection procedures and projected future 
           market conditions.
   
     15.2  Financial liabilities
           Financial liabilities at amortised cost
           The company's financial liabilities include trade and other payables.

           Financial liabilities are measured at fair value, and where applicable, adjusted for 
           transaction costs.
   
           Subsequently, financial liabilities are measured at amortised cost using the effective 
           interest method.
   
           All interest-related charges and, if applicable, changes in an instrument's fair value 
           that are reported in profit or loss are included within finance costs or finance income.
   
     15.3  Fair value estimation
           A number of the group's accounting policies and disclosures require the measurement of 
           fair values. The group uses valuation techniques that are appropriate in the 
           circumstances and for which sufficient data are available to measure fair value, 
           maximising the use of relevant observable inputs and minimising the use of 
           unobservable inputs.
                   
           The classification into different levels is based on the extent that quoted prices are 
           used in the calculation of fair value and the levels have been defined as follows:
           - Level 1: fair value based on quoted prices (unadjusted) in active markets for identical 
             assets or liabilities;
           - Level 2: fair value based on inputs other than quoted prices included within level 1 
             that are observable for the asset or liability, either directly (that is, as prices) or 
             indirectly (that is, derived from prices); or
           - Level 3: fair value based on inputs for the asset or liability that are not based on 
             observable market data (that is, unobservable inputs).
 
                                                                Investment   
                                                                   in cell      Contingent   
                                                                   captive   consideration       Total
           Reconciliation of level 3 fair value measurements                                 
           As at 31 December 2018                                                            
           Opening balance                                           2 605         (25 562)    (22 957)
           Gain/(loss) in profit or loss*                              211          (8 403)     (8 192)
           Additions                                                     -         (79 358)    (79 358)
           Release on liability                                          -          46 351      46 351
           Closing balance                                           2 816         (66 972)    (64 136)
           As at 31 December 2017                                                            
           Opening balance                                             400         (17 406)    (17 006)
           Gain/(loss) in profit or loss                             2 205           6 844       9 049
           Additions                                                     -         (21 326)    (21 326)
           Release on liability                                          -           6 326       6 326
           Closing balance                                           2 605         (25 562)    (22 957)
   
           * Included in fair value adjustments in profit or loss.  

16.  Disposal of subsidiary
     On 22 August 2018, the group disposed of its interest in Qunu Staffing Proprietary Limited. 
     The net assets of Qunu Staffing Proprietary Limited at the date of disposal were as follows:
 
                                                                                                 R'000
     Property, plant and equipment                                                                  82
     Trade receivables                                                                           3 333
     Cash and bank balances                                                                         48
     Deferred tax asset                                                                            802
     Trade payables                                                                             (7 092)
     Gain on disposal                                                                            2 827
     Total consideration                                                                             -
 
     There were no disposals of subsidiaries made in 2017. The impact of Qunu Staffing Proprietary 
     Limited on the group's results in the current year is a loss of R854 361.

17.  Reclassification of prior year presentation
     Certain reclassification has been made to the prior period's condensed consolidated statement of 
     comprehensive income in order to enhance the comparability to the current period's financial 
     results. The recognition of fair value adjustments has subsequently been disclosed separately in 
     the group statement of comprehensive income and the group statement of cash flows resulting in 
     certain line items being reclassified.
 
                                                                Previously
                                                                  reported      Restated
                                                               31 December   31 December
                                                                      2017          2017    Adjustment
                                                                     R'000         R'000         R'000
     Group statement of comprehensive income                   
     Fair value adjustments                                         10 365             -        10 365
     Earnings before interest, taxation, depreciation and          
     amortisation ("EBITDA")                                       133 939       123 574        10 365
     Fair value adjustments                                              -        10 365       (10 365)
     Depreciation and amortisation of non-financial assets         (26 080)      (26 080)            -
     Finance income                                                  1 486         1 486             -
     Finance costs                                                 (23 360)      (23 360)            -
     Profit before taxation                                         85 985        85 985             -
     Group statement of cash flows                                 
     Cash flows from operating activities                           15 918        11 405         4 513
     Cash flows from investing activities                          (60 710)      (57 611)       (3 099)
     Cash flows from financing activities                           (4 789)       (3 375)       (1 414)
     Net change in cash and cash equivalents                       (49 581)      (49 581)            -
     Cash and cash equivalents at the end of the year               25 548        25 548             -
     
Executive directors                        
RS Katz                                    
WP van Wyk
                                 
Non-executive directors                    
JR Macey                                   
KN Vundla                                  
S Thomas
I Ross
S Naidoo
                                           
Designated Adviser
Merchantec Proprietary Limited trading as Merchantec Capital

Company secretary
S van Schalkwyk

Registered office
The registered office, which is also its
principal place of business, is:
11 Wellington Road
Parktown
2193

PO Box 11137
Johannesburg
2000

Transfer secretaries
Link Market Services (South Africa) Proprietary Limited
11 Diagonal Street
Johannesburg
2001

Commercial bankers
ABSA Business Bank

Company registration number
2006/018145/06

Website
www.workforce.co.za
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