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WORKFORCE HOLDINGS LIMITED - Operational Update

Release Date: 25/06/2020 11:02
Code(s): WKF     PDF:  
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Operational Update

WORKFORCE HOLDINGS LIMITED
Incorporated in the Republic of South Africa
(Registration number: 2006/018145/06)
Share code: WKF ISIN: ZAE000087847
(“Workforce” or “the company” or “the group”)

Operational Update

Workforce, a company with four decades of experience in providing human capital services,
recognised early-on and adapted very quickly to the COVID-19 pandemic by mobilising a COVID-19
task team before the national State of Disaster was announced. By the time lockdown was
implemented, a strategic plan was in place and information was being disseminated to employees as
well as to clients. The task team continues to monitor the evolving situation, passing on relevant
information and keeping the core of Workforce operational, ably supported by the executive
committee and the finance, communications and HR teams.

Our Healthcare cluster has been highly productive and resourceful during the lockdown. The cluster’s
vast and varied service offerings, including telephonic counselling, COVID-19 training and mobile
clinics, have been very active. Healthcare recruitment services have been widely used to supply critical
healthcare professionals to Government as well as the private sector.

The Staffing, Outsourcing and Recruitment clusters continue to provide temporary employment
services to essential and critical industries such as e-commerce, retail supply chains, power and water
utilities and call centres. Whilst there has been a marked drop in activity, the levels of business have
exceeded our initial expectations during this crisis. Workforce remains vigilant in scanning and clearing
workers for work opportunities in critical industries and sectors that are open in accordance with the
prevailing regulations relating to the national lockdown.

The Training cluster faced a difficult period when lockdown commenced but was quick to adapt and
developed on-line training courses, where much progress has been made. With the recent opening up
of the mining sector, training courses are starting up again, which will assist the cluster. However, the
cluster did suffer some loss of income during the initial stages of lockdown. The recent acquisition of
Chartall Business College has been well integrated and is already contributing positively towards the
cluster.

In the Financial Services cluster, the ability to grant relief and extended payment terms to those unable
to pay has been evaluated and granted on a case by case basis. A revaluation of the approach to
financial lending in this cluster is currently being assessed.

As a result of COVID-19, many temporary workers have been unable to work, and Workforce has
facilitated the application and dissemination of R49,8 million worth of UIF Temporary Employee Relief
Scheme receipts to date. In addition, food vouchers have been purchased, benefitting a total of 9,875
people.

For the month of April 2020, Workforce made top-up payments to temporary workers amounting to
R3,9 million, which benefitted 11,323 people. Similar top-up payments were made for May 2020. As
an act of solidarity and to preserve liquidity, executive and senior management, along with members
of the Board, took a 20% reduction in salary for the months of April, May and June 2020.

Though some attrition occurred in the normal course of business, these positions will not immediately
be filled unless they are deemed critical roles. Workforce has supported the psychological impact of
lockdown through the provision of psycho/social assistance to staff, which has been well utilised.

Despite the company being negatively impacted as stated, management is able to confirm that
Workforce remains a going concern, with no debt covenants in breach and with sufficient liquidity to
take the group through the current crisis.

Our goal as a group is to ensure the long-term sustainability of the business. This is so that we will be
in a better position to protect jobs and grow and create additional opportunities for Workforce clients
in the future.

All cash outlays are stringently reviewed and analysed, with only critical spend taking place. The
executive committee frequently meets virtually to explore post-lockdown strategies to ensure that
Workforce will emerge stronger once this challenging time has passed. This will also ensure that the
group can capitalise on any organic and acquisitive opportunities that present themselves in the post-
lockdown environment.

The company’s financial results for the six months ending 30 June 2020 will be impacted by COVID-19.
A trading update will be released as soon as the Board is reasonably certain of the quantum of the
impact.

Johannesburg
25 June 2020

Designated Adviser
Merchantec Capital

Date: 25-06-2020 11:02:00
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