ADCORP HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 1974/001804/06
Share code: ADR
ISIN: ZAE000000139
(“Adcorp” or the “Company” or the “Group”)


TRADING STATEMENT, OPERATIONAL UPDATE AND RESULTS PRESENTATION


TRADING STATEMENT

In terms of paragraph 3.4(b) of the JSE Limited Listings Requirements, a listed company is
required to publish a trading statement as soon as it becomes reasonably certain that the
financial results for the period to be reported on next will differ by at least 20% from the
financial results for the previous corresponding period.

The Company hereby advises that a reasonable degree of certainty exists that for the year
ended 28 February 2023 (“Reporting Period”):

   –   Revenue will increase by between 5.2% and 7.7% when compared to the revenue
       reported for the year ended 28 February 2022 (“comparative period”)*;

   –   Gross profit will increase by between 4.9% and 7.4% when compared to the gross
       profit reported for the comparative period*;

   –   Headline earnings per share (“HEPS”) from continuing operations will be between
       137.8 cents and 157.8 cents, representing an increase of between 38% and 58%
       compared to HEPS from continuing operations of 99.7 cents reported for the
       comparative period*;

   –   Earnings per share (“EPS”) from continuing operations will be between 105.1 cents
       and 124.3 cents, representing a decrease of between 9% and 29% compared to EPS
       from continuing operations of 96.3 cents reported for the comparative period; EPS is
       expected to be lower than HEPS due to an impairment of goodwill in one of Group’s
       subsidiaries*;

   –   As a result of exceptional losses, that are non-recurring in nature, experienced in
       allaboutXpert Australia Pty Ltd (“aaX”), which has been classified as a discontinued
       operation for the Reporting Period:


       –   HEPS from total operations will be between 51.2 cents and 71.0 cents,
           representing a decrease of between 29% and 49% compared to HEPS of 99.4
           cents reported for the comparative period; and

       –   EPS from total operations will be between 26.4 cents and 48.2 cents, representing
           a decrease of between 56% and 76% compared to EPS of 109.1 cents reported
           for the comparative period;

   –   As at 28 February 2023, Adcorp was in a net cash (excluding restricted cash) position
       of R312 million (FY22: R198 million). Both the South African and Australian businesses
       were in a net cash position.
The results for the Reporting Period have been impacted by:

•   Considerable contract losses at aaX, a subsidiary of Adcorp Holdings Australia, ultimately
    held by Adcorp, which required extensive investment to remediate. Shareholders are
    referred to the announcement of 14 December 2022 that details aaX being placed in
    voluntary administration on 12 December 2022.
•   Impairment of goodwill and certain positive non-recurring tax adjustments.

*Restated – prior year results adjusted for discontinued operations

OPERATIONAL UPDATE

Business Overview:

Adcorp has continued executing its brand centric strategy, which includes a decentralised
operating model that has enabled more efficient and effective operations. The Group has re-
focused itself on workforce recruiting and workforce outsourcing. The Group has commenced
optimising its portfolio per the strategy and has closed or revived several brands. Additionally,
Adcorp has made steps to expand its reach and enter new channels to market by acquiring a
platform business. These actions have allowed Adcorp better to serve the needs of its clients
and customers and to improve the quality of its offerings.

Market Conditions:

Adcorp has experienced a mixed market environment during the reporting period, with
challenges in the South African market and opportunities in the Australian market.

Low economic growth in South Africa has dampened demand for Adcorp's services,
compounded by high unemployment and low labour absorption rates that continue to bedevil
the economy. Persistently high levels of load shedding have further impacted operations at
both Adcorp and its clients and have posed challenges to the business. In addition, high
inflation has put pressure on input costs.

Despite these challenges, Adcorp has been able to leverage opportunities in other markets,
particularly in Australia. The Australian operations have benefited from continued growth in
the economy, with record low unemployment rates and strong demand for labour driving
positive results. The company's investments in driving growth in Australia have also yielded
positive outcomes, contributing to the overall financial performance of the Group.

Operational Performance:

Adcorp has made significant progress in executing its operational strategy during the reporting
period, resulting in key achievements that are driving growth and improving the group’s
financial performance. Employee engagement has risen significantly, and morale has lifted,
contributing to a more productive workforce. This was driven by a focus on employee
development and recognition, as well as improvements in workplace culture and
communication.

Adcorp's focus on customer centricity has delivered record high levels of customer
satisfaction, resulting in increased loyalty and retention. Investments in customer service and
delivery have contributed to this success. Several of the group’s brands have won awards in
their categories, reflecting the success of Adcorp's refocused marketing efforts. This has
resulted in increased brand recognition and awareness.
Adcorp's balance sheet remains ungeared, providing financial stability during the current high
interest rate cycle. A focus on cash management has resulted in a strong net cash position,
allowing the company to invest in growth and innovation. Overall, Adcorp's operational
excellence and focus on employee engagement, customer centricity, and brand recognition
has yielded positive results, driving growth and improving the group’s financial performance.

Operationally, the group has weathered the market difficulties it has faced, maintained its
strong balance sheet and cash generation, and is well-placed to deal with any challenges in
the market while having the ability to seize opportunities as they arise.

The financial information on which this trading statement is based has not been reviewed or
reported on by the auditors of the Company.

The audited results for the year ended 28 February 2023 are expected to be published on
Monday, 29 May 2023.

RESULTS PRESENTATION

The results presentation will take place electronically on Monday, 29 May 2023, at 10:00.

Should you be interested in attending please contact ir@singular.co.za and a webcast link will
be provided.

Kindly note that a question and answer session will be available at the end of the presentation.

Johannesburg
22 May 2023

Sponsor
Valeo Capital (Pty) Ltd