Adcorp Holdings, the most empowered company in the support services sector for 2005 and 2006, retained its position at the top of the log this year. The recruitment and training group was also placed number two in the empowerment ranking for all sectors, moving up from position seven in 2006.
Adcorp boasts an impressive BEE score of 73% for 2007, thanks to the focus it places on every aspect of empowerment, from management control and shareholding through to enterprise development, corporate social investment, skills development and employment equity.
The group has strong BEE shareholding and management control credentials as a result of the sale of a 25% stake in the flexible staffing division (the largest contributor to group profits) to a consortium of the Black Management Forum Investment Company (BMFI) and Zungu Investment Company for R325m in 2003. The focus has since shifted to the other elements of BEE, including corporate social investment and enterprise development, says Adcorp CEO Richard Pike.
The DTI's Codes of Good Practice for BEE have given SA business certainty and clear targets to work towards, he adds. "That's not to say there will be a day when we'll be able to say we're done with BEE - it's a journey we've started and there's still a long way to go."
Black people, including black women, have strong representation in Adcorp's business at every level. According to the group's annual report for 2005, about half of its 1 569 employees were black and more than a third were black women. Black people held 118 of the group's 429 management positions.
Adcorp also spends more than 1% of its after-tax profits on social development programmes every year and invests heavily in skills development programmes aimed at previously disadvantaged people.
Adcorp's enterprise development score was boosted by a deal last year in which the group sold its Graphicor and Simeka TWS Communications businesses to the management of its communications division.
A consortium headed by divisional director Thendo Ratshitanga paid R13m for the two businesses and formed a new company called Tshirundu Communications. A staff trust has a stake of 20% in the company.
Adcorp sold the businesses in line with its strategy to exit the corporate communications market and focus on its core recruitment and training businesses. The group agreed to help fund the transaction and provide ongoing management support to Tshirundu Communications as part of its enterprise development strategy.
The support services sector houses a diverse range of businesses, from waste management group Enviroserv and skills development and human resources group Advtech to international services, trading and distribution company Bidvest, and Mvelaphanda Group, a holding company with interests as varied as security and contract cleaning.
This means it is difficult to pinpoint general BEE trends for the sector or make direct comparisons between the companies' performance because their trading conditions vary so much.
Bidvest was placed second in the support services sector and 10th in the overall empowerment index with an overall score of 65%, reflecting solid performance in all of the categories evaluated.
- Adcorp announced a revamped BEE ownership structure on March 1. This falls outside the TEC period (calendar year 2006) but is worth noting. The new initiative seeks to transfer 25% of Adcorp's shares valued at R512m to a consortium made up of Women Investment Portfolio Holdings, Simeka Investment Holdings and an Adcorp employee share incentive trust. As it achieved significant black ownership at holding level through this deal, Adcorp bought back the 25% stake in Flexible Staffing Solutions it sold to a BEE consortium in 2003.
