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AWF posts jump in sales, earnings, points to signs of Christchurch rebound

Wednesday 31st October 2012

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OAWF Group, the contract labour firm, posted a jump in first-half sales and earnings and said demand for its services in Christchurch are a leading indicator of a recovery in the stricken city's construction recovery.

Profit in the six months ended Sept. 30 rose to $4.4 million from $1.7 million and sales climbed 29 percent to $61.9 million, the Auckland-based company said in a statement. Shares of AWF climbed about 7 percent to $2.45 on the results and have advanced about 16 percent this year.

The company will pay a first-half dividend of 6.4 cents a share, up from 5 cents a year earlier. The company's results tend to be a leading indicator for the economy because companies are more willing to take on temporary staff when trading picks up, before committing to permanent workers.

"The Christchurch rebuild appears to be gaining momentum," said chief executive Mike Huddleston. At the same time, "strong housing price improvements combined with a shortage of housing and low interest rates are beginning to breathe life into the Auckland residential market."

AWF is New Zealand's largest provider of temporary staff, placing some 3,000 to 4,000 people a day into jobs via a network of 34 branches. Huddleston said while construction was showing signs of revival, the general economy was still weak.

"The broader New Zealand economy remains sluggish and continues to represent a significant challenge," Huddleston said. "Although the improvements in construction activity are positive developments we are not expecting a sharp uplift in demand for temporary staff in many of the other sectors we service."

AWF continues to seek "value-accretive acquisitions to penetrate deeper into the sectors we already service and to widen the scope of our offering," he said.

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