Sharechat Logo

AWF Madison full-year earnings fall 3.7% on one-off restructuring costs

Thursday 26th May 2016

Text too small?

Costs associated with unwinding a joint venture in the Christchurch contract labour market contributed materially to AWF Madison reporting a "disappointing" $5.2 million profit for the year ended March 31, compared with $5.4 million a year earlier.

A "rapid growth" in debtors across the group, particularly in Christchurch, saw provisions for bad and doubtful debt roughly double to about $600,000, chief executive Simon Bennett told BusinessDesk after the company issued its initial earnings announcement to the NZX this morning. 

One-off restructuring costs of $1.3 million related in large part to the unwinding of the JV with a Christchurch operator, Craig Henwood, who has relinquished B class shares in AWF, which were classed as a debt instrument in the company's accounts, which required the buy-out to flow through the national blue and white collar labour force supplier's profit and loss account.

The result was achieved on a 9 percent uplift in revenue to $214.6 million and chairman Ross Keenan said in a statement the company was now positioned for "double-digit growth in profit levels for the 2016/17 year as the benefits of efficiency gains begin to flow through."

"While the overall result is disappointing, the fact is that the restructuring process has taken longer, cost more than forecast, but has positioned the group well as we move into the new financial year."

Labour demand remained strong and was "well spread across the regions."

Underlying earnings, which strips out non-cash amortisation and the sale of subsidiaries and is the company's preferred benchmark earnings measure, slipped from $6.8 million in 2014/15 to $6.5 million in the last financial year, with earnings per share slipping to 16 cents per share from 20.7 cents.

Nonetheless, strong forecast cash flows saw directors preserve an 8 cents per share final dividend and payouts for the year at 15.2 cents. The dividend is fully imputed and payable on July 4, with a record date of June 27.

AWF Madison shares closed yesterday at $2.40 and have risen 11 percent in the last year.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Gold Report 21st May 2019
NZ dollar falls after RBA governor flags potential rate cut
ASB reviews ownership of Aegis
Auckland Airport kicks off next phase of expansion
Cashed-up Plexure eyes acquisitions to accelerate growth as loss shrinks
Tower turns to 1H profit, lifts FY guidance
IRD should have doubled claim against Watson's Cullen Group - Professor
Investore FY profit falls 16% on smaller valuation gain, signals flat dividend for 2020
Synlait receives cease and desist letter regarding Pokeno plant
21st May 2019 Morning Report

IRG See IRG research reports