AWF first-half profit jumps 54% on Madison acquisition, lifts dividend

Friday 31st October 2014

AWF Group, the contract labour firm, boosted first-half profit 54 percent as its white-collar Madison acquisition plumped up revenue, and will pay a bigger interim dividend.

Net profit rose to $2.9 million in the six months ended Sept. 30 from $1.9 million a year earlier, the Auckland-based company said in a statement yesterday. Revenue rose 58 percent to $98.6 million, in line with its guidance in September of almost $100 million in sales. Earnings before interest, tax, depreciation and amortisation climbed 94 percent to $6.6 million.

"Madison has delivered an excellent result for the six months, validating AWF Group's decision to offer a broader range of recruitment solutions across both industrial and commercial sectors," chairman Ross Keenan said. "Allied Work Force's temporary labour recruitment business - although constrained by an ongoing shortage of skilled people in key locations - has delivered a strong result with the Christchurch rebuild and Auckland infrastructure investments underpinning performance."

AWF shareholders approved the $36 million Madison acquisition last year, which is forecast to lift underlying earnings to $8 million and sales to $200 million in 2015.

The company's board today confirmed the earnings from the white collar recruitment firm would trigger the additional $6 million, which will need to be paid near the end of November. AWF will meet the payment with existing bank facilities, it said.

AWF generated an operating cash inflow of $8.3 million in the half, up from $4.5 million a year earlier, and had cash and equivalents of $9.2 million at the Sept. 30 balance date.

The board declared an interim dividend of 7.2 cents per share, with a Nov. 28 record date payable on Dec. 5, and up from 2.8 cents a year earlier.

The shares last traded at $2.48, and have dropped 14 percent this year.

BusinessDesk.co.nz

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