Highlights – Half Year to 30 September 2015
- Revenue rises 8% to $106 million
- Net profit lifts 17% to $3.4 million
- Underlying earnings up to $4.2 million
- Interim dividend steady at 7.2 cents on larger share base
The Board of AWF Madison has advised a steady lift in performance across all areas of the Group with net profit increasing 17% to $3.4 million (LY $2.9 million), from a sales increase to $106 million (LY $98.6 million). Underlying earnings, the measure Directors consider best reflects the overall operating performance of the Group, lifted to $4.2 million (LY $3.6 million).
Chairman Ross Keenan commented that this was a very satisfactory and well balanced result given the significant one off costs that were incurred, directly related to further consolidation of group functions, following the completion of the Madison acquisition. He said that whilst there are always costs associated with any restructure, the benefits will flow through in future periods and with a strong balance sheet and cash flow the company considered the second 6 months of the financial year to be looking positive at this stage.
Keenan noted that the Board had been delighted to achieve a seamless transition to the leadership of recently appointed Chief Executive, Simon Bennett.
Given the steady lift in performance the Directors have declared an interim dividend of 7.2 cents per share. This maintains the same level as the previous year but across the much higher number of shares on issue. This dividend requires a cash outlay of $2.39 million (last year $1.92 million) and will be paid on December 4 to shareholders registered at 5pm on November 27.
In commenting on the trading environment and business performance, CEO Simon Bennett noted that the Group has benefited from reduced interest costs as a result of lower debt levels following the capital raising in March this year. The Group has also benefited from lower net bank costs with lower rates and bank margin.
The Group’s bank term loan facility has been extended to 2018, locking in the strength of the balance sheet.
Bennett said the AWF business had a strong start to the year.
“AWF saw a good increase in revenue, and a programme to reduce operating costs and drive efficiencies is under way.
“We expect continued strong demand for skilled and semi-skilled workers in the metropolitan centres for the remainder of the financial year. AWF’s strategy to take advantage of these skill shortages comprises both offshore and onshore sourcing, coupled with skills training for existing workers and workers new to the market.”
The white-collar Madison business recorded a steady performance.
“The market has been patchy at times. There has been a small reduction in temp revenue and revenue from permanent placements has been flat, but contractor volume has grown. Hiring activity in the market is high and we have a clear opportunity to fulfil this strong demand.
“However, in the short term the ‘time to fill’ roles has been slightly longer as a result of candidate shortages. Some uncertainty in the economy is also slowing permanent recruitment processes.”
Bennett remains confident about the next six months and expects some modest growth in Madison.
“The first six months of the current financial year have demonstrated again the strength and flexibility that comes from having two robust and independent businesses covering the spectrum of New Zealand recruitment services. AWF Madison Group is confident we will deliver a satisfactory result for the full year to March 31, 2016.”
For further information contact:
Simon Bennett 021 036 8387
Chief Executive Officer
Ross Keenan 021 685 655