AWF
09/11/2015 08:30
HALFYR
PRICE SENSITIVE
REL: 0830 HRS AWF Madison Group Limited
HALFYR: AWF: Steady Performance Lifts First Half Profit for AWF Madison
HIGHLIGHTS - HALF YEAR TO 30 SEPTEMBER 2015
o Revenue rises 8% to $106 million
o Net profit lifts 17% to $3.4 million
o Underlying earnings up to $4.2 million
o 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
Chairman
Reconciliation of Profit for the period1 to underlying earnings2 H1 FY 2016
H1 FY 2015 Change Percentage
Profit for the period 3,404 2,902 502 17.3%
Add back amortisation of intangibles4 1,075 931 144
Taxation effect on adjustments5 (301) (261) (40)
Underlying earnings 4,178 3,572 606 17.0%
Earnings per share (cents) 10.5 11.1 (0.6) -5.4%
Underlying earnings per share (cents)6 12.9 13.7 (0.8) -5.8%
Reconciliation of Profit before tax to earnings before Interest, Tax,
Depreciation and Amortisation (EBITDA)3
Profit before tax 5,033 4,368 665 15.2%
Add back: Finance Costs 711 946 (235)
Add back: depreciation and amortisation 1,357 1,375 (18)
Less: investment revenue (38) (50) 12
EBITDA 7,063 6,639 424 6.4%
1. The reported profit for the period information has been prepared in
accordance with New Zealand general accepted accounting practice and complies
with New Zealand Equivalents to International Financial Reporting Standards.
2. Underlying earnings is a non-GAAP measure which adjusts for non-cash item
of amortisation. In the Directors opinion this more clearly reflects the
operating performance of the Group. This treatment is consistent with the
previous reporting period.
3. Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) is a
non-GAAP measure which allows a comparison of profitability by removing the
effects of interest, tax, depreciation and amortization.
4. Included in the assets of subsidiaries acquired are identifiable
intangible assets that are amortised over their useful lives. These
amortisation charges have been added back in the calculation of underlying
earnings.
5. Taxation adjustments as a result of adjustments to 4 above.
6. Underlying earnings per share have been calculated on the same basis as
the audited annual financial statements from 31March 2015.
End CA:00273024 For:AWF Type:HALFYR Time:2015-11-09 08:30:47
