AWF Madison shareholders approve $150,000 increase in directors' fee pool

Shareholders of AWF Madison Group [NZX: AWF], the country's largest recruiter and labour provider, have voted in favour of a $150,000 increase in the directors' fee pool at the annual general meeting in Auckland today to cover an enlarged board and give long-time directors their first pay rise in five years.

The annual pool will rise to $350,000, resulting in a lift in directors' fees to $50,000 from $45,000 and in the chairman's fee to $90,000 from $70,000. Rachel Hopkins, appointed as an associate director under the Institute of Directors' Future Directors programme, will receive half the going rate.

The company has added two additional directors since 2010 – Julia Hoare and Wynnis Armour – and all six directors are now non-executive, including founder Simon Hull, who hung up his managing director hat today and was re-elected to the board.

Chairman Ross Keenan, who was also re-elected today along with Ms Armour, said the company had got off to a good start for the 2016 financial year with unaudited normalised trading revenue up 8% in the first quarter.

"More importantly, margins are lifting which is good news. What we're seeing is well-managed ebitda level performance up 20% on last year," he said.

The company posted a 37% increase in full-year net profit for the year ended March 31, with the 2013 purchase of recruitment firm Madison Group fully reflected in its results for the first time.

Former Madison boss Simon Bennett has taken over as group chief executive from Mike Huddleston, who told shareholders the company had grown from $85 million revenue when he took over in 2008 to the country's largest recruitment company, twice the size of its nearest rival.

Mr Huddleston said the Madison acquisition, which allowed AWF to diversify from its core base of blue collar workers into white collar and from temporary labour into permanent, had proved as successful as he'd hoped.

Mr Bennett, the brother of NZX boss Tim Bennett, said he was undertaking an operational review of the company to see where efficiencies could be made and in particular planned to push harder on the health and safety of the 4500 workers it deploys each day.

He said the number of serious harm incidents had been reduced from 16 to 11 during the 2015 financial year "but that was still too many" and he's looking to have none. Lost time injury hours were down to 222 from 240.

Madison had a particularly strong year in 2015 on the back of a rise in permanent recruitment, particularly in Auckland, due to the stronger economy, while AWF suffered from a downturn in higher-margin regional demand.

The outlook for this year remains strong, Mr Bennett said. Areas for expansion included moving AWF into blue collar permanent recruitment, Madison pushing harder on recruitment for those on salaries above $80,000 a year, and expanding the skilled trades offering which is a high-value, high-margin business.

Mr Hull talked about the progress of the company since its "genesis in a back unit in Penrose in 1988" providing labour, sometimes by the hour, for construction companies.

The company listed 10 years ago and before Mr Huddleston came in as chief executive, Mr Hull said it was run like most founder-led businesses, with "a lot of passion, a bit of experience, and largely by the seat of my pants." Mr Huddleston had brought in new processes and vastly extended the group's reach into other types of labour, including the Madison acquisition.

Mr Hull retains a majority shareholding of the listed company whose share price rose 4.6% to $2.30.

Shareholder Rick Flower expressed disappointment that the share price was continuing to languish only slightly above its $2.15 listing price and queried whether institutional shareholders were among those that participated in the $13.5 million March capital raising.

Keenan said some big institutional shareholders did participate in the rights issue along with existing shareholders and the overall number of shareholders shifted only from 530 to 551.

One of Mr Bennett's tasks will be hitting the road to talk to institutions about the company's performance in a bid to lift its profile.

The company paid a 15c a share dividend for the year, up 9% on the previous year, and has a policy of paying out between 60-65% of underlying earnings.

(BusinessDesk)