AWF Madison's full-year earnings fall on one-off restructuring costs
Rapid growth in debtors saw provisions for bad and doubtful debt double to about $600,000.
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Hawke’s Bay
Costs associated with unwinding a joint venture in the Christchurch contract labour market contributed to AWF Madison’s [NZX: AWF] "disappointing" $5.2 million profit for the year ended March, compared with $5.4 million a year earlier.
Rapid growth in debtors across the group, particularly in Christchurch, saw provisions for bad and doubtful debt double to about $600,000 chief executive Simon Bennett says after the company issued its initial earnings.
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.
The shares were classed as a debt instrument in the company's accounts, which required the buy-out to flow through the labour force supplier's profit and loss account.
The result was achieved on a 9% uplift in revenue to $214.6 million and chairman Ross Keenan says the company is 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, the company says.
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 16c per share from 20.7c.
Nonetheless, strong forecast cash flows saw directors preserve an 8c per share final dividend and payouts for the year at 15.2c. The dividend is fully imputed and payable on July 4, with a record date of June 27.
AWF Madison shares closed at $2.40 and have risen 11% in the past year.
(BusinessDesk)
Pattrick Smellie
Thu, 26 May 2016
Thu, 26 May 2016
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AWF Madison's full-year earnings fall on one-off restructuring costs
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