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New Zealand – AWF Group’s revenues rise but profits fall

25 November 2013

New Zealand-based blue collar temporary staffing provider AWF Group (AWF: NZSX) reported revenue for the NZD 62.5 million (USD 51.2 million) for the six months ending 30 September 2013, an increase of +1% from NZD 61.9 million (USD 50.7 million) last year.

The company reported a profit before tax for the period of NZD 2.8 million (USD 2.3 million), a fall of -20% from NZD 3.5 million (USD 2.9 million) a year ago. Net income for the period was NZD 1.9 million (USD 1.6 million), equating to a significant drop of -56.9% from NZD 4.4 million (USD 3.6 million) in 2012.

Mike Huddleston, AWF Group CEO, commented: “With the rebound in economic confidence, we had expected continued growth. And in anticipations of this shift in late 2012 we increased our permanent staff compliment, particularly in the Auckland region.”

“However, anticipated growth has not materialised as widely as we expected. The Northland and Auckland markets have been strong. But in the central North Island and most of the South Island trading conditions have been weaker,” he added.

In early October 2013, AWF Group announced the acquisition of Madison Group, comprising Madison Recruitment Ltd and Madison Force Ltd. The acquisition would expand AWF’s remit beyond blue-collar staffing into white-collar staffing. The acquisition has subsequently created New Zealand’s largest staffing firm

The trading conditions for the Group remained challenging through October and into November. Looking forward, the Group does not expect to recover the ground lost from the first half of the year and may in fact see further slippage from the strong performance of 2012. They remain confident that with aggressive cost management and the development of the recently added Madison Group the company will report a return to growth in 2014.

In trading today, the company’s share price rose marginally by +0.4% to NZD 2.90 (USD 2.37), an increase of +28.6% compared with a year ago. Based on its share price, the company has a current market value of NZD 74.8 million (USD 61.2 million).       

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