AWF warns 2018 profit will drop on softer construction hiring
By Sophie Boot
March 1 (BusinessDesk) - AWF Madison Group, the country's biggest contract labour firm, said it expects profit to fall in the current financial year due to ongoing softness in labour hiring and delays from its migrant construction workforce.
Prior to its first-half results released in October, the company flagged a weaker interim result on the back of a decline in construction activity and wet weather reducing chargeable hours, but said it was confident of delivering a good financial performance for the year to March 31. Today, AWF said changes in activity, reduced hours and a continued increased cost of legislative compliance had led to lower revenue in the second half.
The company is due to report its results for the 2018 year on May 28. It said that profit is expected to be lower than 2017's $5.9 million, but cash flow remains strong and "operational plans to improve financial performance implemented during the year are having the desired effect, albeit at a rate slower than anticipated."
"The demand for trades, particularly in the Auckland construction sector, is strong; however, the mobilisation of AWF’s migrant workforce channel, which largely supports this function, has been hampered by delays in arrivals to take advantage of this opportunity," AWF said. "The demand for recruitment talent has had some impact on the Madison business with pressure of competition for current and future talent by growing internal recruitment teams. This has softened the Madison result. The performance of AWF Madison’s other business, Absolute IT, continues to meet expectations."
The shares last traded at $2.27, down 18 percent in the past year.