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AWF expects first half sales growth near 61%, flags fatter earnings

AWF Group [NZX: AWF], the contract labour firm, anticipates first-half sales will grow almost 61 percent with the addition of white-collar recruitment firm Madison Group, and signalled bigger earnings as a result.

The Auckland-based company expects sales of almost $100 million in the six months ending Sept. 30, up from $62 million a year earlier, with net profit and underlying earnings likely to increase significantly, it said in a statement. The Madison acquisition is "performing extremely well" and AWF said it expects to pay the full purchase price of $36 million, with a $6 million earn-out to be paid near the end of November.

AWF shareholders approved the Madison acquisition last year, which is forecast to lift underlying earnings to $8 million and sales to $200 million in 2015.

The company said it's considering a debt reduction programme, and expects to give shareholders an update by the end of the year, which is "likely to include the opportunity for shareholder participation," it said. AWF had borrowings of about $30.7 million as at March 31, according to its annual report.

The shares rose 2.1 percent to $2.48 yesterday, and have dropped 14 percent this year, lagging the 6.6 percent increase on the NZX All Index over the same period.

(BusinessDesk)