AWF divisional earnings can be found on p33 of AR2021 (Note A1 Segment Revenue and Results). Equivalent HY2022 information may be found in HYR2022 p15.
This table includes FY2021.5, a composite year composed of 2HY2021 and HY2022. Actual Trade & Receivables Writedown can be found on p55 of AR2021 (Note C6: Provision for Impairment). There is no such equivalent information in the half yearly report HY2022. So I have used the equivalent information from FY2021 again, as my best estimate of the trade and receivables write-down for my constructed composite year.
|
2018 |
2019 |
2020 |
2021 |
2021.5 |
AWF Revenue |
$129.868m |
$115.859m |
$97.448m |
$77.762m |
$83.298m |
AWF EBIT {A} |
$4,858m |
$1.260m |
$1.692m |
$10.782m |
$1.326m |
Actual Trade & Receivables Writedowns {B} |
($0.815m) |
($1.034m) |
($0.123m) |
($0.205m) |
($0.205m) |
Assuming no redeployment of Overseas Workers (creating a saving) {C} |
|
$1.500m (1) |
|
AWF EBIT - Writedowns {A}-{B}+{C} |
$5.673m |
$3.794m |
$1.569m |
$10.577m |
$1.121m |
Notes
(1) From 29th May 2019 market update: Regulatory issues impeded AWF from redeploying migrant workers on guaranteed wages to cities and regions where they were needed, at a direct cost of $1.5 million, plus .lost opportunity margin.
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From HYR2021 p5:
"AWF has had a fall in permanent fee revenue and its temporary business suffered considerably during the Level 4 lockdown. At our current recovery rate, we expect AWF to return to normal trading in its temp business by the end of the financial year."
Snoopy comment: We should be there by now. 'Normal trading' in an IR2021 sense looks like around $100m in revenue, and we are -still- some 20% below that. I am hoping that some of the particularly poor EBIT result is because of redundancy payments (see quote below).
From HYR2022 p5:
"A Level 4 lockdown is especially hard on the civil and construction sectors that AWF services, and we were forced to stand down a significant portion of our workforce."
From AR2021 p19
"AWF Revenue was down $19.7m (20.2%) on the prior year."
Snoopy comment: And it is still down 20%. I do not expect underlying profits to be down this much though, for as we have heard before some of those building industry temp contracts are marginally profitable.
Following the last AWF crisis relating the the construction sector, the 29th May 2019 wrap up press release said
"Bennett said AWF had reduced its cost base, and was now geared to return 4% to 6% EBITDA on turnover approaching $120 million."
Using a D&A figure (see Segmented Analysis AR2021 p34, HYR2022 p17) of: $0.955m + ($1.964m-$0.952m) =$ 1.967m,
=>
Underlying EBIT = ((0.04 to 0.06) x $83.298m) - $1.967m) =
$1.365m to $3.031m
I think there is evidence here that EBIT for the AWF unit of Accordant has likely bottomed out. Yet AWF does have quite a branch network to maintain. That means cutting costs to the bone at the trough of the business cycle is not easy, and may mean minimal profitability for the AWF business unit for some time.