AWF divisional earnings can be found on p33 of AR2021 (Note A1 Segment Revenue and Results).
Actual Trade & Receivables Writedown can be found on p55 of AR2021 (Note C6: Provision for Impairment).
|
2017 |
2018 |
2019 |
2020 |
2021 |
AWF EBIT {A} |
$8.726m |
$4,858m |
$1.260m |
$1.692m |
$10.782m |
Actual Trade & Receivables Writedowns {B} |
($0.163m) |
($0.815m) |
($1.034m) |
($0.123m) |
($0.205m) |
Assuming no redeployment of Overseas Workers (creating a saving) {C} |
|
|
$1.500m (1) |
|
AWF EBIT - Writedowns {A}-{B}+{C} |
$8.889m |
$5.673m |
$3.794m |
$1.569m |
$10.577m |
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.
From IR2021 p5,
"AWF has had a fall in permanent fee revenue and 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."
From AR2021 p7
"With the permanent recruitment market most significantly impacted in 2020, the first to see growth was our AWF blue collar labour hire channel."
From AR2021 p19
"AWF Revenue was down $19.7m (20.2%) on the prior year."
The above comments are incongruous with the record numerical result. So what is going on? My conclusion is that the wage subsidies have been booked as normalized revenues which have no associated operating costs. This greatly boosted AWF EBIT.
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."
Turnover at AWF over FY2021 was $77.762m, suggesting EBITDA of $3.1m to $4.7m. Take off $1.7m in Depreciation and Amortisation (refer my post 904) off those EBITDA estimates and I get a forecast EBIT of $1.4 to $3.0m.
Granted all of this is before Covid-19 and any longer term restructuring measures taken as a result. But there is still a major disconnect between the forecast restructured AWF EBIT from FY2019 of '$4.6m to $7.0m' (using FY2019 as a base year for earnings) verses the actual FY2021 EBIT of $10.577m. My conclusion is that EBIT for AWF over FY2021 has been grossly distorted by subsidies and a 'reality check' will loom over the HY2022 results. I will be listening with interest for any 'progress reports' at the upcoming AGM to see if my speculation is confirmed.