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According to this little NZHerald article propectus will be issued Thursday.
I presume that this company does well in most phases of the economic cycle.
Boom times companies need all the hands they can get.
Bust times casual labour is easier to get rid off.
etc etc.
May have some merit
PAPERTIGER, I have used this company over a period of a few years so will let you know from a business perspective warts and all how i was treated. I have hired labourers and carpenters in various building projects as required when required. I found the company honest punctual and easy to deal with. The quality of labour when treated right give me good service. If i require labour to suppliment i have no hesitation in calling them. That is a very honest opinion i have no doubt that they employ the occasional rat bag. As far as listing and buying shares well its up to you. macdunk
BONGO, I would not be interested, even although as i stated i found it to be an honest company, easy to deal with that supplied a good service. They have nothing of substance to sell if it goes bad. Why list?. Why not expand without listing?. It costs very little to open a new office, and hire out casual labour. What is to stop you or me renting an office and doing the same. It looks like someone wants to take my money, and bugger off leaving me with all the risk.
The labourers and other trade workers mostly have their own transport, the only expence being an office, and a van to take the others that dont have transport to the workplace. To me that risk is definately not on. macdunk
The economy is slowing.
For those that are interested
[quote]quote:
NZXR
09/06/2005
GENERAL
REL: 1130 HRS New Zealand Exchange Limited
GENERAL: NZXR: Allied Work Force IPO to raise $11.4 million
Allied Work Force IPO to raise $11.4 million
Specialist labour hire firm Allied Work Force Group Limited today announced
that it plans to list on the NZSX and raise $11.4 million in an initial
public offering of ordinary shares.
The share offer opens on June 13 and the company expects that its shares will
be listed on July 6. ABN AMRO Craigs are lead managers of the offer.
Founded 17 years ago by its managing director and major shareholder Simon
Hull, Allied operates nationally and is New Zealand's largest specialist blue
collar labour hire company. It provides on-demand labour across an industrial
spectrum that includes firms operating in the distribution, manufacturing,
processing, infrastructure and construction industries.
Simon Hull says the company has a 'crew' of around 8000 skilled and
semi-skilled workers who are available to be placed in some 6000 client
businesses.
In the year to March 31, 2006, the company is projecting a net profit after
tax (pre goodwill amortisation) of $3.1 million on revenue of $74.2m. Based
on the offer price of $1.50 per share the company will list with a market
capitalisation of $39.2 million.
"The business has grown on the back of demand for more flexible labour
arrangements," says Simon Hull.
"We believe we are now one of the largest employers in the country in terms
of the number of IRD returns we file each year. This year we expect to supply
4.4 million hours of work to our crew and our customers."
"We make it easy for businesses to use casual labour, which means that they
can get the necessary work done without incurring the long-term costs
associated with having a permanent labour force.
"For many companies we open the door to a more cost-effective business model
that allows them to cope with seasonal trends, special projects and overflow
work."
He says the on-hire business model also provides benefits to members of the
Allied crew, in that as well as enjoying attractive wage rates and
conditions, they get to handle a variety of work and to develop a range of
different skills.
ACC information suggests that, based on the wages paid to on-hire workers,
the New Zealand market has grown by 56% in the four years to 2004.
The company's board is made up Simon Hull, Allied's chief executive, Greg
Webster, and the independent directors Ted van Arkel and chairman Ross
Keenan.
Mr Keenan says Allied is a hands-on, can-do sort of business that has
expanded rapidly in the past few years through organic growth and more
recently by acquisition.
"We believe that growth is far from over yet and part of the reason for
listing is to position the company for further acquisitions."
Mr Keenan says that after the IPO Simon Hull will retain a 66.8% stake in the
company, and will continue to lead the business through its next phase of
development.
"At this stage he is only selling down to the extent required to meet the
spread requirements of the NZX and to provide some liquidity in the market,"
he says.
Allied Work Force is projecting an annualised gross dividend yield of 9.48%
based on a fully imputed net dividend of 9.5c per share for the financial
year ending 31 March, 2006. The company expects to pay dividends of 70% to
80% of net profit after tax, subject to prudent future investment
requirements.
Allied has 90 full time staff and operates from 21 locations around New
Zealand in addition to the 'crew' in its 8000 strong labour pool.
The company uses its own software and proprietary systems for managing
on-hire labour and its rate of successfully placing 'crew' into available
roles is approximately 98%.
Allied estimates that the New Zealand on-hire labour market is made up of
around 15,000 workers, or some 0.7%
From a straight practical point of view i would not buy in. The only thing that this company supplies is a service. They rent an office hire casual labour and take the cut off the top. All the workers supply their own tools of trade work boots etc. It sounds like someone wants to sell the business to the punters. Seem to remember things like this that went on in the past i will definately not be in. macdunk
Given that I started this thread spose I ought to come "out" and admit that I almost certainly will not be "in". I do not even intend to acquire a prospectus.
I've not heard of them, 21 locations they say but not in the Wellington phone book. Perhaps trading under another name?
Doubt if it will get off the ground. At best another MPM.
This is a growth industry. If you want proof just look at the number of copycats who have cropped up around the place. We have 3 or 4 in Wellington (Quinn Workforce is another). It is a successful business model.
Yes it will be subject to economic conditions but as they don't actually "employ" the workers is this really a big risk? A downturn will merely cut into their overall revenue, same as any other volume-based business.
I will not be purchasing, but I am impressed at the size and turnover of the company. Had no idea it was so big!
SaintJohn there is a trick to reading phone books. You have to look under "Allied Work Force". Look on page 76, it's highlighted in red (3rd column, about an inch from the top).:)
I think their catchphrase is "it's not just actors who have agents". Lately they have been appealing to students to sign up for extra money.
Dont get me wrong guys i think its a good company with nothing to show for it if it goes bad. You are buying what?. Start one up yourselves with limited capital. macdunk
i disagree... this one will be successful...
anyone can buy a van and get a gang of 10 dudes to start their own... but its all based around the relationship customers have with the leader/organiser... and these guys are trusted...
plus all the one man bands dont have the ability to deliver the people 98 times out of 100... the small outfits have no ability to bring in people from other cities within hours if necessary etc..
they do well when the eceonomy is cranking (no spare people and low enemployment)... and when the economy is slowing (businesses hesitant to commit to permanent contracts etc as not confident of prospects)...
I'd prefer to make judgement after I've read the prospectus than before. Albeit the timing does seem interesting with the economy indicating signs of coming off the boil.
While a company may have defensive or counter cyclical qualities, lean times hit everyone, even if only to shave some growth off a company lower down the S curve. A bit hard to make a call on Allied's defensive qualities without access to historical data.
The issue of hard assets is a non event. If hard assets measured the value of a business then media companies and Microsoft would be worth very little and Carter Holt Harvey would be worth a lot more than it is. A company earning high returns on few assets is a flag for investment rather than against.
Quote:
quote:from the Herald
Allied working up an appetite for float
10.06.05
By Georgina Bond
One of the country's biggest employers, Allied Work Force, will raise $11.4 million when it lists on the stock exchange next week.
Offering $1.50 a share, the labour hire company will list with a market capitalisation of $39.2 million.
The offer opens on Monday and the company expects its shares will be listed on July 6.
Allied Work Force started 17 years ago when its managing director and main shareholder, Simon Hull, set up a casual workforce business from a rented office in Penrose, Auckland.
It now has 21 branches, employing 90 staff, and from a pool of 8000 daily places workers across a range of industries including construction, factories, transport and food processing. Based on the number of IRD returns it filed each year, Hull believed it was one of the largest employers in the country.
In the year to March 31, it is projecting a net profit after tax of $3.1 million on revenue of $74.2 million.
Hull said the business had grown rapidly through demand for more flexible labour arrangements.
And with the unemployment rate below 4 per cent, his crews were in heavy demand.
This year, it expected to supply 4.4 million hours of work to its 6000 client businesses.
Early this year, the company boosted its manpower by buying Wellington-based Quin Workforce, following up its acquisition of Far North Labour Hire last year.
Chairman Ross Keenan said the company believed its growth was far from over and part of the reason for the listing was to position it for more acquisitions.
Also on the board is Hull, Allied's chief executive, Greg Webster, and independent director Ted van Arkel.
Keenan said Hull would retain a 66.8 per cent stake in the company after the IPO and would continue to lead the business through its next phase of development.
"At this stage. he is only selling down to the extent required to meet the spread requirements of the NZX and to provide some liquidity in the market."
The company expected to pay dividends of 70 per cent to 80 per cent of net profit after tax, subject to prudent future investment requirements.
ABN Amro Craigs is the lead broker.
Time and a half
* Allied Work Force started 17 years ago from a rented office in Penrose, Auckland.
* It now has 21 branches nationally, employing 90 staff, with a pool of 8000 workers.
* It has 6000 clients.
* The crews work in a range of industries including construction, factories, transport and food processing
Quote:
quote:and from Stuff
Allied share float to drive expansion
10 June 2005
By ADRIAN BATHGATE
Labour hire firm Allied Workforce is looking to a sharemarket float to drive further expansion and make it the only provider of a national casual labour force.
It will be the first big float of 2005 when it puts one-third of its shares on the market early next month to raise $11.4 million.
None of the 7.6 million shares in the float are being offered publicly. Seven million will be available to organising broker ABN Amro Craigs' clients, with the other 600,000 going to Allied Workforce management and staff.
They are new shares on issue, with Allied Workforce founder and managing director Simon Hull retaining his existing holding of 18.5 million shares, giving him 70 per cent control of the company.
Mr Hull said the float was primarily to finance further expansion, both through extending its branch network and by snapping up small regional-based companies.
These include recently acquired Wellington company Quin Workforce, which generated $10 million in revenue for the year ended March 31.
"It's a fantastic company, and these are the sorts of opportunities that we're looking for."
Mr Hull said Allied Workforce would not look to diversify into other fields, or expand overseas. "We'll just stick to our knitting."
The company has enjoyed strong growth over the past few years, with revenue rising from $38 million in the March 2003 year to a projected total of $74.2 million in the March 2006 year.
Mr Hull is confident the company will have a strong dividend payout policy.
"This is a cash business: We make real money, not paper money. The board has said if there's nothing within the company to invest it in, we'll pay it out and that's what we intend to do."
Allied Workforce has workers in a range of industries broadly classed as "blue collar". It specialises in short notice and contract work, and has 8000 workers on the books. Of these, Mr Hull said, there was a core of about 2000 workers who were almost exclusively full time. Workers are employees of Allied Workforce, which contracts them out to its clients.
Allied Workforce has also expanded to 21 branch offices, with another four planned. "Some of our clients are now using us nationwide."
Mr Hull attributes this to more businesses employing a casual labour force, with ACC figures showing the casual workforce has grown by 56 per cent in the four years to 2004.
Up to one-third of the workforce is now employed in casual or part-time positions.
Because of this, Mr Hull said, it was strong enough to absorb any downturn, with the main issue being getting skilled workers.