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  1. #901
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    Quote Originally Posted by Nor View Post
    Price 1.5 volume 1 million? ? ? ? ?
    Quote Originally Posted by Snoopy View Post
    According the AR2020 top twenty shareholder list in the annual report, there are only three entities that could sell 1m (actually 998,145 shares) in one hit.

    1/ The family trust associated with company founder Simon Hull.
    2/ The company associated with rich lister Peter Masfen.
    3/ The partnership between two Christchurch businessmen, Russelll John Field and Anthony James Palmer

    The first two are substantial holders so the stock exchange will have to be informed. But if no substantial shareholder notice is forthcoming. then the seller must be 3/ No point to speculate. We might as well just wait!
    Just a follow up on the 'million share sale' from 09-09-2020. There were no substantial shareholder notices issued. Then if I compare the top twenty shareholder list in AR2020 and AR2021, find

    1/ The family trust associated with company founder Simon Hull.
    2/ The company associated with rich lister Peter Masfen.
    3/ The partnership between two Christchurch businessmen, Russelll John Field and Anthony James Palmer

    have exactly the same number of shares that they had before.! What did change is that the number of shares listed under the 'New Zealand Central Securities Depository Limited' went down from 7.85% of the company to just 4.17%.

    A new shareholder has popped into the top 5 list shareholder list under the name of 'Ma Janssen Limited'. This company is 100% owned by Waiheke Island based businessman Maarten Arnold JANSSEN. Maarten Arnold JANSSEN is also associated with 'Syft Technologies' (owns 3.6% of that). M.A. Janssen owns 1,117,019 or 3.25% of the AGL shares on issue.

    SNOOPY
    Last edited by Snoopy; 10-06-2021 at 03:29 PM.
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  2. #902
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    Default Triangular Employment Issue Resolved

    Quote Originally Posted by Snoopy View Post
    A further insight into AWF's woes was given in the interim report from p6.

    "Of more concern is the industrial relations activity we are seeing, with aggressive action by a number of Unions. We currently have a case before the Employment Relations Authority, taken by a Union, challenging the status of a number of our workers. We believe this case has no merit and, in fact, they are seeking an outcome that would have applied if the Employment Relations (Triangular Employment) Amendment Bill had not been amended prior to it becoming legislation. This action has resulted in a shift away from contingent workers in a large client of ours who is seeking to take a more conservative balance of permanent and contingent workers."

    "I believe the Union is effectively bullying a number of clients in this way. It is unfortunate for our workers as now a number have been left without work opportunities as a result. We are confident this will be resolved and may, in fact, result in stronger case law for legitimate providers of temporary employees. A balance of permanent and contingent workers optimises a workforce and provides good opportunities for workers, and we are confident common sense will prevail. The result has seen our white collar segment"
    The above quotes from HYR2020 relates to a case that has now been through the NZ court system over FY2021. The result, as reported in AR2021 seems favourable for Accordant. From AR2021 p10.

    -----------

    NEW ZEALAND’S LEGISLATIVE FRAMEWORK

    "Employment legislation must cater for this growing workforce. The Employment Relations (Triangular Employment) Act 2019 is the first legislation that talks to this space, whereby an agency employer, like we are, employs workers who carry out assignments at client sites. This type of work must ensure that the responsibilities of each of the three parties are clear, and that minimum entitlements for the employee are met."

    <snip>

    "Last year we co-defended a status claim in the Employment Court alongside our government client. The eight plaintiffs, all former Madison employees backed by the PSA union, claimed they were not our employees, but those of our client. It was significant that a full bench of the Employment Court confirmed the legitimacy of our tripartite agreement, which underscores our temporary workforce business model. It is a strong affirmation of our processes and a benchmark for best practice. The decision was significant, being 100 percent in our favour."

    --------------

    SNOOPY
    Last edited by Snoopy; 14-06-2021 at 09:33 AM.
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  3. #903
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    Default 'AWF Madison' AWF division 'gets the blues'. (FY2021 Perspective)

    Quote Originally Posted by Snoopy View Post
    AWF experienced the collapse of three construction sector clients in FY2018 that had a significant effect on the 'blue collar' side of the AWF business.

    http://nzx-prod-s7fsd7f98s.s3-websit...389/288702.pdf

    CEO Simon Bennet, aka 'The Bennster' vowed to fix things. So what actually happened over FY2020?

    AWF divisional earnings can be found on p31 of AR2020.
    Actual Trade & Receivables Writedown can be found on p52 of AR2020.

    2014 2015 2016 2017 2018 2019 2020
    AWF EBIT {A} $7.471m $7.498m $7.067m $8.726m $4,858m $1.260m $1.692m
    Actual Trade & Receivables Writedowns {B} ($0.088m) ($0.204m) ($0.163m) ($0.163m) ($0.815m) ($1.034m) ($0.123m)
    Assuming no redeployment of Overseas Workers (creating a saving) {C} $1.500m (1)
    AWF EBIT - Writedowns {A}-{B}+{C} $7.559m $7.702m $7.230m $8.889m $5.673m $3.794m $1.569m

    (1) From 29th May 2019 market update

    This table could be the indicator that AWF's construction sector woes are far from over. Remember that the latest figures are for the year ended 31st March 2020, and that includes only a few days of the lock down. The figures for 'AWF blue collar' are so bad I am wondering if I have made a mistake ??!?? Are the glory days of AWF Madison as a group over? It looks like 'The Bennster' has some explaining to do!

    The June 8th announcement to the market contains some answers:

    "The reduction in Group revenue was driven by AWF, where revenue fell by 16% to $97.4 million (Snoopy edit: I think the technical market term for this is 'Ouch!'). This reflected a number of factors. The Group took the decision in 2018 to start relinquishing low margin, high cost-to-serve business in favour of customers with higher engagement levels. In addition, AWF has recently seen growth in permanent recruitment, which furnishes higher margins than temporary. Taken together, these factors constitute encouraging momentum by AWF towards a greater contribution to Group profitability."

    A further insight into AWF's woes was given in the interim report from p6.

    "Of more concern is the industrial relations activity we are seeing, with aggressive action by a number of Unions. We currently have a case before the Employment Relations Authority, taken by a Union, challenging the status of a number of our workers. We believe this case has no merit and, in fact, they are seeking an outcome that would have applied if the Employment Relations (Triangular Employment) Amendment Bill had not been amended prior to it becoming legislation. This action has resulted in a shift away from contingent workers in a large client of ours who is seeking to take a more conservative balance of permanent and contingent workers."

    "I believe the Union is effectively bullying a number of clients in this way. It is unfortunate for our workers as now a number have been left without work opportunities as a result. We are confident this will be resolved and may, in fact, result in stronger case law for legitimate providers of temporary employees. A balance of permanent and contingent workers optimises a workforce and provides good opportunities for workers, and we are confident common sense will prevail. The result has seen our white collar segment"

    There were further problems redeploying workers from Christchurch (interim report p6).

    "We had expected to resolve issues with the Labour Inspectorate relating to an investigation which commenced in May of 2018, following an exaggerated and sensationalised report by the media on 9 May 2018. This investigation stalled our renewal process for Accredited Employer status with Immigration New Zealand and resulted in us having little flexibility to redeploy many workers based in Christchurch, who were surplus to requirements, with large construction projects drawing to a close. We expect to announce a long overdue pathway forward in the coming weeks."

    I take no 'momentum encouragement' myself from any of this! In a post Covid-19 world, are all the big corporates out there looking to hire new people? I can see a shift back to short term contracts, and more grindingly low margins for AWF blue collar temp workers.
    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.

    SNOOPY
    Last edited by Snoopy; 26-06-2021 at 06:19 PM.
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  4. #904
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    Default Apportioning Depreciation: Blue Collar vs White Collar (FY2021 Perspective) Pt1

    This post is calculation sub note for my previous post 903. To apportion amortisation & depreciation between AWF and the other business within the wider Accordant group (Madison, AbsoluteIT and JacksonStone).

    AWF Madison/AbsoluteIT/JacksonStone Total
    Revenue $76.793m $95.563m $172.356m
    Revenue Percentage 44.55% 55.45% 100.00%

    I use 'relative revenue percentage' as an indicator of the wear and tear suffered by each business unit.

    Amortisation & Depreciation Amortisation & Depreciation (AWF share) Amortisation & Depreciation (Madison/AbsoluteIT/JacksonStone) share
    Depreciation of Property Plant & Equipment $0.990m $0.441m $0.549m
    Depreciation of Right of Use Assets $2.702m $1.204m $1.498m
    Amortisation of Software $1.594m-$0.492m-$0.874m= $0.228m $0.102m $0.126m
    Amortisation of Customer Relationships $0.874m $0.874m
    Amortisation of Restraint of Trade $0.492m $0.492m
    Total $5.286m $1.747m $3.539m

    Notes

    1/ Figures $0.874m and $0.492m represent intangible assets of 'Customer Relationships' and 'Restraint of Trade' respectively, that are only applicable to the white collar divisions of Accordant.

    SNOOPY
    Last edited by Snoopy; 04-07-2022 at 07:41 PM.
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  5. #905
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    Default Apportioning Depreciation: Blue Collar vs White Collar (FY2021 Perspective) Pt2

    To apportion amortisation & depreciation between AWF and the other business within the wider Accordant group (Madison, AbsoluteIT and JacksonStone), I use 'relative revenue' as an indicator of the wear and tear suffered by each business unit.

    AWF Madison/AbsoluteIT/JacksonStone Total
    Revenue $76.793m $95.563m $172.356m
    Revenue Percentage 44.55% 55.45% 100.00%

    Amortisation & Depreciation Amortisation & Depreciation (White Collar share)
    Property Plant & Equipment $0.990m $0.549m
    Right of Use Assets $2.702m $1.498m
    Amortisation of Software $1.594m-$0.492m-$0.874m= $0.228m $0.126m
    Restraint of Trade $0.492m
    Customer Relationships $0.874m
    Total $3.539m

    SNOOPY
    Last edited by Snoopy; 20-06-2021 at 08:29 AM.
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  6. #906
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    Default Wage Subsidy: Can any other company beat this?

    Quote Originally Posted by winner69 View Post
    That $33m of corporate welfare which shows up on the Cash Flow Statement is pretty impressive
    The full declaration on the wage subsidy received over FY2021 is in AR2021 on p32

    "During the financial year Group eligible entities received Government Grants totalling $35.6m (for 6,367 employees) and repaid $2.3m (for 429 employees) under the initial COVID-19 Wage Subsidy Scheme and the subsequent Government Wage Subsidy Extension scheme. A net receipt from Government grants of $33.3m."

    However we need to remember that payments of the wage subsidy were made in advance. So a large proportion of the wage subsidies paid in FY2020 actually were for payouts in the FY2021 year.

    Quote Originally Posted by Snoopy View Post

    From page 16 of the HYR2021

    "This was in addition to the amount claimed under the initial 12 week COVID‑19 Wage Subsidy Scheme referred to in the Group’s annual financial statements for the year ended 31 March 2020. Under the initial 12 week COVID‑19 Wage Subsidy Scheme, the Group applied for $22.9m (for 3,451 employees) subsequently refunding $1.4m (for 231 employees)."

    So the net amount of wage subsidy claimed over FY2020 was: $22.9m - $1.4m = $21.5m

    The NZ Covid -19 wage subsidy was introduced on 17th March 2020. So of the initial 12 week period for which wage subsidy payments were made, only 14 days (2 weeks) related to FY2020 (which ended on 31-03-2020). This means that although a net wage subsidy payment of $21.5m was made in FY2020, only:

    2/12 x $21.5m = $3.583m

    of that payment related to FY2020. The balance of that payment ($21.5m - $3.583m = $17.417m) related to FY2021, as did the net 8 week wage extension payment of $11.0m. This means the initial wage subsidy and extension applying to FY2021 was:

    $17.417m + $11.000m = $28.417m
    This means the actual net payment for wage subsidies applying to the FY2021 year was:

    $28.417m + $33.323m = $61.740m

    Truly eye watering.

    SNOOPY
    Last edited by Snoopy; 15-06-2021 at 07:24 PM.
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  7. #907
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    Default Wage Subsidy Revised Total

    Quote Originally Posted by Snoopy View Post
    There was nothing in the cashflow statement indicating the level of wage subsidy being received. You have to hunt down in page 16 of the HYR2021 notes to find it.

    "During the six month period ended 30 September 2020, Group eligible entities claimed $13.2m and repaid $2.2m under the New Zealand Government’s COVID-19 Wage Subsidy Schemes. This was in addition to the amount claimed under the initial 12 week COVID-19 Wage Subsidy Scheme referred to in the Group’s annual financial statements for the year ended 31 March 2020. Under the initial 12 week COVID-19 Wage Subsidy Scheme, the Group applied for $22.9m (for 3,451 employees) subsequently refunding $1.4m (for 231 employees). Under the initial 8 week extension of the COVID-19 Wage Subsidy Scheme, the Group applied for $13.2m (for 2,992 employees) subsequently refunding $0.8m (for 198 employees)."

    "These grants supported the Group’s ability to retain personnel and pay remuneration throughout New Zealand’s COVID-19 Alert Levels 4 and 3. The grants have been offset against employee benefits expense in the statement of comprehensive income."

    If I read that note correctly, the net wage subsidy claimed by Accordant over the period 01-04-2020 to 30-09-2020 was: $13.2m - $2.2m = $11m. Read on and the note says the refund on the $13.2m of wage subsidies applied for was only $0.8m. I presume the difference ( $2.2m vs $0.8m ) was due to a refund relating to the previous period but paid back during the FY2021 half year?
    It looks like I have been fooled by some of the wage subsidy talk, and the inconsistent treatment of the same.

    "referred to in the groups financial statements" gave me the impression the initial wage subsidy payments were incorporated in the FY2020 annual accounts. In fact the reference is in AR2021 note F6 "Events after the Reporting Date."

    "Prior to reporting date, in March 2020, the Group received a grant of $534,000 and in April 2020, the Group received grant of $22,286,000. Both grants were recognised as liabilities on the dates they were claimed and shall be recognised in profit or loss on a systematic basis over the periods in which the entity recognises as expenses the related costs for which the grants are intended to compensate."

    This would suggest the total wage subsidy claimed was:

    $0.534m + $33.323m = $33.857m

    That figure is still very high, being over ten times FY2020 declared profit. But not quite as eye watering as my previous post (906) suggested.

    The statement "Both grants were recognised as liabilities on the dates they were claimed" would suggest the wage subsidies ($22,286,000 + $534,000) could be part of the FY2020 Balance sheet. If that were the case they would form part of 'current liabilities'. The only category of 'current liabilities' of sufficient size to hold that size of "trade and other payables". Lo and behold, under note C8 'Trade and Other Payables' there it is! 'Deferred Grant Income $21.778m'.

    The double entry accounting convention means there must be an equivalent book entry on the other side of the ledger. It must be a current asset to match the paired current liability accounting entry. Look under Note C6 'Trade and Other Receivables' and there it is! Grant Income Receivable' $22.286m.

    Why do the two numbers not exactly match? I presume the difference ($22.286m - $21.778m = $0.508m) must represent salary top ups already earned before EOFY2020.

    Man, I am starting to sound like a real accountant!

    SNOOPY
    Last edited by Snoopy; 16-06-2021 at 08:35 AM.
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  8. #908
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    No surprises there.!
    We all have....
    And that comes after trying to sort out right to occupy...lol

  9. #909
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    Default A lesson in Debt Repayment: EOFY2020 to EOFY2021

    Quote Originally Posted by Snoopy View Post
    the reduction in net debt since balance date is very welcome and impressive:

    Net Debt EOFY 2020 $29.822m
    add EOFY2020 Tax Payable $0.950m
    less Final FY2020 dividend not paid (1) $2.819m
    less Excess of Profit and D&A above dividend (2) $1.530m
    less Reduced Capital Expenditure $?m
    less Reduced Working Capital $?m
    equals Net Debt EOHY 2021 (including Tax Payable) $11.500m


    Notes

    1/ 0.082dps x 34,325,542shares = $2.819m (Final dividend FY2020, cancelled, not paid)

    2/ Estimate of D&A for HY2021: $6.194m - $3.285m = $2.909m. Estimate of 'Net Profit' added to estimate of 'Depreciation & Amortisation' (does not reduce cash on hand) for HY2021: 0.72 x $2m +$2.909m = $4.349m (Estimate is required because this post was originally made before half year result for HY2021 was released).

    I had always considered AWF Madison a 'Capital Light' company. I have searched right through AR2020 looking for what their capital expenditure was and could not find a reference to them spending anything on 'capital expenditure'. So I am guessing whatever 'saving' they have made here is a small number.

    'Reducing Working Capital' is another way of saying you are increasing the amount of money you are collecting from customers much faster than the new bills you are creating. But this is what happens when the size of your business decreases significantly. That isn't necessarily a good thing. Because even though the total debt has come down, your capacity to service that debt is similarly decreased.

    Assuming a $1m reduction in capital expenditure, my table above is showing a 'Reduction In Working Capital' of $13.923m. If all of this has come off trade receivables at last balance date of ($53.071m - $22.206m = $30.865m), this is pointing to a decline in business of: $13.923m/$30.865m = 45% from FY2020. And remember this decline is with all the wage subsidies in place.
    I have been very cautious about he debt position of AGL over the last year. Yet the EOFY2021 picture has seen an improvement way above what I expected. How did it all happen?

    Net Debt EOFY 2020 $29.822m
    add EOFY2020 Tax Payable $0.950m
    less Final FY2020 and interim FY2021 dividends not paid (1) $5.561m
    less Excess of Net Profit for FY2021 above dividend not paid (2) $0.636m
    less Depreciation & Amortisation (3) $3.806m
    less Reduced Capital Expenditure $2m?
    less Reduced Working Capital $?m
    equals Net Debt EOFY 2021 (including Tax Payable) $15.034m

    Notes

    1/ (0.08+0.082)dps x 34,325,542shares = $5.561m

    2/ $6.197m - $5.561m = $0.636m

    3/ Depreciation and Amortisation are non-cash deductions. 0.72 x $5.286m = $3.806m

    Assuming a $2m reduction in capital expenditure (my estimate because the company says capital spending, although not large enough to be reported separately, is being reduced), my table above is implying a 'Reduction In Working Capital' of $3.735m (calculated to make the addition and subtraction elements to equate to the total).

    'Reducing Working Capital' is another way of saying you are increasing the amount of money you are collecting from customers much faster than the new bills you are creating. But this is also what happens when the size of your business decreases significantly. So 'reducing working capital' isn't necessarily a good thing. Because even though the total debt has come down, your capacity to service that debt is likely similarly decreased. Nevertheless the 'wage subsidy boosted profits' of $6.197m have meant this hasn't been a problem over FY2021.

    If all of this working capital decline has come off 'trade receivables' at last balance date of $53.071m - $22.286m = $30.785m, this is pointing to a decline in business of: $3.735m/$30.785m = 12% from the FY2020 comparative year. But remember this decline is with all the wage subsidies in place.

    It is pertinent to note that although the net debt has reduced significantly over the year, it has gone up over the most recent half year

    SNOOPY
    Last edited by Snoopy; 20-06-2021 at 06:21 PM.
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  10. #910
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    Just 34 mill shares on issue -- SP seems quite volatile

    Gone Ex 8.2 cps Div today & SP still holding without a blink

    May be some further upside here ?

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