AGL - Accordant Group. was previously AWF Madison, Allied...

[minimoke]

And this wasn’t price sensitive information!!
All buyers have dried up with none on the board and one willing seller only at $1.45

[minimoke]

quote:Originally posted by minimoke

And this wasn’t price sensitive information!!
All buyers have dried up with none on the board and one willing seller only at $1.45

Youch - and a buyer now in at $0.90

[Steve]

I wonder what the warranties actually covered?

[minimoke]

$8 - $10m in income at risk; 700 workers – how many were underpaid and will stay? Settlement September 2006 – probably paid up. How good are those warranties??

AWF
27/09/2005
ASSET

REL: 1401 HRS Allied Work Force Group Limited

ASSET: AWF: ALLIED WORK FORCE GROUP LTD EXPANDS INTERESTS

Allied Work Force Group Ltd (AWF) today announced its intention to purchase a 64% interest in the agricultural labour hire business of Contract Labour Services (NZ) Ltd (CLS).

AWF managing director, Simon Hull, says the acquisition will provide AWF with a strategic opportunity to supply labour to agricultural and horticultural industries, a sector that, because of its seasonal nature is well suited to labour hire.

The key personnel of CLS have been involved in agricultural labour hire for more than 15 years and, with a total crew in excess of 700 people, supply seasonal labour to apple, wine, horticulture and agricultural businesses in the Gisborne, Hawkes Bay, Nelson, Blenheim and Canterbury areas. CLS meets the seasonal needs of businesses in primary industries, by moving labour resources around the country as required.

AWF will acquire shares in CLS at a price based on the EBITDA CLS achieves in the 12 months from 1st October 2005. Settlement will be payable in cash and completed after the results for the period to 30th September 2006 are produced. While CLS is expected to have revenues of $8 to $10 million annually, it is not expected to make a contribution to AWF FY2006 profit projections due to the intention to invest in growth opportunities through this period.

AWF will provide financial services to CLS and as a consequence of the
introduction of AWF management systems and synergies between the businesses, the profitability of CLS will improve significantly from next year onwards.

Simon Hull says that he expects CLS to grow to be an important part of the AWF Group. "Through CLS and its experienced management team, AWF plans to expand its agricultural offering to other industries and other geographic areas where AWF already has established branches. The partnership between AWF and CLS will provide significantly more capacity and potential to a respected supplier in a sector searching for reliability," he said.

Mr Hull said he expected the agreement to become unconditional by 30th
September.

[Misc]

Hmmm , what more can one say ....except that this announcement should have been made a week ago and recent buyers will feel justifiably shafted by the Company.

Misc

[minimoke]

And AWF had no worries and knew nothing??

From Simon Hulls address in the 2006 half year report:

“The competitive horticulture and viticulture sector where CLS operates continues to grow and show strong demand, with sourcing staff a big challenge. We are continuing to work on multiple solutions to add motivated and capable staff to our crews.”............


“At 31 March 2006, the purchase consideration was estimated to be $952,000, based on the first six months earnings and an estimate of earnings for the six month period to September 2006. Actual earnings were however lower than expected and the final purchase consideration was $285,000.”

[Misc]

And this from Sept last year ....

"AWF will provide financial services to CLS and as a consequence of the
introduction of AWF management systems and synergies between the businesses,
the profitability of CLS will improve significantly from next year onwards"

Is Simon Hull saying that AWF management inside CLS did not notice their computers and other records missing on the 5th December?? LOL

What a disgrace ! NZX investigation coming up ??

Misc

[minimoke]

Or that the payroll system was showing people getting paid $5 (or whatever) an hour? The following suggests most workers (but probably not all) were on the payroll!

“Most were Southeast Asian overstayers, though as the investigation expands, the nationalities of workers look set to widen.

The workers were paid less than the minimum wage of $10.25 per hour and the department was looking into whether some were on the pay-roll at all.”

[Misc]

Looks like AWF have adopted the 'Sargeant Schultz' approach and are trying to distance themselves from what is obviously a ticking timebomb ...

My questions would be:

1. What did you look at when you did your Due Diligence prior to purchasing the subsidiary?

2. Have you had AWF staff and management working inside the subsidiary , and if so , for how long?

3. When did you come to know of the 'raid' of early a.m. 5th December 2006? (DOL will have the answer to this)

4. As there have been no charges laid , why have you not vigorously refuted the allegations and sought to defend them?

5. Why does the NZX release of 14th December 2006 contain statements that are probably misleading or at best belated?

6. What profit guidance can you give to shareholders given the likely scenario that the subsidiary may not longer be able to function?

7. Are similar problems likely in other areas of the AWF business?

I guess the NZX will have a much more exhaustive list , I cant believe this kind of thing still goes on , Im sure the Directors will not be having a very Merry Christmas , LOL they may be (or should be) on the end of push-hoes and picking buckets to 'make up numbers'!!

Misc

[Happy Camper]

Sorry Misc, this Happy Camper thinks that you are being overly down on this company.

IMHO the answer to question 4 is that not all battles are won by fighting. Please bear in mind that the department you are proposing they come out blazing against is one that AWF are likely to schmooze/lobby heavily from time to time. The best long-term answer for AWF could well be to co-operate fully with the investigation, provide "meaningful" input into the process with a view toward encouraging constructive results for the future.

If they have to take the punishment, then so be it. By all accounts warranties exist in the original S&P agreement to mitigate the materiality of any monetary penalty.

Cheers