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  1. #111
    Legend minimoke's Avatar
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    On 31 Oct 05 AWF announced to the Market that CLS had up to 800 people. I’ll have to revise my wages liability to $400k for each week of outstanding pay. They could well be up for more than 4 weeks arrears giving a liability of at least $1.6m.

    Of these 800 people it is likely that many have been underpaid. It looks like AWF will pay out these shortfalls. If it works out to be an average of $1 an hour for 800 people for a year then we have another $1.66m liability.

    Holidays and ACC will be payable on these amounts so here is another $260,000 in cash gone.

    If CLS is worth 20 cents in the dollar does this mean Spring Creek is now only worth $360,000 – a $1.4m loss.

    How much are liquidation costs, I’ve no idea - lets say $50k.

    Simon hull has already flagged that for YE 2007 there is going to be “a challenge to achieve year end net growth” and this was before the CLS problems.

    AWF could be up for $4m in costs associated with CLS so definitely a challenge on last years $3m NPAT and only $803k by 06/07 half year. This is one sick puppy!

    So where is the profit warning to the Market?

  2. #112
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    If the 'hit' is $4m or so then AWF cannot survive this , lets not forget the possible litigation costs/penalties from the DOL / Imigration investigation . I am amazed anyone is still buying ..... even the staff that bought 600,000 shares at $1.50 must be sweating (or maybe they sold prior just after the raids??)
    If Hull is prepared to 'whack' a subsidiary , then why wouldnt he do the same to AWF and buy the business back from the liquidator and go private?
    Misc

  3. #113
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    Obviously the liquidation will have an impact so surely there should be an updated earnings outlook under the continuous disclosure rules?

    I wonder if AWF has provided any guarantees for CLS debt, as of so it should be disclosed as well if it is going to be called upon
    Death will be reality, Life is just an illusion.

  4. #114
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    Correct Steve , AWF shares should be suspended pending clarification of financial and Director exposure.
    Misc

  5. #115
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    It appears that AWF is not the only higher-profile company currently under investigation by the Immigration Dept. It must be the season for it

    Chubb sacks 12 illegal guards
    Twelve Chubb security guards have been sacked and the company is under Immigration Department investigation amid revelations it hired bank and Customs guards without work permits and with questionable security authorisation.
    Death will be reality, Life is just an illusion.

  6. #116
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    No mention of Director/Shareholder liabilities if Immigration charges stick? Misc

    FORECAST: AWF: CLS AND OPERATING PERFORMANCE UPDATE

    - Allied Workforce Group (AWF) has advised that further to releases of
    22 December and 27 December the company's involvement with Contract Labour
    Services NZ Ltd (CLS) in the rural sector has ceased and the investment made
    in this business is unlikely to be recovered.

    - AWF Group lost confidence in CLS Management's commitment to follow
    stated company policies and procedures and were forced to sever the
    relationship. For legal reasons we are constrained from commenting on this
    matter further at this time.

    - Due the significant write-offs which will be necessary by 31/3/07 the
    Board believes it appropriate to issue a profit guidance for the year ended
    31/3/07 - expected at around 50% of last years NPAT of just on $3m. This
    includes full write off of all investment in the Spring Creek and CLS
    operations.

    - Directors advise that although they expect to be able to announce a
    final dividend, it is likely to be at a level consistent with the final
    result, and therefore lower than for the year ended 31/3/06.

    - Managing Director Simon Hull commented that although the Company
    remains convinced that the rural/seasonal sector offers opportunities for the
    future, given the CLS experience the Group would handle immediate
    opportunities through its existing AWF branch network.

    For the Board

    Simon Hull
    Managing Director
    End CA:00143371 For:AWF Type:FORECAST Time:2007-02-13:10:02:03


  7. #117
    Legend minimoke's Avatar
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    quote:Originally posted by Misc

    No mention of Director/Shareholder liabilities if Immigration charges stick? Misc
    And what about the expenses associated with bailing out CLS wages liability?

    What a useless profit announcement – we had already flagged this on this thread a month ago!

  8. #118
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    And what happened to the 'warranties' AWF recieved when purchasing CLS (described in the 14/12 announcement)??

    The market may well speculate that AWF had full knowledge of all CLS activities and the CLS owners have struck a deal to remain silent over AWFs 'knowledge' in lieu of not having to repay the purchase price??

    Not sure where this leaves AWF amidst the illegal immigration scam though.

    Looks like someone is propping up the selling at $1.20 , possibly close associates of the company trying to avoid a total shareprice collapse and breach of banking covenants , I wonder how long they can hold it up?

    Misc


  9. #119
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    Remember that this is the NZX. All annoucements are automaically assumed to include the rider "E&OE".

    Good spotting by minimoke & misc last december.

  10. #120
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    Hairdresser , sadly you are correct , nothing has really changed since 1987 .... has it? Misc

    Allied Workforce signals lower profit after write-off

    NZPA | Tuesday, 13 February 2007

    AdvertisementAllied Workforce Group (AWF) is signalling a 50 per cent decline in annual profit, blaming an investment in the rural sector that went sour.


    The Blue collar labour hire company reported a maiden $3.02 million net profit for the year to March 31 last year, which was slightly below its prospectus forecast.

    Today it said the profit in the year to March 31, 2007 was expected to be 50 per cent down on last year after the write-off of investments.

    The final dividend was also likely to lower than last year. Managing Director Simon Hull the company's involvement with Contract Labour Services NZ Ltd (CLS) in the rural sector has ceased and the investment made in it was unlikely to be recovered.

    "Although the company remains convinced that the rural/seasonal sector offers opportunities for the future, given the CLS experience the Group would handle immediate opportunities through its existing AWF branch network," he said.

    AWF had lost confidence in CLS's commitment to company policies and procedures and was forced to sever the relationship.

    AWF is New Zealand's largest specialist blue collar labour hire company. It debuted on the stock market in 2005.




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