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%
Originally Posted by Snoopy
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