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AWF plays down share spike query

NZ Newswire logoNZ Newswire 26/04/2017 Paul McBeth

AWF Madison Group, the country's largest contract labour firm, has played down an inquiry into a recent share price spike that's seen the stock trade near a three-and-a-half-year high.

NZX Regulation sought an explanation over a 13 per cent gain in the share price between April 3 and April 24, to which AWF company secretary David Lazarus responded that the company remained within continuous disclosure obligations.

AWF last posted a price-sensitive announcement to the NZX on November 2 when it declared its $15.3 million acquisition of Absolute IT recruitment firm unconditional.

The shares have climbed 24 per cent since that November 2 announcement to trade at their highest level since July 2013.

The stock is trading at a price-to-earnings multiple of 17.02 times, compared to P/E multiple of 15.52 times for the S&P/NZX All Index, according to Reuters data.

AWF set "modest goals" for the year ended March 31, 2017, with a goal of bouncing back from a dip in earnings in 2016 when it bore a $1.3 million restructuring bill.

It lifted first-half profit 15 per cent to $3.9 million as a tight labour market stoked demand for its contract services and expected that dynamic to continue through the second half of the year to deliver "double-digit earnings growth for the full year".

Companies with March and September balance dates are set to report earnings from next week.

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