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Revenue up 4% in H1 2018 for Ashley Services Group

Ashley Services Group has released its results for the half year ended 31st December 2017.

Statutory after-tax profit from continuing operations was $2.2m, representing an improvement of $7.3m on the prior corresponding period (pcp) (1H17: loss $5.1m).

Revenue from continuing operations was $169.5m, $6.9m or 4.2% above the pcp (1H17: $162.6m), despite a $14.1m decline in revenue for the training division following the restructure of that division as announced twelve months ago.

Underlying EBITDA profit for the period was $4.0 million.

The labour hire division is made up of Action Workforce (bluecollar labour hire), Concept Engineering (technical labour hire) and Blackadder Recruitment (white-collar recruitment). Labour hire revenue mix is Action Workforce (83%), Concept Engineering (13%) and Blackadder Recruitment (4%). Labour Hire saw strong revenue growth across the half, up 14.5% on the prior year. Action Workforce revenues grew by 13% year on year, whilst Concept Engineering grew by 31%. Blackadder Recruitment contracted slightly at both the top and bottom line, but maintained a modest profit for the half.

The company’s training division has effectively operated with only meaningful operations in Western Australia and Queensland, both of which have operated profitably over the half. These profitable operations were largely offset by its continued investment in compliance and its unprofitable Victorian training operations. Minimal operations were maintained throughout the first half in Victoria, in anticipation of the outcome of the awarding of the 2018-19 Standard VET Funding Contract – Skills First Program.

The Group balance sheet has strengthened overall by just over $2m, in line with the first half profit, with net assets at $22.2m (30th June 2017: $20.0m). Net tangible assets at end 31st December 2017 represent $19.0m or 13.2c per share (30th June 2017: $16.7m or 11.6c per share).

Ross Shrimpton, managing director, said, “It was pleasing to see that we have been able to continue to build on the positive momentum outlined for the first quarter at our AGM. Our first half result represents a strong EBITDA on the back of a solid performance from our Labour Hire division. Action Workforce and Concept Engineering have offset the decline in our Training division. Top line growth for both of our major Labour Hire brands has been strong, and by closely controlling our costs during this growth, we have been able to leverage our cost base to deliver improved profitability in the labour hire division.

“I would also like to highlight our industry best practice performance in the area of workplace health and safety. With an LTIFR just above 0.5 this is a testament to how seriously we take our responsibilities to our employees and our customers. Corporate costs have played a role in our result, being well down on prior year as we managed the challenge of bringing them down to a level more appropriate to our current operations. In terms of our training division I am pleased to report that Western Australia has performed well and Queensland continues to develop. The recent awarding of a funding contract in Victoria is pleasing and now gives us the opportunity to have meaningful training operations in these three states. Our balance sheet has pleasingly strengthened further over the last six months.

“We have deferred any decision on dividend payments at the half, pending consideration of acquisition opportunities that we are currently evaluating. We do anticipate further announcements in this regard in the coming months. Finally, I would like to take the opportunity to thank all of our team at Ashley Services, both our 220 committed internal team members, as well as the more than 5,000 employees who work every day in our customer’s businesses, delivering a level of service we firmly believe to be the best operating in our sector. We are proud of our performance and the role it plays in our customer’s success”.

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