Allied Work Force seeks higher profile

The chairman of blue collar labour hire company Allied Work Force Group said the business needed to be brought to the awareness of the investing community and analysts.

The sector was largely unknown but had huge growth potential, chairman Ross Keenan told the group's annual meeting of shareholders today.

Allied estimated it had around 40 per cent of the true blue collar contracting business, with a regular client base of about 5000, he said.

The company listed on the New Zealand sharemarket a year ago, having set its initial public offer price at $1.50.

The share price closed at $1.73 yesterday having ranged between $1.16 and $1.75 over the last year.

For the year to March, Allied reported a $3.02 million net profit, up 133 per cent on a year ago but $95,000 less than the prospectus due to higher tax and interest charges.

Earnings before interest, tax depreciation and amortisation came to $5.41m, up 38 per cent on a comparable basis and $200,000 ahead of projected earnings.

Today Mr Keenan said there now seemed to be better recognition of Allied's value.

"There were a number of areas that we needed to demonstrate the ability to achieve results to get that confidence from the investing community and we believe we have certainly done that in our first year of listing," he said.

The company believed the net dividend for the year of 10c a share was sustainable in cents per share, and it was expected imputations would continue to be available.

Some shareholders might wonder at the level of payout, given earnings per share of 11.5c, but the business was not capital intensive and there was a lot of free cash flow, Mr Keenan said.

Allied now had 37 branches in 30 locations and intended to open more.

A branch was due to start up in Kapiti in late-August or early-September and the area had "enormous" future growth potential.

But the company had ruled out growing across the Tasman, or moving into equipment hire or related hire businesses.

- NZPA