KEY POINTS:
Allied 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 writeoff of investments.
The final dividend was also likely to lower than last year.
Managing Director Simon Hull said 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.
- NZPA
