Costs associated with unwinding a joint venture in the Christchurch contract labour market contributed materially to AWF Madison reporting a "disappointing" $5.2 million profit for the year ended March 31, compared with $5.4 million a year earlier.

A "rapid growth" in debtors across the group, particularly in Christchurch, saw provisions for bad and doubtful debt roughly double to about $600,000, chief executive Simon Bennett told BusinessDesk after the company issued its initial earnings announcement to the NZX this morning.

One-off restructuring costs of $1.3 million related in large part to the unwinding of the JV with a Christchurch operator, Craig Henwood, who has relinquished B class shares in AWF, which were classed as a debt instrument in the company's accounts, which required the buy-out to flow through the national blue and white collar labour force supplier's profit and loss account.

The result was achieved on a 9 per cent uplift in revenue to $214.6 million and chairman Ross Keenan said in a statement the company was now positioned for "double-digit growth in profit levels for the 2016/17 year as the benefits of efficiency gains begin to flow through."


"While the overall result is disappointing, the fact is that the restructuring process has taken longer, cost more than forecast, but has positioned the group well as we move into the new financial year."

Labour demand remained strong and was "well spread across the regions."

Underlying earnings, which strips out non-cash amortisation and the sale of subsidiaries and is the company's preferred benchmark earnings measure, slipped from $6.8 million in 2014/15 to $6.5 million in the last financial year, with earnings per share slipping to 16 cents per share from 20.7 cents.

Nonetheless, strong forecast cash flows saw directors preserve an 8 cents per share final dividend and payouts for the year at 15.2 cents. The dividend is fully imputed and payable on July 4, with a record date of June 27.

AWF Madison shares closed yesterday at $2.40 and have risen 11 percent in the last year.