A Glance At The Sydney-Based Workforce Solution Provider Ashley Services Group

Ashley Services Group Limited (ASX:ASH), headquartered in Sydney, Australia, is engaged in the provision of tailored workforce solutions, including recruitment and training. The Group operates through two broad segments- the Labour Hire division with a smaller and more focussed, complementary Training division, thereby helping the clients to get appropriate people on board, understand their capabilities and unleash their talents for mutual benefit and growth.

Engaging with more than 4,500 workers every week, the Labour Hire division has sub-segments namely Action Workforce (blue-collar labour hire), Concept Engineering (technical labour hire) and Blackadder Recruitment (white-collar recruitment).

FY2018 marked a settling year for the Group as the overall business performed fairly well and bounced back, following the prior two-year period of average growth.

The revenue for FY18 recorded a 6% rise to $ 332.8 million, led by the Labour Hire division with majority contributing of $ 326.1million revenue. The statutory EBITDA was also a profit of $ 8 million, reflecting a turnaround from a loss of $ 5 million in the prior year. The net profit after tax for the financial year increased by $ 10.8 million to $ 4.8 million. As a result, the Group paid out final dividends of $ 3.6 million, after ~ three-year hiatus.

This has been possible due to its strenuous on-boarding programmes, close partnerships with customers, as well as an absolute commitment to introducing innovations across its Workplace Health & Safety Programmes.

In March 2017, the Group executed a strategic repositioning that supported its return to a full year profit in FY18, following on from a profitable second half FY17. Besides, Ashley Services also reported, amongst other improvements in FY2018, that it's Lost Time Injury Frequency Rate (LTIFR) had further reduced to 0.39 from 0.42 in FY17.

With a strong cash flow performance of an overall $ 3.2-million inflow for FY18 and a robust balance sheet, the Group kick-started FY19, well positioned to take advantage of the growth opportunities.

As the first half of FY19 came to close, Ashley Services Group disclosed its financial results for the six months to December 31st, 2018, reporting a statutory after-tax profit from continuing operations of $ 2.71 million, a pleasing improvement of 24.6% pcp (1H 2018: $ 2.17-million profit). Overall positive revenue growth was witnessed across all divisions.

Moreover, the EBITDA for the half-year was also up 20.2% on pcp to $ 4.53 million with the EBITDA rate rising by 84 basis points to 3.06%. Besides, Labour Hire’s revenue increased by 6.5% year-on-year while the Training division also recorded a 14.2% revenue hike as it continued to operate under a strong culture of compliance. The Group’s net debt stood at zero and $ 2.6 million of net cash.

Recently on April 24th, 2019, Ashley Services Group informed the market that it had executed a Deed of Settlement for the previously announced shareholder class action commenced against it by Richard John Findlay Bradgate as Trustee of the Bradgate Superannuation Fund in the New South Wales (NSW) Registry of the Federal Court of Australia on December 1ST, 2016. As reported, the Deed of Settlement was signed by all parties to the proceeding and was implemented without the admission of liability by any party.

The Settlement will now be forwarded to the Court for approval and expected to have minimal impact on Ashley Services’ financial results. The Court’s verdict to approve or reject the Settlement will be provided to the market as it is received.

Ashley’s market valuation is ~AUD 38.87 million with ~ 143.98 million outstanding shares. The ASH stock settled at AUD 0.280, up by 3.704% on 3 May 2019.

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