ASH - Ashley Services Group

[System]

Ashley Services Group Limited (ASH) provides training, recruitment, and labour hire services in Australia. It offers workplace based training programs in the areas of pre-employment/introduction to industry, operational/production, supervision, and executive/management.

http://www.ashleyservicesgroup.com.au

 

[So_Cynical]

ASH listed in Aug 2014 at $1.66 and quickly saw a high of $1.94, cut to 11 months later and the stock is trading at 53c, quite a decline considering that financial results so far have been only a little (30% approx) under prospectus forecasts.

ASH has more cash than debt, revenues of at least 250m, lots of historic growth and vertical integration. Top 20 hold over 90% with the Shrimpton Family holding about half of that...looks cheap.
~

 

[skc]

ASH listed in Aug 2014 at $1.66 and quickly saw a high of $1.94, cut to 11 months later and the stock is trading at 53c, quite a decline considering that financial results so far have been only a little (30% approx) under prospectus forecasts.

ASH has more cash than debt, revenues of at least 250m, lots of historic growth and vertical integration. Top 20 hold over 90% with the Shrimpton Family holding about half of that...looks cheap.
~

I think half the decline is due to missing the prospectus forecast, while the other half is due to de-rating on the back of the VET debacle. Equity markets is all but closed to these training providers. If they can't grow by acquisition they are worth a lot less in terms of earnings multiple.

It remains to be seen whether they can achieve their current forecast yet. They should report soon next month and if they do achieve the figures (and pay the 4.1c dividend) then they'd receive some re-rating you'd think.

 

[McLovin]

I think half the decline is due to missing the prospectus forecast, while the other half is due to de-rating on the back of the VET debacle. Equity markets is all but closed to these training providers. If they can't grow by acquisition they are worth a lot less in terms of earnings multiple.

It remains to be seen whether they can achieve their current forecast yet. They should report soon next month and if they do achieve the figures (and pay the 4.1c dividend) then they'd receive some re-rating you'd think.

I think a fair bit of the re-rating is because they promised a lot with Integracom acquisition that has missed its forecasts by a very wide margin. A fair whack of the money raised last August was to fund this acquisition. From the prelim numbers it's been a disaster. There's also the general sense that government have woken up to the rorting that had been happening, so is the industry really as profitable as it was?



If they're locked out of equity markets then they've pretty much bought a whole lot of regulatory risk without much reward and little ability to expand.

Of course assuming all this is accurate, it's on ~4x EBITDA so it wouldn't take too much to make the SP jump. I haven't looked too deeply into this, how much organic growth is there?

 

[systematic]

Was looking for "Ben Graham" style stocks (his more conservative stocks - not the NCAV stocks) - just seeing how many on ASX.
This was the only (liquid) stock that came up.

 

[skc]

ASH listed in Aug 2014 at $1.66 and quickly saw a high of $1.94, cut to 11 months later and the stock is trading at 53c, quite a decline considering that financial results so far have been only a little (30% approx) under prospectus forecasts.

ASH has more cash than debt, revenues of at least 250m, lots of historic growth and vertical integration. Top 20 hold over 90% with the Shrimpton Family holding about half of that...looks cheap.
~

Getting a whole lot cheaper... down to 31.5c today on the back of a "at least" 10% cut in guidance for FY16... 4 months into the year and less than 2 months after the FY15 report.

FY15 NPATA was $14.8m. So even if the haircut was 20% it'd still be ~$11-12m. Compare that with a market cap of $47m... cash of $6m ($12.5m in report less $6m dividend paid) and no drawn debt.

The market is pricing something will be very wrong.

I remember trying to locate some ASH borrow when VET first bit the dust in Oct 2014... ASH was >$1.60 at the time. Too bad there wasn't any available!

 

[Ves]

Getting a whole lot cheaper... down to 31.5c today on the back of a "at least" 10% cut in guidance for FY16... 4 months into the year and less than 2 months after the FY15 report.

FY15 NPATA was $14.8m. So even if the haircut was 20% it'd still be ~$11-12m. Compare that with a market cap of $47m... cash of $6m ($12.5m in report less $6m dividend paid) and no drawn debt.

FWIW, these guys strike me as being a bit opaque and have plenty of spin in their presentations. The guidance is not exactly clear to someone having a brief look. I didn't plan to spend long on it, but ended up going round in circles to figure it out.

On 5 October 2015 they say the NPATA will be at least 10% lower than previous guidance. The old "you better go find it" tactic, with the investor thinking "I better go through all the announcements in case they've hidden it somewhere."

Nothing in the Annual Report on 30 Sept 2015. Announcement on 28 August 2015 says the guidance is the same as that released with the results on 19 August 2015.

On 19 August 2015 their guidance is that they expect FY16 NPATA to be in line with the Proforma FY15 result.

So what's the 2015 Pro-forma result?? Well, it isn't specifically mentioned to my eyes.

Plenty of mention of Proforma EBITDA (which was $20.7 million).

Statutory NPATA was $14.8 million.

Page 2 of the announcement on 19 August 2015 entitled "2015 result, final dividend, outlook & investor call" says that Proforma ROE (calculated as NPATA / Equity) was 13.3%.

Equity was $102.876m on 30 June 2015. Therefore Proforma NPATA must be $13.7m (102.876 x 13.3%).

So latest guidance is that 2016FY NPATA will be at least 10% less than 2015FY, which is $12.33m.

Surely it's not that hard to clearly communicate that figure. And when a company doesn't it makes you wonder.

 

[skc]

FWIW, these guys strike me as being a bit opaque and have plenty of spin in their presentations. The guidance is not exactly clear to someone having a brief look. I didn't plan to spend long on it, but ended up going round in circles to figure it out.

On 5 October 2015 they say the NPATA will be at least 10% lower than previous guidance. The old "you better go find it" tactic, with the investor thinking "I better go through all the announcements in case they've hidden it somewhere."

Nothing in the Annual Report on 30 Sept 2015. Announcement on 28 August 2015 says the guidance is the same as that released with the results on 19 August 2015.

On 19 August 2015 their guidance is that they expect FY16 NPATA to be in line with the Proforma FY15 result.

So what's the 2015 Pro-forma result?? Well, it isn't specifically mentioned to my eyes.

Plenty of mention of Proforma EBITDA (which was $20.7 million).

Statutory NPATA was $14.8 million.

Page 2 of the announcement on 19 August 2015 entitled "2015 result, final dividend, outlook & investor call" says that Proforma ROE (calculated as NPATA / Equity) was 13.3%.

Equity was $102.876m on 30 June 2015. Therefore Proforma NPATA must be $13.7m (102.876 x 13.3%).

So latest guidance is that 2016FY NPATA will be at least 10% less than 2015FY, which is $12.33m.

Surely it's not that hard to clearly communicate that figure. And when a company doesn't it makes you wonder.

Nice detective work... clearly I didn't spend nearly as long as you on this.

I once read somewhere that, the more letters (I, T, D, A, X, W etc) and qualifiers (proforma, underlying, pre-significant etc) there are to a profit number, the more you should be wary of what the true picture really is. Seems quite true in many cases.

 

[greggles]

Ashley Services Group on the move over the last couple of days on increased volume, but no announcements have been released to the market. Some good news around the corner perhaps?

 

[divs4ever]

Fully Franked Interim Dividend – 3.0 cents a 66.7% lift on prior year interim dividend
Ashley Services Group Limited (ASX: ASH), would like to announce to the market that the Board has today declared a fully franked interim dividend of 3.0 cents per share in relation to the 2022 financial year. Whilst the result for the first half of 2022 is not yet finalised, the Board have deemed there to be sufficient clarity to allow them to make the dividend declaration at this time.
This dividend is consistent with our pattern of dividend payments and reflects a first half result well up on the prior year, on the back of strong double digit revenue growth in the first half of 2022. Dividend timetable:
▪ Ex-dividend date for final dividend Wednesday 2 March 2022
▪ Record date for final dividend Thursday 3 March 2022
▪ Final dividend payment date Thursday 17 March 2022

DYOR

i hold ASH ( bought in October 2015 .. @ 48 cents and 34 cents ...on two consecutive days !!! , av. SP 41.5 cents )

has been a bit of a patience tester

DIVIDEND TYPE	DIVIDEND AMOUNT ($)	FRANKED	EX-DIV DATE	PAY DATE
Final	0.024	100.00%	01/09/2021	17/09/2021
Interim	0.018	100.00%	02/03/2021	18/03/2021
Final	0.027	100.00%	01/09/2020	11/09/2020
Final	0.027	100.00%	27/08/2019	06/09/2019
Final	0.025	100.00%	02/08/2018	17/08/2018
Final	0.041	100.00%	02/09/2015	25/09/2015
Interim	0.023	100.00%	04/03/2015	27/03/2015

 

[divs4ever]

Ashley Services Group Limited completes acquisition of a major shareholding
in Linc Personnel Pty Ltd
Further to its 30 May 2022 announcement, Ashley Services Group Limited (ASX: ASH), announces the purchase of 75% of Linc Personnel Pty Ltd following successful completion of due diligence and Purchaser conditions precedent.
For further details:
Ross Shrimpton
Managing Director and Chief Financial Officer
Established almost half a century ago as a Labour Hire business in Sydney, Ashley Services Group listed on the Australian Securities Exchange in 2014. Today, it has cemented its position as a prominent national labour hire provider engaging almost 6,000 workers during the peak seasonal period.


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(DYOR)

i hold ASH

 

[divs4ever]

Ashley acquires Owen Pacific Workforce
Ashley Services Group Limited (ASX: ASH) has today entered into an agreement to acquire Owen Pacific Workforce
Pty Ltd (“OPW”), a company which provides seasonal workers, sourced predominantly from Tonga and Vanuatu, to
the Australian horticultural industry.
The acquisition price for the 100% purchase of OPW is expected to be between $14.2 million and $15.9 million in
total, based primarily on EBITDA for the financial year ending 30 June 2023, which is expected to be between $4.1
million and $5.0 million.
Remaining conditions precedent are expected to be fulfilled shortly and it is anticipated that the acquisition will
complete on 6th February 2023. The acquisition is expected to be Earnings Per Share accretive in the financial year
ending 30 June 2024.
The initial purchase consideration payment of approximately $7.1 million will be funded from newly extended bank
facilities with Westpac. The new facilities with aggregate limits of $45 million (previously $35 million) are comprised
of an invoicing facility of $25 million and a new acquisition facility of $20 million (expiring 28 December 2025), the
latter replacing the previous $10 million Bank Bill Business loan facility, on similar terms and conditions (with
adjustments consistent with those associated with a larger institutional facility).
The remaining OPW purchase consideration is expected to be paid in two approximately equal amounts in
September 2023 and September 2024.
Ashley Services Managing Director Ross Shrimpton said, “The acquisition of OPW is a significant expansion
opportunity for Ashley, broadening both our sourcing options for labour and our industry sector coverage. OPW has
a strong management team and proven track record and we believe the backing of Ashley Services will place OPW in
a stronger position to convert growth opportunities in other industry sectors from its already well-established
horticultural base.
I am also pleased to have increased our financing facility with our banking partner Westpac on largely comparable
terms to existing arrangements, with an extended maturity”.
For further details:
Paul Brittain
Chief Financial Officer and Executive Director

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(DYOR)

i hold ASH ( and a trivial amount of WBC )

 

[finicky]

A good little company @divs4ever and looks like its picking up the target for a cheap EBITDA multiple?
But a training and labour hire company increasing its debt and being acquisitive when many believe a recession looms? I've considered it for a buy quite a few times. l remember chat about ASH when the Covid lockdowns hit and what an unfortunate business to be in - lost half its market cap like a drunk ice skating but not alone there. Might make this a top 20 target for bad times.

Not Held

 

[divs4ever]

it has been a patience-tester for me so far

i bought some in October 2015 ( av. SP 41.5 cents )

i guess we will see how this new acquisition plays out

China creating real jobs in the South Pacific islands might put a real dampener on the migrant worker flow

 

[finicky]

Sorry, something went wrong with my transcription of ROE.

Return on Equity (%) FY15 - FY22
13.30, -85.80, 21.30, 19.30, 20.40, 18.10, 32.10, 35.90

 

[divs4ever]

Fully Franked Interim Dividend – 3.0 cents
Consistent with prior year interim dividend
Ashley Services Group Limited (ASX: ASH), would like to announce to the market that the Board has today declared a
fully franked interim dividend of 3.0 cents per share in relation to the 2023 financial year.
Dividend timetable:
▪ Ex-dividend date for final dividend Thursday 2 March 2023
▪ Record date for final dividend Friday 3 March 2023
▪ Final dividend payment date Thursday 17 March 2023

DYOR

i hold ASH ( my av. SP 41.5 cents )

and boy has it been a bumpy ride

 

[finicky]

Ashley hiring and training (ASH) @ 0.69
Getting a bit interesting again. Can't make my mind up whether it is likely to be a bearish double topping formation or a bullish high level sideways consolidation. Doesn't look to be any reason in its recent H1 performance to correct further but it is a company that I imagine is hypersensitive to loss of confidence about the direction of the general economy - witness the > 50% plunge in share price during the Wuhan crisis. Looks like a reasonable expectation that fy23 will deliver another ROE aound 30%. Guess I'll watch and maybe dabble if it revisits the bottom of its range @ 0.65 .. hesitant, as break of 0.65 could see it 15c lower imo.

Not Held

WEEKLY

FY23 HALF

 

[finicky]

Was trying to make my mind up about an entry today. Was down over 30% at one point @ 0.36 but reversed super fast before I could fully scope it out. I was guessing a loss of $1 npat from a large contract lost to one of its segments as well as a one-off write-down of say $4m good-wiil at worst but maybe less. So reduction of say $5m npat fy24 cf fy23 of $11m and a ROE of 32%. Assuming other earnings are similar, might be looking at a ROE of ~15% on a fy23 book value of 0.23.
Also though, overshadowing this business is Albanese government acting against casual labour hire contractors.

Not Held

 

[divs4ever]

Was trying to make my mind up about an entry today. Was down over 30% at one point @ 0.36 but reversed super fast before I could fully scope it out. I was guessing a loss of $1 npat from a large contract lost to one of its segments as well as a one-off write-down of say $4m good-wiil at worst but maybe less. So reduction of say $5m npat fy24 cf fy23 of $11m and a ROE of 32%. Assuming other earnings are similar, might be looking at a ROE of ~15% on a fy23 book value of 0.23.
Also though, overshadowing this business is Albanese government acting against casual labour hire contractors.

Not Held

View attachment 164991

saw the ann. but couldn't copy/paste it , and missed the bottom to boot so wasn't tempted to add more

i hold ASH

key shock was the lost contract was a key gem in a company recently acquired so looks like they bought a tax write-off plus a few trinkets

 

[galumay]

Labour hire is such a grubby business, they treat their 'employees' like ****, the big operators using them hate them and pitch one against the other, just not a sector that has ever attracted me.