APM Human Services swings to loss ahead of takeover vote
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The news: APM Human Services swung to a full-year loss in the 2024 financial year as historically low unemployment weighed on earnings.
The numbers: APM reported a net loss after tax of $166.6 million, down from a $158.5 million profit in FY23. The statutory result included an impairment charge of $269 million relating to goodwill and customer contracts acquired through historical acquisitions, having previously guided an impairment in the range of $250 million and $350 million.
On an underlying basis, NPATA fell 47% to $95.1 million and EBITDA dropped 23% to $279.6 million. APM's underlying EBITDA margin of 12.2% was 7 basis points lower than in FY23.
Revenue grew 21% year on year to $2.3 billion, driven by a full-year contribution from US-based Equus Workforce Solutions — acquired in 2022 — and Australia-based Everyday Independence — bought last year. The rise was also attributed to organic growth across its Australian health business, offset by a reduction in revenue in Australia and UK employment services.
The context: The Perth-based multinational human services provider announced the full-year result ahead of next month's shareholder vote on the proposed takeover by US private equity firm Madison Dearborn Partners (MDP).
APM's board has unanimously recommended that its shareholders vote in favour of the scheme, valuing the company at $1.3 billion, in the absence of a superior proposal and subject to the review of an independent expert. The company previously said that implementation of the scheme is expected to take place before the end of the calendar year.
What they said: "As has been seen throughout the year, we have been operating in an environment with extended and historic low levels of unemployment which has impacted many parts of our business," said APM group CEO Michael Anghie.
"Whilst we are seeing early signs of stabilisation in unemployment data and caseloads in employment programs, the environment remains subdued," he said.
The source: ASX announcement
