TORONTO, Aug. 4, 2021 /CNW/ - Accord Financial Corp. (TSX:
ACD) today released its financial results for the three and six
months ended June 30, 2021. The
financial figures presented in this release are reported in
Canadian dollars and have been prepared in accordance with
International Financial Reporting Standards.
SUMMARY OF
FINANCIAL RESULTS
|
Three Months
Ended June
30
|
Six Months
Ended June
30
|
|
2021
|
2020
|
2021
|
2020
|
|
$
|
$
|
$
|
$
|
Average funds
employed (millions)
|
385
|
341
|
371
|
352
|
Revenue
(000's)
|
15,416
|
11,270
|
28,897
|
23,285
|
Earnings before
income tax (000's)
|
4,017
|
3,822
|
6,951
|
(5,089)
|
Net earnings
(loss) attributable to shareholders (000's)
|
3,085
|
4,343
|
5,670
|
(1,534)
|
Adjusted net
earnings (loss) (000's) (note)
|
3,161
|
4,730
|
5,844
|
(684)
|
Earnings (loss)
per common share (basic and diluted)
|
0.36
|
0.51
|
0.66
|
(0.18)
|
|
|
|
|
|
Adjusted earnings
(loss) per common share (basic and diluted)
|
0.37
|
0.55
|
0.68
|
(0.08)
|
Book value per
share (June 30)
|
|
|
$
10.96
|
$
10.61
|
Revenue increased by 37% to a quarterly record $15,416,000 in the second quarter of 2021
compared to $11,270,000 last year
primarily driven by a 13% increase in average funds employed and
improved average yields and other income, principally origination
and set up fees. Average funds employed were $385 million in the current quarter compared to
$341 million last year. Funds
employed at June 30, 2021 were a
record $406 million.
Net earnings attributable to shareholders ("shareholders' net
earnings") declined by $1,258,000 to
$3,085,000 in the second quarter of
2021 compared to the quarterly record of $4,343,000 earned last year. Shareholders' net
earnings were 19% ahead of the first quarter of 2021 and 39% higher
than 2019's second quarter and represented Accord's fourth best
ever quarterly earnings as it continues to recover from the adverse
economic impacts of Covid-19. Last year's shareholders' net
earnings were boosted by the recovery of a loan loss of
$2,615,000, net of tax, and a
one-time income tax recovery of $881,000. Earnings per common share ("EPS")
were 36 cents compared to
51 cents last year. Adjusted net
earnings were $3,161,000 compared to
the $4,730,000 earned in the second
quarter of 2020. Adjusted EPS were 37
cents compared to 55 cents
last year.
Shareholders' net earnings in the first six months of 2021 were
a first half record $5,670,000
compared to a shareholders' net loss of $1,534,000 in 2020. The increase in net
earnings primarily resulted from higher revenue and a lower
provision for losses. EPS were also a first half record
66 cents compared to a loss per
common share ("LPS") of 18 cents last
year. First half adjusted net earnings were a record $5,844,000 (Adjusted EPS of 68 cents per share) compared to the adjusted net
loss of $684,000 (Adjusted LPS of
8 cents per share) in the first half
of 2020.
Revenue rose by 24% to a first six-month record $28,897,000 in 2021 compared to $23,285,000 last year mainly as a result of a 5%
rise in average funds employed, improved average yields and higher
other income. Average funds employed in the first half of 2021
were $371 million compared to
$352 million last year.
Commenting on the financial results, the Company's President and
CEO, Mr. Simon Hitzig, stated:
"Accord's record funds employed, revenue and first half earnings
validated our strategy, and is consistent with the growth
trajectory Accord had been on in the three years leading up to the
pandemic. Growth in the first half of 2021 reflects the steady
acquisition of new clients, in part driven by new products, and in
part by the accelerating economy. Revenue and earnings are also
benefiting from a shift in Accord's portfolio mix, which in the
past several quarters is skewing towards higher yielding segments,
especially at our Canadian small business division and US-based
media finance division."
Mr. Hitzig added: "While our record financial performance is
gratifying, we continue to embrace the hard work defined in our
strategic plan, which aims to bring all divisions of Accord onto a
unified platform, stronger together, with a singular commitment to
simplify access to capital so our clients can thrive. With four
strong quarters in a row, we also now have a taste of the success
we can achieve as our strategic plan unfolds."
About Accord Financial Corp.
Accord Financial is
North America's most dynamic
commercial finance company providing fast, versatile financing
solutions for companies in transition, including factoring,
inventory finance, equipment leasing, trade finance and film/media
finance. By leveraging our unique combination of financial
strength, deep experience and independent thinking, we craft
winning financial solutions for small and medium-sized businesses,
simply delivered, so our clients can thrive. For 43 years, Accord
has helped businesses manage their cash flows and maximize
financial opportunities.
Note: Non-IFRS measures
The Company's financial statements have been prepared in
accordance with IFRS. The Company uses a number of other financial
measures to monitor its performance and believes that these
measures may be useful to investors in evaluating the Company's
operating performance and financial position. These measures may
not have standardized meanings or computations as prescribed by
IFRS that would ensure consistency between companies using these
measures and are, therefore, considered to be non-IFRS measures.
The non-IFRS measures presented in this press release are as
follows:
1) Adjusted net earnings and adjusted EPS. The Company derives
these measures from amounts presented in its IFRS prepared
financial statements. Adjusted net earnings comprise shareholders'
net earnings before stock-based compensation, business acquisition
expenses (transaction and integration costs and amortization of
intangible assets) and restructuring expenses. Adjusted EPS (basic
and diluted) is adjusted net earnings divided by the weighted
average number of common shares outstanding (basic and diluted) in
the period. Management believes adjusted net earnings is a more
appropriate measure of operating performance as it excludes items
which do not relate to ongoing operating activities. The following
table provides a reconciliation of the Company's net earnings to
adjusted net earnings:
|
Three Months Ended
June 30
|
Six Months Ended
June 30
|
|
2021
|
2020
|
2021
|
2020
|
|
$'000
|
$'000
|
$'000
|
$'000
|
Shareholders' net
earnings:
|
3,085
|
4,343
|
5,670
|
(1,534)
|
Adjustments, net of
tax:
|
|
|
|
|
Business acquisition
expenses
|
76
|
56
|
127
|
111
|
Restructuring
expenses
|
–
|
331
|
47
|
739
|
Adjusted net
earnings
|
3,161
|
4,730
|
5,844
|
(684)
|
2) Book value per share – book value is shareholders' equity and
is the same as the net asset value (calculated as total assets
minus total liabilities) of the Company less non-controlling
interests. Book value per share is the book value divided by the
number of common shares outstanding as of a particular date.
3) Funds employed are the Company's finance receivables and
loans, an IFRS measure. Average funds employed are the average
finance receivables and loans calculated over a particular
period.
SOURCE Accord Financial Corp.