Accord Announces Strong Year-over-Year Growth in Funds Employed, Revenue and Earnings
Accord Financial Corp. (TSX – ACD) today released its financial results for the quarter ended March 31, 2022. 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 March 31 | ||
|---|---|---|
| 2022 | 2021 | |
| $ | $ | |
| Average funds employed (millions) | 457 | 358 |
| Revenue (000’s) | 16,178 | 13,480 |
| Net earnings attributable to shareholders (000’s) | 3,138 | 2,585 |
| Adjusted net earnings (000’s) (note) | 3,195 | 2,683 |
| Earnings per common share (basic and diluted) | 0.37 | 0.30 |
| Adjusted earnings per common share (basic and diluted) | 0.37 | 0.31 |
| Return on average equity (as a percentage) | 12.7 | 11.5 |
| Book value per share (March 31) | $11.75 | $10.70 |
Commenting on the financial results, the Company’s President and CEO, Mr. Simon Hitzig, stated: “Seven strong quarters in a row have driven shareholders’ equity above the $100 million mark for the first time, closing the quarter at an all-time high book value per common share of $11.75. The growing scale of the Company has boosted return on equity to 12.7% this quarter, headed toward the mid-teens, as our strategy gains traction.”
Net earnings attributable to shareholders (“shareholders’ net earnings”) reached $3,138,000, 21% higher than the $2,585,000 earned in the same period last year. Adjusted net earnings were $3,195,000 compared to $2,683,000 in the first quarter of 2021. The increase in earnings was driven by revenue, which grew 20% to $16,178,000 in the first quarter of 2022 compared to $13,480,000 last year.
“Accord continues to generate strong year-over-year growth in its portfolio, revenue and earnings. Average funds employed in the first quarter rose to $457 million, up 28% over the first quarter of 2021. Revenue followed suit, driving earnings per common share up 23% to 37 cents, a first quarter record for the company,” added Mr. Hitzig.
“Steady year-over-year growth brings trailing twelve months EPS up to $1.46,” said Mr. Hitzig, adding, “The upcoming June 1st dividend of $0.075 per share is the second in a row at this level, 50% higher than $0.05 per share paid quarterly throughout 2021. With performance tracking well above pre-pandemic growth levels, we’re pleased to share this success with our shareholders through a sustainable dividend, aiming to grow it as earnings grow.”
Looking ahead, Mr. Hitzig said, “Accord is clearly at an inflection point. Two themes are set to propel Accord to the next phase of financial performance. First, our streamlined operating platform is rounding into shape, ready to scale Accord to the next level. Second, over the past several years we’ve strengthened the Company’s balance sheet and diversified our range of funding sources. With our conservative debt to equity profile, we have ample dry powder to finance the next phase of growth. And with the platform and balance sheet in place, the next phase of top line growth will be more profitable than the last.”
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 44 years, Accord has helped businesses manage their cash flows and maximize financial opportunities.
For further information please visit www.accordfinancial.com or contact:
Stuart Adair
Senior Vice President, Chief Financial Officer
Accord Financial Corp.
40 Eglinton Avenue East, Suite 602
Toronto, ON M4P 3A2
(416) 642-5647
sadair@accordfinancial.com
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 March 31 | ||
|---|---|---|
| 2022 | 2021 | |
| $’000 | $’000 | |
| Shareholders’ net earnings | 3,138 | 2,585 |
| Adjustments, net of tax: | ||
| Stock-based compensation | 26 | – |
| Business acquisition expenses | 21 | 51 |
| Restructuring expenses | 10 | 47 |
| Adjusted net earnings | 3,195 | 2,683 |
2) Return on average equity – this is a profitability measure that presents shareholders’ net earnings as an annualized percentage of the average shareholders’ equity employed in the period to earn the income. The Company includes all components of shareholders’ equity, as shown on the Company’s balance sheet, calculated on a month-by-month basis to calculate the average thereof.
| Three Months Ended March 31 | ||
|---|---|---|
| 2022 | 2021 | |
| $’000 | $’000 | |
| Net earnings attributable to shareholders | 3,138 | 2,585 |
| Weighted average shareholders’ equity (note) | 100,043 | 90,941 |
| Return on average equity (annualized) | 12.7% | 11.5% |
Note: weighted average shareholders’ equity is the average shareholder’s equity calculated for each month of the period, then totalled up and divided by 12
3) 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 or shareholders’ equity divided by the number of common shares outstanding as of a particular date.
4) 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.