Accord Financial Announces Fourth Quarter and Fiscal 2024 Financial Results
Accord Financial Corp. (TSX – ACD) today released its financial results for the fourth quarter and year ended December 31, 2024. 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 Dec. 31 |
Year Ended Dec. 31 |
|||
|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |
| $ | $ | $ | $ | |
| Average funds employed (millions) | 377 | 503 | 423 | 472 |
| Revenue (000s) | 21,220 | 23,898 | 83,056 | 79,705 |
| Net loss attributable to shareholders (000s) | (1,848) | (7,575) | (3,139) | (14,625) |
| Adjusted net earnings (loss) (000s) (note) | (791) | 3,698 | (1,353) | 5,817 |
| Loss per common share (basic and diluted) | (0.22) | (0.89) | (0.37) | (1.71) |
| Adj. earnings (loss) per common share (basic and diluted) | (0.09) | 0.43 | (0.16) | 0.68 |
| Book value per share (December 31) | $9.44 | $9.80* | ||
* includes $0.35 of intangible assets
The Company’s President and CEO, Mr. Simon Hitzig, commented: “2024 was an eventful year. We successfully executed several strategic initiatives, including the sale of the AEF lease financing portfolio in the third quarter, a key step in refocusing on the Company’s core businesses.” Earlier in the year the Company reported it had established two new financing arrangements – a $40 million private securitization facility and a more competitive facility for BondIt Media Capital. “Accord closed the year a more streamlined business, with a more conservative balance sheet, but we couldn’t sidestep the challenging credit environment, which impacted our earnings,” added Mr. Hitzig.
Following the sale of the AEF portfolio, Accord’s finance receivables and loans (“portfolio”) closed at $366 million on December 31, 2024, down from $477 million at the start of the year. Average funds employed during 2024 slipped to $423 million compared to $472 million in 2023. Despite the year-over-year decline in average funds employed, higher average yields and the gain on sale of AEF portfolio assets drove 2024 revenue up to $83.1 million compared to $79.7 million in 2023.
In tandem with the decline in portfolio assets, the Company reduced its overhead, with general and administrative expenses coming down by $1.3 million year-over-year despite incurring nearly $2.0 million of professional fees related to bank negotiations. However, the provision for credit losses, while substantially improved from 2023 (which had an unusual fraud-related loss in the fourth quarter), came in at $16.2 million, largely due to specific accounts written off in the fourth quarter.
While the sale of AEF assets contributed a gain, and the Company’s cost-control measures took hold, the provision for credit losses tipped the Company to a 2024 net loss attributable to shareholders of $3.1 million, an improvement from the net loss of $14.6 million in 2023. Adjusted net loss, which excludes the gain on sale of lease financing assets, came in at $1.4 million, or 16 cents per common share. While the Company grappled with a challenging credit environment throughout the year (with associated loan write-offs), the sale of AEF mitigated the effect on tangible book value per share, which closed at $9.44 on December 31st, essentially flat from $9.45 at the start of the year.
Commenting further Mr. Hitzig noted, “We made progress in a tough year. Now we’re looking ahead – refinancing the Company’s main bank facility in late July is a key focus, including discussions with members of our existing bank syndicate. We’re also focused on further strategic initiatives, including potential additional non-core asset sales, aiming to strengthen the balance sheet, streamline the business, and reposition for success going forward.”
About Accord Financial Corp.
Accord Financial is one of North America’s most dynamic commercial finance companies providing fast, versatile financing solutions including asset-based lending, factoring, inventory finance, equipment finance (Canada), 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.
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:
- Adjusted net earnings, adjusted net loss, and adjusted EPS/LPS. The Company derives these measures from amounts presented in its IFRS prepared financial statements. Adjusted net earnings (loss) comprise shareholders’ net earnings before goodwill impairment, net single account loss (in 2023 and 2024), professional fees related to bank negotiations (2024), gain on AEF sale, stock-based compensation, business acquisition expenses (primarily amortization of intangible assets) and restructuring expenses. Adjusted EPS/LPS (basic and diluted) is adjusted net earnings (loss) divided by the weighted average number of common shares outstanding (basic and diluted) in the period. Management believes adjusted net earnings (loss) 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 (loss) to adjusted net earnings (loss):
Three Months Ended
Dec 31Year Ended
Dec 312024 2023 2024 2023 Shareholders’ net loss (1,848) (7,575) (3,139) (14,625) Adjustments, net of tax: Goodwill impairment – 8,729 – 8,729 Gain on AEF sale – – (785) – Net single account write-off and associated costs 1,040 2,563 2,343 10,961 Restructuring and other expenses 17 (19) 228 752 Adjusted net earnings (loss) (791) 3,698 (1,353) 5,817 - 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.
- 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.
Forward-Looking Statements
This news release contains certain “forward-looking statements”, and certain “forward-looking information” as defined under applicable Canadian securities laws. Forward-looking statements can generally be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “continue”, “plans” or similar terminology. Forward-looking statements in this news release include, but are not limited to, statements, management’s beliefs, expectations or intentions regarding the financial position of the Company, and the duration of the suspension of the quarterly dividend announced in November 2023. Forward-looking statements are based on forecasts of future results, estimates of amounts not yet determinable and assumptions that while believed by management to be reasonable, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Forward-looking statements are subject to various risks and uncertainties including the ability of the Company to reinstate dividends and those risks identified in the Accord’s periodic filings with Canadian securities regulators. See Accord’s most recent annual information form and most recent management’s discussion and analysis of results of operations and financial condition for a detailed discussion of the risk factors affecting Accord. Such forward-looking information represents management’s best judgment based on information currently available. No forward-looking statement can be guaranteed, and actual future results may vary materially. Accordingly, readers are advised not to place undue reliance on forward-looking statements or information.
Contacts
For further information please visit www.accordfinancial.com or contact:
Irene Eddy
Senior Vice President, Chief Financial Officer
Accord Financial Corp.
40 Eglinton Avenue East, Suite 602
Toronto, ON M4P 3A2
(416) 961-0304
ieddy@accordfinancial.com