TORONTO, July 26, 2017 /CNW/ - Accord Financial Corp. (TSX
– ACD) today released its financial results for the three and six
months ended June 30, 2017. 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
|
|
2017
|
2016
|
2017
|
2016
|
|
$
|
$
|
$
|
$
|
Average funds
employed (millions)
|
167
|
152
|
155
|
147
|
Revenue
(000's)
|
6,603
|
6,897
|
13,104
|
13,768
|
Net earnings
(000's)
|
369
|
1,627
|
1,594
|
3,091
|
Adjusted net
earnings (000's) (note)
|
573
|
1,800
|
1,935
|
3,390
|
Earnings per
common share (basic and diluted)
|
0.04
|
0.20
|
0.19
|
0.37
|
Adjusted earnings
per common share (basic and diluted)
|
0.07
|
0.22
|
0.23
|
0.41
|
Book value per
share (June 30)
|
|
|
$
8.99
|
$
8.69
|
|
|
|
|
|
|
Net earnings for the second quarter of 2017 declined to
$369,000 compared to $1,627,000 last year. Net earnings decreased
mainly as a result of a higher provision for credit and loan losses
and lower revenue. The provision for losses of $1,959,000 (2016: $312,000) was adversely impacted by a charge-off
for one impaired loan totalling $1,576,000. Earnings per share ("EPS") declined
to 4 cents compared to 20 cents last year. Adjusted net earnings
totalled $573,000 in the second
quarter of 2017 compared to the $1,800,000 earned in the second quarter of 2016.
Adjusted EPS decreased to 7 cents
compared to 22 cents in last year's
second quarter.
Revenue declined by 4% to $6,603,000 in the current quarter compared to
$6,897,000 last year. Revenue
decreased mainly as a result of reduced receivables management fees
and lower yields on funds employed.
Net earnings in the first half of 2017 decreased to $1,594,000 compared with $3,091,000 in the first half of 2016 for reasons
noted above. EPS declined to 19 cents
compared to 37 cents last year.
Adjusted net earnings decreased to $1,935,000 in the first half of 2017 compared to
$3,390,000 last year. Adjusted EPS
declined to 23 cents compared to
41 cents last year.
Revenue declined by 5% to $13,104,000 in the first half of 2017 compared to
$13,768,000 last year mainly as a
result of lower yields on funds employed.
Commenting on the second quarter and first half 2017 results,
Mr. Tom Henderson, the Company's
CEO, stated: "The progress the Company made in 2017 is substantial;
we ended the half year with record funds employed of $175 million, which was 25% higher than last
year-end, we refreshed our brand to further illuminate the unique
advantages we bring to small and middle market businesses in the
U.S. and Canada, and we made an
exciting new strategic investment. On July
13, 2017, the Company, through its U.S. subsidiary, acquired
an interest in BondIt Media Capital, a film and media finance
company based in California. This
investment strengthens Accord's presence on the U.S. west coast and
allows it to enter the film and media finance sector. Second
quarter and first half results, however, were adversely impacted
mainly as a result of providing for an almost $1.6 million loan loss and one-time expenses of
$174,000 to wind down the operations
of a small U.S. office."
The Company's Board of Directors today declared a quarterly
dividend of $0.09 per common share,
payable September 1, 2017 to
shareholders of record August 15,
2017.
About Accord Financial Corp.
Accord Financial Corp.
is a leading North American finance company providing distinctive
working capital solutions to companies from coast to coast.
Accord's flexible finance programs cover the full spectrum of
asset-based lending, from factoring and inventory finance, to
equipment leasing and trade finance. For 39 years, Accord has
helped businesses manage their cash flows and maximize financial
opportunities – keeping business liquid.
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 net earnings
before stock-based compensation, amortization of intangible assets
and restructuring expenses. Adjusted EPS is adjusted net earnings
divided by the weighted average number of common shares outstanding
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
|
|
2017
|
2016
|
2017
|
2016
|
|
$'000
|
$'000
|
$'000
|
$'000
|
Net earnings
reported
|
369
|
1,627
|
1,594
|
3,091
|
Adjustments, net of
tax:
|
|
|
|
|
|
Stock-based
compensation
|
27
|
79
|
96
|
112
|
|
Amortization of
intangible assets
|
67
|
94
|
135
|
187
|
|
Restructuring
expenses
|
110
|
–
|
110
|
–
|
Adjusted net
earnings
|
573
|
1,800
|
1,935
|
3,390
|
2) Book value per share – book value is the net asset value of
the Company calculated as total assets minus total liabilities and,
by definition, is the same as total equity. Book value per share is
the net asset 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.