TORONTO, Feb. 27, 2020 /CNW/ - Accord Financial Corp.
(TSX – ACD) today released its financial results for the fourth
quarter and year ended December 31,
2019. 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
|
|
2019
|
2018
|
2019
|
2018
|
|
$
|
$
|
$
|
$
|
Average funds
employed (millions)
|
395
|
317
|
378
|
271
|
Revenue
(000's)
|
14,297
|
12,951
|
56,175
|
46,927
|
Net (loss)
earnings attributable to shareholders (000's)
|
(658)
|
4,161
|
6,444
|
10,356
|
Adjusted net
(loss) earnings (000's) (note)
|
(2,136)
|
3,883
|
4,939
|
10,840
|
(Loss) earnings
per common share (basic and diluted)
|
(0.08)
|
0.50
|
0.76
|
1.24
|
Adjusted (loss)
earnings per common share (basic and
diluted)
|
(0.25)
|
0.46
|
0.58
|
1.30
|
Book value per
share (December 31)
|
|
|
$
10.77
|
$
10.66
|
|
|
|
|
|
The Company reported record average funds employed and revenue
in 2019. "Average funds employed over the year reached an all-time
high of $378 million. As a result,
revenue also hit an all-time high of $56
million" said President and CEO Simon Hitzig. "However, we booked a significant
account write-down in the fourth quarter, which brought full year
earnings lower compared to 2018," added Mr. Hitzig.
Revenue rose by 20% to a record $56,175,000 this year compared to $46,927,000 last year as a result of higher funds
employed. Average funds employed rose by 39% in 2019 to an annual
record of $378 million compared to
$271 million in 2018.
Net earnings attributable to shareholders ("shareholders' net
earnings") in 2019 declined to $6,444,000 compared with $10,356,000 in 2018 mainly as a result of an
increased provision for losses, general & administrative
expenses and income tax expenses. Earnings per common share ("EPS")
were $0.76 compared to $1.24 last year. Adjusted net earnings were
$4,939,000 in 2019 compared to
$10,840,000 in 2018. Adjusted EPS
declined to $0.58 compared to
$1.30 in the previous year. Book
value per share was $10.77 at
year-end.
Revenue rose by 10% to $14,297,000
in the fourth quarter of 2019 compared to $12,951,000 last year.
Shareholders' net loss for the fourth quarter of 2019 was
$658,000 compared to net earnings of
$4,161,000 in 2018. Net loss was
mainly as a result of a $6,928,000
increase in the provision for losses as a result of the above noted
account write-off. Loss per share ("LPS") was 8 cents compared to EPS of 50 cents last year. Adjusted net loss was
$2,136,000 compared to adjusted net
earnings of $3,883,000 earned in the
fourth quarter of 2018. Adjusted LPS was 25
cents compared to adjusted EPS of 46
cents earned in last year's fourth quarter.
Commenting further on 2019's results Mr. Hitzig, stated: "The
portfolio and revenue growth in 2019 was strong proof that our
strategic plan is working. Our operating efficiency (general and
administrative expenses as a percentage of total revenues) also
improved this year, from 62% three years ago to 48%. Unfortunately,
Accord's loss provision, at 1.9% of average portfolio, was
disappointing. We're working hard to mitigate the loss and maximize
our recovery from this challenging account in 2020. These metrics
tell a story about the past and future. With the loss provisions
behind us, we enter 2020 with a strong pipeline set to drive
revenue and earnings in the right direction."
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, to film and media finance.
For 42 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 Dec. 31
|
Year
Ended Dec. 31
|
|
2019
|
2018
|
2019
|
2018
|
|
$'000
|
$'000
|
$'000
|
$'000
|
Shareholders' net
earnings:
|
(658)
|
4,161
|
6,444
|
10,356
|
Adjustments, net of
tax:
|
|
|
|
|
Stock-based
compensation
|
(256)
|
64
|
(124)
|
233
|
Business acquisition
expenses
|
(1,222)
|
(342)
|
(1,381)
|
251
|
Adjusted net
earnings
|
(2,136)
|
3,883
|
4,939
|
10,840
|
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.