Accordant Group (NZX:AGL): How did it perform in interim results?

Highlights

  • Accordant reported strong interim results but was impacted by level 4 lockdown.
  • AGL has a good pipeline of work ahead in H2 FY22.

Accordant Group Limited (NZX:AGL) is the largest recruiter in NZ and has 4 trading entities Madison, AWF, Absolute IT and JacksonStone & Partners.

Accordant witnessed a strong beginning in FY22, with the Group experiencing high levels of recruitment activity in an environment of substantial client demand and a very tight candidate market.

The Group reported robust activity and demand for 6 months to 30 September, with revenue rising by NZ$4.5 million to NZ$110.4 million and net cash generated from operating activities rising to nearly NZ$7 million. AGL has also decided to pay 6.5 cps as a dividend.

Company officials discussing performance

Image source: © 2021 Kalkine Media

However, the Group’s progress was majorly impacted by the level 4 lockdown that started on 18 August due to COVID-19 delta outbreak.

Executive Director Simon Bennett stated that the effects of the current lockdown starting on 18 August varied significantly from those affecting the first half of the financial year a year ago.

He added that the year has seen business moving towards work from home, leading to increased demand in lockdowns. The Group has also succeeded in moving some temporary workers to alternative work or presenting them with permanent employment prospects.

A look at AGL’s entities performance

AWF was the most affected by the level 4 lockdown, but the business has been increasing steadily as the country shifted from Level 3 to Level 2.

JacksonStone & Partners played a significant role in adding to the EBITDA level, resulting in a lift in the estimated final earnout payment to the vendors.

Madison has also been faring well after making positive adjustments to its resourcing model to deal with strong client demand. However, Absolute IT was unable to fully capitalise on strong demand as quickly as others.

Bottom Line

AGL expects border reopening at the end of FY22, with the country returning to lower lockdown curbs. In addition, the job market remains buoyant.

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