Accordant Group (NZX:AGL) launches Restricted Shares Scheme for senior management

Accordant Group (NZX:AGL) is New Zealand-based recruitment company consisting of four units- Madison, AWF, Absolute IT, and JacksonStone & Partners. On 3 October, the company had announced its 2022 Restricted Shares Scheme.  

The main focus of such types of schemes, according to the company, is to incentivise senior management to commit and excel in its work.

What is the scheme?

Under the scheme, participants or senior management is entitled to receive restricted shares in the company. For the purpose of buying the shares, the company provides an interest-free loan to fund their shares.

Further, as per the company update, these loans would be considered financial assistance and are supposed to be secured by a mortgage in favour of the company. The loan is supposed to be paid in full before the participant’s restricted shares are reclassified as ordinary shares. As per conditions, a participant cannot also sell or dispose of the shares unless they are reclassified as ordinary shares.

Moreover, if this condition is not met, the company can redeem restricted shares for a redemption price equivalent to the issue price of those shares.

 Financial assistance

As per the announcement, restricted shares may be issued under the 2022 scheme in next 12 months. Accordingly, the company would be providing interest-free loans to the participants in the 2022 scheme. The total amount of loans would not exceed NZ$700,000, as per the company.

FY22 financial performance

Accordant Group reported an annual profit of NZ$3.0 million till 31 March 2022, down from NZ$6.3 million in FY21. According to the announcement, the group’s profitability was affected by border closures and other closures in the second half of CY2021, standard intangible asset amortisation, and fair value loss.

Simon Bennett, chairman of the board, said that Accordant Group's revenue was up 7.8% at NZ$221.5 million over previous year’s revenue of NZ$205 million.

Amongst the group’s divisions, AWF’s revenue was up 2.4% at NZ$1.8million over pcp, and revenue from Madison Recruitment, Absolute IT, and Jacksonstone & Partners, was up 11.1% at 14.2 million.   

Due to border closures and the impact of the COVID-19 pandemic, there has been a significant impact on revenue,  the company update revealed. The job market will return to the pre-COVID-19 levels, it said.

As per the company, cash flow was also down on the prior comparable period and debt was consistent with prior year. The company resumed dividend payments in the second half of FY21. For FY22, a fully imputed final dividend of 5.6 cps was paid on 30 June 2022.

 Stock performance

On 10 October 2022, the stock gained 4.09% to NZ$1.750, at the time of writing.