AGL - Accordant Group. was previously AWF Madison, Allied...

[nztx]

From far above I smell a sneaky dividend on the way .. far from the Dividend lists so far

Discl: holder

[Snoopy]

With Accordant announcing the reinstatement of dividends, it is worthwhile looking at how the dividend recapitalisation valuation model updates. While doing this I need to remind readers of the crudeness of this model. All I am doing is looking at the actual dividend per share paid over the last five years and projecting that forward over the next five years. Whether actual earnings over the next five years will allow such dividend payments is another matter. The cancelling of dividends during the year following the Covid-19 arrival is reflected forwards too. But as a counter to this I have not backed out any wage subsidy which I am currently forecasting will not be repeated.

	eps	dps (imputed)
FY2017	19.6	8.0 + 8.0
FY2018	15.8	8.2 + 8.0
FY2019	6.2	8.2 + 8.0
FY2020	9.4	8.2 + 8.0
FY2021	18.1	0.0 + 0.0
FY2022	?	8.2 + ?
Total	69.1	64.8
5 year Average		13.0

The non payment of dividends over FY2020 plus the government wage subsidy has allowed the Accordant debt to come under control. So unlike my previous attempt at this exercise (my post 822) , I am no longer expecting a cash issue to shore up the balance sheet.

Implied Acceptable Share Price = (Gross Dividend) / (Acceptable Yield)

= (13.0c / 0.72) / 0.08 = $2.26


discl: Not yet buying more on the strength of just this.

	eps	dps (imputed)
FY2018	15.8	8.2 + 8.0
FY2019	6.2	8.2 + 8.0
FY2020	9.4	8.2 + 8.0
FY2021	18.1	0.0 + 0.0
FY2022	?	8.2 + 6.5
Total	?	63.3
5 year Average		12.7

Implied Acceptable Share Price = (Gross Dividend) / (Acceptable Yield)

= (12.7c / 0.72) / 0.08 = $2.20

I see the share price was bid up as high as $1.99 for the half year results announcement, but then closed on its low at $1.92 with a big gap down to the next buyer at $1.75. Nice December divie for Christmas, although it was at a lower level compared to pre-Covid years, dropping from 8c to 6.5c. Maybe the market expected more? I didn't, but am happy to keep holding.

SNOOPY

[percy]

I sold our holdings in AWF a few days ago.
Felt the labour hire business was at maturity, and was doubtful of the growth prospects for Madison.
Had held for a number of years.

Above posted 16/07/2015.
From Yahoo charts it looks as though I sold at $2.45.
Interesting to note just over 6 years later the share price is $1.92 [today].
So has been a serial under performer since then.Could say "the lost years."

[nztx]

	eps	dps (imputed)
FY2018	15.8	8.2 + 8.0
FY2019	6.2	8.2 + 8.0
FY2020	9.4	8.2 + 8.0
FY2021	18.1	0.0 + 0.0
FY2022	?	8.2 + 6.5
Total	?	63.3
5 year Average		12.7

Implied Acceptable Share Price = (Gross Dividend) / (Acceptable Yield)

= (12.7c / 0.72) / 0.08 = $2.20

I see the share price was bid up as high as $1.99 for the half year results announcement, but then closed on its low at $1.92 with a big gap down to the next buyer at $1.75. Nice December divie for Christmas, although it was at a lower level compared to pre-Covid years, dropping from 8c to 6.5c. Maybe the market expected more? I didn't, but am happy to keep holding.

SNOOPY

Likewise here Snoops .. 6.5 pennies in the interim with tax credits attached is still not too bad
in the circumstances


Not wishing to muck up your Div figures, but -

the 8.0 cps paid on 29 Nov 2019 was interim for 2019/20 year
No final was paid/declared

the 8.2 cps paid 30 Jun 2021 was final for 2020/21 year
No interim was paid/declared

the upcoming 6.5 cps payable (I imagine) in November 2021 will be interim for 2021/22 year


It perhaps helps to tie in relative to each year's EPS which they belong to, rather than when they are paid out

[Snoopy]

Above posted 16/07/2015.
From Yahoo charts it looks as though I sold at $2.45.
Interesting to note just over 6 years later the share price is $1.92 [today].
So has been a serial under performer since then.Could say "the lost years."

I still remember when I got that call back in 2015 from my own sharebroker. 'Mr Big' selling out of AWF (as it was then). If I wanted a 'slice of the placement action' please get back to my broker in the next few days. I remember scrambling through some old annual reports, just to get the feel of things, before saying 'Yes ' 'Yes'. I didn't realise the guy I was buying off was - 'that' - big though! I mean, Percy, otherwise known in heavy hitting trading circles as 'The Purse'! If I had known who was on the other side of that transaction, I might not have bought in!

Nevertheless it hasn't been all bad. I managed the old averaging down trick to reduce my initial buy in price from around $2.30 to just over $2 today. Then there were all those fully imputed divvies over the years:

8.0c, 7.2c, 8.0c, 8.0c, 8.2c, 8.0c, 8.2c, 8.0c, 8.2c, 8.0c, 8.2c

I total that up to be 88c after six years. So not one of my greatest investments. But still a pretty good stream of income over the years (bar the year of Covid's arrival)

Hats off to 'The Purse' though, for getting his timing right. I bet he didn't pay anything like $2.45 for those shares he sold!

SNOOPY

[percy]

I still remember when I got that call back in 2015 from my own sharebroker. 'Mr Big' selling out of AWF (as it was then). If I wanted a 'slice of the placement action' please get back to my broker in the next few days. I remember scrambling through some old annual reports, just to get the feel of things, before saying 'Yes ' 'Yes'. I didn't realise the guy I was buying off was - 'that' - big! I mean Percy otherwise known in heavy hitting trading circles as 'The Purse'! If I had known who was on the other side of that transaction, I might not have bought in!

Nevertheless it hasn't been all bad. I managed the old averaging down trick to reduce my initial buy in price from around $2.30 to just over $2 today. Then there were all those fully impute divvies over the years:

8.0c, 7.2c, 8.0c, 8.0c, 8.2c, 8.0c, 8.2c, 8.0c, 8.2c, 8.0c, 8.2c

I total that up to be 88c after six years. So not one of my greatest investments. But still a pretty good stream of income over the years (bar the year of Covid's arrival)

Hats off to 'the purse' though, for getting his timing right. I bet he didn't pay anything like $2.45 for those shares he sold!

SNOOPY

No I followed Ian "THE REAL" purse in,and even a few years later bought into his beloved SCT.[Realised I had made a mistake and sold].
Can't recall what price I paid,but enjoyed some divies.
At the time I bought I think David Odlin and Kevin Hickman were in the top 10 or 20 shareholders.Both astute investors.
I think in hindsight the under performance was caused by the major shareholder not wanting to have his holding deluted,and perhaps the chairman not being a "gifted" businessman.
Or it could be just a difficult sector to operate in,with no real barrier to new entrants.

[Snoopy]

No I followed Ian "THE REAL" purse in,and even a few years later bought into his beloved SCT. [Realised I had made a mistake and sold].

You mean Ian Urquhart don't you? I can't believe it is now over ten years since he left us.

http://www.stuff.co.nz/business/4166...entor-in-field

The article doesn't say so, but I think Ian made his first fortune as an early investor in Brierley Investments. He used to dress very casually, a smart T-Shirt and shorts were favoured attire IIRC. Some attending the Scott's AGM in Christchurch thought he was the janitor, with little awareness that the total value of his Scott's holding was more than the sum total of all other shareholders at the meeting put together! Very much his own man. Can't say I knew him well. But from what I did see, he seemed a top bloke.

There is still a chance to correct your SCT mistake Percy. You will be welcome back onto the SCT share register at any time :-)

Can't recall what price I paid,but enjoyed some divies.
At the time I bought I think David Odlin and Kevin Hickman were in the top 10 or 20 shareholders.Both astute investors.
I think in hindsight the under performance was caused by the major shareholder not wanting to have his holding diluted,

Yes, despite stepping back from day to day management, the Hullster (a.k.a. company founder Simon Hull) retains a controlling 53% shareholding, via his trust, to this day. He talked about selling down at some point in the future. But I guess we are not at that point yet! Acquisitions have tended to be debt funded. And if those acquisitions do not perform as expected, the company can come under 'financial scrutiny'.

As it stands, liquidity in AGL is diabolical for a share trader. But as a share investor I can cope.

and perhaps the chairman not being a "gifted" businessman.

Maybe not gifted, but makes up for it in his keenness (the only director to buy on market since 'the recent troubles') or at least 'Keenenness'. I will be a little sorry to see Ross go. It was a shame not see see him walk out of his last AGM wearing a ceremonial hard hat and hi-vis vest (like fellow former director Uncle Ted did a couple of years back), and drive away in his Honda Accord with a dent..

Or it could be just a difficult sector to operate in,with no real barrier to new entrants.

Yes renting a small office and prancing around in flowery shirt seems to be the main ingredients in moving into the 'fit the worker for the job' business model these days. I guess it explains why restraint of trade clauses are de rigeur when make an acquisition in this business space?

SNOOPY

[percy]

You mean Ian Urquhart don't you? I can't believe it is now over ten years since he left us.

http://www.stuff.co.nz/business/4166...entor-in-field

The article doesn't say so, but I think Ian made his first fortune as an early investor in Brierley Investments. He used to dress very casually, a smart T-Shirt and shorts were favoured attire IIRC. Some attending the Scott's AGM in Christchurch thought he was the janitor, with little awareness that the total value of his Scott's holding was more than the sum total of all other shareholders at the meeting put together! Very much his own man. Can't say I knew him well. But from what I did see, he seemed a top bloke.

There is still a chance to correct your SCT mistake Percy. You will be welcome back onto the SCT share register at any time :-)



Yes, despite stepping back from day to day management, the Hullster (a.k.a. company founder Simon Hull) retains a controlling 53% shareholding, via his trust, to this day. He talked about selling down at some point in the future. But I guess we are not at that point yet! Acquisitions have tended to be debt funded. And if those acquisitions do not perform as expected, the company can come under 'financial scrutiny'.

As it stands, liquidity in AGL is diabolical for a share trader. But as a share investor I can cope.



Maybe not gifted, but makes up for it in his keenness (the only director to buy on market since 'the troubles') or at least 'Keenenness'. I will be a little sorry to see Ross go. It was a shame not see see him walk out of his last AGM wearing a ceremonial hard hat and hi-vis vest like fellow director Uncle Ted did a couple of years back.



Yes renting a small office and prancing around in flowery shirt seems to be the main ingredients in moving into the 'fit the worker for the job' business model these days. I guess it explains why restraint of trade clauses are de rigeur when make an acquisition in this business space.

SNOOPY

Yes Brierley shares set him up.
Ian was a very honest friendly modest man.I rang him one time asking his advice on Ebos.Really helpful.Used to run into him at ChCh based company's agms.
Always in Jandels.At an Ebos agm he was asked whether he had helped himself to shoes from a clothing bin,as it was the first time any one had seem him wearing shoes.lol.
Also big holding in South Port and Nuplex.

[Snoopy]

Not wishing to muck up your Div figures, but -

the 8.0 cps paid on 29 Nov 2019 was interim for 2019/20 year
No final was paid/declared

the 8.2 cps paid 30 Jun 2021 was final for 2020/21 year
No interim was paid/declared

the upcoming 6.5 cps payable (I imagine) in November 2021 will be interim for 2021/22 year

It perhaps helps to tie in relative to each year's EPS which they belong to, rather than when they are paid out

Your observations are astute and correct nztx. However, a cold hard fact is that 'this years final dividend' comes out of 'next years bank balance'. If you want to find out how much money a company retains on its books at the end of the financial year, you have to take this years earnings and subtract from that this years interim dividend and last years final dividend. That is why I present the dividend figures as I do. Of course when doing a capitalised dividend valuation the amount of earnings retained does not matter. But it does matter in some alternative valuation techniques. I like to keep things consistent across different valuation methods, which is why I present the dividends grouped in the way I do.

If we followed your method of presenting the dividends adjacent to the year in which the earnings ostensibly used to pay the dividends were actually earned, then the dividend table would look like this.

	eps	dps (imputed)
FY2017	19.6	NM + 8.2
FY2018	15.8	8.0 + 8.2
FY2019	6.2	8.0 + 8.2
FY2020	9.4	8.0 + 0.0
FY2021	18.1	0.0 + 8.2
FY2022	?	6.5 + ?
Total	?	63.3
5 year Average		12.7

There is nothing wrong with laying out the dividends in this way. It is equally valid to the layout methodology that I choose. However, both methods are just different ways of presenting the same figures. Whatever presentation method you choose, makes no difference at all to the capitalised dividend valuation result.

SNOOPY

[nztx]

Your observations are astute and correct nztx. However, a cold hard fact is that 'this years final dividend' comes out of 'next years bank balance'. If you want to find out how much money a company retains on its books at the end of the financial year, you have to take this years earnings and subtract from that this years interim dividend and last years final dividend. That is why I present the dividend figures as I do. Of course when doing a capitalised dividend valuation the amount of earnings retained does not matter. But it does matter in some alternative valuation techniques. I like to keep things consistent across different valuation methods, which is why I present the dividends grouped in the way I do.

If we followed your method of presenting the dividends adjacent to the year in which the earnings ostensibly used to pay the dividends were actually earned, then the dividend table would look like this.

	eps	dps (imputed)
FY2017	19.6	NM + 8.2
FY2018	15.8	8.0 + 8.2
FY2019	6.2	8.0 + 8.2
FY2020	9.4	8.0 + 0.0
FY2021	18.1	0.0 + 8.2
FY2022	?	6.5 + ?
Total	?	63.3
5 year Average		12.7

There is nothing wrong with laying out the dividends in this way. It is equally valid to the layout methodology that I choose. However, both methods are just different ways of presenting the same figures. Whatever presentation method you choose, makes no difference at all to the capitalised dividend valuation result.

SNOOPY

Thanks Snoops .. the logic in my suggestion is that the Board will only ever have actual figures for the preceding
Reporting period to base their considerations on the company's trading on, for the distribution.

The company clearly defines the distributions as an Interim or Final in NZX Reporting, nevertheless cash
from the new period may be intermingled in the payouts - such as a final div after period end

I note that the interim reported EPS for 6 months ended 30 Sep 2021 was 4.9 cps (page 9)


If we add back Depreciation & Amortisation for 6 months Net of Tax, we arrive at 9.735 cps
which suggests the cash was or should have been in the balance sheet at 30 Sep to fully cover
the interim 6.5 cps distribution quite comfortably


Hats off to AGL - not even end of month following 30 Sep 2021 yet & they have produced interim unaudited
accounts & presentation & have released these.