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

[Snoopy]

Finance Period	Operational Cashflows	'Dividend Declared' minus 'DRP Reinvestment' (1)
HY2015	$8.330m	($1.986m)
2HY2015	($2.145m)	($1.916m)
HY2016	$6.495m	($2.660m)
2HY2016	($4.437m)	($2.392m)
HY2017	$11.399m	($2.636m)
2HY2017	($3.773m)	($2.602m)
HY2018 (1)	$11.879m	($2.476m)
2HY2018	($0.370m)	($2.645m)
HY2019	$6.143m	($1.931m)
2HY2019	$3.334m	($1.906m)
HY2020	$6.875m	($1.959m)
2HY2020	$3.014m	($1.919m)
HY2021	$21.950m	Nil
2HY2021	($0.053m)	Nil
HY2022	?m	($2.815m)

Notes

(1) From the HY2018 dividend, the 'capital preserving' dividend reinvestment plan was introduced.

I have used 'operational cashflows' because I believe that best reflects the picture of the on
going business as a going concern.

My main concern with holding AGL as a 'good dividend payer' is that if the expectation is for the restoration of a dividend of 16.2cps, as was the case pre-Covid-19, is that this dividend rate was well ahead of profits over FY2019 and FY2020. The reason that paying dividends greatly exceeding profits has happened in the recent past is that cashflow has supported this. And this 'extra cashflow' is largely determined by the amortisation of both 'Customer relationships' and 'Restraint of Trade' assets. If you look on p48 of AR2021 you will see that both of these amortisations have almost 'played out' (a total of $3.379m or 9.8cps left). Thus it would seem obvious that looking out beyond FY2022, dividends will be more closely tied to operational profits. Unless annual profits rise to around $6m per year on a consistent basis (a figure well beyond recent profitability), then dividends from FY2023 onwards could reduce.

I have to admit to being a little slow at getting my head around this cashflow thing. I have Winner to thank for pushing me into re-educating myself on this matter. The table below shows how despite dividends being frequently ahead of profits, Accordant has been able to maintain what I would have once regarded as 'over the top dividend payments' before, quite comfortably.

Finance Period	Operational Cashflows	'Dividend Declared' minus 'DRP Reinvestment' (1) (2)
HY2015	$8.330m	($1.986m)
2HY2015	($2.145m)	($1.916m)
HY2016	$6.495m	($2.660m)
2HY2016	($4.437m)	($2.392m)
HY2017	$11.399m	($2.636m)
2HY2017	($3.773m)	($2.602m)
HY2018 (1)	$11.879m	($2.476m)
2HY2018	($0.370m)	($2.645m)
HY2019	$6.143m	($1.931m)
2HY2019	$3.334m	($1.906m)
HY2020	$6.875m	($1.959m)
2HY2020	$3.014m	($1.919m)
HY2021	$21.950m	Nil
2HY2021	($0.053m)	Nil
HY2022 (2)	$5.654m	($2.865m)
2HY2022	$?m	($2.231m)

Notes

(1) From the HY2018 dividend, the 'capital preserving' dividend reinvestment plan was introduced.
(2) From HY2022, the period in which the final dividend from FY2021 was paid, the dividend reinvestment plan was suspended.

Since FY2019 you can see that dividends have well exceeded cashflows. Prior to that we had the rather strange phenomenon of lots of cashflow in the first half of the year, more than fully covering the dividend for both halves. I hope this trend does not continue, because operational cashflow for the first half has now dropped to an eight year low! To try and understand this, I think it is worthwhile to look at Accordant's amortisation expenses over the last few years.

SNOOPY

[Snoopy]

Since FY2019 you can see that dividends have well exceeded cashflows. Prior to that we had the rather strange phenomenon of lots of cashflow in the first half of the year, more than fully covering the dividend for both halves. I hope this trend does not continue, because operational cashflow for the first half has now dropped to an eight year low! To try and understand this, I think it is worthwhile to look at Accordant's amortisation expenses over the last few years.

Annual Amortisation Table

	During The Year	Computer Software	Customer Relationships {A}	Restraint of Trade {B}	Sub Total {A}+{B}
FY2014	Madison acquired	($0.230m)	($0.936m)	($0.031m)	($0.967m)
FY2015		($0.275m)	($1.788m)	($0.073m)	($1.861m)
FY2016		($0.289m)	($1.746m)	($0.074m)	($1.820m)
FY2017	AbsoluteIT acquired	($0.480m)	($1.659m)	($0.133m)	($1.792m)
FY2018		($0.238m)	($1.937m)	($0.217m)	($2.154m)
FY2019	Select (Dunedin) acquired	($0.350m)	($1.956m)	($0.218m)	($2.174m)
FY2020	JacksonStone acquired	($0.356m)	($1.665m)	($0.477m)	($2.142m)
FY2021		($0.228m)	($0.874m)	($0.492m)	($1.366m)

When I think of of 'Intangible Assets', I think of something esoteric that -over time- can be expected to 'fritter itself away' in a non-cash way. This idea doesn't really apply to 'computer software' which is a 'real asset' (except in the sense you cannot touch it or hold it in your hand) that does 'wear out' and must be periodically replaced. So computer software is generally not a source of cashflow that can be spent, without the thought of putting aside some equivalent money for its potential replacement. For this reason, I have omitted software amortisation from my sub total of 'amortisation that is available to be spent' (on dividends!), without compromising the future of the company.

There is a pattern in the above table, when the year after an acquisition is made, the 'restraint of trade' amortisation for the year tends to go up. This does make sense because the year after you buy a company, that is the first full year that new restraint of trade arrangements are fully on the books. You might think that same reasoning should apply to 'Customer Relationships', namely:

a/ An ongoing relationship with customers that is clearly identifiable and is liable to lead to extra profits that
b/ would other wise not have occurred had the business not been purchased.

However, restraint of trade assets would have a 'contractual expiry date' not related to ongoing business performance. By contrast the ongoing boost in profitability from customer relationships would have to be individually assessed with each business unit purchase. Some business relationship assets may be inherently shorter term than others.

What we can learn from this table is that from FY2021, and by extrapolation over FY2022 as well, is that the sub total of 'intangible write offs' that can be used to top up dividends is significantly reduced, now down to:

$1.366m / 34.326m = 4.0cps 'per year'

Perversely that still sounds like 'quite a bit' ;-)

SNOOPY

[Snoopy]

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

Depreciation & Amortisation expense for HY2022 is reported as $2.573m. At EOFY2021, there were 34.326m AGL shares on issue. So I get an 'incremental cash available' figure for the half year of:

0.72x$2.573m / 34.326m = 5.4cps

Add to that the declared NPAT for the period and I get: 4.9cps + 5.4cps = 10.3cps

Same conclusion as NZTX though: It covers the interim 6.5 cps distribution quite comfortably.

Nevertheless, I would look at the ability to pay dividends a little differently. Depreciation consists of 'Property Plant and Equipment' depreciation (motor vehicles, fixtures and equipment and leasehold improvements) and 'Depreciation of Property Leases' (the equivalent of what accountants used to call rent). IOW the depreciation on the books represents items that do wear out and will need to be replaced. Unless you are thinking really short term, it is in my view, misleading to think of the depreciation as a medium term source of cash. Likewise I would not add back the amortisation of computer software for the same reason.

Referencing my post 952, I think the amount of amortisation that is available to be distributed to shareholders is 4.0cps per year, or 2.0cps per half year. Still 4.9cps + 2.0cps = 6.9cps is still enough to cover a 6.5cps dividend.

There is another aspect of 'eps' that has not yet been discussed though: The 'fair value loss' on contingent consideration of $0.585m (HYR2022 Income Statement). From p20 of HYR2020, this 'loss' is actually a bonus payment to be made to JacksonStone founders, because that business has been performing better than expected. From an Accordant perspective of building the Accordant business in the future, this is good news. So I would 'look through' this charge and see underlying half year earnings of:

$1.663m + 0.72($0.585m) = $2.084m or in per share terms $2.084m / 34.236m = 6.1cps (c.f declared dividend of 6.5cps).

Referring back to my full year forecast (post 623), we are little behind by expected run rate ($6.5m for the year or $3.25m for the half year). So can we close the earnings gap to cover the dividend in future years? Remember the amortisation boost that we shareholders have been relying on to boost dividends for the last few years is fizzling out.

There is one positive sign from this half year. My adjusted net profit margin for HY2022 is:

$2.084m / $110.447m = 1.9%

This is better than achieved over FY2018 (1.8%), FY2019 (0.78%) and FY2020 (1.2%) (albeit well below the freak circumstances of FY2021). -I am referencing my post 889 as I say this-.

SNOOPY

[winner69]

Snoops - you've got me completely confused and dumbfounded about what you trying to show in your last couple of posts

Never mind, my loss

[Snoopy]

Snoops - you've got me completely confused and dumbfounded about what you trying to show in your last couple of posts

Never mind, my loss

Sorry, set off in the ship without telling the crew where I wanted to go. I am trying to figure out how sustainable the level of dividend is going forwards Winner. If you read posts 952 and 953 in that light, they might make more sense.

SNOOPY

[Snoopy]

That is the concept I have called MDRT (Minimum Debt Repayment Time). I wouldn't be quite as 'exclusive' in eliminating potential investment candidates as Buffett. Especially in his time of ultra low interest rates.

'MDRT' is the answer to the question:

"If all profits for the year were put towards paying off the company's debts, how long would that take?"

My rule of thumb for the answer in years is:

years < 2: Company has low debt
2< years <5: Company has medium debt
5< years <10: Company has high debt
years >10: Company debt is cause for concern

	FY2015	FY2016	FY2017	FY2018	FY2019	FY2020
Significant Event	First full year owning Madison			First full year owning AbsoluteIT		JacksonStone Acquired
Cash & Cash Equivalents: {A}	$3.151m	$0.0m	$1.225m	$6.269m	$6.357m	$6.178m
Non Current Borrowings:	$0.0m	$18.500m	$18.500m	$36.000m	$33.000m	$36.000m
add Current Borrowings:	$21.759m	$2.500m	$0.0m	$0.0m	$0.0m	$0.0m
add Overdraft:	$0.0m	$0.870m	$0.108m	$0.0m	$0.0m	$0.0m
equals Total Borrowings: {B}	$21.759m	$21.870m	$18.608m	$36.000m	$33.000m	$36.000m
Total Net Borrowings: {B} - {A}	$18.608m	$21.870m	$17.323m	$29.731m	$26.643m	$29.822m
Net profit declared {C}	$5.416m	$5.202m	$5.867m	$5.048m	$2.013m	$2.677m
MDRT ({B} - {A}) / (C}	3.4 years	4.2 years	3.0 years	5.8 years	13.2 years	11.1 years

Laid out in this way it is a sad tale. AWF may be the largest recruitment company in NZ and it may now have four divisional cylinders to fire on. But every time a cylinder is added to the cylinder bank the spark plug that fires it appears to no longer run cleanly. Madison is in decline. AbsoluteIT is in decline and the former single cylinder stand alone power plant, AWF, definitely has a sooty plug. JacksonStone is the 'saviour' this year to complete the 'firing on all four cylinders' divisional quartet. But when you look at the additive result, the obvious question is:

"Where's the fire?"

I am probably being a bit unfair here because the principal reason behind what is now 'new normal ' profitability is AWF. The construction industry problems appear to have taken the wind out of what was this company's main driving sail. But the end result of going from a strong performing one cylinder motorbike five years ago to a 'flaccid four' today is more weight (overheads) and less performance (profit). It is enough for shareholders to think nostalgically about Simon Hull standing on the side of an Auckland Street loading the workers into a bus with a megaphone. But 'the Hullsters' approach is now history.

Today , under 'the Bennster', profitability has halved. So net debt should really be no more than half of what it was in 2015. That means we are looking at a cash issue of around $10m to fix the debt problem. Current market capitalisation is $50m, with the share price at $1.45. A 1:1 cash issue at $1 would raise approximately $30m. A 1:1 cash issue at $1.30 would raise approximately $40m. A 1:4 cash issue at $1.30 would raise approximately $10m. That's my pick on the way out.

That is the concept I have called MDRT (Minimum Debt Repayment Time). I wouldn't be quite as 'exclusive' in eliminating potential investment candidates as Buffett. Especially in his time of ultra low interest rates.

'MDRT' is the answer to the question:

"If all profits for the year were put towards paying off the company's debts, how long would that take?"

My rule of thumb for the answer in years is:

years < 2: Company has low debt
2< years <5: Company has medium debt
5< years <10: Company has high debt
years >10: Company debt is cause for concern

	FY2017	FY2018	FY2019	FY2020	FY2021
Significant Event		First full year owning AbsoluteIT		JacksonStone Acquired	Covid-19 takes hold
Cash & Cash Equivalents: {A}	$1.225m	$6.269m	$6.357m	$6.178m	$1.795m
Non Current Borrowings:	$18.500m	$36.000m	$33.000m	$36.000m	$15.000m
add Current Borrowings:	$0.0m	$0.0m	$0.0m	$0.0m	$0.0m
add Overdraft:	$0.108m	$0.0m	$0.0m	$0.0m	$0.0m
equals Total Borrowings: {B}	$18.608m	$36.000m	$33.000m	$36.000m	$15.000m
Total Net Borrowings: {B} - {A}	$17.323m	$29.731m	$26.643m	$29.822m	$13.205m
Net profit declared {C}	$5.867m	$5.048m	$2.013m	$2.677m	$6.197m
MDRT ({B} - {A}) / (C}	3.0 years	5.8 years	13.2 years	11.1 years	2.1 years

The doom and gloom that I predicted after the FY2020 result did not play out. My post 894 provides more detail as to what happened. The difference in trade receivables and trade payables shrunk by $4.311m over the year, indicating that operational debt was much more tightly controlled.

The $7m impairment charge against Madison was 'taken on the chin' at the same time as the wage subsidies came in. The net effect of this was that company income that would have gone towards paying wages, was instead diverted to paying down debt. IOW the $7m 'non cash asset' that was lost ended up being indirectly offset by 'real cash' that went into debt reduction while the government took care of the wage bill that , without Covid-19, the 'real cash' would have been required to fund. Indirectly, Accordant has been bailed out by the government is how I see what unfolded. I don't think any of my previous fears from FY2020 were unfounded. But sometimes shareholders just 'get lucky' is how I see the way the situation unfolded.

$7m + $4.311m = $11.311m goes a long way to showing how the debt position of the company turned around.

Add in around $5.5m of dividends 'not paid' to shareholders during the year and you can see how the reduction in debt happened.

However, government funding for FY2022 is likely not going to be as generous and dividends have resumed. How will the FY2022 business environment effect the indebtedness prospects for Accordant going forwards?

SNOOPY

[percy]

Looks as though you are going to have to hand back a few years' dividends.

[winner69]

Hey Snoops - we've discussed AGL debt / dividends a few times in the past. So I've updated my database to see what's happening.

Bear in mind I've preferred looking at cash movements rather than P&L and all those awful amortisation and depreciation things which muddy the waters

As I see it the numbers below -

- It seems that overtime they have been quite happy paying out most of FCF as dividends but generally retain a few bob
- they seem quite comfortable carrying a bit of debt - big reduction in 2021 eh. Leverage currently lowest its been for year
- acquisitions have been funded by debt and new capital .... and as you point out 'paying' some of that back

I have read the AR so wouldn't have a clue whether they have made comments about dividend policy or capital position. But it seems to me that can and will continue to pay most of FCF out as divies

Covid seems to have been a great thing for AGL - a cynic would say a lot of the wage subsidy went to the banks (better than to shareholders)

Cheers

[Snoopy]

Thanks for the clue Winner (I presume you are referring to note C5).

RECONCILIATION OF NET PROFIT AFTER TAX TO CASH FLOWS FROM OPERATING ACTIVITIES

	HY2020 (pcp)	HY2021	2HY2021 (calculated)	FY2021
Net Profit After Income Tax {A}	$1.321m	$3.712m	$2.485m	$6.197m
Adjustments for operating activities non-cash items
Depreciation & Amortisation	$3.285m	$2.618m	$2.668m	$5.286m
Impairment	$0m	$7.000m	$0m	$7.000m
Loss/(Gain) on disposal of Property Plant & Equipment	$0.060m	$0.043m	($0.005m)	$0.038m
Movement in doubtful debt provision plus bad debt write off in current year	$0.099m	$0.187m	$0.151m	$0.338m
Movement in deferred tax	($0.506m)	($0.333m)	($0.369m)	($0.702m)
Equity Settled Share Based Payments	$0.066m	($0.124m)	$0.202m	$0.078m
Interest on contingent consideration to the vendor of JacksonStone and Partners	$0.0m	$0.062m	($0.050m)	$0.016m
Fair value movement on contingent consideration to the vendor of JacksonStone & Partners	$0.0m	$0.000m	($1.285m)	($1.285m)
Total Non Cash Items {B}	$3.004m	$9.453m	$1.316m	$10.769m
(Increase)/Decrease in trade receivables, and contract assets	$5.185m	$28.587m	$1.207m	$29.794m
Increase/(Decrease) in trade payables, contract liabilities and provisions	($2.657m)	($21.706m)	($4.036m)	($25.742m)
(Increase)/Decrease in taxation payable	$0.022m	$1,904m	($1.025m)	$0.879m
Total movement in working capital {C}	$2.550m	$8.785m	($3.854m)	$4.931m
Cash flow from operating activity {A}+{B}+{C}	$6.875m	$21.950m	($0.053m)	$21.897m

HY2021 (1st April 2020 to 30th September 2020) is the period that covers most of the Covid-19 lock down period and the comparison with the pcp HY2020 is illuminating.

1/ The first point to note is the large $7m impairment charge, unique in HY2021, which is a non-cash item. However, I personally would not class a change in impairment as an 'operating item'. So while creating an impairment does affect cashflow, I am surprised that it changes 'operating cashflow'.

2/ Following down, the rest of the two columns of numbers are broadly similar, until we look at the decrease in trade receivables and the decrease in trade payables. This HY2021 period is concomitant with the first six months of the Covid-19 period where demand for hiring workers significantly reduced. With no new 'on the job demand', the need to pay those temp workers wages, who were not needed, rapidly decreased as well. So I can weave a story that makes the figures look like they make sense. But why is the difference between the changes in 'jobs invoiced' and the changes in 'paid work to fulfill those jobs' so large between:

HY2021 ( $28.587m - $21.706m = $6.879m ) AND

HY2020 ( $5.185m -$2.617m = $2.568m ) ?

This imbalanced difference has boosted cashflow in HY2021 vs the pcp by $4.311m.

Combine this with the $7m impairment imbalance and we get a total imbalance of $11.311m. This certainly tallies with the lions share of increased operational cashflow from HY2020 to HY2021 ( $21.950m - $6.875m = $15.075m ). But it doesn't explain the inclusion of 'impairment' as an operational matter. Nor does it explain the dramatic increase in the difference between the 'accounts receivable balance' and the 'accounts payable balance' when we compare HY2021 and HY2020. The real reason for the sharp uptick in both as at HY2021 is that a 'Grant Income Receivable' is recorded in 'Trade & Other Receivables' and 'Deferred Grant Income' is recorded in 'Trade and Other Payables' in the comparative FY2020 year. These entries relate to the wage subsidy that was paid in advance.

Now Looking at 2HY2021

The other interesting point to note is that although the cash flow from operations was extraordinarily high for FY2021, for the second half of HY2021 cashflow was negative! That fact seems to have been washed aside with all the hype of the full year result.

Time to update this little exercise for HY2022, derived from Section C5 of the annual reports, and the equivalent information in the half yearly reports. Historically 'cashflow' has been more important that 'profit' in determining what the dividend might be for Accordant. So the first object of this exercise is to figure out how the cashflow is changing from (in this instance) half year to half year so we can try and predict where the dividend is going.

The second part of the exercise is to look at 'rolling profit' and 'rolling cashflow' over the twelve month period that includes 2HY2021 and HY2022. These figures can be used for checking banking covenants.

RECONCILIATION OF NET PROFIT AFTER TAX TO CASH FLOWS FROM OPERATING ACTIVITIES

	HY2020	HY2021 (pcp)	2HY2021 (calculated)	HY2022
Net Profit After Income Tax {A}	$1.321m	$3.712m	$2.485m	$1.663m
Adjustments for operating activities non-cash items
Depreciation & Amortisation	$3.285m	$2.618m	$2.668m	$2.573m
Impairment	$0m	$7.000m	$0m	$0m
Loss/(Gain) on disposal of Property Plant & Equipment	$0.060m	$0.043m	($0.005m)	$0.002m
Movement in doubtful debt provision plus bad debt write off in current year	$0.099m	$0.187m	$0.151m	$0.045m
Movement in deferred tax	($0.506m)	($0.333m)	($0.369m)	($0.224m)
Equity Settled Share Based Payments	$0.066m	($0.124m)	$0.202m	$0.021m
Interest on contingent consideration to the vendor of JacksonStone and Partners	$0m	$0.062m	($0.050m)	$0.013m
Fair value movement on contingent consideration to the vendor of JacksonStone & Partners	$0m	$0m	($1.285m)	$0.585m
Total Non Cash Items {B}	$3.004m	$9.453m	$1.316m	$3.015m
(Increase)/Decrease in trade receivables, and contract assets	$5.185m	$28.587m	$1.207m	$0.101m
Increase/(Decrease) in trade payables, contract liabilities and provisions	($2.657m)	($21.706m)	($4.036m)	$2.205m
(Increase)/Decrease in taxation payable	$0.022m	$1,904m	($1.025m)	($1.330m)
Total movement in working capital {C}	$2.550m	$8.785m	($3.854m)	$0.976m
Cash flow from operating activity {A}+{B}+{C}	$6.875m	$21.950m	($0.053m)	$5.654m

HY2021 (1st April 2020 to 30th September 2020) is the period that covers most of the Covid-19 lock down period. This is the prior comparative period of interest. But Covid-19 has distorted these six monthly figures, which is why I have included the figures from HY2020 as a somewhat more normalised comparison period.

1/ The first point to note is the significant difference in 'depreciation and amortisation' charge between HY2020 and subsequent half year periods. The break down of 'depreciation and amortisation' is not given in the half year reports. But from comparing AR2020 and AR2021, the one 'sub item' that has changed significantly is the amortisation of 'customer relationships'. This dropped from $1.665m to just $0.876m on an annual basis. Software amortisation fell by more than $100k over the year too. I had wondered whether there was a reduction in asset depreciation due to the centralising of some branch activities, in particular Madison sharing office space with AbsoluteIT. However, I cannot detect any meaningful 'reduction in depreciation effect' from this.

My best guess is that the now lesser reduction in the value of the 'customer relationship' asset via reduced amortisation is more likely because those particular business relationships that gave rise to the 'customer relationship' asset in the first place have now 'played out'. IOW on a business purchase, there was a pre-determined amortisation reduction plan following the appropriate accounting rule schedule. The timing is roughly five years from the Madison acquisition. So it may be that the Madison 'customer relationship' goodwill on acquisition has now expired 'according to plan'.

2/ The residual JacksonStone payment to the sellers of that business sunk in value by $1.285m over 2HY2021, only to be revised upwards again by $0.585m in HY2022. These figures are part of a balance owed which nevertheless remains as 'cash on hand' until the earn out payment is finally paid. This is why revising up the future payment over HY2022 (representing an incremental loss for Accordant) results in an increase in the cash balance of Accordant at balance date. Nevertheless, without these JacksonStone adjustments for 2HY2021 and HY2022, the total excess cash on the books over and above declared income would be about $2.5m added over both both 2HY2021 and HY2022.

3/ The 'change in trade receivables' verses the 'change in trade payables' that caused such an incremental change in the Accordant cash balance between HY2021 and HY2020 is worth reflecting on.

Look at HY2021:

HY2021: $28.587m - $21.706m = $6.879m

The reason for the sharp uptick in gross values of trade receivables and payables during 2HY2021 is that:

a/ Government 'Grant Income Receivable' is recorded in 'Trade & Other Receivables' and
b/ 'Deferred Grant Income' is recorded in 'Trade and Other Payables'.

These entries relate to the wage subsidy that was paid in advance.

The 'faster collection of accounts' combined with 'faster account payment', although a lesserly incremented payment schedule for Accordant's own bills, produced an improved 'business transaction' cash surplus of $6.879m in period. Now compare this to the operating business cashflow generated over HY2022:

HY2022: $0.101m + $2.205m = $2.306m

Here, the incremental cash surplus of $2.306m was generated largely by Accordant not paying their own bills so promptly to the tune of $2.205m. This comparatively smaller increase in cash generated from 'business transactions' is really a consequence of it being ever harder to process bills for collection and payment more and more efficiently. 'Not paying your bills' is an unsustainable way to improve cashflow.

O.K., this has been a long post, so let's get back to the main points. Net profit over 30th September 2020 to 30th September 2021 was:

$2.485m + $1.663m = $4.148m

Cashflow for the rolling twelve month period 30th September 2020 to 30th September 2021 was:

$(0.053m) + $5.564m = $5.511m

If we take out all the JacksonStone related adjustments (those shouldn't be underlying cashflow contingencies for the company in future years) I get an underlying cashflow of:

$5.511m - ( -$0.050m+$0.013m - $1.285m +$0.585m ) = $4.774m

Divide that number by the 34.326m Accordant shares currently on issue to work out the underlying cashflow per share:

$4.774m / 34.326m = 13.9c

Two 6.5cps dividends paid out each year would largely take care of that. I think this is the kind of dividend level that shareholders might look forwards to from here on in.

SNOOPY

[nztx]

Just looking at published AGL accounts for 30 Sep 2020 HY & 31 Mar 2021 FY - Snoops
looks like you're on to it there

Sep 20 HY Cashflow includes includes no Inflow from Govt subsidies (unless buried)

Mar 21 FY however includes $33.3 m Subsidies inflow