I’ve been following a story which has perhaps slipped under the radar of most recruiters. Not because I’m any smarter than the rest of you, I just have to churn out a blog every Friday as part of my pact with Beelzebub. For those of you who have an irrational interest in NZX listed recruitment groups, I am of course referring to the renounceable rights offer issued to Accordant Group shareholders at the end of last month. Most of us have no clue what this means, so let me try and explain in recruiter terms. A renounceable rights offer is a way for a listed company to raise cash from its existing shareholders. They offer current shareholders the right to buy new shares, usually at a discount, in proportion to what they already hold. The “renounceable” bit means shareholders aren’t forced to participate to buy anything. They can also sell their rights to someone else if they don’t want to take them up, so they’re not left completely empty-handed. So why does this happen typically and is it good or bad? Well that depends…
Sometimes it’s to fuel acquisition. This is mostly seen as good. Sometimes it’s to pay off debt when the business isn’t generating enough cash to do it independently. This is seen as bad. Unfortunately for Accordant, it seems the genesis of this cash raise is the bank effectively saying: sort your balance sheet out or we’re pulling the facility. The rights offer isn’t a choice, it’s a condition of this. The offer tells the real story. Typically, if this cash injection is to fuel growth, the share discount is 10-15%. Accordant is offering a nearly 50% discount. That means they definitely need some cash.
Before we jump to conclusions, there’s a bigger picture to look at however. Both a global trend, and the specific reality of the Accordant Group. At some point, I might actually get to the point I want to make. You never know.
Firstly, from a global perspective, publicly listed recruitment firms aren’t worth sh*t. Hays plc was trading around 170p at its 2022 peak. It’s now sitting around 29p. That’s roughly an 83% decline. Robert Half fell nearly 48% during 2022 alone from its February peak. It’s now sitting around $25, against a 52-week high of over $55. Similarly, Page Group’s share price has halved. About the only recruitment plc bucking the trend is Recruit Holdings in Japan, which owns Indeed and Glassdoor. They’ve held up better because it’s essentially a tech platform business that happens to do staffing, not the other way around. More on this later.
The other thing to consider is that although Accordant group is a plc, is it really? About 53% of the group is owned by Simon Hull, through the Hull Family Trust. Hull was the fella who set up AWF, which bought Madison and kicked this whole thing off. The number of shares issued versus traded suggests that Accordant shareholders are in the hundreds, not thousands. Simply put, you and I aren’t buying these shares, and we’re not selling them. This means that the Accordant management team don’t need to keep tens of thousands of highly reactive shareholders happy. It doesn’t have to deliver shareholder value to a load of pensioners who are dependent on the dividends. If Hull is happy, then that’s (almost) good enough. It looks like, as of yesterday afternoon, the shareholders went for the deal, with more than half the required amount already secured by Hull chucking in $3.25m of his own money. So if this were a limited company, it would be an owner operator sticking some cash in the bank to cover a cashflow issue. Maybe this is the best way to do the same for a listed business, and Accordant will rise like a phoenix? We shall see.
And that’s also worth consideration. Many recruitment firms have had to have a word with the bank to extend a facility over the past few years. Especially if they’re running a massive temp payroll. The difference is, they’re not listed, so they don’t have to tell us, and I don’t get to blog about it. Well…not until they go bust. So this brings me on to questioning the place of recruitment firms on stock exchanges. None seem to be able to maintain or grow a share price. They open themselves up to public scrutiny. And their operating model is not what delivers share price growth in 2026. These days, people don’t care about profit. They want revenue. Subscriptions. A defensible product. Traditional recruitment firms can only deliver one of these things (revenue). And they can only deliver this in strong markets. They cannot demonstrate steady or meteoric growth the second there’s an economic downturn. Not unless they position themselves as a tech firm first, recruitment second. If they can do this, they’re a Recruit Holdings and everyone throws cash at them What a time to be alive. In our game, signing up a big client sounds fantastic, but if you know this industry, it can be meaningless or non-existent in 3 months’ time. Maybe we have to accept that we are one of those industries that can make many people rich but not shareholders?
There is a popular website that an acquaintance told me about called “Pornhub”. Now I haven’t visited it, but apparently if you were to accidentally type in “Japanese bi bukkake gangbang”, “BBC bull takes my wife”, “ftm cuckhold group play”, or “step-sister/fister” you would be inundated with pornography of the most extreme variety. Last month, this URL of filth was the 9th most popular website in the world with 4.26 billion visits. Pornhub was sold in 2023 for about….$400m. If it wasn’t peddling smut, it would be valued in the billions. Multiples of them. Same thing with OnlyFans. Again, according to my source, if you pay this website enough money, Denise Richards will message you to personally confirm that she did indeed finger herself over you last night. It has loads of subscribers, and generates USD$46m of revenue per employee per year. No other firm in the world comes close to this. They pay more tax than Starbucks, IBM, and Microsoft combined. And yet they’re not worth much money and no one will buy them. For a plc to be valuable, you need subscribers, a dickhead founder/ceo, a sexy product linked to AI (not replaceable by it), rockets, drugs, weapons, and no chance of sex crimes (or minimal).
So we’re all screwed then. Recruitment firms, porn sites, and celebrity cash-for-gash platforms. All can be profitable, all can be a heap of fun, but I’m not sure if Grandad will ever invest his pension in us.
^SW
