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Jason Cherrington, Group CEO With Accordant's revenue generated from various industries across the country within both the public and private sectors, we are somewhat a barometer for the peaks, troughs, and general economic state of the country. We notice trending movements in hiring intentions and job application numbers usually ahead of the officially reported unemployment rate, with the pace of decision making that we see leading up to and throughout the search and selection process a reflection of business confidence and also an indication of the job seeker's appetite to covet a new role or hunker down and stay put. New Zealand's economic environment and labour market per se has remained inconsistent and challenged through FY24, where the impact of higher interest rates, increasing business costs, a fall in hiring demand and a coalition government determined to tackle Government spending at pace all contributing to labour market contraction. Unemployment rose to 4.3% in the March 2024 quarter, a trend that is expected to continue well into FY25. As the largest provider of labour and talent solutions in New Zealand it is perhaps unsurprising that our resulting revenues in the public sector have been impacted in the short term, down 12.4% vs prior year. The uncertainty and slowdown in decision making that existed prior to the October 2023 general election remained, albeit with a sense of pent-up demand that has been unfulfilled and where skills shortages remain in some specialist areas and senior role appointments that will need to be met at the back end of this current cycle. We did however expect the private sector to rally faster than the current trends suggest, and two consecutive quarters of negative GDP growth further impacted business confidence. At the half year we continued to have cautious optimism for the second half performance, where events such as the general election and other economic factors signalled potential recovery. Clearly however, New Zealand's economic recovery is taking longer than anticipated and this adversely impacted the second half performance and full year result, with total revenue down by 6.6% on the prior year. Due to uncertainty in the medium term and performance below expectations in FY24, we have taken the decision to impair the goodwill held on our balance sheet for Madison Recruitment and AWF by $6.5m and $4.5m respectively. Whilst these adjustments are non-cash, they do make up a large portion of the NPAT loss of $10m for the year. Whilst we have swiftly responded to these fluctuations with a necessity to reduce operational costs, our core capability has not been compromised in order to maximise the opportunities that still exist today, and those expected to return in the short to medium term. We have adapted operating models, doubled down on the growth success we have seen in our blue-collar business this year, and maximised conversions elsewhere to offset the pauses in some clients' hiring activity, whilst laying down the groundwork for the medium term when hiring activity returns to normal levels. With our long history and experience of market fluctuations we remain confident in seeing more buoyant conditions that follow a period of contraction, and furthermore our broad capability to deliver within it. We've also taken the opportunity to further develop our talent pool across the business.
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