CI Financial reports third quarter results; earnings per share up 7% from the previous quarter
TORONTO, Nov. 3, 2016 – CI Financial Corp. (“CI”) today released unaudited financial results for the quarter ended September 30, 2016.
|QUARTERLY RESULTS (in $millions except for per share data)1||
September 30, 2016
September 30, 2015
|Assets Under Management||112,513||105,296||7|
|Average Assets Under Management||112,256||108,541||3|
|Earnings Per Share1||0.51||0.51||–|
|EBITDA Per Share 2||0.83||0.85||(2)|
|Cash Provided By Operating Activities||178.3||180.6||(1)|
|Free Cash Flow2||159.6||160.8||(1)|
September 30, 2016
September 30, 2015
|Dividends Recorded Per Share (in $)||0.345||0.330||5|
|Long-Term Debt (in $millions; including current portion)||675.7||435.6||55|
|Net Debt (in $millions)2||520.7||321.7||62|
|SG&A Expenses3||35.4 bps||34.0 bps||4|
|Return on Equity4||27.7%||29.9%||n/a|
1 Net income and earnings per share are net of non-controlling interest.
2 EBITDA (earnings before interest, taxes, depreciation and amortization), EBITDA per share, free cash flow and net debt are not standardized measures prescribed by IFRS; however, CI believes that these financial measures provide information that is useful to investors in understanding CI’s performance and facilitate a comparison of quarterly and full-year results from period to period. These non-IFRS measures and reconciliations to IFRS, where necessary, are included in Management’s Discussion and Analysis available at www.cifinancial.com.
3 As an annualized percentage of average assets under management.
4 Trailing 12 months.
CI’s average assets under management were $112.3 billion in the third quarter, an increase of $3.7 billionfrom the same quarter last year and an increase of $3.3 billion from the prior quarter. CI’s assets under management of $112.5 billion at September 30, 2016 were up 7% year over year. In comparison, the S&P/TSX Composite Index was up 14% and the FTSE TMX Canada Universe Bond Index was up 6% over the same period.
Net income for the quarter of $136.8 million was up 6% from the prior quarter and down 4% from $142.8 million in the third quarter of 2015. Earnings per share of $0.51 were up 7% from the prior quarter and unchanged year over year. EBITDA per share for the quarter ended September 30, 2016 was $0.83compared to $0.78 in the quarter ended June 30, 2016 and $0.85 in the quarter ended September 30, 2015.
During the quarter, while CI had gross sales of $3.3 billion, up $0.7 billion from the prior quarter, a financial institution advised CI that it planned to repatriate assets in-house that were managed by CI. A portion of those assets were redeemed in the quarter and as a result, CI’s net sales were unchanged from the prior quarter at -$1.5 billion. On September 30, 2016 another financial institution announced portfolio management changes to two funds currently managed in part by sub-advisors of CI. In aggregate, approximately $2.3 billion in institutional assets under management are expected to be redeemed by these institutions during the fourth quarter. These mandates have low fees and the financial impact will be minimal.
Selling, general and administrative (SG&A) expenses as an annualized percentage of average assets under management were 35.4 basis points in the third quarter of 2016, down from 36.2 basis points in the prior quarter and up from 34.0 basis points in the third quarter of 2015.
CI also announced yesterday that it has reached an agreement to acquire an 80% stake in Grant Samuel Funds Management (“GSFM”) of Sydney, Australia, a leading independent manager and distributor of investment strategies and products in the Australian and New Zealand markets with assets under management in excess of A$6 billion.
“We continue to invest in various aspects of our operations to achieve growth and build shareholder value,” said Peter Anderson, CI’s Chief Executive Officer. “With GFSM, we are partnering with a leading firm in one of the world’s fastest-growing pension markets, consistent with our goal of seeking opportunities for new business globally, as well as in the Canadian market.”
CI generated $159.6 million of free cash flow during the third quarter of 2016, up $12.1 million from the second quarter of 2016 and down $1.2 million from the third quarter of 2015. During the quarter, CI repurchased $88.5 million in CI shares and paid $93.6 million in dividends. As at October 31, 2016, CI had 266,910,868 shares outstanding.
The Board of Directors declared a monthly cash dividend of $0.115 per share, payable on each of December 15, 2016, January 13, 2017 and February 15, 2017 to shareholders of record on November 30, 2016, December 31, 2016 and January 31, 2017, respectively. The monthly dividend represented a yield of 5.9% on CI’s closing share price of $23.58 on November 2, 2016.
For further information and detailed financial statements for the quarter ended September 30, 2016, including Management’s Discussion and Analysis, which contains discussions of non-IFRS measures, please refer to CI’s website at www.cifinancial.com under Reports, or contact firstname.lastname@example.org.
Analysts’ Conference Call
CI will hold a conference call with analysts today at 4 p.m. Eastern time. Chief Executive Officer Peter Anderson and Chief Financial Officer Douglas Jamieson will be presenting CI’s results. Also attending will be Steven Donald, President of Assante Wealth Management, Barry Gordon, President and Chief Executive Officer of First Asset Investment Management, and Neal Kerr, President, CI Institutional Asset Management and Executive Vice-President, Investment Management. The call and a slide presentation will be accessible through a webcast at www.ci.com/q3. Alternatively, investors may listen to the discussion by dialing (416) 340-2217 or 1-866-696-5910 (passcode: 7525263). A replay of the call will be available until November 17, 2016 at (905) 694-9451 or 1-800-408-3053 (passcode: 5597226). The webcast will be archived at www.ci.com/q3.
CI Financial Corp. (TSX: CIX) is an independent, Canadian-owned wealth management company. Its primary operating businesses are CI Investments Inc., one of Canada’s largest investment managers, advisory businesses Assante Wealth Management and Stonegate Private Counsel, and First Asset Capital Corp., a leader in providing actively managed exchange-traded funds to the Canadian marketplace. CI is on the Web at www.cifinancial.com.
This press release contains forward-looking statements with respect to CI and its products and services, including its business operations and strategy and financial performance and condition. Although management believes that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, including interest rates, business competition, changes in government regulations or in tax laws, and other factors discussed in materials filed with applicable securities regulatory authorities from time to time.