- Reported diluted earnings per share of $0.32
- Mutual fund net sales of $51.0 million for the quarter
- Announces intention to launch a substantial issuer bid
- Announced quarterly dividend of $0.10 per share
AGF Management Limited (AGF or the Company)
(TSX: AGF.B) today announced financial results for the third
quarter ended August 31, 2022.
AGF reported total assets under management and
fee-earning assets1 of $39.6 billion compared
to $40.3 billion as at May 31, 2022 and $43.4 billion as
at August 31, 2021. “Through another quarter of heightened market
uncertainty, we continued to deliver strong investment performance
that can be attributed to our disciplined processes and focus on
risk management and saw the benefits of our unique liquid
alternative strategies,” said Kevin McCreadie, Chief Executive
Officer and Chief Investment Officer, AGF.
“Additionally, we have continued to execute
against our strategic imperatives, while looking for opportunities
to redeploy capital to deliver continued value to our shareholders
and are committed to doing this by considering small acquisitions
and partnerships, and returning value to our shareholders through
funding share buybacks,” added McCreadie.
The Board has authorized AGF to use up to $40
million of cash in order to return capital to its shareholders
through a substantial issuer bid made to all holders of AGF’s Class
B non-voting shares (the “Offer”). The Offer may be at a premium to
the then-current market price of the Company’s Class B non-voting
shares. Holders of the Company’s Class A voting shares and insiders
of AGF are not expected to participate in the Offer. Subject to
market and other conditions, AGF anticipates that the terms of the
Offer will be finalized in early October, with the Offer expected
to be completed in November 2022.
AGF’s mutual fund gross sales were $594 million
for the quarter compared to $790 million in the comparative period,
while net sales were $51 million compared to $288 million in the
comparative period. AGF’s sales have continued to outpace the
industry. During the quarter the industry2 reported net
redemptions, while AGF mutual funds remained in net sales.
“As we marked our eighth consecutive quarter of
mutual fund net sales, we focused on our strong performance,
advancing discussions with key clients and partners and
diversifying our relationships across channels,” said, Judy
Goldring, President and Head of Global Distribution, AGF. “At the
same time, we reconnected with our employees as we transitioned to
our new home at CIBC SQUARE and committed to a hybrid model that
supports work-life balance. We believe the energy we gain from
collaboration and being together in person will serve as a catalyst
for our continued success.”
AGF also announced today that Adrian Basaraba,
Senior Vice President and Chief Financial Officer, has informed the
Company of his decision to leave his position as AGF’s Chief
Financial Officer to pursue other opportunities; and that Jenny
Quinn has been appointed Interim Chief Financial Officer (CFO),
effective September 29th, following AGF’s third quarter reporting
cycle.
During his tenure, Adrian contributed to major
advances in AGF’s business operations and the successful management
of AGF’s capital and liquidity. Coming out of the pandemic with
AGF’s finances in solid, stable position, and with strategic
priorities progressing positively against plan, Mr. Basaraba felt
the timing was right for him to make this career change. Mr.
Basaraba and AGF have agreed that he will remain with the Company
in an advisory capacity to facilitate the transition of his
responsibilities through November 30, 2022.
Mr. Basaraba joined AGF in 2004 and was
appointed Chief Financial Officer of AGF Management Limited in July
2016. Ms. Quinn has been with AGF for 15 years and currently serves
as the organization’s Chief Accounting Officer. A search process
for the new CFO has been initiated.
1 Fee-earning assets represents assets in which
AGF has carried interest ownership and earns recurring fees but
does not have ownership interest in the managers.2 Long-term
funds.
Key Business Highlights:
- AGF appointed Cybele Negris, CEO and Co-Founder of Webnames.ca
Inc., to the AGF Board of Directors effective September 27, 2022.
As an accomplished tech entrepreneur and seasoned board member, she
further diversifies the collective experience, expertise and
perspective of AGF’s Board.
- AGF International Advisors Company Limited, a subsidiary of
AGF, was once again accepted as a signatory to the UK Stewardship
Code, a best-practice benchmark in investment stewardship. This
stands as a testament to the rigor of AGF’s responsible investing
practices.
- As of August, AGF has successfully onboarded its SMA strategies
on Vestmark, SMArtX Advisory Solutions LLC and Envestnet, three of
the leading U.S. turnkey asset management platforms.
- As AGF’s business continues to evolve, AGF has launched an
enhanced brand architecture to better reflect the diversity and
reach of its three distinct business lines across the public and
private markets: AGF Investments, AGF Private Capital and AGF
Private Wealth.
- During the quarter, AGF moved to its new head office at CIBC
SQUARE. The state of the art building has provided employees with a
flexible workspace, enhanced collaboration and greater
communication, while continuing to advance the reduction of the
firm’s office footprint by approximately 22%.
- As at August 31, 2022, AGF outperformed its one-year and
three-year investment targets with average percentiles of 39%
(target 50%) and 34% (target 40%), respectively, with 1st
percentile being best possible performance.
- The firm remained active under its Normal Course Issuer Bid
(NCIB). During the quarter, AGF repurchased 726,400 AGF.B shares
for cancellation.
- On September 27, 2022, AGF’s Board of Directors approved a
quarterly dividend of $0.10 for shareholders of record on October
12, 2022.
Financial Highlights:
- Management, advisory, administration fees and deferred sales
charges were $105.6 million for the three months ended August 31,
2022, compared to $112.4 million in 2021. The decrease in revenue
is attributable to a 3.9% decrease in average mutual fund assets
under management as a result of market volatility.
- Selling, general and administrative costs were $46.4 million
for the three months ended August 31, 2022, compared to $50.1
million in 2021.
- EBITDA before commissions for the three months ended August 31,
2022 was $33.2 million, compared to $37.5 million in the prior year
comparative period.
- Effective June 1, 2022, the elimination of the payment of
upfront sales commissions, including deferred sales charge options,
took effect. During the three and nine months ended August 31,
2022, AGF paid commissions of nil and $37.1 million, respectively.
- Net income for the three months ended August 31, 2022 was $22.1
million ($0.32 diluted EPS), compared to $14.9 million
($0.21 diluted EPS) in the prior year comparative period.
Diluted EPS in the quarter of $0.32 reflects the impact of the
elimination of DSCs.
|
Three months ended |
Nine months ended |
|
|
August 31, |
|
|
May 31, |
|
|
August 31, |
|
|
August 31, |
|
|
August 31, |
|
(in
millions of Canadian dollars, except per share data) |
|
2022 |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management, advisory, administration fees and deferred sales
charges |
$ |
105.6 |
|
$ |
113.1 |
|
$ |
112.4 |
|
$ |
332.8 |
|
$ |
323.9 |
|
Share of profit (loss) of joint ventures |
|
– |
|
|
(0.2) |
|
|
2.2 |
|
|
(0.9) |
|
|
3.1 |
|
Other income from fee-earning arrangements |
|
0.7 |
|
|
0.7 |
|
|
0.7 |
|
|
2.2 |
|
|
1.1 |
|
Fair value adjustments and other income |
|
6.2 |
|
|
3.9 |
|
|
7.8 |
|
|
20.7 |
|
|
11.7 |
|
Total Income |
$ |
112.5 |
|
$ |
117.5 |
|
$ |
123.1 |
|
$ |
354.8 |
|
$ |
339.8 |
|
Selling, general and
administrative |
|
46.4 |
|
|
47.3 |
|
|
50.1 |
|
|
143.0 |
|
|
145.2 |
|
Deferred selling
commissions |
|
– |
|
|
17.8 |
|
|
14.1 |
|
|
37.1 |
|
|
47.4 |
|
EBITDA before
commissions1 |
|
33.2 |
|
|
35.4 |
|
|
37.5 |
|
|
108.5 |
|
|
92.2 |
|
EBITDA |
|
33.2 |
|
|
17.6 |
|
|
23.4 |
|
|
71.4 |
|
|
44.8 |
|
Net income |
|
22.1 |
|
|
10.1 |
|
|
14.9 |
|
|
45.1 |
|
|
25.5 |
|
Diluted earnings per
share |
|
0.32 |
|
|
0.14 |
|
|
0.21 |
|
|
0.64 |
|
|
0.35 |
|
Free cash flow1 |
|
20.6 |
|
|
12.3 |
|
|
21.5 |
|
|
46.2 |
|
|
42.4 |
|
Dividends per share |
|
0.10 |
|
|
0.10 |
|
|
0.09 |
|
|
0.29 |
|
|
0.25 |
|
(end of period) |
Three months ended |
|
|
August 31, |
|
|
May 31, |
|
|
February 28, |
|
|
November 30, |
|
|
August 31, |
|
(in
millions of Canadian dollars) |
|
2022 |
|
|
2022 |
|
|
2022 |
|
|
2021 |
|
|
2021 |
|
Mutual fund assets under
management (AUM)2 |
$ |
22,496 |
|
$ |
22,849 |
|
$ |
23,625 |
|
$ |
24,006 |
|
$ |
23,792 |
|
Institutional, sub-advisory and ETF accounts AUM |
|
7,932 |
|
|
8,114 |
|
|
8,751 |
|
|
9,082 |
|
|
10,041 |
|
Total AGF Investments AUM |
|
30,428 |
|
|
30,963 |
|
|
32,376 |
|
|
33,088 |
|
|
33,833 |
|
AGF Private Wealth AUM |
|
7,000 |
|
|
7,204 |
|
|
7,410 |
|
|
7,366 |
|
|
7,334 |
|
AGF
Private Capital AUM |
|
60 |
|
|
58 |
|
|
69 |
|
|
73 |
|
|
99 |
|
Total AUM |
$ |
37,488 |
|
$ |
38,225 |
|
$ |
39,855 |
|
$ |
40,527 |
|
$ |
41,266 |
|
AGF
Private Capital fee-earning assets3 |
|
2,067 |
|
|
2,052 |
|
|
2,100 |
|
|
2,108 |
|
|
2,094 |
|
Total AUM and fee-earning
assets3 |
$ |
39,555 |
|
$ |
40,277 |
|
$ |
41,955 |
|
$ |
42,635 |
|
$ |
43,360 |
|
Net mutual fund sales2 |
|
51 |
|
|
132 |
|
|
330 |
|
|
352 |
|
|
288 |
|
Average
daily mutual fund AUM2 |
|
22,207 |
|
|
23,183 |
|
|
24,075 |
|
|
23,896 |
|
|
23,104 |
|
1 EBITDA before commissions (earnings
before interest, taxes, depreciation, amortization and deferred
selling commissions), adjusted EBITDA before commissions, adjusted
net income, adjusted diluted earnings per share and Free Cash Flow
are not standardized measures prescribed by IFRS. The Company
utilizes non-IFRS measures to assess our overall performance and
facilitate a comparison of quarterly and full-year results from
period to period. They allow us to assess our investment management
business without the impact of non-operational items. These
non-IFRS measures may not be comparable with similar measures
presented by other companies. These non-IFRS measures and
reconciliations to IFRS, where necessary, are included in the
Management’s Discussion and Analysis available at
www.agf.com.2 Mutual fund AUM includes retail AUM, pooled fund
AUM and institutional client AUM invested in customized series
offered within mutual funds.3 Fee-earning assets represents assets
in which AGF has carried interest ownership and earns recurring
fees but does not have ownership interest in the managers.
For further information and detailed financial
statements for the third quarter ended August 31, 2022, including
Management’s Discussion and Analysis, which contains discussions of
non-IFRS measures, please refer to AGF’s website at www.agf.com
under ‘About AGF’ and ‘Investor Relations’ and at
www.sedar.com.
Conference Call
AGF will host a conference call to review its
earnings results today at 11 a.m. ET.
The live audio webcast with supporting materials
will be available in the Investor Relations section of AGF’s
website at www.agf.com or at
https://edge.media-server.com/mmc/p/vxofe4c8. Alternatively, the
call can be accessed toll-free in Canada by dialing
1 (866) 455-3403 (PIN: 96087375#), or in the United
States by dialing 1 (866) 374-5140 (PIN: 96087375#).
A complete archive of this discussion along with
supporting materials will be available at the same webcast address
within 24 hours of the end of the conference call.
About AGF Management
Limited
Founded in 1957, AGF Management Limited (AGF) is
an independent and globally diverse asset management firm
delivering excellence in investing in the public and private
markets through its three distinct business lines: AGF Investments,
AGF Private Capital and AGF Private Wealth.
AGF brings a disciplined approach focused on
providing an exceptional client experience and incorporating sound
responsible and sustainable practices. The firm’s investment
solutions, driven by its fundamental, quantitative and private
investing capabilities, extends globally to a wide range of
clients, from financial advisors and their clients to high-net
worth and institutional investors including pension plans,
corporate plans, sovereign wealth funds, endowments and
foundations.
Headquartered in Toronto, Canada, AGF has
investment operations and client servicing teams spanning on the
ground in North America, Europe and Asia. With approximately $40
billion in total assets under management and fee-earning assets,
AGF serves more than 800,000 investors. AGF trades on the Toronto
Stock Exchange under the symbol AGF.B.
AGF Management Limited shareholders,
analysts and media, please contact:
Courtney
LearmontVice-President, Finance647-253-6804,
InvestorRelations@agf.com
Caution Regarding Forward-Looking
Statements
This press release includes forward-looking
statements about the Company, including its business operations,
strategy and expected financial performance and condition, and its
intention to launch a substantial issuer bid. Forward-looking
statements include statements that are predictive in nature, depend
upon or refer to future events or conditions, or include words such
as ‘expects,’ ‘estimates,’ ‘anticipates,’ ‘intends,’ ‘plans,’
‘believes’ or negative versions thereof and similar expressions, or
future or conditional verbs such as ‘may,’ ‘will,’ ‘should,’
‘would’ and ‘could.’ In addition, any statement that may be made
concerning future financial performance (including income,
revenues, earnings or growth rates), ongoing business strategies or
prospects, fund performance, and possible future action on our
part, is also a forward-looking statement. Forward-looking
statements are based on certain factors and assumptions, including
expected growth, results of operations, business prospects,
business performance and opportunities. While we consider these
factors and assumptions to be reasonable based on information
currently available, they may prove to be incorrect.
Forward-looking statements are based on current expectations and
projections about future events and are inherently subject to,
among other things, risks, uncertainties and assumptions about our
operations, economic factors and the financial services industry
generally. They are not guarantees of future performance, and
actual events and results could differ materially from those
expressed or implied by forward-looking statements made by us due
to, but not limited to, important risk factors such as level of
assets under our management, volume of sales and redemptions of our
investment products, performance of our investment funds and of our
investment managers and advisors, client-driven asset allocation
decisions, pipeline, competitive fee levels for investment
management products and administration, and competitive dealer
compensation levels and cost efficiency in our investment
management operations, as well as general economic, political and
market factors in North America and internationally, interest and
foreign exchange rates, global equity and capital markets, business
competition, taxation, changes in government regulations,
unexpected judicial or regulatory proceedings, technological
changes, cybersecurity, the possible effects of war or terrorist
activities, outbreaks of disease or illness that affect local,
national or international economies (such as COVID-19), natural
disasters and disruptions to public infrastructure, such as
transportation, communications, power or water supply or other
catastrophic events, and our ability to complete strategic
transactions and integrate acquisitions, and attract and retain key
personnel. We caution that the foregoing list is not exhaustive.
The reader is cautioned to consider these and other factors
carefully and not place undue reliance on forward-looking
statements. Other than specifically required by applicable laws, we
are under no obligation (and expressly disclaim any such
obligation) to update or alter the forward-looking statements,
whether as a result of new information, future events or otherwise.
For a more complete discussion of the risk factors that may impact
actual results, please refer to the ‘Risk Factors and Management of
Risk’ section of the 2021 Annual MD&A.
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