REG-Canaccord Gen Grp: Canaccord 3rd Quarter Fiscal 2015 Results <Origin Href="QuoteRef">CF.TO</Origin>
05/02/2015 07:00
Canaccord Genuity Group Inc. reports third quarter fiscal 2015 results
Announces strategic changes to leadership and operating structure of global
capital markets business Excluding significant items, third quarter loss per
common share of $0.19(1)
(All dollar amounts are stated in Canadian dollars unless otherwise indicated)
TORONTO, Feb. 4, 2015 /CNW/ - During the third quarter of fiscal 2015, the
quarter ended December 31, 2014, Canaccord Genuity Group Inc. (Canaccord, the
Company, TSX: CF, LSE: CF.) generated $166.5 million in revenue. Excluding
significant items (1), the Company recorded a net loss of $14.3 million or a
net loss of $17.4 million attributable to common shareholders (2) (a loss per
common share of $0.19). Including all expense items, on an IFRS basis, the
Company recorded a net loss of $21.5 million or a net loss attributable to
common shareholders (2) of $24.3 million (a loss per common share of $0.27).
"We are fortunate to have cultivated strong leadership across our global
operations," said Paul Reynolds, President and CEO of Canaccord Genuity Group
Inc. "The steps we have taken to improve and streamline our leadership
structure allow us to bring a sharper management focus to our key priorities,
to maximize our core strengths for our clients and shareholders."
On February 1, 2015, the Company announced that it had taken steps to reduce
the size of its global workforce by 4%, to rationalize operations in light of
current market conditions. In connection with this initiative, the Company
announces key changes within the executive structure of its global capital
markets business. The changes are in the interest of improving collaboration
between global teams and accelerating the delivery of innovative thinking and
solutions to clients focused on growth.
Dan Daviau has been appointed CEO, North American Capital Markets. In his new
role, Dan will take an active role in managing Canadian and US capital markets
operations. This appointment reflects Dan's extensive track record of
achievement in serving and growing our client base in both Canada and the US
and fostering partnerships between our businesses.
Canadian Investment Banking will be led by an executive team reporting to Dan
Daviau comprised of Jens Mayer, who will continue as Co-Head of Investment
Banking alongside Sanjiv Samant, who has been promoted to Co-Head of
Investment Banking, Justin Bosa, who has been promoted to Head of Diversified
Investment Banking and Stewart Busbridge, who assumes the role of Head of
Mergers & Acquisitions. This new team will be charged with continuing to grow
and improve our already leading investment bank franchise.
Dvai Ghose has accepted the role of Global Head of Equity Research, a position
that leverages his proven leadership capabilities as Head of Canadian Equity
Research and his outstanding track record of delivering world-class research
coverage as a top-ranked analyst in his sector. In addition, we are pleased to
announce the appointment of Tony Dwyer and Michael Graham as Co-heads of our
US Equity Research division. Both Tony and Michael have extensive experience
building successful research platforms with global reach.
Concluding a long and distinguished career at Canaccord Genuity, Matt
Gaasenbeek will be stepping down from his role as President of Canadian Capital
Markets. For more than two decades, Matt has been instrumental in building the
Canadian capital markets team and shaping the growth of our North American
equities businesses, having played a key role in the successful integration of
our global sales, trading and execution capability.
Concurrent with these appointments, effective March 31, Phil Evershed has made
the decision to leave his role as Global Head of Investment Banking, to focus
on opportunities outside of investment banking. Since 2010, Phil has been an
integral part of the growth and success of Canaccord Genuity and an outstanding
partner and mentor within our global investment banking business. After March
31, Phil will continue as a Special Advisor to the Board of Directors of
Canaccord Genuity Group Inc.
All appointments will take immediate effect.
Third Quarter of Fiscal 2015 vs. Third Quarter of Fiscal 2014
* Revenue of $166.5 million, a decrease of 28% or $64.5 million from $231.0
million
* Excluding significant items, expenses of $184.1 million, a decrease of 9%
or $18.8 million from $202.9 million(1)
* Expenses of $192.0 million, a decrease of 7% or $14.5 million from $206.5
million
* Excluding significant items, loss per common share of $0.19 compared to
diluted earnings per common share (EPS) of $0.17(1)
* Excluding significant items, net loss of $14.3 million compared to net
income of $21.2 million(1)
* Net loss of $21.5 million compared to net income of $18.3 million
* Loss per common share of $0.27 compared to diluted EPS of $0.14
Third Quarter of Fiscal 2015 vs. Second Quarter of Fiscal 2015
* Revenue of $166.5 million, a decrease of 30% or $69.8 million from $236.3
million
* Excluding significant items, expenses of $184.1 million, a decrease of 11%
or $23.3 million from $207.4 million(1)
* Expenses of $192.0 million, a decrease of 9% or $19.3 million from $211.3
million
* Excluding significant items, loss per common share of $0.19 compared to
diluted EPS of $0.17(1)
* Excluding significant items, net loss of $14.3 million compared to net
income of $20.7 million (1)
* Net loss of $21.5 million compared to net income of $17.6 million
* Loss per common share of $0.27 compared to diluted EPS of $0.14
Year-to-Date Fiscal 2015 vs. Year-to-Date Fiscal 2014
(Nine months ended December 31, 2014 vs. Nine months ended December 31, 2013)
* Revenue of $648.3 million, an increase of 8% or $46.8 million from $601.5
million
* Excluding significant items, expenses of $607.4 million, an increase of 10%
or $54.6 million from $552.8 million(1)
* Expenses of $625.6 million, an increase of 10% or $56.7 million from $568.9
million
* Excluding significant items, diluted EPS of $0.20 compared to diluted EPS
of $0.29(1)
* Excluding significant items, net income of $30.5 million compared to net
income of $39.8 million (1)
* Net income of $15.0 million compared to net income of $26.1 million
* Diluted EPS of $0.05 compared to diluted EPS of $0.16
Financial Condition at End of Third Quarter Fiscal 2015 vs. Fourth Quarter
Fiscal 2014
* Cash and cash equivalents balance of $340.0 million, down $24.3 million
from $364.3 million
* Working capital of $422.2 million, a decrease of $47.2 million from $469.4
million
* Total shareholders' equity of $1.11 billion, down $60.7 million from $1.17
billion
* Book value per diluted common share of $8.63, down $0.42 from $9.05(3)
* On February 4, 2015, the Board of Directors approved a quarterly dividend
of $0.05 per common share payable on March 10, 2015 with a record date of
February 27, 2015
* On February 4, 2015, the Board of Directors also approved a cash dividend
of $0.34375 per Series A Preferred Share payable on March 31, 2015 with a
record date of March 20, 2015, and a cash dividend of $0.359375 per Series
C Preferred Share payable on March 31, 2015 to Series C Preferred
shareholders of record as at March 20, 2015
SUMMARY OF OPERATIONS
Corporate
* During the third quarter, the Company purchased 807,549 common shares under
the terms of its normal course issuer bid (NCIB) to bring the total
purchases to 1,186,249 for the fiscal year as of February 3, 2015
(1,071,749 common shares as of December 31, 2014)
* Subsequent to the quarter, the Company appointed Jefferies International
Ltd. as joint corporate broker
Capital Markets
* Canaccord Genuity led or co-led 34 transactions globally, raising total
proceeds of C$0.9 billion(4) during fiscal Q3/15
* Canaccord Genuity participated in 77 transactions globally, raising total
proceeds of C$6.2 billion(4) during fiscal Q3/15
* Significant investment banking transactions for Canaccord Genuity during
fiscal Q3/15 include:
+ £95.0 million for Ediston Property Investment Company PLC on the LSE
+ US$82.8 million for ORBCOMM, Inc. on the NASDAQ
+ C$80.0 million for AGT Food and Ingredients Inc. on the TSX
+ US$65.0 million for Histogenics Corporation on the NASDAQ
+ C$50.3 million for American Hotel Income Properties REIT on the TSX
+ C$45.9 million for Kinaxis Inc. on the TSX
+ C$45.0 million for NYX Gaming Group Limited on the TSX
+ £36.3 million for Mortgage Advice Bureau on AIM
+ £35.7 million for Chesnara PLC on the LSE
+ C$28.8 million for ProMedic Life Sciences Inc. on the TSX
+ £25.0 million for HICL Infrastructure Company Limited on the LSE
+ AUD$21.3 million for BSA Limited on the ASX
* In Canada, Canaccord Genuity participated in raising $270.9 million for
government and corporate bond issuances during fiscal Q3/15
* Canaccord Genuity generated advisory revenues of $22.6 million during
fiscal Q3/15, a decrease of $17.0 million or 43% compared to the same
quarter last year
* During fiscal Q3/15, significant M&A and advisory transactions included:
+ Agnico Eagle Mines Limited on its acquisition of Cayden Resources Inc.
+ The Co-operative Bank on the £157.5 million sale of Illius Properties
Limited to Salmon Real Estate Limited
+ Essar Power Canada Holdings Inc. on its US$65.0 million debt financing
+ EnterpriseDB on its sale to Peak Equity Partners, Milestone Partners,
and NewSpring Capital
+ Airclic Inc. on its sale to Descartes Systems Group
+ FranConnect on its majority recapitalization by Serent Capital
+ The Intertain Group Limited on its acquisition of Dumarca Group
Holdings PLC
+ IK Investment Partners on the acquisition of Exxelia Group from LBO
France
+ SunOpta Inc. on the C$37.5 million divestiture of its fibre and starch
business
+ Resources Prima Group Limited (formerly Sky One Holdings Limited) on
the acquisition of Energy Prima Pte. Limited
Canaccord Genuity Wealth Management (Global)
* Globally, Canaccord Genuity Wealth Management generated $59.6 million in
revenue in Q3/15
* Assets under administration in Canada and assets under management in the UK
& Europe and Australia were $31.3 billion at the end of Q3/15(3)
Canaccord Genuity Wealth Management (North America)
* Canaccord Genuity Wealth Management (North America) generated $28.3 million
in revenue and, after intersegment allocations, recorded a net loss of $1.8
million before taxes in Q3/15
* Assets under administration in Canada were $10.3 billion as at December 31,
2014, down 4% from $10.8 billion at the end of the previous quarter and up
8% from $9.5 billion at the end of fiscal Q3/14(3)
* Assets under management in Canada (discretionary) were $1.44 billion as at
December 31, 2014, up 4% from $1.39 billion at the end of the previous
quarter and up 35% from $1.07 billion at the end of fiscal Q3/14(3)
* As at December 31, 2014, Canaccord Genuity Wealth Management had 161
Advisory Teams(5), a decrease of one Advisory Team from September 30, 2014
and a decrease of two from December 31, 2013
Canaccord Genuity Wealth Management (UK & Europe)
* Wealth management operations in the UK & Europe generated $30.0 million in
revenue and, after intersegment allocations, and excluding significant
items, recorded net income of $4.7 million before taxes in Q3/15(1)
* Assets under management (discretionary and non-discretionary) were $20.3
billion (£11.2 billion) (3) as at December 31, 2014
Non-IFRS Measures
The non-International Financial Reporting Standards (IFRS) measures presented
include assets under administration, assets under management, book value per
diluted common share and figures that exclude significant items. Significant
items include restructuring costs, amortization of intangible assets,
impairment of goodwill and acquisition-related expense items, which include
costs recognized in relation to both prospective and completed acquisitions.
Book value per diluted common share is calculated as total common shareholders'
equity divided by the number of diluted common shares outstanding and,
commencing in Q1/14, adjusted for shares purchased under NCIB and not yet
cancelled, and estimated forfeitures in respect of unvested share awards under
share-based payment plans.
Management believes that these non-IFRS measures will allow for a better
evaluation of the operating performance of the Company's business and
facilitate meaningful comparison of results in the current period to those in
prior periods and future periods. Figures that exclude significant items
provide useful information by excluding certain items that may not be
indicative of the Company's core operating results. A limitation of utilizing
these figures that exclude significant items is that the IFRS accounting
effects of these items do in fact reflect the underlying financial results of
the Company's business; thus, these effects should not be ignored in evaluating
and analyzing the Company's financial results. Therefore, management believes
that the Company's IFRS measures of financial performance and the respective
non-IFRS measures should be considered together.
Selected financial information excluding significant items (1)
Three months Quarter- YTD -
ended Nine months ended
over- over -
December 31 December 31
quarter YTD
change change
(C$ thousands, except per 2014 2013 2014 2013
share and % amounts)
Total revenue per IFRS $166,471 $230,959 (27.9)% $648,298 $601,496 7.8%
Total expenses per IFRS 191,991 206,539 (7.0)% 625,585 568,919 10.0%
Significant items recorded
in Canaccord Genuity
Amortization of intangible 1,684 1,680 0.2% 5,132 5,040 1.8%
assets
Impairment of goodwill 4,535 - n.m. 4,535 - n.m.
Restructuring costs - - - - 5,486 (100.0)
%
Significant items recorded
in Canaccord Genuity
Wealth Management
Amortization of intangible 1,660 1,945 (14.6)% 6,124 5,585 9.7%
assets
Restructuring costs - - - 783 - n.m.
Significant items recorded
in Corporate and Other
Restructuring costs - - - 1,600 - n.m.
Total significant items 7,879 3,625 117.4% 18,174 16,111 12.8%
Total expenses excluding 184,112 202,914 (9.3)% 607,411 552,808 9.9%
significant items
Net (Loss) income before $ $28,045 (162.9)% $40,887 $48,688 (16.0)%
income taxes - adjusted (17,641)
Income taxes (recovery) - (3,388) 6,818 (149.7)% 10,377 8,917 16.4%
adjusted
Net (loss) income - $ $21,227 (167.1)% $30,510 $39,771 (23.3)%
adjusted (14,253)
(Loss) earnings per common $(0.19) $0.18 (205.6)% $0.21 $0.32 (34.4)%
share - basic, adjusted
(Loss) earnings per
common share - diluted, $(0.19) $0.17 (211.8)% $0.20 $0.29 (31.0)%
adjusted
(1) Figures excluding significant items are noRecent news on Canaccord Genuity
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