REG-Canaccord Gen Grp: Canaccord Genuity Reports Record Annual Revenue <Origin Href="QuoteRef">CF.TO</Origin>

Canaccord GenuityAnnouncement

03/06/2015 07:00

CANACCORD GENUITY GROUP INC. REPORTS RECORD ANNUAL REVENUE FOR 2015

Excluding significant items, fourth quarter diluted earnings per share of $0.05
( 1 )

(All dollar amounts are stated in Canadian dollars unless otherwise indicated)

TORONTO, June 2, 2015 - During the quarter ended March 31, 2015, Canaccord
Genuity Group Inc. ('the Company' or 'Canaccord', TSX: CF, LSE: CF.) generated
$232.5 million in revenue.  Excluding significant items(1) (a non-IFRS
measure), the Company recorded net income of $8.8 million or net income of $4.9
million attributable to common shareholders( 2 ) ($0.05 per diluted common
share).  Including all expense items, on an IFRS basis, the Company recorded
net loss of $26.3 million or net loss attributable to common shareholders (2)
of $30.0 million (a loss per common share of $0.33).

During the fiscal year ended March 31, 2015, Canaccord generated $880.8 million
of revenue and, excluding significant items (1), recorded net income of $39.3
million or net income attributable to common shareholders (2) of $24.6 million
($0.25 per diluted common share). Including all expense items, on an IFRS
basis, the Company recorded net loss of $11.3 million or net loss of $25.1
million attributable to common shareholders (2) (a loss per common share of
$0.27).

"Despite a solid start to the fiscal year, a dramatic shift in global market
conditions reduced activity levels in our capital markets business, which
produced results below our expectations." said David Kassie, Chairman and CEO
of Canaccord Genuity Group Inc. "We have made significant efforts to address
our operating structure and fixed costs, to better position our business for
long-term, sustainable profitability in an evolving market."

Fiscal 2015 vs. fiscal 2014

12 months ended March 31, 2015 vs. 12 months ended March 31, 2014

·         Revenue of $880.8 million, an increase of 3% or $25.5 million from
$855.2 million

·         Excluding significant items, expenses of $827.5 million, an increase
of 7% or $56.9 million from $770.6 million(1)

·         Expenses of $886.4 million, an increase of 12.1% or $95.8 million
from $790.7 million

·         Excluding significant items, net income of $39.3 million compared to
net income of $68.8 million(1)

·         Net loss of $11.3 million, compared to a net income of $52.1 million

·         Excluding significant items, diluted earnings per common share (EPS)
of $0.25 compared to diluted EPS of $0.54 in fiscal 2014(1)

·         Loss per common share of $0.27 compared to a diluted EPS of $0.39 in
the prior year

FOURTH QUARTER FISCAL 2015 vs. FOURTH QUARTER FISCAL 2014

3 months ended March 31, 2015 vs. 3 months ended March 31, 2014

·         Revenue of $232.5 million, a decrease of 8% or $21.3 million from
$253.7 million

·         Excluding significant items, expenses of $220.0 million,  an increase
of 1% or $2.3 million from $217.8 million(1)

·         Expenses of $260.8 million, an increase of 17.6% or $39.1 million
from $221.7 million

·         Excluding significant items, net income of $8.8 million compared to
net income of $29.1 million(1)

·         Net loss of $26.3 million compared to a net income of $25.9 million

·         Excluding significant items, diluted EPS of $0.05 compared to $0.25
in the fourth quarter of 2014(1)

·         Loss per common share of $0.33 compared to a diluted EPS of $0.22

FOURTH QUARTER OF FISCAL 2015 vs. third quarter of fiscal 2015

3 months ended March 31, 2015 vs. 3 months ended December 31, 2014

·         Revenue of $232.5 million, an increase of 40% or $66.0 million from
$166.5 million

·         Excluding significant items, expenses of $220.0 million, an increase
of 20% or $35.9 million from $184.1 million(1)

·         Expenses of $260.8 million, an increase of 36% or $68.8 million from
$192.0 million

·         Excluding significant items, net income of $8.8 million compared to
net loss of $14.3 million(1)

·         Net loss of $26.3 million compared to net loss of $21.5 million

·         Excluding significant items, diluted EPS of $0.05 compared to loss
per common share of $0.19 in the third quarter of 2015(1)

·         Loss per common share of $0.33 compared to loss per common share of
$0.27 in the third quarter of 2015

Financial condition at end of fourth quarter 2015 vs. fourth quarter 2014

·         Cash and cash equivalents balance of $322.3 million, a decrease of
$42.0 million from $364.3 million

·         Working capital of $427.2 million, a decrease of $42.2 million from
$469.4 million

·         Total shareholders' equity of $1,117.5 million, a decrease of $51.2
million from $1,168.7 million

·         Book value per diluted common share for the period end was $8.71, a
decrease of 3.8 % or $0.34 from $9.05( 3 )

·         On June 2, 2015, the Board of Directors approved a quarterly dividend
of $0.05 per common share payable on July 2, 2015 to common shareholders with a
record date of June 19, 2015

·         On June 2, 2015, the Board of Directors also approved a cash dividend
of $0.34375 per Series A Preferred Share payable on June 30, 2015, with a
record date of June 19, 2015, and approved a cash dividend of $0.359375 per
Series C Preferred Share payable on June 30, 2015, with a record date of June
19, 2015

SUMMARY OF OPERATIONS FOR THE QUARTER

Corporate

  * During the fourth quarter, the Company purchased 125,900 common shares
    under the terms of its normal course issuer bid (NCIB) to bring the total
    purchases to 1,197,649 common shares for fiscal 2015
  * In February of 2015, the company announced a planned workforce reduction of
    4% in its global capital markets business
  * On April 1, 2015, Paul Reynolds, President & CEO of Canaccord Genuity Group
    Inc. passed away following a medical emergency in late March 2015. The
    Board of Directors appointed David Kassie as CEO of the Company. Mr. Kassie
    will now serve as Chairman & CEO of Canaccord Genuity Group Inc.

Capital Markets

 DEL:·:DEL          During fiscal Q4/15 Canaccord Genuity led or co-led 24
transactions globally, raising total proceeds of C$1.6 billion( 4 )

·         Canaccord Genuity participated in 74 transactions globally, raising
total proceeds of C$9.1 billion(4)  during fiscal Q4/15

·         Significant investment banking transactions for Canaccord Genuity
during fiscal Q4/15 include:

  *        C$483.0 million for The Intertain Group Limited subscription
    receipts on the TSX
  *        C$299.3 million for Yamana Gold Inc. on the TSX
  *        AUD$132.0 million for Donaco International Limited on the ASX
  *        £102.3 million for The Renewables Infrastructure Group on the LSE
  *        £92.0 million for Eurocell PLC on the LSE
  *        US$86.8 million for Neovasc Inc. on NASDAQ
  *        US$65.0 million for Avinger, Inc. on NASDAQ
  *        US$60.0 million for QAD Inc. on NASDAQ
  *        AUD$51.3 million for Affinity Education Group Limited on the ASX
  *        AUD$40.0 million for Orocobre Limited on the ASX
  *        US$37.0 million for Aeterna Zentaris on NASDAQ
  *        AUD$25.0 million for Nanosonics Limited on the ASX

·         Canaccord Genuity generated advisory revenues of $40.3 million during
fiscal Q4/15 and $151.2 million during fiscal 2015

·         During fiscal Q4/15, significant M&A and advisory transactions
included:

  *        The Intertain Group Limited on their issuance of US$352.3 million in
    senior secured credit facilities
  *        The Intertain Group Limited on their £425.8 million acquisition of
    Jackpotjoy
  *        Stirling Square Capital Partners on the sale of Whittan Storage
    Systems to Bregal Capital
  *        PhotoMedex, Inc. on its sale of its LCA-Vision, Inc. subsidiary
  *        World Energy Solutions, Inc. on its sale to EnerNOC, Inc.
  *        H.I.G. European Capital Partners on the acquisition of Adelie Foods
  *        Distect Controls Inc. on their sale to Acuity Brands Inc.
  *        Mecom Group PLC on their sale to De Persgroep Publishing N.V.
  *        NH Ceramics on the acquisition of BlackGold Asia Resources Pte. Ltd
    and BlackGold Energy Limited
  *        Bridgepoint on their acquisition of ASK Italian and Zizzi for £250.0
    million
  *        Cerba European Lab SAS on their acquisition of Novescia SAS

Canaccord Genuity Wealth Management (Global)

·         On a global basis, Canaccord Genuity Wealth Management generated
revenue of $70.6 million in Q4/15

·         Total assets under administration(3) in Canada, and assets under
management(3) in the UK, Europe and Australia, were $33.3 billion at the end of
fiscal Q4/15

Canaccord Genuity Wealth Management (North America)

·         Canaccord Genuity Wealth Management generated $33.1 million in
revenue and recorded a net loss before taxes of $1.3 million in Q4/15

·         Assets under administration(3) in Canada were $10.7 billion, an
increase of 4% from $10.3 billion at the end of Q3/15 and increase of  6% from
$10.2 billion at the end of Q4/14

·         Assets under management (3) in Canada (discretionary) were $1.6
billion, an increase of 8% from $1.4 billion at the end of Q3/15 and an
increase of 30% from $1.2 million at the end of Q4/14

·         As at March 31, 2015, Canaccord Genuity Wealth Management had 152
Advisory Teams( 5 ),  a decrease of eight Advisory Teams(5) from March 31, 2014
and a decrease of nine from December 31, 2014

·         Canaccord Genuity Wealth Management has 16 offices across Canada,
including eight operating on the Independent Wealth Management (IWM) platform

Canaccord Genuity Wealth Management (UK and Europe)

·         Wealth management operations in the UK and Europe generated $35.7
million in revenue and, excluding significant items, recorded net income of
$7.1 million before taxes (1) in Q4/15

·         Assets under management (discretionary and non-discretionary) (3)
were $21.8 billion (£11.6 billion), an increase of 7% from $20.3 billion (£11.2
billion) at the end of Q3/15 and an increase of 8% from $20.2 billion (£10.9
billion) at the end of Q4/14


 

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 the 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 Canaccord Genuity Group Inc.'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 Canaccord Genuity Group'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 Canaccord Genuity Group's business; thus, these effects should not
be ignored in evaluating and analyzing Canaccord Genuity Group's financial
results. Therefore, management believes that Canaccord Genuity Group's IFRS
measures of financial performance and the respective non-IFRS measures should
be considered together.

Selected financial information excluding significant items

                                  Three months ended  Quarter-over- For the years ended YTD -   
                                       March 31       quarter            March 31       over -  
                                                      change                            YTD     
(C$ thousands, except per share   2015      2014                    2015      2014      change  
and % amounts)                                                                                  
                                                                                                
   Total revenue per IFRS          $232,465  $253,748        (8.4)%  $880,763  $855,244     3.0%
                                                                                                
   Total expenses per IFRS          260,835   221,737         17.6%   886,420   790,656    12.1%
                                                                                                
Significant items recorded in                                                                   
Canaccord Genuity                                                                               
                                                                                                
Restructuring costs                  20,997         -          n.m.    20,997     5,486   282.7%
                                                                                                
Amortization of intangible assets     1,691     1,702        (0.6)%     6,823     6,742     1.2%
                                                                                                
  Impairment of goodwill             10,000         -          n.m.    14,535         -     n.m.
                                                                                                
Significant items recorded in                                                                   
Canaccord Genuity Wealth                                                                        
Management                                                                                      
                                                                                                
  Amortization of intangible          1,467     2,256       (35.0)%     7,591     7,841   (3.2)%
assets                                                                                          
                                                                                                
  Restructuring costs                     -         -             -       783         -     n.m.
                                                                                                
Significant items recorded in                                                                   
Corporate and Other                                                                             
                                                                                                
Restructuring costs                   1,433         -          n.m.     3,033         -     n.m.
                                                                                                
Development costs                     5,200         -          n.m.     5,200         -     n.m.
                                                                                                
       Total significant items       40,788     3,958          n.m.    58,962    20,069   193.8%
                                                                                                
   Total expenses excluding         220,047   217,779          1.0%   827,458   770,587     7.4%
significant items                                                                               
                                                                                                
   Net income before tax -           12,418    35,969       (65.5)%    53,305    84,657  (37.0)%
adjusted                                                                                        
                                                                                                
   Income taxes - adjusted            3,598     6,894       (47.8)%    13,975    15,811  (11.6)%
                                                                                                
   Net income- adjusted              $8,820   $29,075       (69.7)%   $39,330   $68,846  (42.9)%
                                                                                                
   EPS - basic, adjusted              $0.05     $0.28       (82.1)%     $0.27     $0.59  (54.2)%
                                                                                                
   EPS - diluted, adjusted            $0.05     $0.25       (80.0)%     $0.25     $0.54  (53.7)%

ACCESS TO QUARTERLY RESULTS INFORMATION

Investors, the media and others may review this quarterly earnings release and
supplementary financial information at http://www.canaccordgenuitygroup.com/EN/
IR/Pages/default.aspx.

CONFERENCE CALL AND WEBCAST PRESENTATION

Interested parties are invited to listen to Canaccord Genuity Group Inc.'s
fourth quarter and fiscal 2015 results conference call via a live webcast or a
toll free number. The conference call is scheduled for Wednesday, June 3, at 5:
00 a.m. (Pacific Time), 8:00 a.m. (Eastern Time), 1:00 p.m. (UK Time), 8:00
p.m. (China Standard Time), and 10:00 p.m. (Australia EST Time). At that time,
senior executives will comment on the results for the fourth quarter and fiscal
2015 year and respond to questions from analysts and institutional investors.

The conference call may be accessed live and archived on a listen-only basis
via the Internet at: http://www.canaccordgenuitygroup.com/EN/NewsEvents/Pages/
Events.aspx

Analysts and institutional investors can access the call in via telephone at:

·         647-427-7450 (within Toronto)

·         1-888-231-8191 (toll free in North America)

·         0-800-051-7107 (toll free from the UK)

·         1-800-760-620 (toll free from Ireland)

·         0-800-917-449 (toll free from France)

·         0-800-183-0171 (toll free from Germany)

·         10-800-714-1191 (toll free from Northern China)

·         10-800-140-1195 (toll free from Southern China)

·         1-800-287-011 (toll free from Australia)

Please request to participate in Canaccord Genuity Group Inc's Q4/15 earnings
call. If a passcode is requested, please use 44666694.

A replay of the conference call will be available on June 3, 2015, after 8:00
a.m. (Pacific Time), 11:00 a.m. (Eastern