- Reported mutual fund net sales of
$88 million for the fourth quarter, a$269 million improvement over prior year - Completed the sale of Smith & Williamson, receiving
$250.4 million in proceeds, resulting in a strengthened balance sheet, with$94 million in cash and no debt as atNovember 30, 2020 - Returned
$45.6 million to shareholders in the quarter through the completion of a substantial issuer bid and quarterly dividend payment - Reported diluted EPS of
$1.43 for the fourth quarter of 2020, including the gain on sale of Smith & Williamson - Adjusted diluted EPS was
$0.19 , including$0.08 from private alternatives
AGF’s mutual fund net sales totaled
“During this challenging year, we have been committed to demonstrating our value by remaining close to our clients, keeping the lines of communication open and providing valuable insights and resources to help them navigate the ever-changing market environment,” said
During 2020,
The Company used a portion of the proceeds from the sale of S&
AUM related to AGF’s private alternatives increased 8.9% to
“We could not have imagined the impact of the pandemic or prepared for the challenges of 2020,” said
“In 2021, we will continue to focus on organic growth and responding to evolving investor demands for trends like alternatives, sustainable investing and the shift to a vehicle agnostic approach,” added McCreadie.
Key Business Highlights:
- On
September 1, 2020 ,AGF sold its 28.0% interest in S&WHL achieving one of its key strategic goals in realizing the value of its long-term investment. The sale of S&WHL significantly improved the strength of the Company’s statement of financial position. As atNovember 30, 2020 ,AGF had$94 .0 million in cash and no debt on its statement of financial position, providing the financial strength and liquidity to execute on its future growth plans. - In
September 2020 ,AGF accelerated the firm’s commitment to private alternatives through an expanded partnership with theSAF Group . Early this year,AGF and SAF expect to bring to market offerings with varying liquidity and return profiles designed to meet the needs of its respective target segments of the investor market. This will include a direct lending private credit strategy with a focus on originating, structuring and lending to middle and lower middle market companies, primarily inCanada andthe United States . AGF and WaveFront Global Asset Management launched AGFWave to deliver investment management capabilities toChina andSouth Korea .AGF is a signatory to theUnited Nations supportedPrinciples for Responsible Investment (PRI) as a sustaining member of theResponsible Investment Association . In 2020,AGF reinforced its commitment to furthering responsible and sustainable investing practices across the organization with new dedicated investment management hires and a new industry membership focused on enhancing sustainability research.AGF aims to deliver consistent and repeatable investment performance with a target of 50% over one year and 40% over three years when looking at AGF’s mutual fund gross returns (before fees) relative to peers within the same category. As atNovember 30, 2020 , AGF’s average percentile over the past one year was 41% (above target) and the average percentile over the past three years was 53% (below target).- During 2020,
AGF received honours from the FundGrade A+® Awards,Lipper Fund Awards and Wealth Professional Awards.
For further information on AGF’s pandemic response plan statement visit AGF.com.
Financial Highlights:
- EBITDA before commissions for the three and twelve months ended
November 30, 2020 was$137.0 million and$251.1 million . EBITDA before commissions includes the pre-tax gain on sale of S&WHL of$104.4 million and the S&WHL special distribution received in Q3 2020 of$32.5 million . Adjusted EBITDA before commissions2 for the three and twelve months endedNovember 30, 2020 was$31.6 million and$113.2 million , compared to$35.8 million and$125.0 million in prior year comparative periods. - The Company received total cash from the sale of S&
WHL of$296.2 million , including$250.4 million in proceeds from the sale of S&WHL , net of currency hedge and excluding tax and one-time expenses, and interim dividends and a special distribution totaling$45.8 million . Net cash received on the sale, after tax and one-time item expenses, was$231.4 million , resulting in a gain on the transaction of$94.4 million . With proceeds fully received,AGF no longer has an interest in or association with S&WHL . - AGF’s interest in private alternative managers generated EBITDA of
$1.6 million and$2.9 million for the three and twelve months endedNovember 30, 2020 (2019 −$0.1 million and$0.3 million ). The increase includes$1.0 million of carried interest revenue recognized in the fourth quarter of 2020 related to one of AGF’s private alternative funds which has exceeded its performance threshold. - Selling, general and administrative costs were
$174.7 million for the twelve months endedNovember 30, 2020 , compared to$184.5 million (adjusted for IFRS 16) in 2019. The reduction in costs was attributable to the Company’s continued focus on cost control combined with lower travel and entertainment costs as a result of the ongoing pandemic. - Adjusted net income for the three and twelve months ended
November 30, 2020 was$15.0 million ($0.19 adjusted diluted EPS) and$46.0 million ($0.59 adjusted diluted EPS), compared to$19.4 million ($0.24 adjusted diluted EPS) and$56.7 million ($0.71 adjusted diluted EPS) in prior year comparative periods.
Three months ended | Years ended | ||||||||||||||
(in millions of Canadian dollars, except per share data) | 20201 | 20201 | 2019 | 20201 | 2019 | ||||||||||
Income | |||||||||||||||
Management, advisory, and administration fees | |||||||||||||||
and deferred sales charges | $ | 97.5 | $ | 94.9 | $ | 102.4 | $ | 380.7 | $ | 393.3 | |||||
Share of profit of joint ventures | 1.6 | 0.6 | 0.1 | 2.9 | 0.3 | ||||||||||
Share of profit of associate (S& | – | – | 7.8 | – | 24.6 | ||||||||||
Dividend income, net of currency | |||||||||||||||
hedge (S& | – | 41.3 | – | 45.8 | – | ||||||||||
Gain on sale of assets classified as held for sale, | |||||||||||||||
net of currency hedge (S& | 104.4 | – | – | 104.4 | – | ||||||||||
Fair value adjustments and other income | 5.9 | 1.9 | 4.2 | 10.1 | 18.5 | ||||||||||
Total Income | 209.4 | 138.7 | 114.5 | 543.9 | 436.7 | ||||||||||
Selling, general and administrative | 43.1 | 46.1 | 45.4 | 174.7 | 189.2 | ||||||||||
EBITDA before commissions2 | 137.0 | 62.6 | 38.7 | 251.1 | 110.0 | ||||||||||
Adjusted EBITDA before commissions2 | 31.6 | 30.1 | 35.8 | 113.2 | 125.0 | ||||||||||
Net income | 110.4 | 47.3 | 22.2 | 173.9 | 47.9 | ||||||||||
Adjusted net income2 | 15.0 | 14.8 | 19.4 | 46.0 | 56.7 | ||||||||||
Diluted earnings per share | 1.43 | 0.60 | 0.28 | 2.22 | 0.60 | ||||||||||
Adjusted diluted earnings per share2 | 0.19 | 0.19 | 0.24 | 0.59 | 0.71 | ||||||||||
Free cash flow2 | 9.9 | 15.5 | 18.3 | 46.1 | 52.8 | ||||||||||
Dividends per share | 0.08 | 0.08 | 0.08 | 0.32 | 0.32 | ||||||||||
Long-term debt | – | 194.3 | 207.3 | – | 207.3 |
(end of period) | Three months ended | Years ended | ||||||||||||||
(in millions of dollars) | 2020 | 2020 | 2019 | 2020 | 2019 | |||||||||||
Mutual fund Assets Under Management (AUM)3 | ||||||||||||||||
(including retail pooled funds) | $ | 20,322 | $ | 19,232 | $ | 19,346 | $ | 20,322 | $ | 19,346 | ||||||
Institutional, sub-advisory and ETF accounts AUM | 9,638 | 9,252 | 10,755 | 9,638 | 10,755 | |||||||||||
Private client AUM | 6,043 | 5,773 | 6,100 | 6,043 | 6,100 | |||||||||||
Private alternatives AUM4 | 2,810 | 2,755 | 2,580 | 2,810 | 2,580 | |||||||||||
Total AUM, including private alternatives AUM | 38,813 | 37,012 | 38,781 | 38,813 | 38,781 | |||||||||||
Net mutual fund sales (redemptions)3 | 88 | (22) | (181) | (371) | (886) | |||||||||||
Average daily mutual fund AUM3 | 19,487 | 18,879 | 19,015 | 18,804 | 18,908 | |||||||||||
1 | Refer to Note 3 in the 2020 Consolidated Financial Statements for more information on the adoption of IFRS 16. |
2 | 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. |
3 | Mutual fund AUM includes retail AUM, pooled fund AUM and institutional client AUM invested in customized series offered within mutual funds. |
4 | Represents fee-earning committed and/or invested capital from |
For further information and detailed financial statements for the fourth quarter and fiscal year ended
Conference Call
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/bnkee9rx. Alternatively, the call can be accessed toll-free in
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
Founded in 1957,
Senior Vice-President and Chief Financial Officer
416-865-4203, InvestorRelations@agf.com
Vice-President, Finance
416-865-4228, 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. 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
(1) Year-over-year improvement based on gross new money excluding money market funds.
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