Jovian Reports Results for Second Quarter Fiscal 2013
TORONTO, Nov. 7, 2012 /CNW/ - Jovian Capital Corporation (TSX: JOV) ("Jovian") today released its results for the three and six months ended September 30, 2012. The current fiscal year consolidates the results of Hahn Investment Stewards & Company Inc. ("Hahn"), which Jovian acquired control of on March 31, 2012, by increasing its equity interest to 70% from 50%; prior to that date, Jovian accounted for its investment in Hahn under the equity method.
Q2 Fiscal 2013 Highlights
- Revenues of $12.1 million, a 27% increase from the $9.5 million revenue from continuing operations recorded in Q2 fiscal 2012, primarily resulting from a $3.3 million swing in principal trading revenues partially offset by reduced investment banking revenues.
- EBITDA and Adjusted EBITDA (EBITDA net of share based compensation expense) of $(0.7) million versus $(3.0) and $(2.9) million, respectively, in the comparable quarter in fiscal 2012.
- Loss from continuing operations of $1.3 million, or ($0.13) per diluted share, compared to a loss from continuing operations of $3.6 million, or ($0.40) per diluted share, in Q2 fiscal 2012.
- Net loss of $1.3 million, or ($0.13) per diluted share, compared to net loss (including from discontinued operations) of $5.6 million, or ($0.62) per share in Q2 fiscal 2012.
- Client assets (exclusive of discontinued operations) of $6.4 billion as at September 30, 2012, a 5% increase from $6.1 billion as at September 30, 2011 and 3% increase from $6.2 billion as at June 30, 2012.
"Our top line results in the second quarter benefited from improved market conditions which boosted client assets under management and associated asset management fees as well as leading to modest principal trading revenues in our wealth management segment," said Philip Armstrong, C.E.O.
"Unfortunately, market volatility and uncertain macroeconomic issues continued to negatively impact investor confidence in equity markets, resulting in a continued depression of trading volumes and commissions and a reduction in investment banking revenues for our wealth management segment," added Mr. Armstrong.
"Across Jovian, revenue growth significantly outpaced the increase in expenses. The modest 4% increase in expenses was primarily due to costs incurred in our asset management segment to create value in our underlying businesses, notably Hahn and non-recurring professional fees," concluded Mr. Armstrong. "These extra expenses were offset though by a reduction in finance costs due to our decision in March to repay the entirety of our secured bonds and to repay half of our convertible debentures in October 2011."
Selected Financial Data (unaudited)
thousands of Canadian dollars except per
|Three months ended||Six months ended|
|Sept. 30/12||Sept. 30/11||Sept. 30/12||Sept. 30/11|
Compensation and Benefits, Management
and Investment Advisory Fees, and Other Operating expenses
|Adjusted EBITDA1 from continuing operations||(745)||(2,876)||(1,633)||(2,638)|
|Share-based Compensation Expense2||—||116||—||358|
|EBITDA1 from continuing operations||(745)||(2,992)||(1,633)||(2,996)|
|Loss from continuing operations||(1,291)||(3,596)||(3,937)||(5,088)|
|Loss from discontinued operations||
|Loss for the period||(1,291)||(5,555)||(3,937)||(8,663)|
Loss from continuing operations Per Share -
Basic & Diluted
|Loss Per Share - Basic & Diluted||$(0.13)||$(0.62)||$(0.41)||$(0.95)|
1 EBITDA and Adjusted EBITDA are non-IFRS performance measures utilized by Jovian. EBITDA is defined here as earnings before finance costs, taxes, depreciation and amortization, gains on sales and other income or expense, and share of profit or loss of equity accounted investees (net of income tax). Adjusted EBITDA is EBITDA adjusted for additional non-cash items.
2 For measurement purposes, share-based compensation expense, which is a non-cash item, is excluded from compensation and benefits expense in this table in order to determine Adjusted EBITDA.
Revenue from continuing operations for the three months ended September 30, 2012, was $12.1 million ($11.8 million exclusive of Hahn) compared to $9.5 million in the same three-month period last year. For the six months ended September 30, 2012, revenue from continuing operations was $25.7 million ($24.7 million exclusive of Hahn) versus $21.7 million in the comparable period last year. The increase in revenue for the quarter was largely attributable to improved market conditions, which led to increased assets under management ("AUM") and related fees for Jovian's asset management segment and a large improvement in principal trading revenues for Jovian's wealth management segment. Partially offsetting this increase were reductions in commission and fee revenues due to lower trading volumes and investment banking revenues, both in Jovian's wealth management segment.
Total net expenses from continuing operations were $13.4 million in Q2 fiscal 2013 ($12.7 million exclusive of Hahn), compared to $13.1 million in the corresponding quarter in fiscal 2012. For the six months ended September 30, 2012, total net expenses were $29.6 million ($28.1 million exclusive of Hahn) versus $26.8 million in the comparable period last year. The increase in expenses was primarily due to: the inclusion of Hahn in fiscal 2013's consolidated results; costs incurred to grow product lines and to promote T.E. Wealth's 40th anniversary; and a $1.5 million payment recorded in finance costs in the first quarter to the holder of Jovian's convertible debentures in lieu of adjustment to the conversion price, representing the return of capital the holder would have been entitled to receive if the holder had converted the debentures to common shares prior to the record date for the special cash distribution Jovian made to shareholders in the first quarter.
Adjusted EBITDA and EBITDA from continuing operations for the three months ended September 30, 2012, was negative $0.8 million (exclusive of Hahn, negative $0.3 million), compared to negative $2.9 and $3.0 million, respectively, during the three months ended September 30, 2011. For the six months ended September 30, 2012, adjusted EBITDA and EBITDA from continuing operations was negative $1.6 million (exclusive of Hahn, negative $1.1 million), versus negative $2.6 and $3.0 million respectively for the comparable period last year.
For the three and six months ending September 30, 2012, Jovian reported net losses from continuing operations of $1.3 million, or ($0.13) per diluted share, and $3.9 million or ($0.41) per diluted share. For the three and six months ending September 30, 2011, Jovian reported net loss from continuing operations of $3.6 million, or ($0.40) per diluted share, and $5.1 million or ($0.58) per diluted share.
Liquidity and Capital Resources
Cash and those investments considered highly liquid included in securities owned on the consolidated balance sheet were $55.0 million as at September 30, 2012, compared with $65.1 million as at June 30, 2012.
About Jovian Capital Corporation
Jovian acquires, creates and grows financial services companies specializing in two primary market segments: wealth management and asset management. The Jovian group of companies (MGI Securities Inc., MGI Securities (USA) Inc., T.E. Wealth, Leon Frazer & Associates Inc., Hahn Investment Stewards & Company Inc., JovFinancial Solutions Inc. and JovPortfolio Management) manages approximately $6.4 billion of client assets ($5.0 billion in assets under management and $1.4 billion in assets under administration). Additional information is available at www.joviancapital.com and www.sedar.com.
SOURCE: Jovian Capital CorporationFor further information:
Don Sangster, Investor Relations, Jovian Capital Corporation, (416) 933-5744; or
Philip Armstrong, C.E.O., Jovian Capital Corporation, (416) 933-5752.