TORONTO, Feb. 27 /CNW/ - GMP Capital Trust (the "Fund" or "GMP") today
reported revenue of $291.9 million in fiscal 2008, representing a
year-over-year decrease of 38%. Net income was $26.2 million, a decrease of
82% compared with fiscal 2007, generating a return on unitholders' equity
("ROE") of 9.8% for the year. Distributable cash was $55.7 million ($0.91 per
basic unit) in fiscal 2008, down from $171.7 million ($2.73 per basic unit) in
fiscal 2007.
The financial crisis sweeping the capital markets during 2008 intensified
during fourth quarter 2008, resulting in significant equity market volatility
which led to sudden broad-based declines in equity valuations and a sharp
contraction in overall business activity. Against this backdrop, the Fund
reported a net loss in fourth quarter 2008. Revenue was $33.8 million,
representing a 67% decline from the same period a year ago. The net loss for
the quarter was $17.5 million ($0.29 per basic unit) compared with net income
of $23.8 million ($0.38 per basic unit) in fourth quarter 2007. Distributable
cash was negative $5.4 million or negative $0.09 per basic unit in fourth
quarter 2008 compared with $29.3 million ($0.46 per basic unit) in the same
period last year.
Fourth quarter results were impacted by the following items, which in the
aggregate represent $17.0 million in after-tax losses or a loss of $0.28 per
basic unit:- $13.4 million in losses related to principal activities, $9.9 million
of which was unrealized. $3.9 million of the unrealized losses arose
from the Fund's investment in the GMP Diversified Alpha Fund (the
"Alpha Domestic Fund") which the Fund intends to hold for the long
term. The bulk of fourth quarter 2008 losses occurred in October with
75% of the losses in principal activities occurring in that month. It
is probable that we will see a recovery in certain of these
valuations as market pricing and liquidity start to improve. As at
the date hereof, the fair value of net security positions held
relating to principal activities in the Capital Markets segment was
$4.9 million;
- a $0.8 million restructuring charge in connection with the
elimination of 37 positions across Capital Markets and Wealth
Management announced during fourth quarter 2008;
- a $9.8 million non-cash goodwill impairment charge relating to
previously recognized goodwill recorded in connection with the
EdgeStone acquisition in July 2006. This writedown, which was driven
primarily by adverse equity market conditions that caused a decrease
in current market multiples and valuations of comparable entities as
at December 31, 2008, had no impact on the Fund's strategy, day-to-
day operations, liquidity or debt covenants; and
- a dilution gain of $5.2 million recorded following the offering of
Preferred Security Units on December 18, 2008. The net proceeds from
the issuance of the preferred limited partnership units by GMP
Preferred L.P., a newly-formed entity of the Fund, were used by GMP
Preferred L.P. to subscribe for equity of GMP Holding Partnership, a
subsidiary of the Fund. Such issuance of equity by GMP Holding
Partnership diluted the Fund's equity ownership interest in GMP
Holding Partnership from 100% to 86.87%. Since GMP Preferred L.P. is
a variable interest entity which has not been recorded on the
Fund's balance sheets, the Fund is considered to have disposed of
approximately 13.13% of its interest in GMP Holding Partnership,
resulting in a dilution gain of $5.2 million.Elevated facilitation losses were experienced in fourth quarter 2008,
with facilitation losses of 56% of gross commission revenue reported compared
with 24% in the same period a year ago. The Fund made a conscious effort to
continue to support the trading needs of its clients in a difficult market,
resulting in higher-than-normal facilitation losses. As market conditions
worsened, particularly in the month of October 2008, the Fund reduced the
amount of capital deployed in its facilitation trading in the latter part of
fourth quarter 2008, with losses averaging 10% of gross commissions generated
in the last two months of fourth quarter 2008.
"Fiscal 2008, and particularly fourth quarter 2008, will undoubtedly be
remembered as one of the most challenging times that financial services
industry participants have ever experienced. Our fourth quarter 2008 results
were clearly affected by the severity of this financial crisis. When it became
clear to us that revenue for the financial services industry would come under
prolonged and sustained downward pressure, we responded in a decisive manner.
As a result, in fourth quarter 2008, we focused our priorities on managing our
risk exposures, implementing several cost savings initiatives and maintaining
a strong balance sheet," said Kevin Sullivan, CEO, GMP Capital Trust. "It is
through the efforts of all the professionals at GMP that, despite the
financial crisis gripping our industry, we were able to produce positive
returns in fiscal 2008 for our unitholders."FINANCIAL HIGHLIGHTS
Fiscal 2008 versus Fiscal 2007
- Revenue of $291.9 million, down 38%
- Net income of $26.2 million, down 82%
- Earnings per basic unit of $0.43, down 82%
- ROE of 9.8% compared with 48.9%
- Distributable cash of $55.7 million ($0.91 per basic unit), down 68%
from $171.7 million ($2.73 per basic unit)
- Payout ratio of 153.9%, up from 80.3%
Fourth Quarter 2008 versus Fourth Quarter 2007
- Revenue of $33.8 million, down 67%
- Net loss of $17.5 million compared with net income of $23.8 million
- Net loss per basic unit of $0.29 compared with earnings per basic
unit of $0.38
- Annualized ROE of negative 29.6% compared with positive 31.1%
- Distributable cash of negative $5.4 million ($0.09 per basic unit)
compared with $29.3 million ($0.46 per basic unit)For further information about GMP Capital Trust, our results for fiscal
2008 and the meaning of certain references, this press release should be read
in conjunction with our 2008 Annual Financial Statements and the Fund's
Management's Discussion and Analysis for the year ended December 31, 2008,
which can be accessed on our website at gmpcapitaltrust.com and on SEDAR at
sedar.com.
As part of the Fund's overall expense management initiative, the Fund
closely examined its operating structure and initiated a comprehensive
firm-wide review of all operating expenses. In November 2008, the Fund
eliminated 37 positions and implemented a 10% fixed salary reduction for
certain senior level positions. These initiatives, together with initiatives
to lower technology costs, travel and other discretionary expenses, are
designed to reduce the Fund's operating expenses and are expected to yield
annual pre-tax savings of approximately $5 million.
In addition, in light of the current environment, the Fund undertook
several initiatives to enhance its capital position leading into 2009. On
December 18, 2008, the Fund completed a preferred security unit offering,
privately placing 6.154 million preferred security units, which raised gross
proceeds of $40.0 million and, in conjunction with the Fund's decision to
convert from an income trust to a corporation, the Board of Trustees decided
to temporarily suspend monthly cash distributions following the February 2009
distribution payable on March 20, 2009, to unitholders of record on February
27, 2009. These decisions provide GMP with additional financial flexibility to
weather the current financial crisis while at the same time positioning us
well to capitalize on the opportunities we believe may arise from the
structural changes facing the industry.
CONVERSION
GMP also announced today that its Board of Trustees approved a proposal
to convert the Fund from an income trust to a growth-oriented, dividend paying
corporation (the "Conversion"). The Conversion is expected to provide the Fund
with the necessary financial flexibility to create value for its stakeholders
while allowing prudent retention of capital during these uncertain economic
times.
"The Conversion is a prudent response to the constraints facing publicly
traded income trusts and provides a number of compelling and strategic
benefits, including the flexibility to retain more of our cash flow allowing
us to better weather the current market conditions and grow our business; the
ability to reposition GMP as a growth-oriented company; and the creation of a
permanent structure through which we can more effectively access the capital
markets," said Kevin Sullivan, CEO, GMP Capital Trust.
Under the current trust structure the Fund is unable to retain sufficient
capital to fund future growth initiatives and has fewer tools at its disposal
to weather the prolonged financial crisis. Management also believes that the
value of the Fund's current distribution yield is no longer reflected in the
Fund's unit price, as the market has moved away from yield and towards book
value as a key metric for deriving the value of financial services companies.
On the Conversion, it is currently contemplated that unitholders would
receive, for each Fund unit or Exchangeable L.P. unit held, one common share
of the new public corporation. Holders of Preferred L.P. Units are expected to
receive an equal number of preferred shares of the new public corporation
having substantially the same terms, including a cumulative, preferred
dividend at a rate of 10% of the issue price of a Preferred L.P. Unit per
annum. Each warrant issued in connection with the Preferred L.P. Unit offering
will be exercisable for one common share of the new public company at a price
of $6.50. It is expected that the Conversion will be completed on a tax-free,
rollover basis for Canadian income tax purposes.
The Conversion is subject to unitholder, Toronto Stock Exchange, court,
regulatory and other approvals and will be undertaken pursuant to a plan of
arrangement under applicable corporate legislation. A special meeting of
unitholders will be held in conjunction with the Fund's annual general meeting
on May 8, 2009. Unitholders of record on March 17, 2009, will be entitled to
vote on the Conversion at the meeting with the closing expected to occur
mid-May 2009.
DIVIDEND POLICY
GMP's philosophy has always been to return excess capital back to its
stakeholders. The Board of Trustees will adopt a quarterly dividend policy
upon completion of the Conversion. While the Board of Trustees currently
anticipates a quarterly dividend of $0.05 per share, they will assess the
final dividend payout level in light of GMP's financial performance and its
current and anticipated business needs at that time.
BOARD RECOMMENDATION
The Board of Trustees and senior management concluded that the Conversion
is in the best interest of its unitholders and believe the Conversion is the
most prudent response to the challenges facing GMP. In reaching its
conclusions, the Board of Trustees has considered a number of factors
including, among others, that:- the Conversion will provide GMP with much more flexibility regarding
the growth and retention of its capital;
- commencing in 2011, the tax savings to GMP from distributions to
unitholders will be eliminated as a consequence of the Canadian
Federal Government's October 31, 2006, announcement relating to the
taxation of income trusts and subsequent legislation implementing
these proposals, thereby removing the primary benefit of the income
trust structure;
- the Board of Trustees believes a corporate structure will enhance
GMP's access to capital;
- the value of the Fund's current distribution yield is no longer
reflected in the Fund's unit price;
- the significant declines in trading valuations for securities of
income trusts after the government's announcement has made
acquisitions on an accretive basis more difficult; and
- following the Conversion, GMP will be better positioned to facilitate
its future growth plans should the current market and industry
environment remain challenging.
FISCAL 2008 BUSINESS HIGHLIGHTS
CAPITAL MARKETS
- ranked second in Canada for block trading volumes on the TSX,
achieving a 8.9% market share;(1)
- led or co-led 37 common equity underwritings in Canada raising
approximately $1.6 billion;(2)
- ranked sixth among Canadian investment dealers in the dollar value of
common equity underwriting;(2)
- acted as financial advisor on 16 announced M&A transactions in Canada
with a total dollar value of US$3.5 billion;(3)
- reorganized investment banking teams in Calgary and Toronto to better
position them to take advantage of opportunities as they arise from
the transformation of the competitive landscape; and
- obtained Financial Services Authority approvals, for GMP Europe as a
"Limited Activity Firm"; and opened a new office in London, England
allowing GMP Europe to more effectively serve our European clients.
----------------------------------
(1) Source: CanadaEquity.com as at February 4, 2009.
(2) Source: FPinformart as at February 4, 2009.
(3) Source: Bloomberg as at February 4, 2009. Data contains announced
transactions based in Canada in the specified period; includes target
or seller and acquirer.
WEALTH MANAGEMENT
- was the first investment dealer in Canada and among the first
globally to be certified for fiduciary excellence in the Investment
Manager category by CEFEX, Centre for Fiduciary Excellence;
- ranked first by its investment advisors in the Investment Executive's
Brokerage Report Card for 2008;
- launched its wealth management operation in the province of Quebec
with the opening of a new Montreal office;
- ended the year with AUA of $3.4 billion, down $1.0 billion or 23%
from 2007 compared with a 35% drop in the S&P/TSX Composite Index
over the same period;
- continued to invest in its technology platform with the signing of an
agreement with Toogood Financial Systems Inc. to provide a robust and
leading class financial system for portfolio management, performance
measurement, modeling, trade order management, and client reporting;
and
- hired five new investment advisory teams, with 40 advisory teams in
place as at December 31, 2008.
ALTERNATIVE INVESTMENTS
EdgeStone
- focused on optimizing the revenue generating capabilities, operating
costs and capital structures of all its portfolio companies, to
better position them to take advantage of opportunities that are
anticipated to present themselves in 2009;
- invested $102.9 million in 11 portfolio companies;
- commenced fund raising for Venture Fund III, with early success; and
- earned management fees or received general partner distributions on
total capital of $1.1 billion as at December 31, 2008.
GMP Investment Management
- launched the GMP Diversified Alpha Fund on April 2, 2008; and
- reported $157.8 million of assets under management as at December 31,
2008.FOURTH QUARTER 2008 VERSUS FOURTH QUARTER 2007
The financial crisis sweeping the markets intensified during fourth
quarter 2008 resulting in significant equity market volatility which led to
sudden broad-based declines in equity valuations. As a result, fourth quarter
2008 revenue of $33.8 million was $67.6 million or 67% less than the same
period a year ago, primarily due to lower revenue in our Capital Markets
businesses. Capital Markets revenue decreased $60.9 million (or 75%) compared
with fourth quarter 2007, largely due to declines in investment banking
revenue, lower sales and trading commission revenue and unrealized losses
related to principal activities. In Wealth Management, revenue decreased $3.9
million or 26% reflecting lower commission revenue. In Alternative
Investments, revenue decreased $2.9 million due primarily to unrealized losses
arising from the Fund's investment in the Alpha Domestic Fund.
Expenses decreased $24.1 million or 32% compared with fourth quarter
2007. Employee compensation and benefits expenses decreased $23.9 million
primarily due to lower variable compensation expense which declined $25.5
million commensurate with business performance. This decline was partly offset
by higher Fund unit-based compensation reflecting the implementation of a new
retention program during third quarter 2008. Savings of $0.8 million were
recorded in fixed salaries and benefits expense in fourth quarter 2008 as a
result of the restructuring announced in early fourth quarter 2008, which
offset the restructuring charge of $0.8 million recorded in connection with
that same announcement.
Net income in fourth quarter 2008 was affected by the following non-cash,
non-taxable items:i. a $9.8 million non-cash goodwill impairment charge in fourth quarter
2008 relating to its acquisition of EdgeStone; and
ii. a $5.2 million dilution gain recorded in conjunction with the Fund's
preferred unit offering in December 2008.The Fund recorded a net loss of $17.5 million ($0.29 per basic unit) for
fourth quarter 2008 compared with net income of $23.8 million ($0.38 per basic
unit) in fourth quarter 2007. Distributable cash was negative $5.4 million
($0.09 per basic unit) in fourth quarter 2008 compared with positive cash of
$29.3 million ($0.46 per basic unit) in fourth quarter 2007. Cash declared
were $9.6 million in fourth quarter 2008 compared with $25.7 million in fourth
quarter 2007, excluding the special distribution of $0.65 per Fund unit
declared to unitholders of record on December 31, 2007.BUSINESS SEGMENT FINANCIAL PERFORMANCE
FOURTH QUARTER 2008 VERSUS FOURTH QUARTER 2007
-------------------------------------------------------------------------
CAPITAL MARKETS
-------------------------------------------------------------------------Capital Markets was the business segment most affected by the
intensification of the financial crisis during fourth quarter 2008. Total
revenue of $20.4 million decreased $60.9 million or 75% compared with the same
period a year ago.
Investment banking revenue decreased $33.6 million or 68% to $16.1
million compared with fourth quarter 2007. Equity underwriting revenue of
$13.4 million was $24.9 million lower than fourth quarter 2007. During fourth
quarter 2008, GMP Securities led or co-led eight common equity transactions,
down 56% from fourth quarter 2007 and ranked sixth for the total dollar value
of common equity transaction completed in Canada. According to FPInfomart,
there were 85 common equity transactions completed in Canada in fourth quarter
2008 compared with 308 transactions in the same period a year ago. M&A revenue
of $2.7 million for fourth quarter 2008 was $8.7 million lower than the same
period last year.
Sales and trading commissions decreased $18.1 million or 69% compared
with the same period last year reflecting a decrease in client trading volumes
resulting from challenging markets and a shift in trading towards larger
capitalization stocks, which is not a traditional area of strength for GMP.
Also contributing to the decrease was higher than normal client facilitation
trading losses as a result of the relatively illiquid and volatile equity
markets which prevailed during fourth quarter 2008. GMP Securities ranked
number six in equity block trading volume on the TSX in fourth quarter 2008,
achieving a market share of 6.7%, down from 9.8% in the same period a year
ago.
Losses of $9.5 million were recorded in principal activities which were
adversely affected by the broad-based declines in security values this
quarter.
Expenses of $29.2 million decreased $21.1 million or 42% compared with
fourth quarter 2007 largely due to lower variable compensation commensurate
with decreased business activity. Non-compensation expenses were largely
unchanged from the same period a year ago.
Capital Markets recorded an operating deficit of $8.8 million for fourth
quarter 2008 compared with operating earnings of $31.0 million in fourth
quarter 2007.-------------------------------------------------------------------------
WEALTH MANAGEMENT
-------------------------------------------------------------------------Fourth quarter revenue of $10.9 million decreased $3.9 million or 26%
compared with fourth quarter 2007 reflecting reduced client transaction
volumes given the challenging financial markets. AUA decreased by $1.0 billion
compared with fourth quarter 2007 and ended the year at $3.4 billion.
Expenses of $12.7 million were $2.0 million or 14% lower compared with
fourth quarter 2007. Employee compensation and benefits expenses decreased
$1.1 million compared with the same period a year ago largely reflecting lower
variable compensation commensurate with business performance. This decrease
was partly offset by higher fixed salaries and benefits resulting from
additional administrative staff in support of the increased number of
investment advisors. Non-compensation related expenses decreased $0.9 million
compared with a year ago due mainly to lower client-related interest expense
primarily as a result of lower interest rates compared to fourth quarter 2007
and lower business development costs which were partly offset by higher
transactional related charges and higher professional fees.
Wealth Management reported an operating deficit of $1.7 million for
fourth quarter 2008 compared with operating earnings of $0.2 million in fourth
quarter 2007.-------------------------------------------------------------------------
ALTERNATIVE INVESTMENTS
-------------------------------------------------------------------------Fourth quarter 2008 revenue decreased $2.9 million to $3.4 million
compared with the same period a year ago primarily due to an unrealized loss
of $3.9 arising from the Fund's investment in the Alpha Domestic Fund partly
offset by incremental investment management and fee revenue associated with
GMP Investment Management.
Expenses of $5.1 million increased $0.8 million compared with fourth
quarter 2007 largely reflecting the additional staff and infrastructure costs
in support of the launch of GMP Investment Management.
Alternative Investments reported an operating deficit of $1.7 million
compared with operating earnings of $1.9 million in fourth quarter 2007.--------------------- ---------------------
FINANCIAL HIGHLIGHTS
($ 000, unless
otherwise noted) Q4/08 Q4/07 2008 2007
--------------------- ---------------------
--------------------- ---------------------
Selected Financial Highlights
Revenue 33,845 101,476 291,942 473,902
Expenses 50,430 74,578 261,200 308,475
lncome/(loss) before
income taxes (19,794) 26,472 25,520 163,491
Net lncome/(loss) (17,500) 23,816 26,178 146,139
Total assets 873,599 1,098,869 873,599 1,098,869
Total liabilities 628,266 806,761 628,266 806,761
Total unitholders' equity 211,835 289,509 211,835 289,509
Book value per unit
(period end) 3.36 4.52 3.36 4.52
Total headcount (No.) 423 420 423 420
--------------------- ---------------------
--------------------- ---------------------
Financial Measures
Basic earnings/(loss) per
unit (0.29) 0.38 0.43 2.32
Diluted earnings/(loss)
per unit (0.27) 0.37 0.41 2.28
Return on equity(1) -29.6% 31.1% 9.8% 48.9%
Distributable cash(1) (5,427) 29,259 55,688 171,727
Cash distributions declared 9,609 67,244 85,715 137,892
Special cash distributions
declared per unit - 0.65 - 0.65
Regular cash distributions
declared per unit 0.150 0.405 1.338 1.530
Distributable cash per
basic unit(1) (0.09) 0.46 0.91 2.73
Distributable cash per
diluted unit(1) (0.08) 0.45 0.87 2.68
Payout ratio(1,2) -177.1% 229.8% 153.9% 80.3%
--------------------- ---------------------
--------------------- ---------------------
Client Assets
Assets under management(1) 1,290,810 1,166,000 1,290,810 1,166,000
Assets under
administration(1) 3,420,000 4,393,000 3,420,000 4,393,000
--------------------- ---------------------
--------------------- ---------------------
Market Information
Closing Fund unit price
(TSX: GMP.UN) 5.07 24.30 5.07 24.30
Distribution yield(3) 11.7% 6.6% 26.4% 6.3%
Market capitalization(4) 319,714 1,554,933 319,714 1,554,933
--------------------- ---------------------
--------------------- ---------------------
Unitholders' Capital (000)
Fund units, end of period 46,356 45,269 46,356 45,269
Exchangeable L.P. units,
end of period 16,704 18,720 16,704 18,720
Total units issued and
outstanding, end of period 63,060 63,989 63,060 63,989
Weighted-average number of
units - basic 60,946 63,321 60,932 62,929
Weighted-average number of
units - diluted 64,060 64,353 64,304 64,164
--------------------- ---------------------
(1) These represent non-GAAP measures. See the "Presentation of Financial
Information and Non-GAAP Measures" section of the 2008 Annual MD&A
for more information.
(2) Calculated as cash distributions declared divided by distributable
cash.
(3) Calculated as cash distributions declared per unit (annualized)
divided by closing market price per unit.
(4) Market capitalization includes Exchangeable L.P. units
GMP CAPITAL TRUST - UNAUDITED SEGMENT FINANCIAL RESULTS
For further details relating to segmented information see Note 26 to the
2008 Annual Financial Statements.
-------------------------------------------------------------------------
CAPITAL MARKETS
-------------------------------------------------------------------------
Fourth Fourth
Quarter Quarter
2008 2007
-------------------------------------------------------------------------
($000, except otherwise noted)
-------------------------------------------------------------------------
Revenue 20,394 81,325
-------------------------------------------------------------------------
Investment banking 16,059 49,638
-------------------------------------------------------------------------
Commission income 8,301 26,442
-------------------------------------------------------------------------
Principal activities (9,535) (51)
-------------------------------------------------------------------------
Interest income 2,402 4,192
-------------------------------------------------------------------------
Other income 3,167 1,104
-------------------------------------------------------------------------
Expenses 29,198 50,340
-------------------------------------------------------------------------
Employee compensation and benefits 18,043 39,492
-------------------------------------------------------------------------
Selling, general and administrative 10,066 9,363
-------------------------------------------------------------------------
Interest 412 1,021
-------------------------------------------------------------------------
Amortization 677 464
-------------------------------------------------------------------------
Operating earnings/(deficit) (8,804) 30,986
-------------------------------------------------------------------------
Total headcount (No.) 244 259
-------------------------------------------------------------------------
-------------------------------------------------------------------------
WEALTH MANAGEMENT
-------------------------------------------------------------------------
Fourth Fourth
Quarter Quarter
2008 2007
-------------------------------------------------------------------------
($000, except otherwise noted)
-------------------------------------------------------------------------
Revenue 10,950 14,886
-------------------------------------------------------------------------
Commission income 5,453 7,464
-------------------------------------------------------------------------
Investment management and fee income 3,480 4,046
-------------------------------------------------------------------------
Interest income 1,370 3,213
-------------------------------------------------------------------------
Other income 647 163
-------------------------------------------------------------------------
Expenses 12,697 14,702
-------------------------------------------------------------------------
Employee compensation and benefits 7,581 8,650
-------------------------------------------------------------------------
Selling, general and administrative 4,036 3,280
-------------------------------------------------------------------------
Interest 742 2,231
-------------------------------------------------------------------------
Amortization 338 541
-------------------------------------------------------------------------
Operating earnings/(deficit) (1,747) 184
-------------------------------------------------------------------------
Total headcount (No.) 136 123
-------------------------------------------------------------------------
Number of investment advisors (No.) 56 50
-------------------------------------------------------------------------
Number of advisory teams (No.) 40 35
-------------------------------------------------------------------------
Assets under administration ($millions) 3,420 4,393
-------------------------------------------------------------------------
-------------------------------------------------------------------------
ALTERNATIVE INVESTMENTS
-------------------------------------------------------------------------
Fourth Fourth
Quarter Quarter
2008 2007
-------------------------------------------------------------------------
($000, except otherwise noted)
-------------------------------------------------------------------------
Revenue 3,390 6,257
-------------------------------------------------------------------------
Investment management and fee income 6,297 5,844
-------------------------------------------------------------------------
Principal activities (3,853) -
-------------------------------------------------------------------------
Interest income 38 110
-------------------------------------------------------------------------
Other income 908 303
-------------------------------------------------------------------------
Expenses 5,134 4,308
-------------------------------------------------------------------------
Employee compensation and benefits 3,646 2,975
-------------------------------------------------------------------------
Selling, general and administrative 1,364 1,224
-------------------------------------------------------------------------
Interest 39 50
-------------------------------------------------------------------------
Amortization 85 59
-------------------------------------------------------------------------
Operating earnings/(deficit) (1,744) 1,949
-------------------------------------------------------------------------
Total headcount (No.) 44 38
-------------------------------------------------------------------------
-------------------------------------------------------------------------
CORPORATE
-------------------------------------------------------------------------
Inter-segment Enterprise-wide Total Corporate
-------------------------------------------------------------------------
Fourth Fourth Fourth Fourth Fourth Fourth
Quarter Quarter Quarter Quarter Quarter Quarter
2008 2007 2008 2007 2008 2007
-----------------------------------------------------
($000)
-------------------------------------------------------------------------
Revenue (1,326) (997) 437 5 (889) (992)
-------------------------------------------------------------------------
Expenses (1,326) (997) 4,728 6,225 3,402 5,228
-------------------------------------------------------------------------
Employee
compensation and
benefits - - (564) 1,460 (564) 1,460
-------------------------------------------------------------------------
Selling, general
and
administrative (1,326) (997) 763 567 (563) (430)
-------------------------------------------------------------------------
Interest - - 1,258 926 1,258 926
-------------------------------------------------------------------------
Amortization - - 3,271 3,271 3,271 3,271
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Operating deficit - - (4,291) (6,220) (4,291) (6,220)
-------------------------------------------------------------------------CONFERENCE CALL
Management will host a conference call and live audio webcast today at
11:00 a.m. (ET) to discuss the Fund's fourth quarter and fiscal year ended
December 31, 2008. The call may be accessed by dialing 416-644-3415 or
1-800-733-7571. The link to the live audio webcast will be accessible at
gmpcapitaltrust.com. A replay of the conference call can be accessed by
telephone until Friday, March 6, 2009, by calling 416-640-1917 or
1-877-289-8525 (toll free) and entering access code 21292691 followed by the
number sign.
ABOUT GMP CAPITAL TRUST
GMP Capital Trust carries on business through the following principal
entities: GMP Securities L.P., Griffiths McBurney Corp., GMP Securities Europe
LLP, GMP Private Client L.P., EdgeStone Capital Partners, L.P. and GMP
Investment Management L.P. GMP Securities L.P. is a leading independent
Canadian investment dealer focused on investment banking and institutional
equities for corporate clients and institutional investors. GMP Securities
L.P. can be found on the web at gmpsecurities.com. Griffiths McBurney Corp.
services institutional clients in the United States while GMP Securities
Europe LLP provides investment banking and institutional equity services to
clients located in Europe. GMP Private Client L.P. is a full-service
investment firm focused on high-net-worth private investors that provides
wealth preservation, income and growth strategies delivered by seasoned
investment advisors. GMP Private Client L.P. can be found on the web at
gmpprivateclient.com. EdgeStone Capital Partners, L.P. is one of Canada's
leading private equity firms, providing capital, strategic direction and
business and financial advice to help promising mid-market and early stage
companies achieve their full potential. EdgeStone Capital Partners, L.P. can
be found on the web at edgestone.com. GMP Investment Management L.P., through
its private funds, seeks to generate superior risk-adjusted investment returns
over the long term by executing selected investment strategies. GMP Investment
Management L.P.'s offerings are aimed at both high-net-worth individuals and
institutional investors. GMP Capital Trust is listed on the Toronto Stock
Exchange under the symbol GMP.UN. The website is gmpcapitaltrust.com. GMP
Capital Trust has offices in Toronto, Calgary, Montreal, Vancouver and London,
England.
FORWARD-LOOKING STATEMENTS
This press release may contain "forward-looking statements" (as defined
under applicable securities laws) concerning anticipated future events,
results, circumstances, performance or expectations that are not historical
facts but instead represent our beliefs, expectations, estimates and
projections regarding future events, many of which, by their nature, are
inherently uncertain and beyond our control. These statements include, but are
not limited to, statements made with respect to management's beliefs, plans,
estimates, and intentions, and similar statements concerning anticipated
future events, results, circumstances, performance or expectations that are
not historical facts. Forward-looking statements generally can be identified
by the use of forward-looking terminology such as "outlook", "objective",
"may", "will", "expect", "intend", "estimate", "anticipate", "believe",
"should", "plans" or "continue", or similar expressions suggesting future
outcomes or events. Such forward-looking statements reflect management's
current beliefs and are based on information currently available to
management. These statements are not guarantees of future performance and are
subject to numerous risks and uncertainties, including those described in this
press release. The Fund's primary business activities are both competitive and
subject to various risks. These risks include market, credit, liquidity,
operational and legal and regulatory risks and other risk factors including,
without limitation, variations in the market value of securities, the
volatility and liquidity of equity trading markets, the volume of new
financings and mergers and acquisitions ("M&A"), competition in the
marketplace for suitable investments, sustainability of fees, nature and type
of portfolio company investments, ability to realize carried interest
entitlements and dependence on key personnel. Other factors, such as general
economic conditions, including exchange rate fluctuations, may also have an
effect on the Fund's results of operations. Many of these risks and
uncertainties can affect our actual results and could cause our actual results
to differ materially from those expressed or implied in any forward-looking
statement made by us or on our behalf. For a description of risks that could
cause our actual results to materially differ from our current expectations,
please see the "Risk Management" section in the Fund's 2008 Annual MD&A and
"Risk Factors" in the Fund's annual information form dated February 26, 2009.
Material factors or assumptions that were applied to drawing a conclusion or
making an estimate set out in the forward-looking information include: the
impact of continued tightened liquidity conditions and volatile equity pricing
on the level of public offerings, merger and acquisition activity and
securities trading; weaker general economic activity in Canada; sudden and
sharp declines in the market value of securities and commodity prices; a
continued slowdown in the United States' economy leading to a decreased demand
for Canadian exports to the United States; uncertain global economic
conditions; and a weakening Canadian dollar relative to the United States
dollar. For other factors or assumptions applied see the "Business Environment
and Market Outlook - Market Outlook" section included in the Fund's 2008
Annual MD&A. Although forward-looking information contained in this press
release is based upon what management believes are reasonable assumptions,
there can be no assurance that actual results will be consistent with these
forward-looking statements. Certain statements included in this press release
may be considered "financial outlook" for purposes of applicable securities
laws, and as such the financial outlook may not be appropriate for purposes
other than this press release.
For further information: GMP Capital Trust, Rocco Colella, Director,
Investor Relations, 145 King Street West, Suite 300, Toronto, Ontario, M5H
1J8, Tel: (416) 941-0894, Fax: (416) 943-6175, rcolella@gmpsecurities.com;
alternatively: investorrelations@gmpcapitaltrust.com
