CI Financial reports fourth quarter results: Earnings per share increase 10%; dividend raised 6%

TSX Symbol: CIX

TORONTO, Feb. 14, 2013 /CNW/ - CI Financial Corp. ("CI") today released audited financial results for the quarter and year ended December 31, 2012.

HIGHLIGHTS

Quarter ended
December 31, 2012
($millions except
per share amounts)
Quarter ended
September 30, 2012
($millions except
per share amounts)
%
change
Quarter ended
December 31, 2011
($millions except
per share amounts)
%
change
Assets Under Management 75,723 73,866 3 69,558 9
Average Assets Under Management 74,323 72,437 3 69,349 7
Pre-Tax Operating Earnings Per Share1 0.58 0.56 4 0.55 5
EBITDA Per Share 1 0.63 0.62 2 0.61 3
Earnings Per Share 0.34 0.32 6 0.31 10
Free Cash Flow 110 110 0 104 6
Dividends Recorded Per Share 0.240 0.240 0 0.225 7
Net Sales 724 358 102 (360) n/a

HIGHLIGHTS Year ended
December 31, 2012
($millions except
per share amounts)
Year ended
December 31, 2011
($millions except
per share amounts)
% change
Average Assets Under Management 72,606 72,186 1
Pre-Tax Operating Earnings Per Share1 2.26 2.28 (1)
EBITDA Per Share 1 2.48 2.53 (2)
Earnings Per Share 1.24 1.31 (5)
SG&A Expenses 39 bps 40 bps (3)
Free Cash Flow 424 433 (2)
Net Income 352.2 376.9 (7)
Adjusted Net Income2 371.0 373.4 (1)
Dividends Recorded Per Share 0.96 0.89 8
Net Debt3 527 731 (28)
Net Sales 973 323 201

1 Pre-Tax Operating Earnings and EBITDA (earnings before interest, taxes, depreciation and amortization) are not standardized earnings measures prescribed by IFRS; however, management believes that most of its shareholders, creditors, other stakeholders and investment analysts prefer to include the use of these performance measures in analyzing CI's results. CI defines pre-tax operating earnings as income before income taxes less redemption fee revenue, non-recurring items, performance fees and investment gains, plus amortization of deferred sales commissions (DSC) and fund contracts. CI's method of calculating these measures may not be comparable to similar measures presented by other companies.
2 Adjusted for a $3.5 million insurance settlement in 2011 and an $18.8 million non-cash tax adjustment in 2012.
3 Net of cash and marketable securities not required for regulatory working capital.

For the year ended December 31, 2012, average assets under management were $72.6 billion, an increase of 1% from the previous year. Gross sales of funds were $10.6 billion compared to $9.1 billion for the year ended December 31, 2011. CI's net sales tripled year over year to $1.0 billion in fiscal 2012. In the last quarter of 2012 net sales doubled over the prior quarter, from $358 million to $724 million.

At December 31, 2012, ending assets under management were $75.7 billion, up 9% from $69.6 billion at December 31, 2011. In comparison, the S&P/TSX Composite and the DEX Universe Bond indexes increased 7% and 4%, respectively, from December 31, 2011 to December 31 2012. Positive market performance has resulted in CI's assets under management reaching $78.8 billion at February 13, 2013, up 9% from the average assets under management for the year ended December 31, 2012.

For the fourth quarter of 2012, CI reported earnings per share of $0.34, up 10% from $0.31 per share in the fourth quarter of 2011 and up 6% from $0.32 per share in the third quarter of 2012.

"CI ended 2012 with strong sales growth in both retail and institutional funds," said Stephen A. MacPhail, CI President and Chief Executive Officer. "This trend has continued in 2013, with our net sales for the month of January reaching the highest level since 2001. Furthermore, this growth has been accompanied by increased interest in our equity funds."

"Assets under management are now at an all-time high for CI, approaching $80 billion, positioning CI for an excellent first quarter of 2013 and supporting the 6.3% increase in the dividend."

For the year ended December 31, 2012, CI reported earnings per share of $1.24, down 5% from the previous year. Included in the 2011 results was $3.5 million in revenue from an insurance settlement, while 2012 results included an $18.8 million non-cash future tax provision resulting from the increase in the Ontario corporate tax rate imposed in early 2012.  Adjusting for these items, the year-over-year decline in net income was less than 1%.

In addition, CI reported EBITDA per share for the fiscal year of $2.48, a 2% decrease from 2011. This compares to a decline of less than 1% in pre-tax operating earnings per share, which include adjustments for the items mentioned above. Pre-tax operating earnings per share for the fourth quarter of 2012 were up 4% from the prior quarter and up 5% from the fourth quarter of 2011.

CI successfully controlled discretionary spending, keeping expenses in line with the growth in assets under management. Selling, general and administrative (SG&A) expenses as a percentage of average assets under management were 0.39% in 2012, down slightly from 0.40% in the prior year.

CI generated $423.9 million in free cash flow during the year ended December 31, 2012 compared to $433.5 million in 2011. CI's cash flow facilitated a reduction in net debt by $204.2 million, the payment of $269.2 million in dividends and the repurchase of 1.4 million shares at a cost of $30.5 million. As at January 31, 2013, CI had 283,192,638 shares outstanding.

The Board of Directors declared an increase in the monthly cash dividend from $0.08 to $0.085 per share payable on each of March 15, April 15 and May 15, 2013 to shareholders of record on February 28, March 31 and April 30, 2013, respectively. The monthly dividend represents a yield of 3.8% on CI's closing share price of $26.82 on February 13, 2013.

For detailed financial statements for the quarter ended December 31, 2012, including Management's Discussion and Analysis, please refer to CI's website at www.cifinancial.com under Reports, or contact investorrelations@ci.com.

Analysts' Conference Call
CI will hold a conference call with analysts today at 4 p.m. Eastern time. Speaking on the call will be Mr. MacPhail and Douglas Jamieson, Senior Vice-President and Chief Financial Officer. The conference call and a slide presentation will be accessible through a webcast at www.ci.com/q4. Alternatively, investors may listen to the discussion by dialling 1-866-696-5910 (passcode: 3671796).

The call will be available for playback later in the day until February 28, 2013 at (905) 694-9451 or 1-800-408-3053 (passcode: 6593704). The webcast will be archived at www.ci.com/q4.

CI Financial Corp. (TSX: CIX) is an independent, Canadian-owned wealth management company. CI offers a broad range of investment products and services, including an industry-leading selection of investment funds, and is on the Web at www.cifinancial.com.

This press release contains forward-looking statements with respect to CI and its products and services, including its business operations and strategy and financial performance and condition. Although management believes that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, including interest rates, business competition, changes in government regulations or in tax laws, and other factors discussed in materials filed with applicable securities regulatory authorities from time to time.

 

SOURCE: CI Financial Corp.

For further information:

Stephen A. MacPhail
President and Chief Executive Officer
CI Financial Corp.
(416) 364-1145


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