AGF Management Limited Reports Fourth Quarter and Fiscal Year 2016 Financial Results

  • Total assets under management increased to $34.2 billion
  • Retail net redemptions improved 31.3% compared to prior year
  • Quarterly adjusted EPS from continuing operations increased to $0.13

TORONTO, Jan. 24, 2017 /CNW/ - AGF Management Limited (AGF or the Company) today announced financial results for the fourth quarter and year ended November 30, 2016.






































(from continuing operations)

Three months ended

Years ended




November 30,1



August 31,2



November 30,3




November 30,1,2



November 30,3



(in millions of Canadian dollars, except per share data)


2016



2016



2015




2016



2015





















Income


104.8



109.4



105.0




428.7



449.6



Net Income attributable to equity owners



















of the Company


14.6



8.2



8.1




42.5



48.3





















EBITDA 4


30.7



25.3



25.5




109.5



127.2



Adjusted EBITDA 4


25.5



27.4



28.3




107.9



128.7





















Diluted earnings per share attributable to



















equity owners of the Company


0.18



0.10



0.11




0.53



0.58





















Adjusted diluted earnings per share attributable to



















equity owners of the Company


0.13



0.13



0.12




0.52



0.58





















Free Cash Flow 4


21.2



12.9



18.6




61.5



67.8



Dividends per share


0.08



0.08



0.08




0.32



0.51



Long-term debt


188.2



228.0



268.8




188.2



268.8




















1

Three months and year ended November 30, 2016 includes $5.2 million and $3.7 million of one-time items related to a reversal of a provision from prior years related to Harmonized Sales Tax and fund related items, respectively.


2

Three months ended August 31, 2016 and year ended November 30, 2016 includes a $2.1 million charge in income related to the Company's share of a one-time tax levy for Smith and Williamson Holdings Limited.


3

Three months and year ended November 30, 2015 includes a one-time restructuring charge of $2.8 million and $7.2 million, respectively. Year ended November 30, 2015 includes a $5.7 million special distribution from a long-term investment.


4

EBITDA (earnings before interest, taxes, depreciation and amortization), adjusted EBITDA and Free Cash Flow are not standardized measures prescribed by IFRS; however, these are standard measures used in the mutual fund industry by management, investors and investment analysts to understand and compare results. We believe these are important measures as it allows us to assess our investment management business without the impact of non-operational items. These non-IFRS measures and reconciliations to IFRS, where necessary, are included in the Management's Discussion and Analysis available at www.agf.com.



 







































Three months ended

Years ended




November 30,1



August 31,



November 30,




November 30,



November 30,



(in millions of Canadian dollars)


2016



2016



2015




2016



2015





















Retail fund Assets Under Management



















(AUM) (including retail pooled funds)


17,774



17,811



18,030




17,774



18,030



Institutional and sub-advisory accounts AUM


10,810



11,033



10,867




10,810



10,867



Private client AUM


4,908



4,784



4,414




4,908



4,414



Alternative asset management platform AUM


685



619



268




685



268



Total AUM, including alternative asset



















management platform


34,177



34,247



33,579




34,177



33,579





















Net retail redemptions


214



303



249




1,111



1,559



Average daily retail fund AUM


17,756



17,682



17,964




17,535



19,182




















1

Net retail redemptions for the three months and year ended November 30, 2016 also includes a $149.4 million transfer of an existing client from institutional to retail.

 

Total assets under management (AUM) increased 1.8% to end the year at $34.2 billion. Market growth combined with the trend of lower retail redemptions and AUM growth in our alternative asset management platform contributed to the year over year improvement.

During the year ended November 30, 2016, our continued focus on investment performance and customer service excellence resulted in retail fund net redemptions improving 31.3% to $1.1 billion compared to net redemptions of $1.6 billion for the year ended November 30, 2015. 

"In 2017, we are proudly celebrating our 60th anniversary," said Blake C. Goldring, Chairman and Chief Executive Officer, AGF Management Limited. "As a diversified global asset management firm, we are at the forefront of meeting client needs by delivering best-in-class quality of service, superior investment performance and innovative investment products."

During the year ended November 30, 2016, InstarAGF Inc. (InstarAGF) achieved multiple closes of the InstarAGF Essential Infrastructure Fund (EIF). As a result, AGF received $63.4 million as a return of capital net of investments, to bring the Company's invested capital in line with its proportionate share of total commitments. InstarAGF expects to achieve the final closing of EIF in early 2017.

"Looking back at 2016, we experienced real results and achieved key milestones within our strategic plan," said Kevin McCreadie, President and Chief Investment Officer, AGF Investments Inc. "We have purposefully diversified our investment platform and processes to provide investors and clients with consistent and repeatable investment performance that delivers long-term capital growth with downside protection. With our investment process foundation in place, we are reinvesting in our growth platforms and capabilities in emerging areas such as factor-based investing and alternatives."

Income from continuing operations for the three months and year ended November 30, 2016 was $104.8 million and $428.7 million compared to $105.0 million and $449.6 million for the three months and year ended November 30, 2015. The year over year decline in revenue was partly due to the inclusion of a one-time special distribution of $5.7 million related to our alternative investments in the year ended November 30, 2015 and a one-time charge of $2.1 million recorded in the third quarter of 2016 related to the Company's share of a tax levy recorded by Smith and Williamson Holdings Limited (S&WHL). The remainder of the year over year decline in revenue is due to a combination of lower average AUM and price reductions implemented in 2016.  

Selling, general and administrative expenses (SG&A) for the three months and year ended November 30, 2016 included a one-time net recovery of certain expenses of $5.2 million and $3.7 million, respectively. The three months and year ended November 30, 2015 included one-time restructuring expenses of $2.8 million and $7.2 million, respectively.

As a result of the above, EBITDA from continuing operations for the three months and year ended was $30.7 million and $109.5 million, compared to $25.5 million and $127.2 million for the same periods in 2015.

Diluted earnings per share (EPS) from continuing operations for the three months and year ended November 30, 2016 was $0.18 and $0.53, compared to $0.11 and $0.58 for the three months and year ended November 30, 2015. Diluted EPS from continuing operations for the three months and year ended November 30, 2016, adjusted for the one-time income and SG&A items discussed above, was $0.13 and $0.52, compared to $0.12 and $0.58 for the same periods in 2015.

For the three months ended November 30, 2016, AGF declared an eight cent per share dividend on Class A Voting common shares and Class B Non-Voting shares, payable January 13, 2017 to shareholders on record as at January 6, 2017.

For further information and detailed financial statements for the fourth quarter and fiscal year ended November 30, 2016, including Management's Discussion and Analysis, which contains discussions of non-IFRS measures, please refer to AGF's website at www.agf.com under About AGF and Investor Relations and at www.sedar.com.

Conference Call

AGF will host a conference call to review its earnings results today at 11 a.m. ET.

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 http://edge.media-server.com/m/p/35f4fira. Alternatively, the call can be accessed toll-free in North America by dialing 1-800-708-4540 (Passcode #: 44130904).

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 AGF MANAGEMENT LIMITED

Founded in 1957, AGF Management Limited (AGF) is a diversified global asset management firm with retail, institutional, alternative and high-net-worth businesses. As an independent firm, we strive to help investors succeed by delivering excellence in investment management and providing an exceptional client experience. Our suite of diverse investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.

AGF has investment operations and client servicing teams on the ground in North America, Europe and Asia. With over $34 billion in total assets under management, AGF serves more than one million investors. AGF trades on the Toronto Stock Exchange under the symbol AGF.B.

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 North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, taxation, changes in government regulations, unexpected judicial or regulatory proceedings, technological changes, cybersecurity, catastrophic events, and our ability to complete strategic transactions and integrate acquisitions, and attract and retain key personnel. We caution that the foregoing list is not exhaustive. The reader is cautioned to consider these and other factors carefully and not place undue reliance on forward-looking statements. Other than specifically required by applicable laws, we are under no obligation (and expressly disclaim any such obligation) to update or alter the forward-looking statements, whether as a result of new information, future events or otherwise. For a more complete discussion of the risk factors that may impact actual results, please refer to the 'Risk Factors and Management of Risk' section of the 2016 Annual MD&A.

SOURCE AGF

For further information: AGF Management Limited shareholders, analysts and media, please contact: Adrian Basaraba, Senior Vice-President and Chief Financial Officer, 416-865-4203, Adrian.Basaraba@agf.com; Adam Cohen, Director, Finance and Investor Relations, 416-865-4228, Adam.Cohen@agf.com

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