Aston Hill announces 2014 fourth quarter and year end results

CALGARY, March 5, 2015 /CNW/ - Aston Hill Financial Inc. ("Aston Hill" or the "Company") (TSX:AHF) announces it has filed its Audited Consolidated Financial Statements for the year ended December 31, 2014 and related Management's Discussion and Analysis with Canadian securities regulatory authorities.

Aston Hill's Assets Under Management, Advisory and Administration ("AUM") decreased from $7.77 billion to $6.25 billion, a decrease of 24.3% as of December 31, 2014.  The lower AUM is mainly the result of a reduction in institutional and sub-advisory assets as well as assets under administration. This decrease was offset by an increase in higher revenue and higher margin proprietary mutual fund assets. During the fourth quarter, gross sales of mutual funds were $94 million (net $24 million).  Full year mutual fund gross sales of $525 million (net $376 million) represented an increase of 62% from the prior year.  The Company continues to focus its sales efforts on in-house managed funds, as they generate higher corporate average margins.

For the fourth quarter, Aston Hill's revenues were $11.7 million, an increase of 2.6% from the prior year's fourth quarter revenues of $11.4 million.   Fourth quarter revenues of $11.7 million decreased from the prior quarter total of $12.4 million.  The revenue decrease was due to a reduction in revenues from sub-advisory mandates and institutional assets offset by the continued growth and performance of the Aston Hill mutual funds.  Revenue generated by sub-advisory mandates continues to decrease as a percentage of total revenue (currently 19% compared to 24% in the prior year) as management remains focused on higher margin mutual fund growth. In-house mutual and closed end fund management fees accounted for 67% of revenues for the fourth quarter of 2014.

Percent of Revenues by Source for Three Months Ended December 31, 2014

Aston Hill Managed Investment Funds

67%

Sub-Advisory Mandates

19%

Institutional and Other

8%

Aston Hill Securities

6%

 

Total expenses (excluding finance expense) for the fourth quarter were lower at $9.3 million as compared to $10.3 million for the third quarter of 2014. The lower corporate expense is mainly due to one-time employee compensation costs paid in the third quarter.   

Adjusted EBITDA (before stock-based compensation and net investment losses) for the fourth quarter was $3.4 million, a 9.7% increase from the prior quarter adjusted EBITDA of $3.1 million.  This increase is due mainly to the aforementioned one-time expense increase in the prior quarter offset by lower revenue in the fourth quarter.  Net income for the quarter was $0.9 million as compared to a net income in the prior quarter of $0.4 million.

Financial Highlights








(in thousands, except assets under management and





per share amounts)









As at December 


As at September 


As at December



31, 2014


30, 2014


31, 2013

Assets under management (in billions)

$

6.25

$

7.05

$

7.77

Total assets


97,884


97,575


100,167

Shares outstanding


88,988


89,297


89,954










December 


September 


December

For the three months ended


31, 2014


30, 2014


31, 2013

Total revenues

$

11,710

$

12,400

$

11,424

Total expenses excluding finance expense


9,267


10,347


9,997

Total finance expense


1,098


1,077


1,152

Income before income taxes

$

1,345

$

976

$

275

Income tax expense (recovery)

$

433

$

625

$

486

Net income (loss)

$

912

$

351

$

(211)

Net income to non-controlling interest


338


266


270

Net income (loss) to controlling interest

$

574

$

85

$

(481)


Per share - Basic

$

0.006

$

0.001

$

(0.006)


Per share - Diluted

$

0.006

$

0.001

$

(0.006)








Cash dividends declared per share

$

0.015

$

0.015

$

0.015








EBITDA

$

3,202

$

2,796

$

2,218

Adjusted EBITDA


3,448


3,087


2,518













December 31,


December 31,

For the year ended


2014


2013

Total revenues

$

47,329

$

35,562

Total expenses excluding finance expense


38,628


28,820

Total finance expense


4,273


4,285

Income before income taxes

$

4,428

$

2,457

Income tax expense


1,878


1,241

Net income

$

2,550

$

1,216

Net income to non-controlling interest


1,070


351

Net income to controlling interest

$

1,480

$

865


Per share - Basic

$

0.017

$

0.011


Per share - Diluted

$

0.016

$

0.011






Cash dividends recorded per share

$

0.060

$

0.050






EBITDA

$

11,565

$

8,499

Adjusted EBITDA


13,207


9,677

 

For the year ended December 31, 2014, total revenues were $47.3 million, a 33% increase from the prior year total of $35.6 million. The increase was mainly the result of management fees related to the Company's managed mutual funds and closed end funds.  Total expenses increased from $28.8 million to $38.6 million mainly due to an increase in sub-advisory expenses from closed end funds and an increase in trailer fees associated with the mutual fund AUM increase during the year.  Year-over-year adjusted EBITDA increased 36% from $9.7 million to $13.2 million as the Company continues to focus on higher margin managed mutual fund AUM growth.

On February 13, 2015, Aston Hill announced the non-renewal of the sub-advisory agreement between Aston Hill's subsidiary, Aston Hill Asset Management Inc., and IA Clarington Investments Inc. ("IAC") which had a five year term.  Revenue earned from this agreement accounted for approximately 16% of overall 2014 revenue. Under the agreement, Aston Hill's President and Co-Chief Investment Officer, Ben Cheng, exclusively provided portfolio management services to three separate IAC funds.  Mr. Cheng and Aston Hill are each subject to customary lock-up provisions, extending for 9 months after termination of the agreement for Mr. Cheng and 6 months after termination for Aston Hill.  Subsequent to the lock-up expiry, Aston Hill plans to provide new investment solutions managed by Mr. Cheng to Canadian retail investors. For more information regarding this announcement, please see the Company's press release titled Aston Hill Announces Corporate Initiatives and Non-Renewal of Sub-Advisory Agreement with IA Clarington by clicking here.

As a result of the IA Clarington non-renewal, the Company has reduced its quarterly dividend to $0.005 per share.  The reduced dividend represents a more conservative payout ratio that will enable Aston Hill to retain more income for reinvestment in the Company and debt repayment. Aston Hill has also been focused on cost cutting measures and has reduced staff count by over 10% in recent months.

Aston Hill Financial Inc. is a diversified asset management company with a suite of retail mutual funds, closed end funds, private equity funds, hedge funds and segregated institutional funds.  Aston Hill has offices in Calgary, Toronto and Halifax.

The TSX has neither approved nor disapproved the information contained herein.

  1. Adjusted EBITDA and EBITDA:  Adjusted EBITDA and EBITDA are not standardized earnings measures prescribed by IFRS; however, management believes that most of its shareholders, creditors, other stakeholders and investment analysts prefer to use these performance measures in analyzing Aston Hill's results.

  2. Forward-Looking Statements: This news release contains certain "forward-looking statements" within the meaning of such statements under applicable securities law. Forward-looking statements are frequently characterized by words such as "plan", "continue", "expect", "project", "intend", "believe", "anticipate", "estimate", "may", "will", "potential", "proposed" and other similar words, or statements that certain events or conditions "may" or "will" occur. These statements are only predictions. Various assumptions were used in drawing the conclusions or making the projections contained in the forward-looking statements throughout this news release.  Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements.

For a detailed description of the risks and uncertainties facing the Company and its business and affairs, readers should refer to the Company's annual financial statements and management discussion and analysis for the year ended December 31, 2014, both of which are available at www.sedar.com.  The Company undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change, unless required by law. The reader is cautioned not to place undue reliance on forward-looking statements.

SOURCE Aston Hill Financial Inc.

For further information: Please contact: Eric Tremblay, Chief Executive Officer, Aston Hill Financial Inc., (403) 770-4817; Larry Titley, Chief Financial Officer, Aston Hill Financial Inc., (403) 770-4808

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