Aston Hill Announces 2015 Second Quarter Results and Quarterly Cash Dividend

CALGARY, Aug. 4, 2015 /CNW/ - Aston Hill Financial Inc. ("Aston Hill" or the "Company") (TSX:AHF) announces it has filed its Consolidated Financial Statements for the three and six month periods ended June 30, 2015 and related Management's Discussion and Analysis ("MD&A") with Canadian securities regulatory authorities. Aston Hill also announces the quarterly cash dividend in the amount of $0.005 per Common Share will be payable on August 26, 2015 to all Aston Hill shareholders of record on August 14, 2015. The resulting ex-dividend date for the Common Shares will be August 12, 2015.  This dividend is an eligible dividend for Canadian income tax purposes.

Aston Hill's Assets Under Management, Advisory and Administration ("AUM") decreased by 3% over the previous quarter from $4.12 billion to $4.00 billion at June 30, 2015. 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 second quarter, gross sales of mutual funds were $163 million (net $61 million).  The Company continues to focus its sales efforts on in-house managed mutual funds, as they generate higher corporate average margins.

For the second quarter, Aston Hill's revenues were $9.7 million, a decrease of 20% from the prior year's second quarter revenues of $12.2 million. As well, second quarter revenues of $9.7 million decreased by 9% from the prior quarter total of $10.6 million. The revenue decrease was due to a reduction in revenues from sub-advisory mandates and institutional assets, primarily related to the non-renewal of the IA Clarington sub-advisory agreement. Revenue generated by sub-advisory mandates continues to decrease as a percentage of total revenue (currently 5% compared to 21% in the same quarter in the prior year) as management remains focused on higher margin mutual fund growth. In-house mutual funds and closed end funds management fees accounted for 81% of revenues for the second quarter of 2015.

Percent of Revenues by Source for Three Months Ended June 30, 2015

Aston Hill Managed Investment Funds

81%

Sub-Advisory Mandates

5%

Institutional and Other

7%

Aston Hill Securities

7%

Total expenses (excluding finance expense) for the second quarter were higher at $11.5 million as compared to $9.5 million for the first quarter of 2015. The higher corporate expense is mainly due to $3.6 million in one-time restructuring costs accounted for in the second quarter relating to the ongoing corporate reorganization, including consolidating certain corporate functions currently being run from the Calgary, AB office to the Toronto, ON office, as disclosed in the Company's press releases on June 30, 2015 and July 20, 2015. Further detail behind these restructuring costs can be found in the Company's MD&A and Consolidated Financial Statements for the period filed on Sedar.

Adjusted EBITDA (before restructuring costs, stock-based compensation and net investment losses) for the second quarter was $1.3 million, a 14% decrease from the prior quarter adjusted EBITDA of $1.6 million.  This decrease is due mainly to the lower revenue in the second quarter.  Net income for the quarter was a loss of $1.9 million as compared to net income in the prior quarter of $0.03 million.


Financial Highlights





(in thousands, except assets under management and



per share amounts)





As at June

As at March

As at June


30, 2015

31, 2015

30, 2014

Assets under management (in billions)

$

4.00

$

4.12

$

7.48

Total assets


92,185


92,051


97,138

Shares outstanding


89,539


89,488


89,351






As at June

As at March

As at June

For the three months ended

30, 2015

31, 2015

30, 2014

Total revenues

$

9,715

$

10,642

$

11,068

Total expenses excluding finance expense


11,509


9,630


9,551

Total finance expense


1,092


1,026


1,264

(Loss) income before income taxes

$

(2,886)

$

(14)

$

253

Income tax expense (recovery)

$

(975)

$

(40)

$

260

Net (loss) income

$

(1,911)

$

26

$

(7)

Net income to non-controlling interest


164


201


199

Net (loss) income to controlling interest

$

(2,075)

$

(175)

$

(206)





Per share - Basic

$

(0.023)

$

(0.002)

$

0.001

Per share - Diluted

$

(0.023)

$

(0.002)

$

0.001

Cash dividends declared per share

$

0.005

$

0.015

$

0.015





EBITDA

$

(1,019)

$

1,715

$

2,164

Adjusted EBITDA

$

1,348

$

1,565

$

2,807

"While continued market volatility impacted asset flows in the second quarter, net inflows to our in-house mutual funds remained positive," commented Ben Cheng, President and Chief Investment Officer. "Over the past year we have been focused on growing our in-house mutual funds and have achieved a 40% increase in the percent of revenue generated from these funds. To further contribute to our objective of growing our mutual fund business, we have appointed Peter Anderson as Interim Chief Executive Officer effective August 1, 2015. Formerly with CI Investments Inc. as President and Chief Executive Officer, Mr. Anderson will take an active role in the direction and growth of our firm as we continue to focus on expanding our in-house liquid alternative products.

"The aforementioned corporate reorganization resulted in a one-time cost of $3.6 million during the quarter, however the annual cost savings are estimated to be approximately $2.0 million per year, which over the coming quarters will provide the Company with a more efficient cost structure upon which future growth can be built. Along with the corporate reorganization is the closure of the Calgary office, which further demonstrates Aston Hill's commitment to growing our in-house funds, stepping away from our energy management beginnings.

"The on-going investments that we are making to create an expansive retail distribution platform and a complete internal infrastructure gives us the opportunity to drive significant profitability and growth in our proprietary products. Combined with the recent senior management changes, corporate reorganization, and cost cutting initiatives, we are better positioned to achieve our goal of providing Canadian retail investors with best in class products to meet their financial needs. With continued economic uncertainty in financial markets, we believe our liquid alternative funds will meet the growing demand for diversified, risk-adjusted investments." 

"Executing on our plan to grow our in-house mutual funds remains critical to our success, and as such, we made the decision in the first quarter of 2015 not to renew the sub-advisory relationship with IA Clarington so that Ben Cheng would be able to manage investment funds for Aston Hill directly beginning in late 2015," commented Peter Anderson, Interim Chief Executive Officer. "The loss of this sub-advisory revenue, while impactful in the short-term to our earnings, better positions the Company to achieve long-term growth from our in-house mutual funds by appointing Mr. Cheng as a portfolio manager exclusively for Aston Hill's investment products in late November 2015. Additionally, the Company will be able to increase its focus on sales efforts in the Mutual Fund Dealers Association of Canada channel beginning in late August, something it has not previously been able to do because of the sub-advisory relationship."

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: Concerning this press release, please contact: Peter Anderson, Interim Chief Executive Officer, Aston Hill Financial Inc., (416) 583-2300; Ben Cheng, President and Chief Investment Officer, Aston Hill Financial Inc., (403) 583-2300

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