Aston Hill Announces 2015 Third Quarter Results and Quarterly Cash Dividend

TORONTO, Nov. 16, 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 nine month periods ended September 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 December 7, 2015 to all Aston Hill shareholders of record on November 25, 2015. The resulting ex-dividend date for the Common Shares will be November 20, 2015.  This dividend is an eligible dividend for Canadian income tax purposes.

Financial Highlights




(in thousands, except assets under management and



per share amounts)




As at

September 30,

June 30,

September 30,


2015

2015

2014

Assets under management (in billions)

$

3.03

$

4.00

$

7.05

Total assets

93,996

92,185

97,575

Shares outstanding

96,474

89,539

89,297






 September 30, 

June 30,

September 30,

For the three months ended

2015

2015

2014

Total revenues

$

8,508

$

9,820

$

12,423

Total expenses excluding finance expense

7,355

11,614

10,370

Total finance expense

1,116

1,092

1,077

(Loss) income before income taxes

$

37

$

(2,886)

$

976

Income tax expense (recovery)

$

87

$

(975)

$

625

Net (loss) income

$

(50)

$

(1,911)

$

351

Net income to non-controlling interest

195

164

266

Net (loss) income to controlling interest

$

(245)

$

(2,075)

$

85





Per share - Basic

$

(0.003)

$

(0.023)

$

0.001

Per share - Diluted

$

(0.003)

$

(0.023)

$

0.001

Cash dividends declared per share

$

0.005

$

0.005

$

0.015





EBITDA

$

2,034

$

(1,019)

$

2,796

Adjusted EBITDA

$

1,451

$

1,453

$

3,110

On October 29, 2015, Aston Hill announced the completion of the corporate reorganization it had undergone over the previous ten months. The highlights of the reorganization include:

  • Completion of a non-brokered private placement of approximately $6 million at $0.45/share and a premium to the then current stock price.
  • Ben Cheng beginning to manage funds for Aston Hill exclusively for the first time beginning as of November 2, 2015, made possible by the non-renewal of the sub-advisory agreement with IA Clarington earlier in 2015.
  • Continued cost cutting initiatives and focus on managing the Company's cost structure, including the partial redemption of $6 million of the $40 million principal amount of Debentures.
  • Approval by 93% of voters to amend the Convertible Debenture, including extending the maturity date from July 31, 2016 to January 31, 2019, reducing the conversion price from $2.55 to $0.65 per share, and increasing the interest rate from 6.00% to 6.50% per annum effective November 16, 2015.
  • Completion of the consolidation of corporate functions from the Calgary office to the Toronto office, which is expected to save over $2 million per year.
  • Closure of the Calgary office and transition to a new executive team all based in Toronto.
  • Peter Anderson joining the firm as Interim CEO, taking an active role in the direction and growth of Aston Hill in the Company's continued effort to expand its in-house liquid alternative products. Mr. Anderson's career includes serving as President and Chief Executive Officer of CI Investments as well as Chief Investment Officer of CI Financial Inc. for over 15 years.
  • Clearly defining our product line-up, which is focused on liquid alternative funds, including the November 2, 2015 launch of a new mutual fund, the Aston Hill High Income Fund, managed by Ben Cheng. Further information is available in the Company's press release, Ben Cheng Commences Managing Funds Exclusively for Aston Hill.

Aston Hill's Assets Under Management, Advisory and Administration ("AUM") decreased from $4.00 billion at June 30, 2015 to $3.03 billion at September 30, 2015. The lower AUM is mainly the result of a reduction in institutional and sub-advisory assets, as well as assets under administration. During the third quarter, gross sales of mutual funds and hedge funds combined were $33 million (net redemptions of $167 million). The Company continues to focus its sales efforts on in-house managed mutual funds, as they generate higher corporate average margins.

For the third quarter, Aston Hill's revenues were $8.5 million. The revenue decrease was due to a reduction in revenues from sub-advisory mandates and institutional assets, particularly, with regard to the decrease from the prior year, 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 4% 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 82% of revenues for the third quarter of 2015.

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

Aston Hill Managed Investment Funds

82%

Institutional and Other

8%

Aston Hill Securities

6%

Sub-Advisory Mandates

4%

Total expenses (excluding finance expense) for the third quarter were lower at $7.4 million as compared to $11.6 million for the second quarter of 2015. The lower 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.  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 third quarter was $1.5 million, relatively unchanged from the prior quarter adjusted EBITDA of $1.5 million as efforts to reduce expenses were offset by reduced revenues during the quarter. Net loss for the quarter was less than $0.01 million as compared to a net loss in the prior quarter of $1.9 million.

"2015 has likely been the most significant year in Aston Hill's history," said Interim Chief Executive Officer, Peter Anderson. "However, the on-going investments that have been made to create an expansive retail distribution platform and complete changes in the internal infrastructure provide the opportunity to drive meaningful profitability and growth in our proprietary products. With the corporate reorganization initiatives complete, we can focus on achieving this growth by executing our strategic business plan and increasing marketing and sales efforts, including our strategies specifically focused on Ben's new fund."

Aston Hill Financial Inc. is a diversified asset management company with a suite of retail mutual funds, closed end funds, hedge funds and segregated institutional funds.  Aston Hill has offices in 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, Chief Executive Officer (Interim), Aston Hill Financial Inc., (416) 583-2300, peter@astonhill.ca; Derek Slemko, Chief Financial Officer (Interim), Aston Hill Financial Inc., (416) 583-2300, derek@astonhill.ca

RELATED LINKS
http://www.astonhill.ca

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