Aston Hill Announces 2016 First Quarter Results

TORONTO, May 11, 2016 /CNW/ - Aston Hill Financial Inc. ("Aston Hill" or the "Company") (TSX:AHF) announces it has filed its Consolidated Financial Statements for the quarter ended March 31, 2016 and related Management's Discussion and Analysis with Canadian securities regulatory authorities.

"The first quarter was marked by further market volatility and it served to confirm the importance of our risk-averse investment approach." said Aston Hill CEO, James Werry. "Operationally we continue to focus on expense management and have been successful in earmarking substantial savings opportunities that will be fully evaluated in the coming months. We are making significant headway with our product shelf streamlining and our initial proposals have been well received by our ad hoc advisor panels. On the sales and marketing front our team is ramping up for a focused sales campaign into the MFDA channel."

Financial Highlights










(in thousands of dollars, except assets under management and
per share amounts)






As at March 31, 2016

As at December 31, 2015

As at March 31, 2015

Assets under management (in billions)

$

2.19

$

2.67

$

4.12

Total assets


67,322


72,110


92,051

Shares outstanding


98,576


98,849


89,488








For the three months ended

March 31, 2016

December  31, 2015

March 31, 2015





Total revenues

$

6,165

$

7,579

$

10,687

Total expenses excluding finance expense


7,483


25,080


9,675

Total finance expense (income)

1,038

(2,382)

1,026

(Loss) income before income taxes

$

(2,356)

$

(15,119)

$

(14)

Income tax (recovery) expense

$

(809)

$

(2,860)

$

(40)

Net income (loss)

$

(1,547)

$

(12,259)

$

26

Net income to non-controlling interest


132


222


201

Net income (loss) to controlling interest

$

(1,679)

$

(12,481)

$

(175)









Per share – Basic

$

(0.017)

$

(0.125)

$

(0.002)


Per share – Diluted

$

(0.017)

$

(0.125)

$

(0.002)








Cash dividends declared per share

$

-

$

0.005

$

0.015








EBITDA

$

(728)

$

(16,439)

$

1,514

Adjusted EBITDA

$

(831)

$

(352)

$

1,409

 

Aston Hill's Assets Under Management, Advisory and Administration ("AUM") decreased from $2.67 billion at December 31, 2015 to $2.19 billion at March 31, 2016.  The lower AUM is mainly the result of the sale of Aston Hill Securities Inc., and reductions in closed and open end funds AUM. During the first quarter, gross sales of mutual funds were $60 million and net redemptions of $42 million.).  

For the first quarter, Aston Hill's revenues were $6.2 million, a decrease of 18.7% from the prior quarter revenues of $7.6 million.   The revenue decrease was mainly due to net redemptions to open and closed end funds.  Revenue generated by Aston Hill managed investment funds continues to increase as a percentage of total revenue (currently 85% compared to 82% in the prior quarter) as management remains focused on higher margin mutual fund growth.

Percent of Revenues by Source for Three Months Ended March 31, 2016

Aston Hill Managed Investment Funds

85%

Sub-Advisory Mandates

2%

Institutional and Other

6%

Aston Hill Securities

7%

 

Total expenses (excluding finance expense) for the fourth quarter were lower at $7.5 million as compared to $25.1 million for the prior quarter. The higher corporate expense is mainly due to an impairment loss on intangible assets recognized in the prior quarter.  

Adjusted EBITDA (before stock-based compensation, impairment losses, and net investment gains or losses) for the fourth quarter was a loss of $0.8 million, a 136% decrease from the prior quarter adjusted EBITDA of $0.4 million due mainly to lower revenue, partially offset by lower expenses in the first quarter.  Net loss for the quarter was $1.7 million, as compared to a net loss in the prior quarter of $12.5 million, reflecting the aforementioned intangible asset impairment loss in the previous quarter.

Impacts on Q1 2016 Results

  • The sale of the Company's brokerage unit was completed on March 31, 2016. A loss on the sale of the subsidiary of $0.3 million was included in the quarter's results, being the difference between the consideration received and the net assets sold as of the date of sale.
  • On March 21, 2016, the Company announced the suspension of its quarterly dividend. The dividend suspension creates an additional $2.0 million of liquidity per year and is consistent with the Company's conservative approach to capital and risk management. The Board will continue to evaluate its dividend policy.
  • Gross open end mutual fund sales totaled $60.0 million in the first quarter of 2016. Redemptions during the quarter totaled $102.0 million, which resulted in net redemptions of $42.0 million. Adding to this the impact of market performance, AUM for open end funds decreased by $68.0, or 7.8%, from December 31, 2015.
  • Sub-advisory revenue as a percentage of total revenue was 2% compared to 13% in the prior year due to the non-renewal of the IA Clarington sub-advisory agreement and the termination of the sub-advisory relationship with CIBC.
  • Revenue from management fees as a percentage of total revenue was 85% for the period ended March 31, 2016, compared to 73% for the prior year.
  • Other revenue and income as a percentage of total revenue was 6% compared to 7% in the prior year.
  • Managed closed end funds AUM decreased by $130.0 million during the quarter as a result of redemptions and changes in market value.

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.    

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, 2015, 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 Asset Management Inc.

For further information: concerning this press release, please contact: James Werry, President & Chief Executive Officer, Aston Hill Financial Inc., (416) 583-2300, james@astonhill.ca; Derek Slemko, Chief Operating Officer & Chief Financial Officer, Aston Hill Financial Inc., (416) 583-2300, derek@astonhill.ca

RELATED LINKS
http://www.astonhill.ca

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