Aston Hill Announces First Quarter 2015 Results

CALGARY, May 14, 2015 /CNW/ - Aston Hill Financial Inc. ("Aston Hill" or the "Company") (TSX:AHF) announces it has filed its Unaudited Consolidated Financial Statements for the quarter ended March 31, 2015 and related Management's Discussion and Analysis with Canadian securities regulatory authorities.

Aston Hill's Assets Under Management, Advisory and Administration ("AUM") decreased from $6.25 billion to $4.12 billion at March 31, 2015.  The decrease in AUM is the result of the non-renewal of the sub-advisory contract with IA Clarington previously disclosed. During the first quarter, gross sales of mutual funds were $96 million offset by redemptions of $120 million.  This net redemption is offset by net increases in AUM of closed end funds of $15 million and hedge funds of $13 million.  The Company continues to focus its sales efforts on in-house managed funds, as they generate higher corporate average margins.

For the first quarter, Aston Hill's revenues were $10.6 million, a decrease of 9.4% from the prior quarter revenues of $11.7 million. The revenue decrease was due mainly to the loss of sub-advisory fees related to the non-renewal of the IA Clarington contract in February 2015.  Revenue generated by sub-advisory mandates continues to decrease as a percentage of total revenue as management remains focused on higher margin mutual fund growth. The non-renewal of the IA Clarington contract will allow the Company to create and market new in-house funds and take advantage of Ben Cheng's portfolio management expertise in November 2015 once his non-compete restrictions come to an end. In-house mutual and closed end fund management fees accounted for 73% of revenues for the first quarter of 2015.

Percent of Revenues by Source for Three Months Ended March 31, 2015

Aston Hill Managed Investment Funds

73%

Sub-Advisory Mandates

13%

Institutional and Other

7%

Aston Hill Securities

7%

Total expenses (excluding finance expense) for the first quarter were $9.6 million compared to $9.3 million for the prior quarter. The increase is due to $0.9 million in one-time payments related to acquiring brokerage assets, employee severance payments and a non-renewal fee paid related to the IA Clarington contract.   

Adjusted EBITDA (before stock-based compensation and net investment losses) for the first quarter was $1.6 million compared to $3.4 million in the prior quarter.  This decrease is due mainly to the aforementioned one-time payments and a decrease in sub-advisory revenue related to the IA Clarington contract of $0.9 million.  Net income for the quarter was $0.03 million as compared to a net income in the prior quarter of $0.90 million.

Financial Highlights





(in thousands, except assets under management and



per share amounts)





As at March

As at December

As at March


31, 2015

31, 2014

31, 2014

Assets under management (in billions)

$

4.12

$

6.25

$

7.38

Total assets

92,299

97,884

95,940

Shares outstanding

89,488

88,988

89,891






March

December

March

For the three months ended

31, 2015

31, 2014

31, 2014

Total revenues

$

10,642

$

11,710

$

11,068

Total expenses excluding finance expense

9,630

9,267

9,551

Total finance expense

1,026

1,098

1,264

Income before income taxes

$

(14)

$

1,345

$

253

Income tax expense (recovery)

$

(40)

$

433

$

260

Net income (loss)

$

26

$

912

$

(7)

Net income to non-controlling interest

201

338

199

Net (loss) income to controlling interest

$

(175)

$

574

$

(206)





Per share - Basic

$

(0.002)

$

0.006

$

0.001

Per share - Diluted

$

(0.002)

$

0.006

$

0.001

Cash dividends declared per share

$

0.015

$

0.015

$

0.015





EBITDA

$

1,715

$

3,202

$

2,164

Adjusted EBITDA

$

1,565

$

3,448

$

2,807

As previously press released 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").  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.

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

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