Canaccord Genuity Group Inc. Reports Record Annual Revenue for 2015

Excluding significant items, fourth quarter diluted earnings per share of $0.05(1)

(All dollar amounts are stated in Canadian dollars unless otherwise indicated) 

TORONTO, June 2, 2015 /CNW/ - During the quarter ended March 31, 2015, Canaccord Genuity Group Inc. ('the Company' or 'Canaccord', TSX: CF, LSE: CF.) generated $232.5 million in revenue.  Excluding significant items(1) (a non-IFRS measure), the Company recorded net income of $8.8 million or net income of $4.9 million attributable to common shareholders(2) ($0.05 per diluted common share).  Including all expense items, on an IFRS basis, the Company recorded net loss of $26.3 million or net loss attributable to common shareholders (2) of $30.0 million (a loss per common share of $0.33).

During the fiscal year ended March 31, 2015, Canaccord generated $880.8 million of revenue and, excluding significant items (1), recorded net income of $39.3 million or net income attributable to common shareholders (2) of $24.6 million ($0.25 per diluted common share). Including all expense items, on an IFRS basis, the Company recorded net loss of $11.3 million or net loss of $25.1 million attributable to common shareholders (2) (a loss per common share of $0.27). 

"Despite a solid start to the fiscal year, a dramatic shift in global market conditions reduced activity levels in our capital markets business, which produced results below our expectations." said David Kassie, Chairman and CEO of Canaccord Genuity Group Inc. "We have made significant efforts to address our operating structure and fixed costs, to better position our business for long-term, sustainable profitability in an evolving market."

FISCAL 2015 VS. FISCAL 2014
12 months ended March 31, 2015 vs. 12 months ended March 31, 2014

  • Revenue of $880.8 million, an increase of 3% or $25.5 million from $855.2 million

  • Excluding significant items, expenses of $827.5 million, an increase of 7% or $56.9 million from $770.6 million(1)

  • Expenses of $886.4 million, an increase of 12.1% or $95.8 million from $790.7 million

  • Excluding significant items, net income of $39.3 million compared to net income of $68.8 million(1)

  • Net loss of $11.3 million, compared to a net income of $52.1 million

  • Excluding significant items, diluted earnings per common share (EPS) of $0.25 compared to diluted EPS of $0.54 in fiscal 2014(1)

  • Loss per common share of $0.27 compared to a diluted EPS of $0.39 in the prior year

FOURTH QUARTER FISCAL 2015 VS. FOURTH QUARTER FISCAL 2014
3 months ended March 31, 2015 vs. 3 months ended March 31, 2014

  • Revenue of $232.5 million, a decrease of 8% or $21.3 million from $253.7 million

  • Excluding significant items, expenses of $220.0 million, an increase of 1% or $2.3 million from $217.8 million(1)

  • Expenses of $260.8 million, an increase of 17.6% or $39.1 million from $221.7 million

  • Excluding significant items, net income of $8.8 million compared to net income of $29.1 million(1)

  • Net loss of $26.3 million compared to a net income of $25.9 million

  • Excluding significant items, diluted EPS of $0.05 compared to $0.25 in the fourth quarter of 2014(1)

  • Loss per common share of $0.33 compared to a diluted EPS of $0.22

FOURTH QUARTER OF FISCAL 2015 VS. THIRD QUARTER OF FISCAL 2015
3 months ended March 31, 2015 vs. 3 months ended December 31, 2014

  • Revenue of $232.5 million, an increase of 40% or $66.0 million from $166.5 million

  • Excluding significant items, expenses of $220.0 million, an increase of 20% or $35.9 million from $184.1 million(1)

  • Expenses of $260.8 million, an increase of 36% or $68.8 million from $192.0 million

  • Excluding significant items, net income of $8.8 million compared to net loss of $14.3 million(1)

  • Net loss of $26.3 million compared to net loss of $21.5 million

  • Excluding significant items, diluted EPS of $0.05 compared to loss per common share of $0.19 in the third quarter of 2015(1)

  • Loss per common share of $0.33 compared to loss per common share of $0.27 in the third quarter of 2015

Financial condition at end of fourth quarter 2015 vs. fourth quarter 2014

  • Cash and cash equivalents balance of $322.3 million, a decrease of $42.0 million from $364.3 million

  • Working capital of $427.2 million, a decrease of $42.2 million from $469.4 million

  • Total shareholders' equity of $1,117.5 million, a decrease of $51.2 million from $1,168.7 million

  • Book value per diluted common share for the period end was $8.71, a decrease of 3.8 % or $0.34 from $9.05(3)

  • On June 2, 2015, the Board of Directors approved a quarterly dividend of $0.05 per common share payable on July 2, 2015 to common shareholders with a record date of June 19, 2015

  • On June 2, 2015, the Board of Directors also approved a cash dividend of $0.34375 per Series A Preferred Share payable on June 30, 2015, with a record date of June 19, 2015, and approved a cash dividend of $0.359375 per Series C Preferred Share payable on June 30, 2015, with a record date of June 19, 2015

SUMMARY OF OPERATIONS FOR THE QUARTER

Corporate

  • During the fourth quarter, the Company purchased 125,900 common shares under the terms of its normal course issuer bid (NCIB) to bring the total purchases to 1,197,649 common shares for fiscal 2015

  • In February of 2015, the company announced a planned workforce reduction of 4% in its global capital markets business

  • On April 1, 2015, Paul Reynolds, President & CEO of Canaccord Genuity Group Inc. passed away following a medical emergency in late March 2015. The Board of Directors appointed David Kassie as CEO of the Company. Mr. Kassie will now serve as Chairman & CEO of Canaccord Genuity Group Inc.

Capital Markets

  • During fiscal Q4/15 Canaccord Genuity led or co-led 24 transactions globally, raising total proceeds of C$1.6 billion(4)

  • Canaccord Genuity participated in 74 transactions globally, raising total proceeds of C$9.1 billion(4) during fiscal Q4/15

  • Significant investment banking transactions for Canaccord Genuity during fiscal Q4/15 include:
    • C$483.0 million for The Intertain Group Limited subscription receipts on the TSX
    • C$299.3 million for Yamana Gold Inc. on the TSX
    • AUD$132.0 million for Donaco International Limited on the ASX
    • £102.3 million for The Renewables Infrastructure Group on the LSE
    • £92.0 million for Eurocell PLC on the LSE
    • US$86.8 million for Neovasc Inc. on NASDAQ
    • US$65.0 million for Avinger, Inc. on NASDAQ
    • US$60.0 million for QAD Inc. on NASDAQ
    • AUD$51.3 million for Affinity Education Group Limited on the ASX
    • AUD$40.0 million for Orocobre Limited on the ASX
    • US$37.0 million for Aeterna Zentaris on NASDAQ
    • AUD$25.0 million for Nanosonics Limited on the ASX
  • Canaccord Genuity generated advisory revenues of $40.3 million during fiscal Q4/15 and $151.2 million during fiscal 2015

  • During fiscal Q4/15, significant M&A and advisory transactions included:
    • The Intertain Group Limited on their issuance of US$352.3 million in senior secured credit facilities
    • The Intertain Group Limited on their £425.8 million acquisition of Jackpotjoy
    • Stirling Square Capital Partners on the sale of Whittan Storage Systems to Bregal Capital
    • PhotoMedex, Inc. on its sale of its LCA-Vision, Inc. subsidiary
    • World Energy Solutions, Inc. on its sale to EnerNOC, Inc.
    • H.I.G. European Capital Partners on the acquisition of Adelie Foods
    • Distect Controls Inc. on their sale to Acuity Brands Inc.
    • Mecom Group PLC on their sale to De Persgroep Publishing N.V.
    • NH Ceramics on the acquisition of BlackGold Asia Resources Pte. Ltd and BlackGold Energy Limited
    • Bridgepoint on their acquisition of ASK Italian and Zizzi for £250.0 million
    • Cerba European Lab SAS on their acquisition of Novescia SAS

Canaccord Genuity Wealth Management (Global)

  • On a global basis, Canaccord Genuity Wealth Management generated revenue of $70.6 million in Q4/15

  • Total assets under administration(3) in Canada, and assets under management(3) in the UK, Europe and Australia, were $33.3 billion at the end of fiscal Q4/15

Canaccord Genuity Wealth Management (North America)

  • Canaccord Genuity Wealth Management generated $33.1 million in revenue and recorded a net loss before taxes of $1.3 million in Q4/15

  • Assets under administration(3) in Canada were $10.7 billion, an increase of 4% from $10.3 billion at the end of Q3/15 and increase of 6% from $10.2 billion at the end of Q4/14

  • Assets under management (3) in Canada (discretionary) were $1.6 billion, an increase of 8% from $1.4 billion at the end of Q3/15 and an increase of 30% from $1.2 million at the end of Q4/14

  • As at March 31, 2015, Canaccord Genuity Wealth Management had 152 Advisory Teams(5), a decrease of eight Advisory Teams(5) from March 31, 2014 and a decrease of nine from December 31, 2014

  • Canaccord Genuity Wealth Management has 16 offices across Canada, including eight operating on the Independent Wealth Management (IWM) platform

Canaccord Genuity Wealth Management (UK and Europe)

  • Wealth management operations in the UK and Europe generated $35.7 million in revenue and, excluding significant items, recorded net income of $7.1 million before taxes (1) in Q4/15

  • Assets under management (discretionary and non-discretionary) (3) were $21.8 billion (£11.6 billion), an increase of 7% from $20.3 billion (£11.2 billion) at the end of Q3/15 and an increase of 8% from $20.2 billion (£10.9 billion) at the end of Q4/14

Non-IFRS Measures

The non-International Financial Reporting Standards (IFRS) measures presented include assets under administration, assets under management, book value per diluted common share and figures that exclude significant items. Significant items include restructuring costs, amortization of intangible assets, impairment of goodwill and acquisition-related expense items, which include costs recognized in relation to both prospective and completed acquisitions. Book value per diluted common share is calculated as total common shareholders' equity divided by the number of diluted common shares outstanding and, commencing in Q1/14, adjusted for shares purchased under the NCIB and not yet cancelled, and estimated forfeitures in respect of unvested share awards under share-based payment plans.

Management believes that these non-IFRS measures will allow for a better evaluation of the operating performance of Canaccord Genuity Group Inc.'s business and facilitate meaningful comparison of results in the current period to those in prior periods and future periods. Figures that exclude significant items provide useful information by excluding certain items that may not be indicative of Canaccord Genuity Group's core operating results. A limitation of utilizing these figures that exclude significant items is that the IFRS accounting effects of these items do in fact reflect the underlying financial results of Canaccord Genuity Group's business; thus, these effects should not be ignored in evaluating and analyzing Canaccord Genuity Group's financial results. Therefore, management believes that Canaccord Genuity Group's IFRS measures of financial performance and the respective non-IFRS measures should be considered together. 

Selected financial information excluding significant items 


Three months ended March 31

Quarter-over-

quarter change

For the years ended March 31

YTD – over

– YTD change

(C$ thousands, except per share and % amounts)

2015

2014

2015

2014


Total revenue per IFRS

$232,465

$253,748

(8.4)%

$880,763

$855,244

3.0%


Total expenses per IFRS

260,835

221,737

17.6%

886,420

790,656

12.1%


Significant items recorded in Canaccord Genuity









Restructuring costs

20,997

n.m.

20,997

5,486

282.7%



Amortization of intangible assets

1,691

1,702

(0.6)%

6,823

6,742

1.2%



Impairment of goodwill

10,000

n.m.

14,535

n.m.


Significant items recorded in Canaccord Genuity Wealth Management









Amortization of intangible assets

1,467

2,256

(35.0)%

7,591

7,841

(3.2)%



Restructuring costs

783

n.m.


Significant items recorded in Corporate and Other









Restructuring costs

1,433

n.m.

3,033

n.m.



Development costs

5,200

n.m.

5,200

n.m.




Total significant items

40,788

3,958

n.m.

58,962

20,069

193.8%


Total expenses excluding significant items

220,047

217,779

1.0%

827,458

770,587

7.4%


Net income before tax – adjusted

12,418

35,969

(65.5)%

53,305

84,657

(37.0)%


Income taxes – adjusted

3,598

6,894

(47.8)%

13,975

15,811

(11.6)%


Net income– adjusted

$8,820

$29,075

(69.7)%

$39,330

$68,846

(42.9)%


EPS – basic, adjusted

$0.05

$0.28

(82.1)%

$0.27

$0.59

(54.2)%


EPS – diluted, adjusted

$0.05

$0.25

(80.0)%

$0.25

$0.54

(53.7)%

ACCESS TO QUARTERLY RESULTS INFORMATION
Investors, the media and others may review this quarterly earnings release and supplementary financial information at http://www.canaccordgenuitygroup.com/EN/IR/Pages/default.aspx.

CONFERENCE CALL AND WEBCAST PRESENTATION
Interested parties are invited to listen to Canaccord Genuity Group Inc.'s fourth quarter and fiscal 2015 results conference call via a live webcast or a toll free number. The conference call is scheduled for Wednesday, June 3, at 5:00 a.m. (Pacific Time), 8:00 a.m. (Eastern Time), 1:00 p.m. (UK Time), 8:00 p.m. (China Standard Time), and 10:00 p.m. (Australia EST Time). At that time, senior executives will comment on the results for the fourth quarter and fiscal 2015 year and respond to questions from analysts and institutional investors. 

The conference call may be accessed live and archived on a listen-only basis via the Internet at: http://www.canaccordgenuitygroup.com/EN/NewsEvents/Pages/Events.aspx

Analysts and institutional investors can access the call in via telephone at:

  • 647-427-7450 (within Toronto)
  • 1-888-231-8191 (toll free in North America)
  • 0-800-051-7107 (toll free from the UK)
  • 1-800-760-620 (toll free from Ireland)
  • 0-800-917-449 (toll free from France)
  • 0-800-183-0171 (toll free from Germany)
  • 10-800-714-1191 (toll free from Northern China)
  • 10-800-140-1195 (toll free from Southern China)
  • 1-800-287-011 (toll free from Australia)

Please request to participate in Canaccord Genuity Group Inc's Q4/15 earnings call. If a passcode is requested, please use 44666694.

A replay of the conference call will be available on June 3, 2015, after 8:00 a.m. (Pacific Time), 11:00 a.m. (Eastern Time) 4:00 p.m. (UK Time), 11:00 p.m. (China Standard Time) and 1:00 a.m. (Australia EST Time) on June 4, 2015 until July 17, 2015 at 416-849-0833 or 1-855-859-2056 by entering passcode 44666694 followed by the pound (#) sign.

ABOUT CANACCORD GENUITY GROUP INC.

Through its principal subsidiaries, Canaccord Genuity Group Inc. (the "Company") is a leading independent, full-service financial services firm, with operations in two principal segments of the securities industry: wealth management and capital markets. Since its establishment in 1950, the Company has been driven by an unwavering commitment to building lasting client relationships. We achieve this by generating value for our individual, institutional and corporate clients through comprehensive investment solutions, brokerage services and investment banking services. The Company has offices in 10 countries worldwide, including wealth management offices located in Canada, Australia, the UK and Europe. Canaccord Genuity, the international capital markets division, operates in Canada, the US, the UK, France, Ireland, Hong Kong, China, Singapore, Australia and Barbados. To us there are no foreign markets.TM

Canaccord Genuity Group Inc. is publicly traded under the symbol CF on the TSX and the symbol CF. on the London Stock Exchange. Canaccord Series A Preferred Shares are listed on the TSX under the symbol CF.PR.A. Canaccord Series C Preferred Shares are listed on the TSX under the symbol CF.PR.C.

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1
Significant items include restructuring costs, amortization of intangible assets and acquisition-related costs. See Non-IFRS Measures on page 5.
2 Net (loss) income attributable to common shareholders is calculated as net (loss) income adjusted for non-controlling interests and preferred share dividends.
3 See Non-IFRS measures on page 5.
4 Source: FP Infomart and Company Information. Transactions over C$1.5 million.
5 Advisory Teams are normally comprised of one or more Investment Advisors (IAs) and their assistants and associates, who together manage a shared set of client accounts. Advisory Teams that are led by, or only include, an IA who has been licensed for less than three years are not included in our Advisory Team count, as it typically takes a new IA approximately three years to build an average-sized book of business.

None of the information on the Company's websites at www.canaccordgenuity.com and www.canaccordgenuitygroup.com should be considered incorporated herein by reference.

SOURCE Canaccord Genuity Group Inc.

Image with caption: "Canaccord Genuity Group Inc. (CNW Group/Canaccord Genuity Group Inc.)". Image available at: http://photos.newswire.ca/images/download/20150602_C4524_PHOTO_EN_17462.jpg

For further information: North American media: Scott Davidson, Executive Vice President, Global Head of Corporate Development & Strategy, Phone: 416-869-3875, Email: scott.davidson@canaccord.com; Investor relations inquiries: Christina Marinoff, Vice President, Investor Relations and Communications, Phone: 416-687-5507, Email: christina.marinoff@canaccord.com; Broker: Oliver Hearsey, RBC Europe Limited, Phone: +44 (0) 20 7653 4000, Email: oliver.hearsey@rbccm.com; London media: Robert Morgan, Stockwell, Phone: +44 (0) 20 7240 2486, Email: robert.morgan@stockwellgroup.com; Simon Hardy or Alex Collins, Jefferies International Limited, Phone: +44 (0) 20 7029 8000, Email: simon.hardy@jefferies.com; alex.collins@jefferies.com

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