GMP Capital Trust reports results for second quarter 2008



    
    -   Second quarter 2008 revenue down 30%, in persistently challenging
        markets, compared with the same period in 2007
    -   Monthly cash distributions reduced from $0.14 per Fund unit to
        $0.1042 per Fund unit
    -   Delivered solid ROE of 22.4% in the quarter
    -   Successfully launched the GMP Diversified Alpha Fund, growing assets
        to $196 million
    

    TORONTO, Aug. 7 /CNW/ - GMP Capital Trust (the "Fund") reported revenue
of $89.2 million for the second quarter ended June 30, 2008, a decrease of 30%
compared with second quarter 2007 due primarily to lower investment banking
and commission revenue. Net income was $15.7 million, down 59% compared with
strong results reported in the same period in 2007.
    For the six-month period ended June 30, 2008, the Fund reported revenue
of $183.3 million, a decrease of 24% compared with the same period in 2007,
largely due to lower returns in principal activities, which, in the same
period in 2007, included realized gains of $13.0 million from the sale of its
holding of shares in Montreal Exchange Inc. as well as lower equity
underwriting and commission revenue. Net income was $36.7 million for the
six-month period ended June 30, 2008, compared with $83.0 million in the same
period in 2007.
    "Given the market turbulence that we and other financial services
participants, are experiencing, we remain satisfied with our performance and
our return on unitholders' equity. While we did not achieve the same level of
profitability that we and our unitholders have become accustomed, our work
ethic remains strong and we have added talented new professionals to pursue
the opportunities ahead. Through a consistent focus on meeting the needs of
our clients, maintaining the strength of our balance sheet and executing
initiatives designed to grow our business responsibly in light of the current
market environment, we believe, we are well positioned to manage through these
challenging times as we have done in the past. As we considered the Fund's
financial performance and the current capital market activity levels, we felt
it prudent to reduce our monthly cash distribution rate at this time. While
this was a difficult decision, we believe it represents the best course of
action for the Fund and our unitholders over the long term," said 
Kevin Sullivan, Chief Executive Officer.

    
    Second Quarter 2008 (compared with second quarter 2007)

    -   Revenue of $89.2 million, down 30%
    -   Expenses of $70.8 million, down 14%
    -   Net income of $15.7 million, down 59%
    -   Basic earnings per unit of $0.25, down 59%
    -   Annualized ROE of 22.4% compared with 51.9%
    -   Distributable cash of $22.5 million ($0.35 per basic unit), down 52%
        from $47.3 million ($0.75 per basic unit)
    -   Payout ratio of 119.8% compared with 49.8%
    -   Monthly distribution rate reduced from $0.14 per Fund unit to $0.1042
        per Fund unit, commencing with the August 2008 distribution

    First Half 2008 (compared with first half 2007)

    -   Revenue of $183.3 million, down 24%
    -   Expenses of $143.0 million, down 4%
    -   Net income of $36.7 million, down 56%
    -   Basic earnings per unit of $0.57, down 57%
    -   Annualized ROE of 25.8% compared with 57.8%
    -   Distributable cash of $48.6 million ($0.76 per basic unit), down 50%
        from $97.2 million ($1.55 per basic unit)
    -   Payout ratio of 110.6% compared with 48.4%
    

    Commenting further on the Fund's progress in building its franchise,
Mr. Sullivan said "This quarter, we launched the GMP Diversified Alpha Fund;
we continued to grow our European operations; we've added investment advisory
professionals in Wealth Management; and we invested in new technologies to
better serve our clients. We are also pleased to announce the appointment of
Dan Tsubouchi to Vice Chairman and co-head of Investment Banking. In addition
to his current responsibilities for the oversight of the operations of our
Calgary office, Dan will also assume responsibility for all corporate finance
activities in Calgary and continue to work closely with our clients in the oil
and gas sector. Dan has over 25 years of experience in the oil and gas sector,
and we look forward to his continued leadership in his new role. Our
businesses remain fundamentally strong and, we believe, we are well positioned
to grow and prosper when the markets improve."

    SECOND QUARTER 2008 BUSINESS SEGMENT HIGHLIGHTS

    
    Capital Markets

    -   Revenue of $69.8 million, down 35% from second quarter 2007

    -   Income before income taxes of $22.2 million, down 54% from second
        quarter 2007

    -   Investment banking revenue of $36.4 million, down 43% from second
        quarter 2007 primarily as a result of weaker equity underwriting
        results in the mining and oil and gas sectors compared with record
        equity underwriting revenue in the same period in 2007

    -   Sales and trading commission income of $28.9 million, down 21% from
        second quarter 2007, primarily due to persistent equity market
        volatility. In second quarter 2008, facilitation losses were near our
        historical average at 12% of gross commissions generated, and were
        down dramatically from the 31% reported in first quarter 2008 and
        were lower than the 17% reported in second quarter 2007

    -   Ranked No. 1 in block trading volume on the Toronto Stock Exchange
        with a 9.2% market share(1)

    -   Ranked No. 2 in the value of common equity underwriting transactions
        completed in Canada having led or co-led 11 transactions valued at
        approximately $617.4 million(2)

    -   Ranked No. 6 for total value of merger and acquisitions transactions
        announced in Canada, valued at US$541.3 million(3)

    Wealth Management

    -   Revenue of $13.2 million, down 6% from second quarter 2007

    -   Assets under administration of $4.8 billion, up 18% from second
        quarter 2007

    -   Continued focus on growing managed and fee-based assets, having now
        surpassed $1 billion

    -   Continued to add investment advisory professionals and further
        invested in branch infrastructure, contributing to higher
        non-compensation related expenses of $0.9 million

    -   Net loss before income taxes of $0.2 million compared with record
        quarterly net income before taxes of $0.9 million for the same period
        in 2007

    -   During the second quarter, GMP Private Client was the first
        investment dealer in Canada, and among the first globally, to be
        independently certified for fiduciary excellence in the Investment
        Manager category by CEFEX (Centre for Fiduciary Excellence, LLC),
        providing third party validation of our adherence to the industry's
        best fiduciary practices

    --------------------------
    (1) Source: CanadaEquity.com as at July 16, 2008.
    (2) Source: FPinfomart as at July 16, 2008. Data is ranked by value of
        transactions and is presented on a "Full Credit to Book" basis
        whereby the entire transaction value is allocated to the bookrunner.
    (3) Source: Bloomberg as at July 16, 2008. Data contains announced
        transactions based in Canada in the specified period; includes target
        or seller and acquirer.

    Alternative Investments

    -   Revenue of $7.3 million, up 18% from second quarter 2007 primarily
        reflecting incremental investment management fees earned by
        GMP Investment Management arising from the management of the
        GMP Diversified Alpha Fund and unrealized gains on the Fund's
        investment in the GMP Diversified Alpha Fund

    -   Income before income taxes of $2.8 million compared with $2.2 million
        in second quarter 2007, as a net positive contribution from
        GMP Investment Management was partly offset by a decrease in
        management fees earned on lower levels of capital in the
        EdgeStone Funds

    -   The GMP Diversified Alpha Fund generated a net year-to-date return of
        6.2% in its first three months of operation and currently manages
        approximately $196 million in assets
    

    For further information about the Fund, our results for second quarter
2008 and the meaning of certain references, this press release should be read
in conjunction with the Unaudited Interim Consolidated Financial Statements
for second quarter 2008 and the Fund's Management's Discussion and Analysis
for the second quarter ended June 30, 2008, which can be accessed on the
Fund's website at gmpcapitaltrust.com and on SEDAR at sedar.com.

    DISTRIBUTION POLICY AND DISTRIBUTIONS

    In response to the continued challenging market conditions, the Fund's
Board of Trustees approved a decrease to the monthly cash distribution from
$0.14 per Fund unit to $0.1042 per Fund unit commencing with the August 2008
distribution to unitholders of record as at August 29, 2008. 
Griffiths McBurney L.P. will make equivalent monthly distributions to holders
of its Class B limited partner units, which will be payable on or about the
20th day of each month following declaration.

    SECOND QUARTER 2008 CONFERENCE CALL

    Management will host a conference call and live audio webcast today at
11:00 a.m. (ET) to discuss the Fund's second quarter ended June 30, 2008. The
call may be accessed by dialling 416-644-3415 or 1-800-733-7560. The audio
webcast will be accessible at gmpcapitaltrust.com and will be archived on the
site. A replay of the conference call will be available from Thursday, 
August 7, 2008, at 12:00 p.m. (ET) to Thursday, August 14, 2008, at 
11:59 p.m. (ET). The dial-in number for the replay is 416-640-1917 or
1-877-289-8525; access code 21274427 followed by the number sign.

    ABOUT GMP CAPITAL TRUST

    GMP Capital Trust carries on business through the following principal
entities: GMP Securities L.P., Griffiths McBurney Corp., GMP Securities Europe
LLP, GMP Private Client L.P., EdgeStone Capital Partners, L.P. and GMP
Investment Management L.P. GMP Securities L.P. is a leading independent
Canadian investment dealer focused on investment banking and institutional
equities for corporate clients and institutional investors. GMP Securities
L.P. can be found on the web at gmpsecurities.com. Griffiths McBurney Corp.
services institutional clients in the United States while GMP Securities
Europe LLP provides investment banking and institutional equity services to
clients located in Europe. GMP Private Client L.P. is a full-service
investment firm focused on high-net-worth private investors that provides
wealth preservation, income and growth strategies delivered by seasoned
investment advisors. GMP Private Client L.P. can be found on the web at
gmpprivateclient.com. EdgeStone Capital Partners, L.P. is one of Canada's
leading private equity firms, providing capital, strategic direction and
business and financial advice to help promising mid-market and early stage
companies achieve their full potential. EdgeStone Capital Partners, L.P. can
be found on the web at edgestone.com. GMP Investment Management L.P. provides
investment management services to both high-net-worth individuals and
institutional investors. Through its recently launched GMP Diversified Alpha
Fund, GMP Investment Management L.P will seek to generate long-term
risk-adjusted investment returns through the execution of diversified
investment strategies. GMP Capital Trust is listed on the Toronto Stock
Exchange under the symbol GMP.UN. The Fund's website is located at
gmpcapitaltrust.com. The Fund has offices in Toronto, Calgary, Montreal,
Vancouver, Geneva, Switzerland and London, England.

    Forward-Looking Statements

    This press release may contain "forward-looking statements" (as defined
under applicable securities laws) concerning anticipated future events,
results, circumstances, performance or expectations that are not historical
facts but instead represent our beliefs, expectations, estimates and
projections regarding future events, many of which, by their nature, are
inherently uncertain and beyond our control. These statements include, but are
not limited to, statements made with respect to management's beliefs, plans,
estimates, and intentions, and similar statements concerning anticipated
future events, results, circumstances, performance or expectations that are
not historical facts. Forward-looking statements generally can be identified
by the use of forward-looking terminology such as "outlook", "objective",
"may", "will", "expect", "intend", "estimate", "anticipate", "believe",
"should", "plans" or "continue", or similar expressions suggesting future
outcomes or events. Such forward-looking statements reflect management's
current beliefs and are based on information currently available to
management.
    These statements are not guarantees of future performance and are subject
to numerous risks and uncertainties, including those described in the Fund's
regulatory filings, which are available on the Fund's website at
gmpcapitaltrust.com and on SEDAR at sedar.com. The Fund's primary business
activities, by their nature, are both competitive and subject to various
risks. These risks include market, credit, liquidity, operational and
regulatory risks and other risk factors including, without limitation,
variations in the value of securities, the volatility and liquidity of equity
trading markets, the volume of new financings and mergers and acquisitions,
competition in the marketplace for suitable investments, sustainability of
fees, nature and type of portfolio company investments, ability to realize
carried interest entitlements and dependence on key personnel. Other factors,
such as general economic conditions also may have an impact on the Fund's
results of operations. Many of these risks and uncertainties can affect our
results and could cause our actual results to differ materially from those
expressed or implied in any forward-looking statement made by us or on our
behalf. For a description of risks that could cause our actual results to
materially differ from our current expectations, please see the "Risk
Management" section in the Fund's 2007 Annual MD&A and Q2 2008 MD&A and "Risk
Factors" in the Fund's Annual Information Form dated February 27, 2008.
Material factors or assumptions applied in drawing a conclusion or making an
estimate set out in any forward-looking information include: continued
tightened liquidity conditions; a continued slowdown in the United States'
economy leading to a decreased demand for Canadian exports to the United
States; a strong Canadian dollar relative to the American dollar; and high and
rising commodity prices. For other factors or assumptions applied see the
"Business Environment and Market Outlook - Market Outlook" section in the
Fund's 2007 Annual MD&A and Q2 2008 MD&A. Although forward-looking information
contained in this press release is based upon what management believes are
reasonable assumptions, there can be no assurance that actual results will be
consistent with these forward-looking statements. Certain statements included
in this press release may be considered "financial outlook" for purposes of
applicable securities laws, and as such the financial outlook may not be
appropriate for purposes other than this press release. Except as required by
applicable law, management and the Board of Trustees of the Fund undertake no
obligation to publicly update or revise any forward-looking statement, whether
as a result of new information, future events or otherwise.

    Non-GAAP Measures

    Certain financial terms included in this press release (e.g.,
"distributable cash", "payout ratio" and "ROE") are not recognized measures
under Canadian generally accepted accounting principles (GAAP) and do not have
any standardized meanings prescribed by GAAP. Therefore, readers are cautioned
that these measures may not be comparable to similar measures presented by
other issuers. For a more comprehensive discussion on the Fund's use of
non-GAAP measures, please see the "Presentation of Financial Information and
Non-GAAP Measures" section of the Fund's 2007 Annual MD&A and Q2 2008 MD&A,
which is available on the Fund's website at gmpcapitaltrust.com and on SEDAR
at sedar.com.





For further information:

For further information: GMP Capital Trust, Rocco Colella, Director,
Investor Relations, 145 King Street West, Suite 300, Toronto, Ontario, M5H
1J8, Tel: (416) 941-0894, Fax: (416) 943-6175, rcolella@gmpsecurities.com or
investorrelations@gmpcapitaltrust.com


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890