TORONTO, Nov. 10, 2011 /CNW/ - Sprott Inc. (TSX: SII) ("Sprott" or the
"Company") today announced its financial results for the three and nine
month periods ended September 30, 2011.
Q3 2011 Highlights
Assets Under Management ("AUM") were $9.9 billion as at September 30,
2011, compared to $6.5 billion as at September 30, 2010 and $9.3
billion as at June 30, 2011
Management Fees were $40.4 million, an increase of 63.4% compared with
the third quarter of 2010
Base EBITDA was $18.3 million ($0.11 per share), compared with $10.4
million ($0.07 per share) in the third quarter of 2010, an increase of
EBITDA was $17.4 million ($0.10 per share), compared with $13.8 million
($0.09 per share) in the third quarter of 2010, an increase of 26.5%
Net income increased by 4.1% to $10.4 million ($0.06 per share), from
$10.0 million ($0.07 per share) in the third quarter of 2010
Sprott Strategic Fixed Income Fund completed $220 million Initial Public
Sprott Physical Gold Trust completed US$306 million follow-on offering
Paul Meehl named CEO of Global Resource Investments, Ltd.
J.D Rothstein named Senior Vice President and National Sales Manager of
Sprott Asset Management
Introduced new Sprott USA (formerly Terra Resource Investment
Management) managed accounts platform
Launched Sprott Corporate Class Inc.
"During the third quarter, we continued to build and diversify our
organization to offer our clients a broader range of investment
opportunities," said Peter Grosskopf, CEO of Sprott Inc. "In October,
we launched our first Sprott-branded products through Sprott USA, with
the introduction of a new managed accounts platform that offers US
investors access to the combined expertise of Rick Rule, Eric Sprott
and the Sprott investment team."
"The ongoing climate of global economic uncertainty has taken a toll on
the markets, with most major indices in negative territory for the
year," added Mr. Grosskopf. "While we have positioned our portfolios
defensively, in line with our well-stated views on the weaknesses
inherent in the financial system, we were disappointed not to have
delivered better performance through the recent turmoil. We remain
confident in our physical metals positions and believe the current
market environment presents unique opportunities to invest in precious
metals-related equities, many of which are trading at historically wide
spreads to bullion prices."
For the three
For the three
For the nine
For the nine
AUM, beginning of period
Market value appreciation
(depreciation) of portfolios
AUM, end of period
Assets Under Management
At September 30, 2011, AUM increased by 51.7% to $9.9 billion, from $6.5
billion at September 30, 2010. When compared to AUM of $9.3 billion at
June 30, 2011, AUM increased by 6.3% during the third quarter. The $0.6
billion increase in AUM at the end of the third quarter of 2011, when
compared to the second quarter of 2011, resulted from $0.7 billion in
net sales, offset by $0.1 billion in market depreciation of portfolios.
The majority of the net sales for the quarter came from the launch of
the Sprott Strategic Fixed Income Fund, which raised net proceeds of
$213 million, and the completion of a $281 million (net) follow-on
offering of Sprott Physical Gold Trust Units. During the quarter,
market value depreciation from most Mutual Funds and Managed Accounts,
more than offset the positive investment performance of the Domestic
Hedge Funds, Offshore Funds and Bullion Funds.
Average AUM for the quarter ended September 30, 2011 was $10.4 billion,
compared with $5.7 billion for the third quarter of last year.
Total revenue for the quarter ended September 30, 2011 increased by
52.4% to $44.3 million, from $29.1 million in the third quarter of
2010. For the nine months ended September 30, 2011, total revenue
increased by 51.2% to $123.1 million from $81.4 million in the first
nine months of 2011.
Management fees increased by 63.4% during the quarter to $40.4 million,
from $24.7 million in the third quarter of 2011, as average AUM
increased by approximately 82.4% over the same period last year.
Management fee margins fell to 1.6% from 1.7% in the third quarter of
2010. The decrease is mainly due to the significant growth in bullion
funds, which have a lower management fee than the majority of the other
Sprott Funds. For the first nine months of 2011, management fees
increased by 56.8% to $113.1 million from $72.1 million in the first
three quarters of 2011.
Losses from proprietary investments, which include investments in funds
that Sprott manages, an investment in Sprott Resource Lending Corp,
certain other resource-related stocks and warrants, and gold and silver
bullion, totaled $2.4 million for the third quarter of 2011, compared
with a gain of $2.9 million in the third quarter of 2011. For the nine
months ended September 30, 2011, losses from proprietary investments
totaled $6.0 million, compared with a gain of $3.4 million during the
first nine months of 2010.
Commission revenue for the quarter ended September 30, 2011, was $3.4
million compared to $0.3 million during the prior year period. In the
third quarter of 2011, commission revenue was mainly due to commissions
generated by Global Resource Investments, Ltd. ("GRIL") and, to a
lesser extent, Sprott Private Wealth LP. For the nine months ended
September 30, 2011, commission revenue increased by $8.0 million to
$11.3 million from $3.3 million during the prior year period, primarily
due to the addition of GRIL in February 2011.
Other income decreased by $0.5 million in the third quarter of 2011 to
$1.0 million from $0.5 million for the third quarter of 2010. For the
nine months ended September 30, 2011, other income increased by $0.3
million to $2.0 million from $1.7 million during the prior year period.
Total expenses for the quarter ended September 30, 2011 were $30.3
million, an increase of $14.5 million or 92.1%, compared with $15.8
million for the third quarter of 2010. Total expenses for the first
nine months of 2011 were $83.0 million, an increase of 72.8% from $48.0
million in the nine months ended September 30, 2010. The increase
during the quarter and nine months of 2011 is primarily due to the
acquisition of the Global Group of Companies (including the
amortization of the related intangible assets and earn out shares) and
higher costs associated with the growth of the business, including
higher compensation and benefits expenses.
Base EBITDA, which excludes the impact of income taxes and certain
non-cash expenses and gains or losses on proprietary investments,
increased by 76.6% to $18.3 million ($0.11 per share) for the third
quarter of 2011, compared with $10.4 million ($0.07 per share) in the
third quarter of 2010. For the nine months ended September 30, 2011,
Base EBITDA increased by 72.2% to $53.3 million from $31.0 million in
the first nine months of 2010.
Net income for the quarter ended September 30, 2011 increased 4.1% to
$10.4 million ($0.06 per share) from $10.0 million ($0.07 per share) in
the third quarter of 2010. During the quarter, despite an increase in
net income, net income per share decreased by $0.01, compared to the
third quarter of 2010. The decrease resulted primarily from the
issuance of common shares in relation to the acquisition of the Global
Companies. For the first nine months of 2011, net income was $28.4
million ($0.17 per share), a 17.7% increase over the $24.1 million
($0.16 per share) earned during the first nine months of 2010.
On August 9, 2011, a dividend of $0.03 per common share was declared for
the quarter ended June 30, 2011. This dividend was paid on September 2,
2011 to shareholders of record at the close of business on August 18,
In November 2011, a dividend of $0.03 per common share was declared for
the quarter ended September 30, 2011.
Conference Call and Webcast
A conference call and webcast will be held today, Thursday November 10,
2011, at 10:00am ET to discuss the Company's financial results. To
access the call, please dial 647-427-7450 or 1-888-231-8191 ten minutes
prior to the scheduled start of the call. A taped replay of the
conference call will be available until Thursday, November 17, 2011 by
calling 416-849-0833 or 1-855-859-2056, reference number 24801373.
The conference call will also be webcast live at www.sprottinc.com and www.newswire.ca. An archived replay of the webcast will be available for 365 days.
*Non-IFRS Financial Measures
This press release includes financial terms (including AUM, EBITDA, Base
EBITDA, Cash Flow from Operations and net sales) that the Company
utilizes to assess the financial performance of its business that are
not measures recognized under International Financial Reporting
Standards ("IFRS"). These non-IFRS measures should not be considered
alternatives to performance measures determined in accordance with IFRS
and may not be comparable to similar measures presented by other
issuers. For additional information regarding the Company's use of
non-IFRS measures, including the calculation of these measures, please
refer to the "Non-IFRS Financial Measures" section of the Company's
Management's Discussion and Analysis and its financial statements
available on the Company's website at www.sprottinc.com and on SEDAR at www.sedar.com.
This release contains "forward-looking statements" which reflect the
current expectations of the Company. These statements reflect
management's current beliefs with respect to future events and are
based on information currently available to management. Forward-looking
statements involve significant known and unknown risks, uncertainties
and assumptions. Many factors could cause actual results, performance
or achievements to be materially different from any future results,
performance or achievements that may be expressed or implied by such
forward-looking statements including, without limitation, those listed
under the heading "Risk Factors" in the Company's annual information
form dated March 22, 2011. Should one or more of these risks or
uncertainties materialize, or should assumptions underlying the
forward-looking statements prove incorrect, actual results, performance
or achievements could vary materially from those expressed or implied
by the forward-looking statements contained in this release. Although
the forward-looking statements contained in this release are based upon
what the Company believes to be reasonable assumptions, the Company
cannot assure investors that actual results, performance or
achievements will be consistent with these forward-looking statements.
These forward-looking statements are made as of the date of this
release and the Company does not assume any obligation to update or
revise them to reflect new events or circumstances.
About Sprott Inc.
Sprott Inc. is a leading independent asset manager dedicated to
achieving superior returns for its clients over the long term. The
Company currently operates through four business units: Sprott Asset
Management LP, Sprott Private Wealth LP, Sprott Consulting LP, and
Sprott U.S. Holdings Inc. Sprott Asset Management is the investment
manager of the Sprott family of mutual funds and hedge funds and
discretionary managed accounts; Sprott Private Wealth provides wealth
management services to high net worth individuals; and Sprott
Consulting provides management, administrative and consulting services
to other companies, including Sprott Resource Corp. (TSX: SCP), Sprott
Resource Lending Corp. (TSX: SIL) (NYSE AMEX: SILU) and Sprott Power
Corp. (TSX: SPZ). Sprott U.S. Holdings Inc. includes Global Resource
Investments Ltd, Sprott Asset Management USA Inc., and Resource Capital
Investments Corporation. Sprott Inc. is headquartered in Toronto,
Canada, and is listed on the Toronto Stock Exchange under the symbol
"SII". For more information on Sprott Inc., please visit www.sprottinc.com.
SOURCE Sprott Inc.
For further information:
Investor contact information: (416) 203-2310 or 1 (877) 403-2310 or firstname.lastname@example.org.