- Revenue down 4% over the same comparable period
- Positive operating leverage results in an 89% increase in income
before income taxes compared with same period in 2008
- Announces a cash dividend of $0.05 per common share
TORONTO, Nov. 5 /CNW/ - GMP Capital Inc. ("GMP") (TSX: GMP) reported revenue of $71.5 million in the third quarter ended September 30, 2009, a decrease of 4% compared with third quarter 2008 due primarily to lower investment banking and commission revenue, partly offset by higher returns from principal activities. Income before income taxes was $12.0 million ($0.18 per basic share) compared with $6.4 million ($0.10 per basic unit) during the same period a year ago, an increase of 89%. Net income increased 21% to $8.4 million ($0.12 per basic share) compared with $6.9 million ($0.11 per basic unit) reported in the same period a year ago.
For the nine-month period ended September 30, 2009, GMP reported revenue of $239.7 million, a decrease of 7% compared with the same period in 2008, largely due to lower mergers and acquisitions revenue, lower commission revenue and lower interest income, which was partly offset by higher returns from principal activities and stronger equity underwriting revenue. Income before income taxes of $45.9 million remained relatively unchanged year over year. Net income was $23.6 million ($0.35 per basic share) compared with $43.7 million ($0.68 per basic unit) in the same period in 2008. First nine months 2009 included adjustments to the provision for income taxes to reflect the impact of the completion of the conversion from an income trust back to a corporation during second quarter 2009, which in aggregate reduced net income by $11.6 million.
"This quarter's results reflect the slowdown in the markets experienced in July and August which resulted in lower investment banking and commission revenue as markets continued to react to ongoing uncertainty surrounding the global economic recovery. The benefits realized from the cost savings initiatives we launched in late 2008 are contributing to an improvement in our quarterly results, despite the drop in revenue," said Kevin Sullivan, Chief Executive Officer, GMP Capital Inc. "GMP remained active this quarter as an underwriter on many significant financings on behalf of our clients. Although revenue remains below historical levels, we continue to build on our strong competitive and financial position and remain cautiously optimistic that markets will return to more sustained levels of activity," concluded Mr. Sullivan.
Third Quarter 2009 (compared with third quarter 2008)
- Revenue of $71.5 million, down 4%
- Expenses of $59.2 million, down 14%
- Income before income taxes of $12.0 million, up 89%
- Net income of $8.4 million, up 21%
- Earnings per basic share of $0.12 compared with earnings per basic
unit of $0.11
- Annualized ROE of 13.2% compared with 10.3%
First Nine Months 2009 (compared with first nine months 2008)
- Revenue of $239.7 million, down 7%
- Expenses of $191.1 million, down 9%
- Income before income taxes of $45.9 million, up 1%
- Net income of $23.6 million, down 46%
- Earnings per basic share of $0.35 compared with earnings per basic
unit of $0.68
- Annualized ROE of 13.2% compared with 20.9%
- Successful conversion from an income trust to a corporation effective
May 15, 2009
RICHARDSON GMP TRANSACTION
As announced on July 23, 2009, GMP entered into a definitive agreement with Richardson Partners Financial Limited, a private wealth management firm controlled by Richardson Financial Group, a subsidiary of James Richardson & Sons, Limited, in respect of transactions that will result in the combination of their respective wealth management businesses. Closing of the transactions is expected to occur on November 12, 2009, pending receipt of all corporate and regulatory approvals.
On November 4, 2009, the Board of Directors approved a cash dividend of $0.05 per common share, representing payment for the third quarter ended September 30, 2009, payable on November 25, 2009, to shareholders of record on November 16, 2009. During third quarter 2009, the Board of Directors approved a cash dividend of $0.1625 per Series A preferred share paid on October 20, 2009, to preferred shareholders of record on September 30, 2009.
THIRD QUARTER 2009 BUSINESS SEGMENT HIGHLIGHTS
- Revenue of $51.3 million, down 12% compared with third quarter 2008
- Operating earnings of $13.6 million, up 18% compared with third
- GMP Securities ranked No.2 in block trading volume on the Toronto
Stock Exchange ("TSX") with a 9.6% market share(1)
- GMP Securities ranked No. 4 in the value of common equity
underwriting transactions completed in Canada having led or co-led
17 transactions valued at $1.5 billion, and participated in
44 underwriting transactions valued at approximately $8.0 billion(2)
- Investment banking revenue of $28.7 million, down 28% compared with
third quarter 2008 due to weaker M&A revenue
- Revenue from a number of underwriting transactions announced in
September 2009 will be recognized in fourth quarter 2009; providing a
solid start to that quarter
- Sales and trading commission income of $16.5 million, down 26%
compared with third quarter 2008, due to lower trading volumes
executed by GMP Securities on behalf of clients on the TSX.
Facilitation trading losses were 15% of gross commissions generated
in third quarter 2009 compared with 21% in the same period a year
ago, reflecting GMP's prudent deployment of capital
- Revenue of $11.1 million, down 8% compared with third quarter 2008
- Commission revenue of $6.9 million, up 25% compared with third
- Operating loss of $1.1 million compared with an operating loss of
$656,000 in third quarter 2008 - Assets under administration of
$4.1 billion as at September 30, 2009, up 11% compared with second
- One additional advisory team hired during the quarter bringing the
total number of investment advisory teams to 41 as at the date hereof
- Revenue of $10.4 million, up 78% compared with third quarter 2008
- Revenue of $1.3 million was recorded in principal activities in third
quarter 2009, arising from the recovery in the market value of GMP's
investment in the GMP Diversified Alpha Fund, compared with losses of
$1.3 million in the same period last year,
- Revenue of $2.6 million recognized in third quarter 2009 on
successful sale of a portfolio company investment, Trimaster, by
EdgeStone's Equity Fund II
- Operating earnings of $5.9 million compared with $1.5 million in
third quarter 2008 - The GMP Diversified Alpha Fund (Class F)
generated a net return of 33.74% for the nine months ended
September 30, 2009
- As of the date hereof, the GMP Diversified Alpha Master Fund has
$244.0 million in assets under management, while EdgeStone currently
manages $1.1 billion in total capital
For further information about GMP, our results for third quarter 2009 and the meaning of certain references, this press release should be read in conjunction with the Unaudited Interim Consolidated Financial Statements and GMP's Management's Discussion and Analysis for the three and nine months ended September 30, 2009, which can be accessed on GMP's website at gmpcapital.com and on SEDAR at sedar.com.
THIRD QUARTER 2009 CONFERENCE CALL
Management will host a conference call and live audio webcast today at 10:00 a.m. (ET) to discuss GMP's third quarter ended September 30, 2009. The call may be accessed by dialing 416-644-3414 or 1-800-814-4859 (toll free). The audio webcast will be accessible at gmpcapital.com and will be archived on the site. A replay of the conference call will be available from Thursday, November 5, 2009, at 12:00 p.m. (ET) to Thursday, November 12, 2009, at 11:59 p.m. (ET). The dial-in number for the replay is 416-640-1917 or 1-877-289-8525 (toll free) and entering access code 4162631 followed by the number sign.
ABOUT GMP CAPITAL INC.
GMP Capital Inc. is listed on the Toronto Stock Exchange under the symbol GMP. The website is gmpcapital.com. With offices in Toronto, Calgary, Montreal, Vancouver and London, England, GMP Capital Inc. 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., through its private funds, seeks to generate superior risk-adjusted investment returns over the long term by executing selected investment strategies. GMP Investment Management L.P.'s offerings are aimed at both high-net-worth individuals and institutional investors.
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 this press release. GMP's primary business activities are both competitive and subject to various risks. These risks include market, credit, liquidity, operational and legal and regulatory risks and other risk factors including, without limitation, variations in the market 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, including exchange rate fluctuations, may also have an effect on GMP's results of operations. Many of these risks and uncertainties can affect our actual 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 GMP's 2008 Annual MD&A and "Risk Factors" in GMP's annual information form dated February 26, 2009. Material factors or assumptions that were applied to drawing a conclusion or making an estimate set out in the forward-looking information include: recent positive economic indicators resulting in a slower pace of economic and business contraction; improving liquidity and credit market conditions; uncertain equity market conditions in connection with public offerings, M&A activities and securities trading; a low interest rate environment; continued weakness in the United States' economy leading to a decreased demand for Canadian exports to the United States; and a strengthening Canadian dollar relative to the United States dollar. For other factors or assumptions applied see the "Business Environment and Market Outlook - Market Outlook" section included in GMP's 2008 Annual 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.
(1) Source: CanadaEquity.com as at October 8, 2009.
(2) Source: FPinfomart as at October 8, 2009. 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.
SOURCE GMP Capital Inc.
For further information: For further information: GMP Capital Inc., Rocco Colella, Director, Investor Relations, 145 King Street West, Suite 300, Toronto, Ontario, M5H 1J8, Tel: (416) 941-0894, Fax: (416) 943-6175, firstname.lastname@example.org or email@example.com