TORONTO, March 28, 2013 /CNW/ - Sprott Inc. (TSX: SII) ("Sprott" or the "Company") today announced its financial results for the year ended December 31, 2012.
- Assets Under Management ("AUM") were $9.9 billion as at December 31, 2012, compared to $9.1 billion as at December 31, 2011 and $10.3 billion as at September 30, 2012
- Assets Under Administration ("AUA") were $3.7 billion as at December 31, 2012, compared to $4.4 billion as at December 31, 2011
- Management Fees were $118.5 million, a decrease of 19.3% compared with the year ended December 31, 2011
- Base EBITDA was $52.5 million ($0.31 per share) compared with $69.4 million ($0.41 per share) for the year ended December 31, 2011, a decrease of 24.4%
- EBITDA was $59.6 million ($0.35 per share), compared with $64.5 million ($0.38 per share) for the year ended December 31, 2011, a decrease of 7.5%
- Net income was $32.0 million ($0.19 per share) for the year ended December 31, 2012, a decrease of 3.2% from $33.0 million ($0.20 per share) in the year ended December 31, 2011
- Raised US $1.6 billion through follow-on offerings of Sprott Physical Gold Trust and Sprott Physical Silver Trust Units
- Completed the initial public offering of the Sprott Physical Platinum and Palladium Trust for gross proceeds of US $280 million
- Finalized acquisition of Toscana Capital Corporation and Toscana Energy Corporation (now "Sprott Toscana")
- Sprott Resource Corp. marked five years in operation with a track record that placed it near the top of all resource-focused private equity strategies over the same period
- Named John Wilson and Scott Colbourne Co-Chief Investment Officers of Sprott Asset Management LP
- Completed non-brokered private placement with an institutional investor for gross proceeds of $25 million
- Signed joint venture agreement to launch new offshore fund with Zijin Mining Group Co., Ltd.
"In 2012, precious metals equities traded at increasingly depressed valuations over the year, while government stimulus programs pushed broader equity indices higher," said Peter Grosskopf, Chief Executive Officer of Sprott. "The combination of these factors caused several of our principal equities strategies to post losses for the year, which had a negative impact on our financial results."
"While we are confident in our positioning, the expertise of our investment team and our ability to deliver superior results over the long term, we have also taken immediate steps to improve our performance," continued Mr. Grosskopf. "These include the appointments of John Wilson and Scott Colbourne as co-Chief Investment Officers of Sprott Asset Management. John and Scott will direct the investment management functions of Sprott Asset Management and will be focused on optimizing idea sharing and risk management while reinforcing our results-oriented culture."
"Our business continued to grow in 2012, due largely to the success of our bullion products franchise," continued Mr. Grosskopf. "On the year, we raised approximately $1.9 billion through follow-on offerings of our physical gold and silver trusts and the launch of our newest publicly-traded bullion product, the Sprott Physical Platinum and Palladium Trust. Our private equity and lending businesses continue to perform well and were responsible for the majority of our performance fee revenue during the year."
"Looking ahead, one of our key priorities will be leveraging our global brand recognition to establish partnerships to manage capital for international clients," added Mr. Grosskopf. "We are pleased with the early results of our efforts in this area and recently signed a joint venture agreement to launch a new offshore fund in partnership with China's largest gold miner. We are also in the process of marketing our first institutionally-focused offshore fund, which will draw on the combined resources of our entire investment and technical teams."
|For the year ended|
|($ in millions)||2012||2011|
|AUM, beginning of year||9,137||8,545|
|Market value depreciation of portfolios||(942)||(1,521)|
|AUM, end of year||9,931||9,137|
Assets Under Management
At December 31, 2012, AUM increased by 8.7% to $9.9 billion from $9.1 billion at December 31, 2011.
Net sales for the year ended December 31, 2012 were $1.3 billion. The initial and follow-on offering of Sprott 2012 Flow-Through LP, the launch of the Sprott Silver Equities Class, the Sprott Enhanced Equity Class, the Sprott Enhanced Balanced Fund and follow-on offerings of Sprott Physical Gold Trust and Sprott Physical Silver Trust along with the initial public offering of Sprott Physical Platinum and Palladium Trust added approximately $1.9 billion to sales for the year ended December 31, 2012. Collectively, the Company's other Mutual Funds, Managed Accounts and Domestic Alternative Investment Strategies experienced net redemptions of approximately $0.4 billion for the year ended December 31, 2012. The Offshore Funds collectively, had redemptions resulting in net outflows for the year ended December 31, 2012 of approximately $0.2 billion or 39.9% of offshore AUM at the beginning of the year. The launch of Resource Income Partners Limited Partnership by Resource Capital Investment Corp. added $50 million to AUM.
Acquisitions during the year added $0.4 billion to the Company's AUM.
Average AUM for the year ended December 31, 2012 was $9.6 billion compared with $9.8 for the year ended December 31, 2011, a decrease of 1.3%.
Total revenue for the year ended December 31, 2012, decreased by 1.9% to $158.2 million from $161.3 million for the year ended December 31, 2011.
For the year ended December 31, 2012, management fees decreased by 19.3% to $118.5 million from $146.8 million the prior year. The decrease in management fees is primarily attributable to both the lower average AUM for the year ended December 31, 2012 as well as an increase in lower fee offerings such as the physical bullion trusts and fixed-income products.
Gains from proprietary investments, which include investments in products that Sprott manages, certain other resource-related stocks and warrants, and bullion, totaled $2.3 million, compared with losses of $8.0 million during 2011.
Commission revenue for the year ended December 31, 2012, decreased by $0.7 million to $13.5 million from $14.2 million during the prior year. During the year ended December 31, 2012, Sprott Global Resource Investments Ltd. ("GRIL") and Sprott Private Wealth LP ("SPW") earned commissions primarily from the sale and purchase of stocks by its clients, private placements and from sales of Sprott sponsored Funds and shares of Managed Companies to GRIL and SPW clients.
Total expenses for the year ended December 31, 2012 were $116.4 million, a decrease of 0.7% from $117.3 million in the year ended December 31, 2011.
Base EBITDA, which excludes the impact of income taxes and certain non-cash expenses and gains or losses on proprietary investments, decreased by 24.4% to $52.5 million from $69.4 million in 2011.
Net income for the year ended December 31, 2012 was $32.0 million ($0.19 per share), compared with $33.0 million ($0.20 per share) earned during the year ended December 31, 2011.
For the fourth quarter of 2012, management fee revenues decreased to $29.2 million from $33.7 million during the fourth quarter of 2011. Gross performance fees increased to $9.8 million from $2.5 million in the fourth quarter of 2011. Base EBITDA was $15.5 million, compared with $16.0 million in the fourth quarter of 2011. Net income was $3.3 million ($0.02 per share) compared to $4.6 million ($0.03 per share) in the prior year period.
On November 13 2012, a dividend of $0.03 per common share was declared for the quarter ended September 30, 2012. This dividend was paid on December 4, 2012 to shareholders of record at the close of business on November 22, 2012.
On March 26, 2013, a dividend of $0.03 per common share was declared for the quarter ended December 31, 2012. The dividend will be paid on April 23, 2013 to shareholders of record at the close of business on April 8, 2013.
Conference Call and Webcast
A conference call and webcast will be held today, Thursday, March 28, 2013 at 10:00am ET to discuss the Company's financial results. To participate in 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, April 4, 2014 by calling 416-849-0833 or 1-855-859-2056, reference number 26711530. The conference call will be webcast live at www.sprottinc.com and www.newswire.ca
*Non-IFRS Financial Measures
This press release includes financial terms (including AUM, AUA, 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 26, 2013. 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. Sprott U.S. Holdings Inc. includes Sprott 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.
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