- Quarterly adjusted EPS1 at record level of $0.73
- Q1 adjusted EBITDA per share1 of $1.14 and adjusted revenue1
of $603.2 million also reach record levels
- Repurchased 6.6 million shares in Q1 for $112.7
million
- Paid quarterly dividend of $0.18 a share, totalling $37.9
million
- Reduced debt by retiring $525 million in debentures due in
2021 and 2023 and repurchasing $44 million in bonds due in
2024
- Total assets at record $240.6 billion, up 55% year over
year
- Reached agreements in Q1 to acquire three U.S. RIAs with a
combined $39 billion in assets, more than doubling CI’s U.S. assets
to $74 billion2
- Continued modernization of asset management with launch of
bitcoin ETF, private equity fund
All financial amounts in
Canadian dollars unless otherwise stated.
CI Financial Corp. (“CI”) (TSX:CIX, NYSE:CIXX) today released
financial results for the quarter ended March 31, 2021.
“Our record financial results speak to the tremendous progress
we have made in executing on our strategic priorities over the past
15 months,” said Kurt MacAlpine, CI Chief Executive Officer. “CI
has been fundamentally transformed into a much larger, more global
firm with increasingly diversified businesses and sources of
revenue and earnings.
“Core to our strategy has been our rapid growth in U.S. wealth
management and we continued that momentum in the first quarter with
three transactions that have added $39 billion to our U.S. assets
(as of April 30, 2021). As CI has grown, it has become more
balanced between regions and between asset management and wealth
management.
“We have also made significant advances in modernizing our asset
management business this year, launching innovative new products
that included an industry-leading suite of cryptocurrency ETFs and
funds, a private equity fund and a gold bullion ETF,” Mr. MacAlpine
said. “Our success in ETFs, where we are among the top five
companies in Canada by assets and a sales leader, has contributed
to a strong improvement in our sales, as CI had its best quarter
for net flows since the third quarter of 2017.”
Mr. MacAlpine also said, “We continue to take a dynamic approach
to capital allocation and repurchased 6.6 million shares in the
first quarter while at the same time reducing and reorganizing our
debt through the early redemption of debentures due over the next
two years in favor of longer-term notes.”
Financial results
CI reported adjusted earnings per share1 for the first quarter
of $0.73, an all-time high for CI. This compares to adjusted
earnings per share of $0.71 for the fourth quarter and $0.56 for
the first quarter of 2020. Basic earnings per share were $0.60 for
the first quarter of 2021, an increase of 20% from $0.50 for the
previous quarter and an increase of 9% from $0.55 for the first
quarter of 2020. Adjusted earnings per share are earnings per share
attributable to common shareholders excluding amortization of
acquisition-related intangibles, the change in fair value of
acquisition liabilities, and foreign exchange gains and losses
associated with the translation of balance sheet and income
statement items related to acquisitions, and net of other
provisions and adjustments.
Adjusted revenue1 was $603.2 million in the first quarter of
2021, an increase of 9% from $554.1 million in the fourth quarter
and an increase of 22% from $493.0 million in first quarter of
2020. The increases reflect higher asset levels and, when compared
to the prior quarter, contributions from Doyle Wealth Management,
LLC, RGT Wealth Advisors, LLC, The Roosevelt Investment Group, LLC
and Stavis & Cohen Private Wealth, LLC, which were acquired
effective December 31, 2020.
SG&A expenses for the first quarter were $133.4 million, up
from $116.7 million in the fourth quarter and $115.0 million in the
same quarter a year ago. The increases are due in part to the
inclusion of newly acquired firms.
CI generated $155.6 million in free cash flow1 during the first
quarter, an increase of 7% from $145.6 million in the previous
quarter and an increase of 8% from $144.7 million in the same
quarter a year ago.
As at March 31, 2021, total assets were a record $240.6 billion,
up 4% from December 31, 2020 and up $85 billion or 55% year over
year, reflecting organic growth and acquisitions in wealth
management.
Assets under management at the end of the quarter were $138.5
billion, representing an increase of 3% from December 31, 2020 and
25% from March 31, 2020. Core assets under management, which
consist of assets managed by CI’s Canadian and Australian
subsidiaries, were $132.6 billion at March 31, 2021, an increase of
2% from the previous quarter-end and an increase of 19% year over
year. U.S. assets under management were $5.9 billion at March 31,
2021, up 8% over the quarter.
Total average assets under management were $137.1 billion in the
first quarter, up 4% from the fourth quarter and up 8% from the
first quarter of 2020. Core average assets under management were
$131.6 billion in the first quarter, compared to $126.2 billion for
the previous quarter and $127.2 billion for the year-ago
quarter.
Total wealth management assets as at March 31, 2021 were $102.1
billion, which also represents an all-time quarter-end high for CI.
They increased by 6% from December 31, 2020 and by $57.5 billion or
129% from a year earlier.
Canadian wealth management assets were $71.1 billion at the end
of the first quarter, representing increases of 6% from December
31, 2020 and 61% from March 31, 2020. The year-over-year increase
is a result of net sales, market growth and the acquisition of
Aligned Capital Partners Inc. in October 2020. This also includes
the assets of CI Assante Wealth Management, CI Private Counsel LP,
CI Direct Investing and Virtual Brokers.
U.S. wealth management assets were $31.0 billion at March 31,
2021, compared to $29.2 billion at December 31, 2020 and $0.5
billion at March 31, 2020. The year-over-year change is due to CI’s
acquisitions of U.S. registered investment advisor firms over the
period.
In the first quarter, CI had its best quarterly net flows since
the third quarter of 2017. Overall net redemptions were $0.9
billion, compared to net redemptions of $2.1 billion and $2.7
billion in the fourth and first quarters of 2020, respectively.
CI’s Canadian retail business, excluding products closed to new
investors, had $0.6 billion in net redemptions for the first
quarter of 2021, an improvement of $0.7 billion over both the
fourth quarter of 2020 and the first quarter of 2020. CI’s Canadian
institutional business had net redemptions of $0.4 billion for the
first quarter of 2021, an improvement of $0.5 billion over the
fourth quarter of 2020 and an improvement of $0.4 billion from the
same quarter a year ago. GSFM had net sales of $46 million in the
first quarter of 2021, improving $0.5 billion from the same quarter
a year ago, and CI’s U.S. RIA business had $0.3 billion in net
sales. CI’s closed business, comprised primarily of segregated fund
contracts that are no longer available for sale, had $0.2 billion
in net redemptions for the quarter.
Capital allocation
In the first quarter of 2021, CI repurchased 6.6 million shares
at a cost of $112.7 million, for an average cost of $17.17 per
share, and paid $37.9 million in dividends at a rate of $0.18 a
share.
The Board of Directors declared a quarterly dividend of $0.18
per share, payable on October 15, 2021 to shareholders of record on
September 30, 2021. The annual dividend rate of $0.72 per share
represented a yield of 3.6% on CI’s closing share price of $20.23
on May 12, 2021.
During the quarter, CI issued US$260 million in notes in a
re-opening of its 3.200% notes due 2030, which were originally
issued in December 2020, raising the aggregate principal amount of
the notes to US$960 million. CI also completed the early redemption
of $200 million of debentures maturing in November 2021 and $325
million of debentures due in July 2023. Additionally, CI
repurchased $44 million principal amount of debentures maturing in
July 2024. As a result, CI has reduced its debt level while
extending the overall maturity of its debt and locking in favorable
long-term rates. Long-term debt (including the current portion)
declined by 10% during the quarter to $2.2 billion.
First quarter business highlights
- CI’s U.S. expansion accelerated in the first quarter of 2021
with agreements to acquire three RIAs with combined assets of $39.4
billion, more than doubling CI’s U.S. asset base to $74 billion.2
The acquisitions, which were completed on April 30, 2021, included:
- Segall Bryant & Hamill, LLC of Chicago, which provides
wealth management services and institutional investment management
services to a broad array of clients from offices in Chicago,
Denver, Philadelphia, St. Louis and Naples, FL.
- Barrett Asset Management, LLC of New York, which delivers
high-touch wealth management services to families, trusts and
charitable organizations.
- Brightworth, LLC of Atlanta, which provides comprehensive
investment advisory and financial planning services to
high-net-worth individuals, families, business owners, trusts,
estates, charitable organizations, pension and profit-sharing plans
from offices in Atlanta and Charlotte, NC.
- In an important step in modernizing CI’s asset management
business and enhancing its product lineup, CI Global Asset
Management (“CI GAM”) launched the CI Galaxy Bitcoin ETF (TSX:BTCX)
in March, with the competitive advantage of having the lowest
management fee of any bitcoin ETF at 0.40%.
- Other enhancements to the product lineup included the launch of
a private equity product with Adams Street Partners, CI Gold
Bullion Fund (TSX:VALT), an ETF that invests in physical gold, and
retail series of CI Munro Global Growth Equity Fund.
Following quarter-end:
- CI agreed to acquire Dowling & Yahnke, LLC, a San
Diego-based registered investment advisor firm with US$5.1 billion
in assets3. The firm was founded in 1991 and serves over 1,300
clients, primarily individuals, families, and non-profit
organizations.
- CI supported the acquisition by Congress Wealth Management, LLC
(“CWM”) of Pinnacle Advisory Group, Inc. of Columbia, MD, an RIA
with US$2.4 billion in assets3 and offices in Columbia and Miami.
CI holds a strategic interest in CWM.
- CI acquired full ownership of Lawrence Park Asset Management
(“Lawrence Park”), a Toronto-based alternative fixed-income
investment firm. CI previously held a minority interest in Lawrence
Park, which manages approximately $600 million of assets in
credit-focused strategies.
- CI continued to build out an industry-leading suite of
cryptocurrency solutions with the launch of CI Galaxy Ethereum ETF,
the world’s first ETF to invest directly in Ether, as well as CI
Bitcoin Fund, North America’s first bitcoin mutual fund, and CI
Ethereum Fund, the world’s first Ethereum mutual fund. The launches
made CI GAM the only company in the world to offer convenient,
low-cost and secure exposure to the two largest cryptocurrencies
through both ETFs and mutual funds.
- CI GAM and The Empire Life Insurance Company launched the CI
Empire Life Concentric GIF family of segregated funds, which
combine the diversification, risk management, and growth potential
of actively managed mutual funds with the security of insurance
benefit guarantees.
Analysts’ conference call
CI will hold a conference call with analysts today at 9:00 a.m.
Eastern Time, led by Chief Executive Officer Kurt MacAlpine and
Chief Financial Officer Douglas Jamieson. The call and a slide
presentation will be accessible through a webcast or by visiting
the Investor Relations page on www.cifinancial.com. Alternatively,
investors may listen to the discussion by dialing 1-800-437-2398 or
647-792-1240 (Passcode: 2096170). A replay of the call will be
available for one year following the presentation (Passcode:
2096170). The webcast will be archived in the Financials section of
www.cifinancial.com.
Financial highlights
As at and for the quarters
ended
Change (%)
[millions of dollars, except share
amounts]
Mar. 31, 2021
Dec. 31, 2020
Mar. 31, 2020
QoQ
YoY
Core assets under management (Canada and
Australia)
132,626
129,591
111,065
2
19
U.S. assets under management
5,916
5,461
-
8
n/a
Total assets under management
138,541
135,052
111,065
3
25
Canadian wealth management
71,066
67,257
44,150
6
61
U.S. wealth management
31,013
29,230
461
6
6,627
Total wealth management assets
102,078
96,487
44,611
6
129
Total assets
240,620
231,539
155,675
4
55
Core average assets under management
131,569
126,233
127,163
4
3
Total average assets under management
137,142
131,246
127,163
4
8
Total net flows
(883)
(2,140)
(2,721)
Net income attributable to
shareholders
124.2
105.0
120.2
18
3
Adjusted net income1
151.6
148.7
124.0
2
22
Basic earnings per share
0.60
0.50
0.55
20
9
Diluted earnings per share
0.59
0.50
0.54
18
9
Adjusted earnings per share1
0.73
0.71
0.56
3
30
Free cash flow1
155.6
145.6
144.7
7
8
Share repurchases
112.7
29.8
103.9
278
8
Dividends paid per share
0.18
0.18
0.18
-
-
Dividend yield
4.0%
4.6%
5.2%
Average shares outstanding
207,476,125
209,347,760
219,550,908
(1)
(5)
Long term debt (including current
portion)
2,201
2,456
1,745
(10)
26
Net debt1
1,856
1,872
1,464
(1)
27
Net debt to adjusted EBITDA1
1.94
2.08
1.92
(7)
1
1. Free cash flow, net debt, adjusted net income, adjusted
earnings per share, adjusted revenue and adjusted EBITDA are not
standardized earnings measures prescribed by IFRS. Descriptions of
these measures, as well as others, and reconciliations to the
nearest IFRS measures, where necessary, are included in
Management’s Discussion and Analysis available at
www.cifinancial.com. 2. As at April 30, 2021. 3. As at March 31,
2021.
About CI Financial
CI Financial Corp. is an independent company offering global
asset management and wealth management advisory services. CI’s
primary asset management businesses are CI Global Asset Management
(CI Investments Inc.) and GSFM Pty Ltd., and it operates in
Canadian wealth management through Assante Wealth Management
(Canada) Ltd., CI Private Counsel LP, Aligned Capital Partners
Inc., CI Direct Investing (WealthBar Financial Services Inc.), and
CI Investment Services Inc.
CI’s U.S. wealth management businesses consist of Barrett Asset
Management, LLC, BDF LLC, Bowling Portfolio Management LLC,
Brightworth, LLC, The Cabana Group, LLC, Congress Wealth
Management, LLC, Doyle Wealth Management, LLC, One Capital
Management, LLC, The Roosevelt Investment Group, LLC, RGT Wealth
Advisors, LLC, Segall, Bryant & Hamill, LLC, Stavis & Cohen
Private Wealth, LLC and Surevest LLC.
CI is listed on the Toronto Stock Exchange under CIX and on the
New York Stock Exchange under CIXX. Further information is
available at www.cifinancial.com.
Commissions, trailing commissions, management fees and expenses
all may be associated with an investment in mutual funds and
exchange-traded funds (ETFs). Please read the prospectus before
investing. Important information about mutual funds and ETFs is
contained in their respective prospectus. Mutual funds and ETFs are
not guaranteed; their values change frequently, and past
performance may not be repeated. You will usually pay brokerage
fees to your dealer if you purchase or sell units of an ETF on
recognized Canadian exchanges. If the units are purchased or sold
on these Canadian exchanges, investors may pay more than the
current net asset value when buying units of the ETF and may
receive less than the current net asset value when selling
them.
This press release contains forward-looking statements
concerning anticipated future events, results, circumstances,
performance or expectations with respect to CI Financial Corp.
(“CI”) and its products and services, including its business
operations, strategy and financial performance and condition.
Forward-looking statements are typically identified by words such
as “believe”, “expect”, “foresee”, “forecast”, “anticipate”,
“intend”, “estimate”, “goal”, “plan” and “project” and similar
references to future periods, or conditional verbs such as “will”,
“may”, “should”, “could” or “would”. These statements are not
historical facts but instead represent management beliefs regarding
future events, many of which by their nature are inherently
uncertain and beyond management’s control. Although management
believes that the expectations reflected in such forward-looking
statements are based on reasonable assumptions, such statements
involve risks and uncertainties. The material factors and
assumptions applied in reaching the conclusions contained in these
forward-looking statements include that the acquisition of Dowling
& Yahnke, LLC will be completed and its asset levels will
remain stable, that the investment fund industry will remain stable
and that interest rates will remain relatively stable. Factors that
could cause actual results to differ materially from expectations
include, among other things, general economic and market
conditions, including interest and foreign exchange rates, global
financial markets, changes in government regulations or in tax
laws, industry competition, technological developments and other
factors described or discussed in CI’s disclosure materials filed
with applicable securities regulatory authorities from time to
time. The foregoing list is not exhaustive and the reader is
cautioned to consider these and other factors carefully and not to
place undue reliance on forward- looking statements. Other than as
specifically required by applicable law, CI undertakes no
obligation to update or alter any forward-looking statement after
the date on which it is made, whether to reflect new information,
future events or otherwise.
CI Global Asset Management is a registered business name of CI
Investments Inc.
This communication is provided as a general source of
information and should not be considered personal, legal,
accounting, tax or investment advice, or construed as an
endorsement or recommendation of any entity or security discussed.
Individuals should seek the advice of professionals, as
appropriate, regarding any particular investment. Investors should
consult their professional advisors prior to implementing any
changes to their investment strategies.
This announcement is not an offer of securities for sale into
the United States. None of the investment fund securities described
herein have been registered under the U.S. Securities Act of 1933,
as amended, and may not be offered or sold in the United States
absent registration or any applicable exemption from the
registration requirements. This news release does not constitute an
offer to sell or the solicitation of an offer to buy securities nor
will there be any sale of such securities in any state in which
such offer, solicitation or sale would be unlawful.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210513005329/en/
Investor Relations Jason Weyeneth, CFA Vice-President,
Investor Relations & Strategy 416-681-8779 jweyeneth@ci.com
Media Canada Murray Oxby Vice-President, Communications
416-681-3254 moxby@ci.com
United States Trevor Davis, Gregory FCA for CI Financial
443-248-0359 cifinancial@gregoryfca.com
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