- Reported diluted earnings per share of $0.21
- Mutual fund gross sales of $790 million for the third quarter
of 2021, an improvement of 61% year-over-year
- Mutual fund net sales of $288 million for the quarter
- Total assets under management and fee-earning assets1 of $43.4
billion
AGF Management Limited (AGF or the Company)
(TSX: AGF.B) today announced financial results for the third
quarter ended August 31, 2021.
AGF reported total assets under management and
fee-earning assets1 of $43.4 billion compared
to $36.5 billion as at August 31, 2020.
“As we head into the final months of 2021, we
are well-positioned to execute against our strategic priorities and
will aim to continue to gain momentum with a focus on increasing
sales, evolving our client-base and looking for opportunities to
diversify our business,” said Kevin McCreadie, Chief Executive
Officer and Chief Investment Officer, AGF.
“Despite the challenges of the pandemic, this
year we have made strides expanding into the private alternatives
space and are seeing the results of growing interest into our
fee-based series and separately managed accounts,” added
McCreadie.
AGF’s mutual funds net sales improved $310
million year-over-year, with total net sales of $288 million in Q3
2021, compared to net redemptions of $22 million in Q3 2020.
Excluding net flows from institutional clients invested in mutual
funds, retail mutual fund net sales were $288 million for the
quarter compared to net redemptions of $4 million in the
comparative period of 2020. AGF mutual fund gross sales for the
quarter totaled $790 million, a 61% improvement over prior
year.
Mutual fund sales momentum continued into
September with AGF reporting mutual fund net sales of $80 million
as at September 24, 2021 compared to net redemptions of $11
million for the same time last year. Mutual fund gross sales were
up 51% year-over-year.
“Delivering on our strategic growth strategy,
this quarter we deployed capital and diversified partnerships
within our private alternatives business,” said Adrian Basaraba,
Senior Vice-President and Chief Financial Officer. “The
opportunities within this space have allowed us to realize value
for our shareholders and grow our assets and revenue streams.”
“We are targeting continued growth while keeping
expense management top of mind with the goal of improving margins,”
added Basaraba.
Key Business Highlights:
- AGF in partnership with the SAF Group (SAF) announced the
launch of AGF SAF Private Credit Limited Partnership and AGF SAF
Private Credit Trust. The new offerings provide both institutional
and retail investors access to the benefit of private credit
investing.
- AGF announced an evolution of its strategic partnership with
SAF. The partnership is focused on providing investors access to
unique private alternative opportunities leveraging AGF’s
operations and distribution reach coupled with SAF’s private credit
investment management expertise. AGF and SAF have agreed to a
definitive agreement along with a distribution arrangement as an
alternative to AGF exercising its option to acquire management
contracts of select SAF funds.
- In June 2021, one of AGF’s long-term private alternative
investments, SAF Jackson Management LP (SAFJM LP), was fully
monetized, with a final cash distribution of $5.9 million
received. As part of this transaction, AGF through its joint
venture ownership interest in the manager received $2.4 million of
carried interest.
- AGF announced a strategic private equity partnership with First
Ascent Ventures (First Ascent) focused on investing in emerging
technology companies that are building the next generation of
disruptive, fast growing enterprise B2B software companies. AGF has
made a $30 million cornerstone investor commitment to First
Ascent’s second fund and is a member of the Limited Partner
Advisory Committee of the fund.
- AGF International Advisors Company Limited has been accepted as
a signatory to the UK Stewardship Code, recognized globally as a
best-practice benchmark in investment stewardship.
- Building on its commitment to diversity and inclusion, AGF
announced a multi-year partnership for the creation of the AGF
Scholarship Fund for Indigenous students with Indspire, a national
Indigenous organization that invests in the education of Indigenous
people, enabling their success through financial awards, resources
and role models.
- Judy Goldring, AGF's President and Head of Global Distribution,
was elected Vice-Chair of The Investment Funds Institute of Canada
(IFIC)'s Board of Directors. She will serve a two-year term
supporting IFIC's commitment to further strengthen the integrity of
Canada's investment funds industry and foster a strong, stable
investment sector for the benefit of investors and the
association’s Members.
For further information on AGF’s pandemic response plan
statement visit AGF.com.
Financial Highlights:
“When it comes to expense management, we
continue to take a thoughtful approach that has allowed our core
expenses and operations to remain relatively consistent as we
continue to see an increase in success-based expenses,” added
Basaraba.
- Management, advisory, administration fees and deferred sales
charges were $112.4 million for the three months ended
August 31, 2021, compared to $94.9 million in 2020. The
increase in revenue is attributable to higher net sales, increase
in AUM and higher average revenue rate as a result of product
mix.
- The continued increase in mutual fund sales in the third
quarter along with increased corporate development activity drove
higher selling, general and administrative costs in the period.
Selling, general and administrative costs were $50.1 million for
the three months ended August 31, 2021, compared to $46.1 million
in 2020. This increase in variable costs was partially offset by
management’s continued focus on cost control.
- EBITDA before commissions for the three months ended August 31,
2021 was $37.5 million, compared to $62.6 million in the prior year
comparative period. Excluding reported earnings
from S&WHL, adjusted EBITDA before commissions for the three
months ended August 31, 2021 was $37.5 million, compared to $21.3
million in the prior year comparative period.
- DSC commissions for the three months ended August 31, 2021 were
$14.1 million, compared to $8.9 million in the prior year
comparative period.
- Net income for the three months ended August 31, 2021 was $14.9
million ($0.21 diluted EPS), compared to $47.3 million
($0.60 diluted EPS) in the prior year comparative period.
Adjusted net income for the three months ended August 31, 2021 was
$14.9 million ($0.21 adjusted diluted EPS), compared to $14.8
million ($0.19 adjusted diluted EPS) in the prior year comparative
period. Excluding reported earnings from S&WHL, adjusted
diluted earnings per share was $0.08 in the comparative prior year
period. The increase is primarily due to the growth in mutual fund
sales as well as the income generated from AGF’s interest in
private alternative managers and long-term investments.
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Three months ended |
Nine months ended |
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August 31, |
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May 31, |
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August 31, |
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August 31, |
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August 31, |
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|
(in
millions of Canadian dollars, except per share data) |
|
2021 |
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|
2021 |
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|
20201 |
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2021 |
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|
20201 |
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Income |
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Management, advisory, administration fees |
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and deferred sales charges |
$ |
112.4 |
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$ |
108.6 |
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$ |
94.9 |
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$ |
323.9 |
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$ |
283.2 |
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Share of profit of joint ventures |
|
2.2 |
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|
0.1 |
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|
0.6 |
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3.1 |
|
|
1.3 |
|
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Other income from fee-earning arrangements |
|
0.7 |
|
|
0.4 |
|
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– |
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|
1.1 |
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– |
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Dividend income (S&WHL) |
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– |
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– |
|
|
41.3 |
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– |
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|
45.8 |
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Fair value adjustments and other income |
|
7.8 |
|
|
0.4 |
|
|
1.9 |
|
|
11.7 |
|
|
4.3 |
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Total Income |
$ |
123.1 |
|
$ |
109.5 |
|
$ |
138.7 |
|
$ |
339.8 |
|
$ |
334.6 |
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Selling, general and
administrative |
|
50.1 |
|
|
47.1 |
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46.1 |
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145.2 |
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131.6 |
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Deferred selling
commissions |
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14.1 |
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17.7 |
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8.9 |
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47.4 |
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31.7 |
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EBITDA before
commissions2 |
|
37.5 |
|
|
28.2 |
|
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62.6 |
|
|
92.2 |
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|
114.1 |
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Adjusted EBITDA before
commissions2 |
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37.5 |
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|
28.2 |
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30.1 |
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92.2 |
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81.6 |
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EBITDA |
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23.4 |
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|
10.5 |
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53.7 |
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44.8 |
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82.4 |
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Net income |
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14.9 |
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|
5.0 |
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47.3 |
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25.5 |
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63.5 |
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Adjusted net income2 |
|
14.9 |
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|
5.0 |
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14.8 |
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25.5 |
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31.0 |
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Diluted earnings per
share |
|
0.21 |
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|
0.07 |
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|
0.60 |
|
|
0.35 |
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|
0.80 |
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Adjusted diluted earnings per
share2 |
|
0.21 |
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0.07 |
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0.19 |
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0.35 |
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0.39 |
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Free cash flow2 |
|
21.5 |
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10.4 |
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15.5 |
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|
42.4 |
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|
36.1 |
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Dividends per share |
|
0.09 |
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|
0.08 |
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0.08 |
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0.25 |
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|
0.24 |
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Long-term debt |
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– |
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– |
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194.3 |
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– |
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194.3 |
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(end of period) |
Three months ended |
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August 31, |
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May 31, |
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February 28, |
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November 30, |
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August 31, |
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|
(in
millions of Canadian dollars) |
|
2021 |
|
|
2021 |
|
|
2021 |
|
|
2020 |
|
|
2020 |
|
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Mutual fund assets under
management (AUM)3 |
$ |
23,792 |
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$ |
22,290 |
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$ |
21,394 |
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$ |
20,322 |
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$ |
19,232 |
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Institutional, sub-advisory
and ETF accounts AUM |
|
10,302 |
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9,713 |
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|
9,403 |
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|
9,638 |
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|
9,252 |
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Private client AUM |
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7,073 |
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|
6,689 |
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6,300 |
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6,043 |
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|
5,773 |
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Private
alternatives AUM4,5 |
|
99 |
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|
134 |
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|
142 |
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|
227 |
|
|
178 |
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Total AUM4 |
$ |
41,266 |
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$ |
38,826 |
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$ |
37,239 |
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$ |
36,230 |
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$ |
34,435 |
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Private
alternatives fee-earning assets4,5 |
|
2,094 |
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|
1,983 |
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|
2,012 |
|
|
2,038 |
|
|
2,029 |
|
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Total AUM and fee-earning
assets5 |
$ |
43,360 |
|
$ |
40,809 |
|
$ |
39,251 |
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$ |
38,268 |
|
$ |
36,464 |
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|
|
Net mutual fund sales
(redemptions)3 |
|
288 |
|
|
408 |
|
|
385 |
|
|
88 |
|
|
(22) |
|
|
Average
daily mutual fund AUM3 |
|
23,104 |
|
|
22,011 |
|
|
21,118 |
|
|
19,487 |
|
|
18,879 |
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1 Refer to Note 3 in the 2020 Consolidated
Financial Statements for more information on the adoption of IFRS
16.2 EBITDA before commissions (earnings before interest, taxes,
depreciation, amortization and deferred selling commissions), and
Free Cash Flow are not standardized measures prescribed by IFRS.
The Company utilizes non-IFRS measures to assess our overall
performance and facilitate a comparison of quarterly and full-year
results from period to period. They allow us to assess our
investment management business without the impact of
non-operational items. These non-IFRS measures may not be
comparable with similar measures presented by other companies.
These non-IFRS measures and reconciliations to IFRS, where
necessary, are included in the Management’s Discussion and Analysis
available at www.agf.com.3 Mutual fund AUM includes retail AUM,
pooled fund AUM and institutional client AUM invested in customized
series offered within mutual funds.4 Total AUM and Private
alternatives AUM have been reclassified and restated to exclude
co-investment AUM for comparative purposes.5 Fee-earning assets
represents assets in which AGF has carried interest ownership and
earns recurring fees but does not have ownership interest in the
managers.
For further information and detailed financial
statements for the third quarter ended August 31, 2021, including
Management’s Discussion and Analysis, which contains discussions of
non-IFRS measures, please refer to AGF’s website at www.agf.com
under ‘About AGF’ and ‘Investor Relations’ and at
www.sedar.com.
Conference Call
AGF will host a conference call to review its
earnings results today at 11 a.m. ET.
The live audio webcast with supporting materials
will be available in the Investor Relations section of AGF’s
website at www.agf.com or at
https://edge.media-server.com/mmc/p/357jk6jw. Alternatively, the
call can be accessed toll-free in North America by dialing
1 (800) 708-4540 (Passcode #: 50216247).
A complete archive of this discussion along with
supporting materials will be available at the same webcast address
within 24 hours of the end of the conference call.
About AGF Management Limited
Founded in 1957, AGF Management Limited (AGF) is
an independent and globally diverse asset management firm. AGF
brings a disciplined approach to delivering excellence in
investment management through its fundamental, quantitative,
alternative and high-net-worth businesses focused on providing an
exceptional client experience. AGF’s suite of investment solutions
extends globally to a wide range of clients, from financial
advisors and individual investors to institutional investors
including pension plans, corporate plans, sovereign wealth funds
and endowments and foundations.
AGF has investment operations and client
servicing teams on the ground in North America, Europe and Asia.
With over $43 billion in total assets under management and
fee-earning assets, AGF serves more than 700,000 investors. AGF
trades on the Toronto Stock Exchange under the symbol AGF.B.
AGF Management Limited shareholders, analysts and media,
please contact:
Adrian Basaraba Senior Vice-President and Chief
Financial Officer 416-865-4203, InvestorRelations@agf.com
Courtney Learmont Vice-President, Finance
647-253-6804, InvestorRelations@agf.com
Caution Regarding Forward-Looking
Statements
This press release includes forward-looking
statements about the Company, including its business operations,
strategy and expected financial performance and condition.
Forward-looking statements include statements that are predictive
in nature, depend upon or refer to future events or conditions, or
include words such as ‘expects,’ ‘estimates,’ ‘anticipates,’
‘intends,’ ‘plans,’ ‘believes’ or negative versions thereof and
similar expressions, or future or conditional verbs such as ‘may,’
‘will,’ ‘should,’ ‘would’ and ‘could.’ In addition, any statement
that may be made concerning future financial performance (including
income, revenues, earnings or growth rates), ongoing business
strategies or prospects, fund performance, and possible future
action on our part, is also a forward-looking statement.
Forward-looking statements are based on certain factors and
assumptions, including expected growth, results of operations,
business prospects, business performance and opportunities. While
we consider these factors and assumptions to be reasonable based on
information currently available, they may prove to be incorrect.
Forward-looking statements are based on current expectations and
projections about future events and are inherently subject to,
among other things, risks, uncertainties and assumptions about our
operations, economic factors and the financial services industry
generally. They are not guarantees of future performance, and
actual events and results could differ materially from those
expressed or implied by forward-looking statements made by us due
to, but not limited to, important risk factors such as level of
assets under our management, volume of sales and redemptions of our
investment products, performance of our investment funds and of our
investment managers and advisors, client-driven asset allocation
decisions, pipeline, competitive fee levels for investment
management products and administration, and competitive dealer
compensation levels and cost efficiency in our investment
management operations, as well as general economic, political and
market factors in North America and internationally, interest and
foreign exchange rates, global equity and capital markets, business
competition, taxation, changes in government regulations,
unexpected judicial or regulatory proceedings, technological
changes, cybersecurity, the possible effects of war or terrorist
activities, outbreaks of disease or illness that affect local,
national or international economies (such as COVID-19), natural
disasters and disruptions to public infrastructure, such as
transportation, communications, power or water supply or other
catastrophic events, and our ability to complete strategic
transactions and integrate acquisitions, and attract and retain key
personnel. We caution that the foregoing list is not exhaustive.
The reader is cautioned to consider these and other factors
carefully and not place undue reliance on forward-looking
statements. Other than specifically required by applicable laws, we
are under no obligation (and expressly disclaim any such
obligation) to update or alter the forward-looking statements,
whether as a result of new information, future events or otherwise.
For a more complete discussion of the risk factors that may impact
actual results, please refer to the ‘Risk Factors and Management of
Risk’ section of the 2020 Annual MD&A.
1 Fee-earning assets represents assets in which AGF has carried
interest ownership and earns recurring fees but does not have
ownership interest in the managers.
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