- Reported quarterly diluted earnings
per share of $0.34
- AGF reported mutual fund net
redemptions of $151 million
- AGF saw growth of 43% in its ETFs
and SMA AUM year over year
- Quarterly dividend of $0.11 per
share
AGF Management Limited (AGF or the Company)
(TSX: AGF.B) today announced financial results for the third
quarter ended August 31, 2023.
AGF reported total assets under management and
fee-earning assets1 of $42.3 billion compared
to $41.2 billion as at May 31, 2023 and $39.6
billion as at August 31, 2022.
“We continue to see the results of implementing
our long-term strategic plan to diversify our business across asset
classes and client channels allowing us to persevere through
different market cycles,” said Kevin McCreadie, Chief Executive
Officer and Chief Investment Officer, AGF. “Our flows continue to
exceed the industry at a time of heightened market volatility and
against a backdrop where investors are feeling pressure due to
higher inflation and higher interest rates.”
AGF’s mutual fund gross sales were $633 million
for the quarter compared to $594 million in the comparative period.
Mutual fund net redemptions were $151 million compared to sales of
$51 million in the comparative period. AGF reported ETFs and SMA
AUM of $1.3 billion as at August 31, 2023 as compared to $0.9
billion in the comparative period.
“Key to our continued success during this time
of market uncertainty is the diversification of our product
lineup,” said Judy Goldring, President and Head of Global
Distribution, AGF. “As our clients embrace different ways of
accessing our investment capabilities, we are seeing the benefits
of our vehicle agnostic approach in the form of consistent, strong
growth in separately managed accounts both here in Canada as well
as in the U.S.”
Key Business Highlights:
- In August, AGF
Investments Inc. expanded its lineup with the launch of AGF
Enhanced U.S. Equity Income Fund, which is available as a mutual
fund with an ETF series option. As the firm takes a more vehicle
agnostic approach, this is the first in a series of strategies
expected to launch or to be made available in a mutual fund and
ETF.
- AGF continued to
experience a better than industry redemption rate of 13% in
Canadian mutual funds, compared to the industry average of 15% for
IFIC reporting firms.2
- The firm
celebrated 55 years of AGF Management Limited’s stock being listed
on the TSX with a Market Open event at the TMX. This longevity is a
testament to AGF’s history of innovation, a disciplined investment
approach and an unwavering commitment to our clients.
- AGF
International Advisors Company Limited, a subsidiary of AGF, was
once again accepted as a signatory to the UK Stewardship Code, a
best-practice benchmark in investment stewardship.
- Judy Goldring
has been named Chair of the Investment Funds Institute of Canada
(IFIC). In this role, she leads an experienced Board that provides
oversight and guidance to IFIC as it carries out its important
advocacy work as the voice of Canada's investment funds
industry.
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.2 Long-term mutual
funds in the Canadian mutual fund industry on a
trailing-twelve-months basis as of June 2023. Source: IFIC and
Investor Economics.
Financial Highlights:
-
EBITDA for the three months ended August 31, 2023, was $33.8
million, compared to $33.2 million in the prior year comparative
period.
-
Net management, advisory and administration fees were $73.8 million
for the three months ended August 31, 2023, compared to $70.9
million for the comparative prior year period. Net management,
advisory and administration fees are directly related to our AUM
levels, the proportion of AUM invested in various strategies (i.e.,
equity fund vs. fixed income fund) and commission fee structures
(i.e., fee-based, front-end, or deferred sales commission
basis).
-
Revenue from Private Capital for the three months ended August 31,
2023, was $7.3 million, compared to $6.6 million for the
comparative prior year period. Of the $7.3 million, $2.5 million
was generated from AGF’s interest in Private Capital Managers and
$4.8 million was generated from AGF’s investment in Private Capital
long-term investments, compared to $0.7 million and $5.9 million in
the comparative prior year period.
-
Selling, general and administrative costs were $50.2 million for
the three months ended August 31, 2023, compared to $46.4 million
in 2022. The year-over-year increase in SG&A was impacted by
higher incentive compensation as a result of our track record of
investment outperformance and the successful execution of our sales
strategy, which is to increase our presence in the investment
dealer channel. In addition, the increase incorporates strategic
investments made into the business to support our growth plan,
including Private Capital, as well as increases driven by the
market environment. AGF is committed to being an employer of
choice, which means looking at responsible practices and
initiatives to attract, develop and reward employees.
-
Net income for the three months ended August 31, 2023, was $23.0
million ($0.34 diluted EPS), compared to $22.1 million ($0.32
diluted EPS) in the prior year comparative period.
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Three months ended |
Nine months ended |
(in millions of Canadian dollars, |
|
August 31, |
|
|
|
May 31, |
|
|
|
August 31, |
|
|
|
August 31, |
|
|
|
August 31, |
|
except
per share data) |
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
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|
|
|
|
|
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|
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management, advisory and administration fees |
$ |
107.4 |
|
|
$ |
109.8 |
|
|
$ |
103.8 |
|
|
$ |
324.0 |
|
|
$ |
327.4 |
|
Trailing commissions and investment advisory fees |
|
(33.6 |
) |
|
|
(34.1 |
) |
|
|
(32.9 |
) |
|
|
(101.5 |
) |
|
|
(103.3 |
) |
Net management, advisory and administration fees1 |
$ |
73.8 |
|
|
$ |
75.7 |
|
|
$ |
70.9 |
|
|
$ |
222.5 |
|
|
$ |
224.1 |
|
Deferred sales charges |
|
1.8 |
|
|
|
2.1 |
|
|
|
1.8 |
|
|
|
5.7 |
|
|
|
5.4 |
|
Revenue from Private Capital1 |
|
7.3 |
|
|
|
18.0 |
|
|
|
6.6 |
|
|
|
29.4 |
|
|
|
19.6 |
|
Other revenue1 |
|
1.1 |
|
|
|
– |
|
|
|
0.3 |
|
|
|
2.4 |
|
|
|
2.4 |
|
Total net revenue1 |
|
84.0 |
|
|
|
95.8 |
|
|
|
79.6 |
|
|
|
260.0 |
|
|
|
251.5 |
|
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|
|
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|
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|
|
|
|
|
|
Selling, general and
administrative |
|
50.2 |
|
|
|
53.0 |
|
|
|
46.4 |
|
|
|
156.2 |
|
|
|
143.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred selling
commissions |
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
37.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA before
commissions1 |
|
33.8 |
|
|
|
42.8 |
|
|
|
33.2 |
|
|
|
103.8 |
|
|
|
108.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA1 |
|
33.8 |
|
|
|
42.8 |
|
|
|
33.2 |
|
|
|
103.8 |
|
|
|
71.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
23.0 |
|
|
|
30.3 |
|
|
|
22.1 |
|
|
|
70.9 |
|
|
|
45.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share |
|
0.34 |
|
|
|
0.45 |
|
|
|
0.32 |
|
|
|
1.05 |
|
|
|
0.64 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow1 |
|
23.0 |
|
|
|
19.8 |
|
|
|
20.6 |
|
|
|
62.1 |
|
|
|
46.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends per share |
|
0.11 |
|
|
|
0.11 |
|
|
|
0.10 |
|
|
|
0.32 |
|
|
|
0.29 |
|
|
|
|
|
|
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|
|
|
|
|
|
(end of period) |
Three months ended |
|
|
August 31, |
|
|
|
May 31, |
|
|
|
February 28, |
|
|
|
November 30, |
|
|
|
August 31, |
|
(in
millions of Canadian dollars) |
|
2023 |
|
|
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
Mutual fund assets under management (AUM)2 |
$ |
24,377 |
|
|
$ |
23,631 |
|
|
$ |
24,029 |
|
|
$ |
23,898 |
|
|
$ |
22,496 |
|
ETFs and SMA AUM |
|
1,332 |
|
|
|
1,400 |
|
|
|
1,394 |
|
|
|
1,236 |
|
|
|
930 |
|
Segregated accounts and sub-advisory AUM |
|
7,058 |
|
|
|
6,876 |
|
|
|
7,045 |
|
|
|
7,204 |
|
|
|
6,930 |
|
Total AGF Investments AUM |
|
32,767 |
|
|
|
31,907 |
|
|
|
32,468 |
|
|
|
32,338 |
|
|
|
30,356 |
|
AGF Private Wealth AUM |
|
7,360 |
|
|
|
7,162 |
|
|
|
7,324 |
|
|
|
7,349 |
|
|
|
7,072 |
|
AGF
Private Capital AUM |
|
42 |
|
|
|
48 |
|
|
|
54 |
|
|
|
55 |
|
|
|
60 |
|
Total AUM |
$ |
40,169 |
|
|
$ |
39,117 |
|
|
$ |
39,846 |
|
|
$ |
39,742 |
|
|
$ |
37,488 |
|
AGF
Private Capital fee-earning assets3 |
|
2,090 |
|
|
|
2,087 |
|
|
|
2,082 |
|
|
|
2,077 |
|
|
|
2,067 |
|
Total AUM and fee-earning assets3 |
$ |
42,259 |
|
|
$ |
41,204 |
|
|
$ |
41,928 |
|
|
$ |
41,819 |
|
|
$ |
39,555 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net mutual fund sales2 |
|
(151 |
) |
|
|
77 |
|
|
|
221 |
|
|
|
251 |
|
|
|
51 |
|
Average
daily mutual fund AUM2 |
|
24,168 |
|
|
|
24,017 |
|
|
|
23,782 |
|
|
|
22,504 |
|
|
|
22,207 |
|
|
1 Net management, advisory and administration
fees, revenue from Private Capital, other revenue, total net
revenue, EBITDA before commissions, EBITDA, 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.2 Mutual fund AUM includes
retail AUM, pooled fund AUM and institutional client AUM invested
in customized series offered within mutual funds.3 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, 2023, 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/zwqr45mo.
Alternatively, the call can be accessed over the phone
by registering here or in the Investor Relations section
of AGF’s website at www.agf.com, to receive the dial-in
numbers and unique PIN.
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. Our companies deliver
excellence in investing in the public and private markets through
three distinct business lines: AGF Investments, AGF Private Capital
and AGF Private Wealth.
AGF brings a disciplined approach focused on providing an
exceptional client experience and incorporating sound responsible
and sustainable practices across its businesses. The firm’s
collective investment solutions, driven by its fundamental,
quantitative and private investing capabilities, extends globally
to a wide range of clients, from financial advisors and their
clients to high-net worth and institutional investors including
pension plans, corporate plans, sovereign wealth funds, endowments
and foundations.
Headquartered in Toronto, Canada, AGF has investment operations
and client servicing teams on the ground in North America and
Europe. With over $42 billion in total assets under
management and fee-earning assets, AGF serves more than 800,000
investors. AGF trades on the Toronto Stock Exchange under the
symbol AGF.B.
Commissions, trailing commissions, management fees and expenses
all may be associated with investment fund investments. Please read
the prospectus before investing. Investment funds are not
guaranteed, their values change frequently, and past performance
may not be repeated.
AGF Management Limited shareholders, analysts and media,
please contact:
Courtney LearmontVice-President,
Finance647-253-6804, 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 2022 Annual MD&A.
AGF Management (TSX:AGF.B)
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