Sprott Inc. announces 2012 third quarter results
TORONTO, Nov. 14, 2012 /CNW/ - Sprott Inc. (TSX: SII)
("Sprott" or the "Company") today announced its financial results
for the three and nine months ended September 30, 2012.
Q3 2012 Overview
- Assets Under Management ("AUM") were $10.3 billion as at September 30, 2012, compared to $9.9 billion as at September 30, 2011 and $8.5 billion as at June 30, 2012
- Assets Under Administration ("AUA") were $4.0 billion as at September 30, 2012, compared to $4.9 billion as at September 30, 2011
- Management Fees were $28.2
million, a decrease of 30.1% compared with the three months
ended September 30, 2011
- Base EBITDA was $10.4 million
($0.06 per share) compared with
$18.3 million ($0.11 per share) for the three months ended
September 30, 2011, a decrease
of 42.9%
- EBITDA was $14.3 million
($0.08 per share), compared with
$17.4 million ($0.10 per share) for the three months ended
September 30, 2011, a decrease
of 17.8%
- Net income was $11.0 million
($0.07 per share) for the three
months ended September 30, 2012,
an increase of 6.3% from $10.4
million ($0.06 per share) in
the comparable quarter of 2011
- Completed US $220 million
follow-on offering of Sprott Physical Silver Trust Units
- Completed US $392 million
follow-on offering of Sprott Physical Gold Trust Units
- Launched Sprott Flatiron Yield Trust
- Finalized acquisition of Toscana Capital Corporation and
Toscana Energy Corporation (now "Sprott Toscana")
- Closed acquisition of Flatiron Capital Management
Partners (now "Sprott Flatiron")
Subsequent events:
- Filed prospectus for Flatiron Canadian Convertible Strategies
Trust
- U.S. subsidiary, Resource Capital Investment Corp. raised US
$50 million through new fixed-term
Limited Partnership
- Completed US $279 million
offering of Sprott Physical Silver Trust Units
"During the third quarter we raised more than
US$600 million through follow-on
offerings of our Sprott Physical Silver Trust and Sprott Physical
Gold Trust. We are pleased with the continued growth of our
physical bullion business and expect to expand this franchise
before the end of the year with the launch of the Sprott Physical
Platinum and Palladium Trust," said Peter
Grosskopf, Chief Executive Officer of Sprott. "We continue
to enhance our investment capabilities through complementary
acquisitions of new managers and products. We have now completed
the acquisitions of Sprott Flatiron and Sprott Toscana, two
transactions that give us additional specialty yield expertise in
the energy and fixed-income areas. Both companies recently launched
new yield-oriented products that we expect to be very attractive to
investors in the current market environment."
"After a challenging first half of the year, our
investment performance improved during the third quarter, due
largely to a rebound in precious metals and their related
equities," continued Mr. Grosskopf. "With the U.S. Federal
Reserve's open-ended extension of its quantitative easing programs
and the ongoing instability in Europe, we are confident in our positioning
and remain focused on delivering superior investment results to our
investors over the long term."
"In September, Sprott Resource Corp. marked its
five-year anniversary, having established a strong track record of
value creation. The company recently completed the successful sale
of its subsidiary, Waseca Energy Inc., for total proceeds of
approximately $111.7 million. Based
largely on the success of this transaction, Sprott Consulting is
well positioned to earn performance fees in 2012, through its
management services agreement with Sprott Resource Corp.," added
Mr. Grosskopf. "We believe the private equity space represents a
potential growth area for our business. Increasingly, the pursuit
of this growth has led us to explore international mandates."
|
For the three months
ended |
|
|
|
|
For the nine months
ended |
|
September
30, |
|
|
|
|
September
30, |
($ in millions) |
2012 |
2011 |
|
|
|
|
2012 |
2011 |
|
|
|
|
|
|
|
|
|
AUM, beginning of period |
8,485 |
9,292 |
|
|
|
|
9,137 |
8,545 |
Net sales |
449 |
655 |
|
|
|
|
836 |
1,480 |
Business acquisitions |
429 |
— |
|
|
|
|
429 |
695 |
Market value appreciation (depreciation) of
portfolios |
940 |
(66) |
|
|
|
|
(99) |
(839) |
AUM, end of period |
10,303 |
9,881 |
|
|
|
|
10,303 |
9,881 |
Assets Under Management
At September 30,
2012, AUM increased by 4.3% to $10.3
billion from $9.9 billion at
September 30, 2011. Net sales
for the three months ended September 30, 2012 were $0.5 billion and market value appreciation was
$0.9 billion. The Sprott
Flatiron acquisition added approximately $0.3 billion to AUM and the acquisition of Sprott
Toscana added approximately $0.1
billion to AUM, resulting in total AUM increase of
$1.8 billion for the quarter.
Average AUM for the three months ended
September 30, 2012 was
$9.3 billion compared with
$10.4 billion for the three months
ended September 30, 2011, a
decrease of 10.4%.
Income Statement
Total revenue for the three months ended
September 30, 2012 decreased by
19.3% to $35.8 million, from
$44.3 million in the same period in
2011. For the nine months ended September 30, 2012, total revenue decreased
by 12.6% to $107.6 million from
$123.1 million in the first nine
months of 2011.
Management fees decreased by 30.1% during the
quarter to $28.2 million, from
$40.4 million for the three months
ended September 30, 2011. For
the first nine months of 2012, management fees decreased by 21.1%
to $89.3 million from $113.1 million in the first three quarters of
2011. The decrease in management fees is attributable to both
the lower average AUM for the three and nine-month periods ended
September 30, 2012 as well as an
increase in lower margin 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
$3.8 million for the three months
ended September 30, 2012,
compared to losses of$2.4 million for the quarter ended
September 30, 2011. For the nine
months ended September 30, 2012,
gains (realized and unrealized) from proprietary investments
totaled $4.1 million, compared with
losses of $6.0 million during the
first nine months of 2011.
Commission revenue for the three months ended
September 30, 2012, was
$2.4 million compared to $3.4 million during the three months ended
September 30, 2011. For the nine
months ended September 30, 2012,
commission revenue decreased by $1.1
million to $10.2 million from
$11.3 million during the prior year
period.
Other income increased by $0.3 million in the three months ended
September 30, 2012 to
$1.3 million from $1.0 million in the third quarter of 2011. For
the nine months ended September 30,
2012, other income increased by $2.0
million to $3.9 million from
$1.9 million during the prior year
period.
Total expenses for the three months ended
September 30, 2012 were
$20.9 million, a decrease of
$9.4 million or 31.1%, from
$30.3 million during the same period
last year. Total expenses for the first nine months of 2012 were
$70.3 million, a decrease of 15.2%
from $83.0 million in the nine months
ended September 30, 2011.
Base EBITDA, which excludes the impact of income
taxes and certain non-cash expenses and gains or losses on
proprietary investments, decreased by 42.9% to $10.4 million ($0.06 per share) for the three months ended
September 30, 2012, compared
with $18.3 million ($0.11 per share) in the third quarter of 2011.
For the nine months ended September 30,
2012, Base EBITDA decreased by 30.7% to $37.0 million from $53.3
million in the first nine months of 2011.
Net income for the three months ended
September 30, 2012 increased by
6.3% to $11.0 million ($0.07 per share) from $10.4 million ($0.06 per share) in the second quarter of 2011.
Net income for the first nine months of 2012 was $28.7 million ($0.17 per share), compared with $28.4 million ($0.17 per share) earned during the nine months
ended September 30, 2011.
Dividends
On August 8, 2012,
a dividend of $0.03 per common share
was declared for the quarter ended June 30,
2012. This dividend was paid on September 4, 2012 to shareholders of record at
the close of business on August 17,
2012.
In November 2012,
a dividend of $0.03 per common share
was declared for the quarter ended September
30, 2012.
Conference Call and Webcast
A conference call and webcast will be held
today, Wednesday, November 14, 2012,
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 Wednesday, November
21, 2012 by calling 416-849-0833 or 1-855-859-2056,
reference number 58876486. 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, 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.
Forward-Looking Statements
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 27,
2012. 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.