TORONTO, Nov. 13, 2014 /CNW/ - Sprott Inc. (TSX: SII)
("Sprott" or the "Company") today announced its financial results
for the three months ended September 30, 2014.
Q3 2014 Financial Overview
- Assets Under Management ("AUM") were $7.4 billion as at September 30, 2014,
compared to $7.3 billion as at
September 30, 2013 and $7.8
billion as at June 30, 2014
- Assets Under Administration ("AUA") were $2.2 billion as at September 30, 2014,
compared to $2.6 billion as at
September 30, 2013 and $2.6
billion as at June 30, 2014
- Management fees were $20.3
million, reflecting an increase of $0.8 million (4.0%) from the three months ended
September 30, 2013
- Commission revenues were $2.0
million reflecting an increase of $0.5 million (36.3%) from the three months ended
September 30, 2013
- Invested capital stood at $321.9
million, reflecting a $7.7
million (2.5%) increase from December
31, 2013
- Adjusted base EBITDA was $11.4
million ($0.05 per share),
reflecting an increase of $5.5
million (91.9%) from the three months ended
September 30, 2013
- Net income was $4.5 million
($0.02 per share), reflecting a
decrease of $9.0 million (66.6%) from
the three months ended September 30, 2013
Significant events for the three months ended September 30, 2014 and year-to-date 2014
- Launched Sprott Gold Miners ETF on the New York Stock
Exchange
- Launched the Sprott Bridging Income Fund LP
- Completed secondary offering of 23 million shares previously
held by a company controlled by Eric
Sprott and private placement of an additional five million
shares to the Sprott employee trust
- Announced hiring of Whitney
George as Senior Portfolio Manager
- Announced hiring of James Bowen
and Jonathan Wiesblatt as Portfolio
Managers
"After delivering solid performance across the board through the
first eight months of the year, our resource-related funds suffered
from the broad decline in commodity prices and the sell-off in
resource equities since September," said Peter Grosskopf, Chief Executive Officer of
Sprott. "Our investment performance remained positive through the
first three quarters of 2014 with $170
million in market value appreciation, and our overall assets
under management levels have proved resilient."
"We continue to diversify our product lineup, launching two new
funds during the quarter," added Mr. Grosskopf. "We expanded our
specialty lending franchise with the Sprott Bridging Income LP and
introduced our first ETF on the NYSE, the Sprott Gold Miners ETF
("SGDM"). We are pleased by the growth of SGDM since it was
launched in July and are currently exploring other potential
avenues to expand this product line."
"Earlier this week, we announced three new additions to our
investment team, including Whitney
George, who will be joining Sprott as a Senior Portfolio
manager," continued Mr. Grosskopf. "Over the past 23 years, Whitney
played a key role in helping to build Royce & Associates LLC
into one of the largest and most successful asset management firms
in the US. He will be based in New
York and will be focused on building our US business as well
as managing two funds with a combined AUM of $285 million that we intend to transfer from
Royce, pending the necessary approvals."
The breakdown of AUM by investment product type on a
quarter-over-quarter basis is as follows:
$ (in
millions)
|
|
AUM
June 30, 2014
|
|
Net Sales /
(Redemptions)
|
|
Net Market
Value Change
|
|
Acquisitions /
(Divestitures)
|
|
AUM
September 30,
2014
|
|
|
|
|
|
|
|
|
|
|
|
Bullion
Funds
|
|
3,603
|
|
(22)
|
|
(298)
|
|
—
|
|
3,283
|
Mutual
Funds
|
|
1,908
|
|
95
|
|
(139)
|
|
—
|
|
1,864
|
Alternative
Investment Strategies
|
|
866
|
|
(12)
|
|
(49)
|
|
18
|
|
823
|
Managed
Companies
|
|
938
|
|
—
|
|
(27)
|
|
—
|
|
911
|
Managed
Accounts
|
|
136
|
|
—
|
|
(15)
|
|
—
|
|
121
|
Fixed Term Limited
Partnerships
|
|
391
|
|
—
|
|
(30)
|
|
—
|
|
361
|
Total
|
|
7,842
|
|
61
|
|
(558)
|
|
18
|
|
7,363
|
|
|
|
|
|
|
|
|
|
|
|
Assets Under Management
AUM as at September 30, 2014 was $7.4 billion, reflecting a decrease of
$0.5 billion (6.1%) from
June 30, 2014. Net sales for the three months ended
September 30, 2014 were $0.1
billion. Average AUM for the three months ended
September 30, 2014 was $7.8
billion, reflecting an increase of $0.4 billion (4.9%) from average AUM levels in
the prior quarter.
Income Statement
Total revenues for the three months ended September 30,
2014 decreased by $12.1 million
(30.1%) to $28.1 million from the
comparative period in 2013.
Management fees for the three months ended September 30,
2014 increased by $0.8 million (4.0%)
to $20.3 million from the comparative
period in 2013, reflecting an increase in average AUM over the
period.
Commission revenue for the three months ended September 30,
2014 increased by $0.5 million
(36.3%) to $2.0 million from the
comparative period in 2013. Commission revenue is generated
primarily through private placements by Sprott Global Resource
Investments Ltd., and to a lesser extent, Sprott Private
Wealth.
Interest income for the three months ended September 30,
2014 increased by $2.0 million
(61.1%) to $5.3 million from the
comparative period in 2013. Interest income earned by the
Company is generated primarily by Sprott Resource Lending Corp.,
which was acquired by the Company on July
23, 2013.
Unrealized and realized losses on proprietary investments and
loans were $4.3 million, reflecting a
decrease of $5.6 million from the
comparative period gains in 2013.
Other income for the three months ended September 30, 2014
decreased by $9.4 million (68.6%) to
$4.3 million from the comparative
period in 2013.
Total expenses for the three months ended September 30,
2014 decreased by $8.9 million
(29.3%) to $21.5 million from the
comparative period in 2013.
Adjusted base EBITDA for the three months ended
September 30, 2014 increased by $5.5
million (91.9%) to $11.4
million from the comparative period in 2013.
Net income for the three months ended September 30, 2014
decreased by $9.0 million (66.6%) to
$4.5 million from the comparative
period in 2013.
Basic and diluted earnings per share were $0.02, versus $0.06
for the comparative period in 2013.
Dividends
On November 11, 2014, a dividend of $0.03 per common share was declared for the
quarter ended September 30, 2014.
Conference Call and Webcast
A conference call and webcast will be held today, Thursday, November 13, 2014 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 and provide conference ID 29007673 ten minutes prior
to the scheduled start of the call. A taped replay of the
conference call will be available until Thursday, November 20, 2014 by calling
416-849-0833 or 1-855-859-2056, reference number 29007673. 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 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 Information and Statements
Certain statements in this press release contain forward-looking
information (collectively referred to herein as the
"Forward-Looking Statements") within the meaning of applicable
securities laws. The use of any of the words "expect",
"anticipate", "continue", "estimate", "may", "will", "project",
"should", "believe", "plans", "intends" and similar expressions are
intended to identify Forward-Looking Statements. In particular, but
without limiting the forgoing, this press release contains
Forward-Looking Statements pertaining to: (i) the continued
diversification of the Company's product lineup; (ii) expansion of
the SGDM product line; (iii) expectations regarding Mr. George's
role at the Company; (iv) expectations regarding the transfer of
two funds from Royce; and (v) the declaration, payment and
designation of dividends.
Although the Company believes that the Forward-Looking
Statements are reasonable, they are not guarantees of future
results, performance or achievements. A number of factors or
assumptions have been used to develop the Forward-Looking
Statements, including: (i) future exchange rates will remain
consistent with the current environment; (ii) the price of precious
metals will increase; (iii) the resource sector will recover; (iv)
the impact of increasing competition in each business in which the
Company operates will not be material; (v) quality management will
be available; and (vi) the effects of regulation and tax laws of
governmental agencies will be consistent with the current
environment. Actual results, performance or
achievements could vary materially from those expressed or implied
by the Forward-Looking Statements should assumptions underlying the
Forward-Looking Statements prove incorrect or should one or more
risks or other factors materialize, including: (i) difficult market
conditions; (ii) changes in the investment management industry;
(iii) risks related to regulatory compliance; (iv) failure to deal
appropriately with conflicts of interest; (v) failure to continue
to retain and attract quality staff; (vi) competitive pressures;
(vii) corporate growth may be difficult to sustain and may place
significant demands on existing administrative, operational and
financial resources; (viii) foreign exchange risk relating to the
relative value of the U.S. dollar; (ix) historical financial
information is not necessarily indicative of future performance; *
those risks described under the heading "Risk Factors" in the
Company's annual information form dated March 27, 2014; and (xi) those risks described
under the headings "Managing Risk - Financial" and "Managing Risk -
Other" in the Company's MD&A for the three and nine months
ended September 30, 2014. In
addition, the payment of dividends is not guaranteed and the amount
and timing of any dividends payable by the Company will be at the
discretion of the Board of Directors of the Company and will be
established on the basis of the Company's earnings, the
satisfaction of solvency tests imposed by applicable corporate law
for the declaration and payment of dividends, and other relevant
factors. The Forward-Looking Statements speak only as of the date
hereof, unless otherwise specifically noted, and the Company does
not assume any obligation to publicly update any Forward-Looking
Statements, whether as a result of new information, future events
or otherwise, except as may be expressly required by applicable
Canadian securities laws.
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 primarily through six business units:
Sprott Asset Management LP, Sprott Private Wealth LP, Sprott
Consulting LP, Sprott Resource Lending Corp., Sprott Toscana 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 and Sprott Toscana provide management,
administrative and consulting services to other companies. Sprott
Resource Lending provides lending services to mining and energy
sectors. 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.