- Second consecutive quarter of positive retail mutual fund net sales
- Institutional net sales of $1.2 billion
- AUM increases to $38.5 billion
TORONTO, June 27, 2018 (GLOBE NEWSWIRE) -- AGF Management Limited (AGF or the Company) (TSX:AGF.B) today announced financial results for the second quarter ended May 31, 2018.
Total assets under management (AUM) increased 5.6% to $38.5 billion compared to the same period in 2017, with growth across all lines of business.
During the quarter ended May 31, 2018, mutual fund net sales were $100.0 million, an improvement from net redemptions of $107.0 million for the quarter ended May 31, 2017, reflecting the Company’s continued focus on investment performance and customer service excellence. Adjusting for net sales from institutional clients invested in mutual funds, net sales of retail mutual funds were $85.0 million in the quarter1.
“While the industry experienced a slowdown with net sales of mutual funds declining more than 30% year over year, AGF continued to deliver consistent improvements in net flows,” said Blake Goldring, Chairman and Chief Executive Officer, AGF. “Our focus on providing our clients the products and service they demand is contributing to our success.”
Key Operating Highlights:
- Net sales of retail mutual funds for the second consecutive quarter, with improvement in both the MFDA and IIROC channels.
- Institutional net sales of $1.2 billion in the quarter with AGFiQ, as well as fundamental strategies sold to clients in multiple jurisdictions.
- AGF’s “Invested in Discipline” campaign was the winner of the Best Advertising Campaign Award at the Wealth Professional Awards ceremony held on May 31, 2018. This Award recognized AGF for an outstanding individual campaign directed at wealth professionals in terms of its effectiveness, reach, currency and creativity.
- Announced the extension of AGF’s preferred pricing offering to allow eligible investors to automatically benefit from the lowest fee option as well as fee reductions on AGF Emerging Markets Fund/Class and AGF Fixed Income Plus Fund/Class.
- Substantially resolved AGF’s transfer pricing case, resulting in a tax provision release of $9.6 million and receipt of $27.8 million in cash.
“I am encouraged by the early success of our AGFiQ platform within the institutional channel, as investors look for products that provide better risk-adjusted returns through a disciplined multi-factor process,” said Kevin McCreadie, President and Chief Investment Officer, AGF Investments Inc. “We will continue to focus on offering our clients custom solutions that deliver consistent outcomes.”
Income for the three months ended May 31, 2018 was $114.2 million, compared to $117.1 million for the three months ended May 31, 2017. EBITDA was $20.6 million for the three months ended May 31, 2018, compared to $29.2 million for the same period in 2017. Adjusting for one-time items, EBITDA was $25.8 million, compared to $29.2 million for the same period in 2017.
Diluted earnings per share (EPS) for the three months ended May 31, 2018 was $0.21 compared to $0.16 for the comparative period. Adjusted diluted EPS for the three months ended May 31, 2018 was $0.14 compared to $0.16 for the comparative period.
For the three months ended May 31, 2018, AGF declared an eight cent per share dividend on Class A Voting common shares and Class B Non-Voting shares, payable July 18, 2018 to shareholders on record as at July 10, 2018.
|(from continuing operations)||Three months ended||Six months ended|
|May 31,||February 28,||May 31,||May 31,||May 31,|
|(in millions of Canadian dollars, except per share data)||2018||2018||2017||2018||2017|
|Net income attributable to equity owners|
|of the Company||17.0||21.5||13.2||38.5||22.4|
|Diluted earnings per share attributable to|
|equity owners of the Company||0.21||0.27||0.16||0.47||0.28|
|Adjusted diluted earnings per share attributable to|
|equity owners of the Company2||0.14||0.14||0.16||0.28||0.28|
|Free Cash Flow2||2.1||10.5||10.4||12.6||20.9|
|Dividends per share||0.08||0.08||0.08||0.16||0.16|
|(end of period)||Three months ended|
|May 31,||February 28,||November 30,||August 31,||May 31,|
|(in millions of Canadian dollars)||2018||2018||2017||2017||2017|
|Mutual fund assets under management (AUM)3|
|(including retail pooled funds)||$||19,118||$||19,056||$||19,111||$||18,165||$||18,884|
|Institutional, sub-advisory and ETF accounts AUM||12,823||11,545||11,782||10,665||11,336|
|Private client AUM||5,521||5,471||5,517||5,221||5,323|
|Alternative asset management platform AUM4||1,009||902||902||902||902|
|Total AUM, including alternative asset|
|Net mutual fund sales (redemptions)3||100||(68)||(139)||(40)||(107)|
|Average daily mutual fund AUM3||18,727||18,675||18,220||18,239||18,579|
|1||Net sales in retail mutual funds are calculated as reported mutual fund net sales (redemptions) less non-recurring institutional net sales (redemptions) in excess of $5.0 million invested in our mutual funds.|
|2||EBITDA (earnings before interest, taxes, depreciation and amortization), adjusted EBITDA, adjusted diluted earnings per share 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 and institutional client AUM invested in customized series offered within mutual funds.|
|4||Represents fee-earning committed and/or invested capital from AGF and external investors held through joint ventures. AGF’s portion of this commitment is $150.0 million, of which $112.9 million has been funded as at May 31, 2018, which includes $10.1 million return of capital related to the monetization of its seed assets.|
For further information and detailed financial statements for the second quarter ended May 31, 2018, 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.
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/m6/p/65xzun9o. Alternatively, the call can be accessed toll-free in North America by dialing 1-800-708-4540 (Passcode #: 47054123).
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 $38 billion in total assets under management, AGF serves more than one million investors. AGF trades on the Toronto Stock Exchange under the symbol AGF.B.
AGF Management Limited shareholders, analysts and media, please contact:
Senior Vice-President and Chief Financial Officer
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, 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 2017 Annual MD&A.
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