TORONTO, March 28, 2013 /CNW/ - Sprott Inc. (TSX: SII)
("Sprott" or the "Company") today announced its financial results
for the year ended December 31,
2012.
2012 Overview
- Assets Under Management ("AUM") were $9.9 billion as at December 31, 2012, compared to $9.1 billion as at December 31, 2011 and $10.3 billion as at September 30, 2012
- Assets Under Administration ("AUA") were $3.7 billion as at December 31, 2012, compared to $4.4 billion as at December 31, 2011
- Management Fees were $118.5
million, a decrease of 19.3% compared with the year ended
December 31, 2011
- Base EBITDA was $52.5 million
($0.31 per share) compared with
$69.4 million ($0.41 per share) for the year ended December 31, 2011, a decrease of 24.4%
- EBITDA was $59.6 million
($0.35 per share), compared with
$64.5 million ($0.38 per share) for the year ended December 31, 2011, a decrease of 7.5%
- Net income was $32.0 million
($0.19 per share) for the year ended
December 31, 2012, a decrease of
3.2% from $33.0 million ($0.20 per share) in the year ended December 31, 2011
- Raised US $1.6 billion through
follow-on offerings of Sprott Physical Gold Trust and Sprott
Physical Silver Trust Units
- Completed the initial public offering of the Sprott Physical
Platinum and Palladium Trust for gross proceeds of US $280 million
- Finalized acquisition of Toscana Capital Corporation and
Toscana Energy Corporation (now "Sprott Toscana")
- Sprott Resource Corp. marked five years in operation with a
track record that placed it near the top of all resource-focused
private equity strategies over the same period
Subsequent events:
- Named John Wilson and Scott
Colbourne Co-Chief Investment Officers of Sprott Asset Management
LP
- Completed non-brokered private placement with an institutional
investor for gross proceeds of $25
million
- Signed joint venture agreement to launch new offshore fund with
Zijin Mining Group Co., Ltd.
"In 2012, precious metals equities traded at increasingly
depressed valuations over the year, while government stimulus
programs pushed broader equity indices higher," said Peter Grosskopf, Chief Executive Officer of
Sprott. "The combination of these factors caused several of our
principal equities strategies to post losses for the year, which
had a negative impact on our financial results."
"While we are confident in our positioning, the
expertise of our investment team and our ability to deliver
superior results over the long term, we have also taken immediate
steps to improve our performance," continued Mr. Grosskopf. "These
include the appointments of John
Wilson and Scott Colbourne as
co-Chief Investment Officers of Sprott Asset Management. John and
Scott will direct the investment management functions of Sprott
Asset Management and will be focused on optimizing idea sharing and
risk management while reinforcing our results-oriented
culture."
"Our business continued to grow in 2012, due
largely to the success of our bullion products franchise,"
continued Mr. Grosskopf. "On the year, we raised approximately
$1.9 billion through follow-on
offerings of our physical gold and silver trusts and the launch of
our newest publicly-traded bullion product, the Sprott Physical
Platinum and Palladium Trust. Our private equity and lending
businesses continue to perform well and were responsible for the
majority of our performance fee revenue during the year."
"Looking ahead, one of our key priorities will be leveraging our
global brand recognition to establish partnerships to manage
capital for international clients," added Mr. Grosskopf. "We are
pleased with the early results of our efforts in this area and
recently signed a joint venture agreement to launch a new offshore
fund in partnership with China's
largest gold miner. We are also in the process of marketing our
first institutionally-focused offshore fund, which will draw on the
combined resources of our entire investment and technical
teams."
|
For the year ended |
|
|
|
|
December 31, |
|
|
|
($ in millions) |
2012 |
|
2011 |
|
|
|
|
AUM, beginning of year |
9,137 |
|
|
|
8,545 |
Net sales |
1,308 |
|
|
|
1,418 |
Business acquisitions |
428 |
|
|
|
695 |
Market value
depreciation of portfolios |
(942) |
|
|
|
(1,521) |
AUM, end of year |
9,931 |
|
|
|
9,137 |
Assets Under Management
At December 31,
2012, AUM increased by 8.7% to $9.9
billion from $9.1 billion at
December 31, 2011.
Net sales for the year ended December 31,
2012 were $1.3 billion. The
initial and follow-on offering of Sprott 2012 Flow-Through LP, the
launch of the Sprott Silver Equities Class, the Sprott Enhanced
Equity Class, the Sprott Enhanced Balanced Fund and follow-on
offerings of Sprott Physical Gold Trust and Sprott Physical Silver
Trust along with the initial public offering of Sprott Physical
Platinum and Palladium Trust added approximately $1.9 billion to sales for the year ended
December 31, 2012. Collectively, the
Company's other Mutual Funds, Managed Accounts and Domestic
Alternative Investment Strategies experienced net redemptions of
approximately $0.4 billion for the
year ended December 31, 2012. The
Offshore Funds collectively, had redemptions resulting in net
outflows for the year ended December 31,
2012 of approximately $0.2
billion or 39.9% of offshore AUM at the beginning of the
year. The launch of Resource Income Partners Limited Partnership by
Resource Capital Investment Corp. added $50
million to AUM.
Acquisitions during the year added $0.4
billion to the Company's AUM.
Average AUM for the year ended December 31, 2012 was $9.6 billion compared with $9.8 for the year ended December 31, 2011, a decrease of 1.3%.
Income Statement
Total revenue for the year ended December 31, 2012, decreased by 1.9%
to $158.2 million from $161.3 million for the year ended December 31, 2011.
For the year ended December 31, 2012, management fees decreased by
19.3% to $118.5 million from
$146.8 million the prior year.
The decrease in management fees is primarily attributable to both
the lower average AUM for the year ended December 31, 2012 as well as an increase in lower
fee 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
$2.3 million, compared with losses of
$8.0 million during 2011.
Commission revenue for the year ended
December 31, 2012, decreased by
$0.7 million to $13.5 million from $14.2
million during the prior year. During the year ended
December 31, 2012, Sprott Global
Resource Investments Ltd. ("GRIL") and Sprott Private Wealth LP
("SPW") earned commissions primarily from the sale and purchase of
stocks by its clients, private placements and from sales of Sprott
sponsored Funds and shares of Managed Companies to GRIL and SPW
clients.
Total expenses for the year ended December 31, 2012 were $116.4 million, a decrease of 0.7% from
$117.3 million in the year ended
December 31, 2011.
Base EBITDA, which excludes the impact of income
taxes and certain non-cash expenses and gains or losses on
proprietary investments, decreased by 24.4% to $52.5 million from $69.4
million in 2011.
Net income for the year ended December 31, 2012 was $32.0 million ($0.19 per share), compared with
$33.0 million ($0.20 per share) earned during the year ended
December 31, 2011.
For the fourth quarter of 2012, management fee revenues
decreased to $29.2 million from
$33.7 million during the fourth
quarter of 2011. Gross performance fees increased to $9.8 million from $2.5
million in the fourth quarter of 2011. Base EBITDA was
$15.5 million, compared with
$16.0 million in the fourth quarter
of 2011. Net income was $3.3 million
($0.02 per share) compared to
$4.6 million ($0.03 per share) in the prior year period.
Dividends
On November
13 2012, a dividend of $0.03 per common share was declared for the
quarter ended September 30, 2012.
This dividend was paid on December 4,
2012 to shareholders of record at the close of business on
November 22, 2012.
On March 26, 2013,
a dividend of $0.03 per common share
was declared for the quarter ended December
31, 2012. The dividend will be paid on April 23, 2013 to shareholders of record at the
close of business on April 8,
2013.
Conference Call and Webcast
A conference call and webcast will be held
today, Thursday, March 28, 2013 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 Thursday, April 4,
2014 by calling 416-849-0833 or 1-855-859-2056, reference
number 26711530. 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, 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 26,
2013. 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.