TORONTO, May 14, 2014 /CNW/ - Sprott Inc. (TSX: SII)
("Sprott" or the "Company") today announced its financial results
for the three months ended March 31,
2014.
Q1 2014 Financial Overview
- Assets Under Management ("AUM") were $7.7 billion as at March 31, 2014, compared to $9.1 billion as at March 31, 2013 and $7.0 billion as at December 31, 2013
- Assets Under Administration ("AUA") were $2.7 billion as at March 31, 2014, compared to $3.3 billion as at March 31, 2013 and $2.3 billion as at December 31, 2013
- Management Fees were $19.4
million, reflecting a decrease of $6.6 million (25.4%) from the three months ended
March 31, 2013 and an increase of
8.9% from $17.8 million for the three
months ended December 31, 2013
- Commission revenue was flat at $1.9
million compared to the three months ended March 31, 2013 and increased 58% from
$1.2 million for the three months
ended December 31, 2013
- Invested capital stood at $331.5
million, reflecting a $17.3
million (5.5%) increase from December
31, 2013
- Returns on invested capital were $9.7
million during the first quarter of 2014
-
- Interest income was $5.4 million,
reflecting an increase of $4.6
million from the three months ended March 31, 2013
- Unrealized and realized gains on proprietary investments and
loans were $4.4 million, reflecting
an increase of $7.4 million from the
three months ended March 31,
2013
- Adjusted base EBITDA was $9.1
million, reflecting a decrease of $0.3 million (3.0%) from the three months ended
March 31, 2013
- Net income was $10.2 million
($0.04 per share), reflecting an
increase of $8.1 million from the
three months ended March 31, 2013
Significant events for the three months ended
March 31, 2014 and year-to-date
2014:
- Named John Wilson Chief
Executive Officer of Sprott Asset Management LP ("SAM")
- Acquired three real assets focused funds to be managed by
Capital Innovations Ltd., Inc.
"During the first quarter of 2014, our Assets Under Management
increased by $700 million to
$7.7 billion due largely to strong
performance from our mutual and hedge funds," said Peter Grosskopf, Chief Executive Officer of
Sprott. "While our natural resource focused strategies led the way,
almost all of our funds have delivered positive performance with
several posting double digit returns year-to-date. We have also
successfully maintained the sales momentum established during the
second half of 2013, generating our third consecutive quarter of
positive net sales."
"We continue to build our institutional business and, over the
past year, we have secured two substantial mandates to manage
institutional funds for Asian investors," continued Mr. Grosskopf.
"We are also close to completing a first close of our new Resource
Lending LP, with subsequent closings to follow later this
year."
"With approximately $367 million
in available capital, we are well positioned to invest in the
continued growth of our business," added Mr. Grosskopf. "We have a
disciplined capital allocation plan in place, focused foremost on
capital preservation and seeding next generation funds. Our capital
book performed well during the first quarter, delivering strong
returns on invested capital."
The breakdown of AUM by investment product type on a
quarter-over-quarter basis is as follows:
|
|
|
|
|
|
$ (in millions) |
AUM December 31,
2013 |
Net Sales /
(Redemptions) |
Net Market Value
Change |
Acquisitions |
AUM March
31,
2014 |
|
|
|
|
|
|
Bullion Funds |
3,542 |
(268) |
307 |
— |
3,581 |
Mutual Funds |
1,483 |
88 |
123 |
53 |
1,747 |
Alternative Investment Strategies |
765 |
(92) |
38 |
— |
711 |
Offshore Funds |
173 |
(6) |
19 |
— |
186 |
Managed Companies |
521 |
376 |
21 |
— |
918 |
Managed Accounts |
122 |
(2) |
14 |
— |
134 |
Fixed Term Limited Partnerships |
361 |
27 |
30 |
— |
418 |
Total |
6,967 |
123 |
552 |
53 |
7,695 |
Assets Under Management
AUM at March 31,
2014, decreased by 15.5% to $7.7
billion from $9.1 billion at
March 31, 2013. Net sales for
the three months ended March 31,
2014 were $0.1 billion.
Average AUM for the three months ended March 31, 2014 was $7.6 billion compared with $9.5 billion for the three months ended
March 31, 2013, a decrease of
20.4%.
Income Statement
Total revenues for the three months ended
March 31, 2014 increased by
19.3% to $32.9 million from
$27.6 million for the three months
ended March 31, 2013.
For the quarter ended March 31, 2014, Management Fees decreased by
25.4% to $19.4 million from
$26.0 million in the quarter ended
March 31, 2013, reflecting the
decline in average AUM over the period.
Commission revenue was flat at $1.9 million. Commission revenue is generated
primarily through private placements by Sprott Global Resource
Investments Ltd., and to a lesser extent, Sprott Private
Wealth.
Interest income was $5.4
million, reflecting an increase of $4.6 million from the prior period. 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 gains on proprietary
investments and loans were $4.4
million, reflecting an increase of $7.4 million from the prior period. The
increase was due to market value appreciation in proprietary
investments resulting in net unrealized gains of $6.0 million, partially offset by realized losses
of $1.6 million from the sale of
certain proprietary investments.
Other income increased by $1.0 million from $0.6
million in the quarter ended March 31, 2013 to $1.6 million in the quarter ended March 31, 2014.
Total expenses were $21.2
million, reflecting a decrease of $2.5 million (10.6%) from the prior period.
Adjusted base EBITDA was $9.1 million, reflecting a decrease of
$0.3 million (3.0%) from the prior
period.
Net Income was $10.2
million, reflecting an increase of $8.1 million from the prior period.
Basic earnings per share were $0.04, versus $0.01
for the prior period. Diluted earnings per share were $0.04, versus $0.01
for the prior period.
Dividends
On March 25, 2014,
a dividend of $0.03 per common share
was declared for the quarter ended December
31, 2013. On May 13,
2014, a dividend of $0.03 per
common share was declared for the quarter ended March 31, 2014.
Conference Call and Webcast
A conference call and webcast will be held
today, Wednesday, May 14, 2014 at
10:00am ET to discuss the Company's
financial results. To participate in the call, please dial
647-427-7450 or 1-888-231-8192 ten minutes prior to the scheduled
start of the call. A taped replay of the conference call will be
available until Wednesday, May 21,
2014 by calling 416-764-8677or 1-888-390-0541, reference
number 34524617. 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
This news release contains certain
forward-looking information and statements (collectively referred
to herein as "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 news release contains
Forward-Looking Statements pertaining to: (i) building Sprott's
institutional business; and (ii) expected completion of a first
close of Sprott's new Resource Lending LP, with subsequent closings
to follow later this year
Forward-Looking Statements are based on a number
of expectations or assumptions, which have been used to develop
such information and statements but which may prove to be
incorrect, including, but not limited to: (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; (vi) the effects of regulation and
tax laws of governmental agencies will be consistent with the
current environment; and (vii) those assumptions disclosed under
the heading "Critical Accounting Judgments and Estimates" in the
Company's Management's Discussion and Analysis ("MD&A") for the
three months ended March 31,
2014. Although the Company believes the expectations
and assumptions reflected in such Forward-Looking Statements are
reasonable, undue reliance should not be placed on Forward-Looking
Statements because the Company can give no assurance that such
expectations and assumptions will prove to be correct. The
Forward-Looking Statements included in this news release are not
guarantees of future performance and should not be unduly relied
upon. Such information and statements, including the
assumptions made in respect thereof, involve known and unknown
risks, uncertainties and other factors, which may cause actual
results or events to differ materially from those anticipated in
such Forward-Looking Statements, including, without limitation, (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) failure
to execute the Company's succession plan; (ix) litigation risk; *
employee errors or misconduct could result in regulatory sanctions
or reputational harm; (xi) failure to implement effective
information security policies, procedures and capabilities; (xii)
failure to develop effective business resiliency plans; (xiii)
failure to obtain or maintain sufficient insurance coverage on
favourable economic terms; (xiv) foreign exchange risk relating to
the relative value of the U.S. dollar; (xv) historical financial
information is not necessarily indicative of future performance;
(xvi) the market price of common shares of the Company may
fluctuate widely and rapidly; (xvii) those risks listed under the
heading "Risk Factors" in the Company's annual information form
dated March 27, 2014; (xviii) those
risks disclosed under the heading "Managing Risk" in the Company's
MD&A for the three months ended March
31, 2014; and (xix) other risks, which are beyond the
control of the Company or its subsidiaries. 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 news release. 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 contained in this
news release speak only as of the date of this news release, and
the Company does not assume any obligation to publicly update or
revise any of the included Forward-Looking Statements, whether as a
result of new information, future events or otherwise, except as
may be expressly required by applicable 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.