- Total assets under management increased to $38.8 billion
- Adjusted diluted EPS from continuing operations of $0.14
TORONTO, March 27, 2019 (GLOBE NEWSWIRE) -- AGF Management Limited (AGF or the Company) (TSX: AGF.B) today announced financial results for the first quarter ended February 28, 2019.
Total assets under management (AUM) increased 5.0% to $38.8 billion compared to the same period in 2018 driven by improved sales trajectory and growth in AGF’s alternatives business.
Despite challenging industry conditions, AGF’s mutual fund business reported modest net redemptions of $104.0 million, which is in line with the prior year.
“We believe that markets will continue to grind higher, and, in time, recoup the remaining losses from the selloff we experienced late last year,” said Kevin McCreadie, Chief Executive Officer and Chief Investment Officer, AGF. “But given the strong rally we’ve had so far in 2019, we expect more market volatility ahead and will continue to run our portfolios — and our businesses more broadly — with a disciplined, risk-managed approach.”
“With this backdrop in mind, we are making progress against our stated goals and growth objectives as we realign our resources to take advantage of opportunities outside of our market and against future growth engines including our institutional and alternative business lines,” added McCreadie. “We are always looking for ways to improve how we operate, to simplify our processes and structures, to prudently manage expenses, while accelerating growth.”
Key Business Highlights:
- On January 11, 2019, AGF committed an additional $75.0 million to a subsequent closed-end fund, managed by InstarAGF Asset Management Inc., which invests in North American, middle-market infrastructure.
- AGF welcomed leading U.S. political strategist Greg Valliere to the firm in a new advisory role, as Chief U.S. Policy Strategist, providing insight into how U.S. politics are shaping global markets.
- In March 2019, West Midlands Pension Fund (WMPF) announced that AGF was one of only five investment managers appointed to a multi-provider Sustainable Equity framework by WMPF. The framework will be available to all nine Administering Authorities in the UK’s Local Government Pension Schemes (LGPS) Central Investment Pool as well as LGPS Central Ltd.
- AGF remains focused on recognizing efficiencies within the business while continuing to reduce costs. During the three months ended February 28, 2019, the Company implemented a plan to achieve certain organizational and operational efficiencies, resulting in a restructuring charge of $14.4 million.
- AGF announced proposed fund mergers: AGF Flex Asset Allocation Fund into AGF Elements Conservative Portfolio and AGF Canadian Growth Equity Fund into AGFiQ Dividend Income Fund. Through these proposed fund mergers, investors may benefit from reduced risk ratings and potential cost efficiencies as the result of being invested in a product with a larger asset base.
- AGF also announced a proposed investment objective change for AGF Global Resources Class and AGF Precious Metals Fund giving the Funds exposure to real assets.
- During the quarter, AGF Global Convertible Bond Fund earned a FundGrade A+® Award, AGF Total Return Bond (Series F) was upgraded to five stars by Morningstar, and AGF Global Select Fund (Series F) was the best performing fund in its category on a three-year basis.
Income for the three months ended February 28, 2019 was $105.0 million, compared to $110.9 million for the three months ended February 28, 2018. EBITDA before commissions2 from continuing operations was $12.9 million for the three months ended February 28, 2019, compared to $24.9 million for the same period in 2018. Adjusting for the one-time restructuring charge, EBITDA before commissions was $27.3 million, compared to $24.9 million for the same period in 2018.
Diluted earnings per share (EPS) from continuing operations for the three months ended February 28, 2019, which includes one-time items, was nil, compared to $0.27 for the comparative period. Adjusting for one-time items, diluted EPS for the three months ended February 28, 2019 was $0.14, compared to $0.14 for the same period in 2018.
For the three months ended February 28, 2019, AGF declared an eight cent per share dividend on Class A Voting common shares and Class B Non-Voting shares, payable April 18, 2019 to shareholders on record as at April 10, 2019.
| (from continuing operations) | Three months ended | ||||||||||
| February 28, | November 30, | February 28, | |||||||||
| (in millions of Canadian dollars, except per share data) | 2019 | 2018 | 2018 | ||||||||
| Income | $ | 105.0 | 1 | $ | 108.5 | $ | 110.9 | ||||
| Net income (loss) attributable to equity owners | |||||||||||
| of the Company | (0.2 | ) | 1 | 14.7 | 21.5 | ||||||
| EBITDA before commissions2 | 12.9 | 28.7 | 24.9 | ||||||||
| Adjusted EBITDA before commissions2 | 27.3 | 27.2 | 24.9 | ||||||||
| Diluted earnings per share attributable to | |||||||||||
| equity owners of the Company | – | 0.19 | 0.27 | ||||||||
| Adjusted diluted earnings per share attributable to | |||||||||||
| equity owners of the Company2 | 0.14 | 0.17 | 0.14 | ||||||||
| Free Cash Flow2 | 16.6 | 16.1 | 10.5 | ||||||||
| Dividends per share | 0.08 | 0.08 | 0.08 | ||||||||
| Long-term debt | 168.7 | 188.6 | 168.6 | ||||||||
| (end of period) | Three months ended | ||||||||||||||||||
| February 28, | November 30, | August 31, | May 31, | February 28, | |||||||||||||||
| (in millions of Canadian dollars) | 2019 | 2018 | 2018 | 2018 | 2018 | ||||||||||||||
| Mutual fund assets under management (AUM)3 | |||||||||||||||||||
| (including retail pooled funds) | $ | 19,028 | $ | 18,713 | $ | 19,401 | $ | 19,118 | $ | 19,056 | |||||||||
| Institutional, sub-advisory and ETF accounts AUM | 12,023 | 12,475 | 12,694 | 12,823 | 11,545 | ||||||||||||||
| Private client AUM | 5,633 | 5,513 | 5,714 | 5,521 | 5,471 | ||||||||||||||
| Alternative asset management platform AUM4 | 2,140 | 1,011 | 1,009 | 1,009 | 902 | ||||||||||||||
| Total AUM, including alternative asset | |||||||||||||||||||
| management platform | 38,824 | 37,712 | 38,818 | 38,471 | 36,974 | ||||||||||||||
| Net mutual fund sales (redemptions)3 | (104 | ) | 111 | (9 | ) | 100 | (68 | ) | |||||||||||
| Average daily mutual fund AUM3 | 17,762 | 18,382 | 18,788 | 18,727 | 18,675 | ||||||||||||||
| 1 | Refer to Note 3 in the Condensed Consolidated Interim Financial Statements for more information on the adoption of IFRS 15. | |
| 2 | EBITDA before commissions (earnings before interest, taxes, depreciation, amortization and deferred selling commissions), adjusted EBITDA before commissions, 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 $225.0 million, of which $137.4 million has been funded as at February 28, 2019, which includes $26.6 million return of capital related to the monetization of its seed assets. |
For further information and detailed financial statements for the first quarter ended February 28, 2019, 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.
Conference Call
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/au87jmo4. Alternatively, the call can be accessed toll-free in North America by dialing 1 (800) 708-4540 (Passcode #: 48321650).
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 nearly $39 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:
Adrian Basaraba
Senior Vice-President and Chief Financial Officer
416-865-4203, InvestorRelations@agf.com
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 2018 Annual MD&A.