CI Financial reports first quarter results; raises dividend 5%

TORONTO, May 5, 2016 /CNW/ - CI Financial Corp. ("CI") today released unaudited financial results for the quarter ended March 31, 2016.

QUARTERLY RESULTS (in $millions except for per share data)^1	Quarter ended March 31, 2016		Quarter ended March 31, 2015		% change
Assets Under Management	108,715		109,137		0
Average Assets Under Management (excluding First Asset)	104,636		106,531		(2)
Net Income	116.6		144.5		(19)
Earnings Per Share	0.42		0.51		(18)
Adjusted Earnings Per Share^2	0.46		0.50		(8)
Adjusted EBITDA Per Share^2,3	0.77		0.84		(8)
Pre-Tax Operating Earnings Per Share^3	0.74		0.79		(6)
Cash Provided By Operating Activities	117.1		146.0		(20)
Free Cash Flow^3	143.6		143.0		0
OTHER METRICS	Quarter ended March 31, 2016		Quarter ended March 31, 2015		% change
Dividends Recorded Per Share (in $)	0.330		0.315		5
Long-Term Debt (in $millions; including current portion)	613.5		311.5		97
Net Debt (in $millions)^3	493.1		210.7		134
SG&A Expenses (net of First Asset)^4	35.7 bps		34.6 bps		3
Return on Equity^5	28.0%		28.8%		n/a

^1	All results are net of non-controlling interest.
^2	Q1-2016 excludes a $13.0 million ($9.6 million after tax) provision for severance and transition costs. Q1-2015 excludes income of $7.5 million related to a fair value adjustment to contingent consideration, a $1.4 million write-down of fund management contracts and a $4.0 million ($2.9 million after tax) provision for legal costs.
^3	EBITDA (earnings before interest, taxes, depreciation and amortization), adjusted EBITDA, pre-tax operating earnings, free cash flow and net debt are not standardized measures prescribed by IFRS; however, CI believes that these financial measures provide information that is useful to investors in understanding CI's performance and facilitate a comparison of quarterly and full-year results from period to period. These non-IFRS measures and reconciliations to IFRS, where necessary, are included in Management's Discussion and Analysis available at www.cifinancial.com.
^4	As an annualized percentage of average assets under management.
^5	Trailing 12 months.

In the first quarter of 2016, average assets under management were $104.6 billion excluding First Asset Capital Corp. ("First Asset"), which was acquired on November 30, 2015. This compares to $106.5 billion in the same quarter of the previous year and is down 3% from the prior quarter average of $107.7 billion. CI's assets under management including First Asset of $108.7 billion at March 31, 2016 were flat year over year. In comparison, the S&P/TSX Composite Index declined 7% and the FTSE TMX Canada Universe Bond Index was up 1% over the same period.

Net income for the quarter of $116.6 million compared to $144.5 million in the first quarter of 2015. The first quarter of 2016 included a $9.6 million after tax charge related to severance and transition costs. The first quarter of 2015 included after-tax adjustments of $7.5 million to contingent consideration, a $1.4 million writedown of fund management contracts and a $2.9 million provision for legal costs. Adjusting for these items, net income was $126.1 million or $0.46 per share compared to $141.4 million or $0.50 per share in the same quarter of 2015.

Adjusted EBITDA per share for the first quarter of 2016 was $0.77 compared to $0.84 in the first quarter of 2015. Pre-tax operating earnings per share were $0.74, a decline of 6% from the same quarter a year ago.

During the quarter, CI experienced net redemptions of $329.8 million as a result of losing a large legacy institutional mandate and a decline in gross sales in the IIROC channel. The Assante, Stonegate Private Counsel, Sun Life, credit union and Edward Jones channels all continued to have positive flows.

CI has a long-term goal of balancing discretionary spending at a level close to the change in assets under management. However, in 2014, CI launched an initiative to strategically build-out its sales, marketing and portfolio management capabilities, which is now largely complete and has set the stage for future growth. Selling, general and administrative (SG&A) expenses as an annualized percentage of average assets under management were 36.1 basis points in the first quarter of 2016 compared to 34.6 basis points in the first quarter of 2015. The first quarter of 2016 included the results of First Asset. Excluding the results and assets of First Asset, SG&A expenses as an annualized percentage of average assets under management were 35.7 basis points for the first quarter of 2016, up slightly from 35.2 basis points from the fourth quarter of 2015. In absolute terms, CI reduced SG&A expenses (excluding First Asset) by $3 million, or $12 million annualized, during the first quarter to help offset the effect of lower asset levels in the quarter.

"The sudden decline in the markets in the first quarter certainly presented its challenges with lower asset levels and reduced gross sales," said Stephen A. MacPhail, CI Chief Executive Officer. "Nevertheless, CI continued to have positive results from key distribution channels especially within Assante and Stonegate Private Counsel. In addition, CI's high net worth assets increased by 27% year over year, reflecting the success of this strategic push. We also continued our reinvestment in the business with the restructuring of the Harbour Advisors portfolio management team, while at the same time trimming expenses. Incoming CEO Peter Anderson has done an outstanding job fully integrating himself in the CI business and I am confident of CI's continued success under his leadership."

CI generated $143.6 million in free cash flow during the quarter ended March 31, 2016 compared to $143.0 million in the first quarter of 2015. CI's cash flow facilitated the repurchase of $63.7 million in CI shares and the payment of $91.1 million in dividends. As at April 30, 2016, CI had 273,310,379 shares outstanding.

The Board of Directors declared a 5% increase in the monthly cash dividend to $0.115 per share, payable on each of June 15, July 15, and August 15, 2016 to shareholders of record on May 31, June 30 and July 31, 2016, respectively. The monthly dividend represents a yield of 5.1% on CI's closing share price of $26.85 on May 4, 2016.

For further information and detailed financial statements for the quarter ended March 31, 2016, including Management's Discussion and Analysis, which contains discussions of non-IFRS measures, please refer to CI's website at www.cifinancial.com under Reports, or contact [email protected].

Analysts' Conference Call

CI will hold a conference call with analysts today at 4 p.m. Eastern time. Chief Executive Officer Stephen MacPhail, incoming CEO Peter Anderson, and Chief Financial Officer Douglas Jamieson will be presenting CI's results. Also attending will be Derek Green, President of CI Investments, Steven Donald, President of Assante Wealth Management, and Neal Kerr, President of CI Institutional Asset Management. The call and a slide presentation will be accessible through a webcast at www.ci.com/q1. Alternatively, investors may listen to the discussion by dialling [phone] or 1-866-696-5910 (passcode: 4623854). The call will be available for playback later that day until May 19, 2016 at [phone] or 1-800-408-3053 (passcode: 5129451). The webcast will be archived at www.ci.com/q1.

CI Financial Corp. (TSX: CIX) is an independent, Canadian-owned wealth management company. Its primary operating businesses are CI Investments Inc., one of Canada's largest investment managers, advisory businesses Assante Wealth Management and Stonegate Private Counsel, and First Asset Capital Corp., a leader in providing actively managed exchange-traded funds to the Canadian marketplace. CI is on the Web at www.cifinancial.com.

This press release contains forward-looking statements with respect to CI and its products and services, including its business operations and strategy and financial performance and condition. Although management believes that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, including interest rates, business competition, changes in government regulations or in tax laws, and other factors discussed in materials filed with applicable securities regulatory authorities from time to time.

SOURCE CI Financial Corp.

Stephen A. MacPhail, Chief Executive Officer, CI Financial Corp., [phone]