MONTREAL, March 13, 2012 /CNW Telbec/ - Fiera Sceptre Inc. (TSX: FSZ) ("Fiera" or "the Firm"), a leading independent Canadian investment firm, today reported its financial results for the first quarter ended December 31, 2011 ("the first quarter").
First Quarter Highlights
- Total AUM decreased by $348 million or 1.2% to $28.9 billion as at December 31, 2011 compared to AUM of $29.3 billion as at December 31, 2010.
- Revenue for the three-month period ended December 31, 2011 was $16.1 million, a decrease of 13.1% or $2.4 million compared to $18.6 million for the same period in 2010;
- Operating expenses were $12.7 million for the three-month period ended December 31, 2011, an increase of 9.1% or $1.1 million compared to $11.7 million for the same period in 2010;
- Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) (a non-IFRS measure of performance) were $2.6 million for the three-month period ended December 31, 2011, a decrease of $2.8 million or 51.3% compared to the adjusted EBITDA of $5.4 million for the same period in 2010 (Adjusted EBITDA eliminates the effect of performance fees on EBITDA);
- Non-recurring costs related to strategic initiatives were $0.9 million.
- For the quarter ended December 31, 2011, net earnings were $0.8 million compared to $2.8 million for the corresponding three month period of last year. The net earnings were impacted by non-recurring costs related to the aforementioned strategic initiatives of $0.9 million ($0.6 million net of income taxes) or a $0.02 (basic and fully diluted) per share impact. Excluding these expenses, net earnings for the current quarter would have been $1.5 million or $0.04 (basic and fully diluted) earnings per share.
"While our investment teams generally continued to outperform markets in 2011, our earnings were impacted by several one-off expenses, including expenses related to strategic initiatives for future growth," said Jean-Guy Desjardins, Chairman, CEO and CIO. "The acquisition of NATCAN Investment Management by Fiera takes our assets to over $54 billion, adding to our existing strong base of earnings and enabling us to offer new strategies and services to our clients. During the quarter, we also announced that we are investing in Fiera Properties, a new joint venture with Axia Investments Inc. The joint venture will offer unique national real estate fund vehicles and segregated account management services to investors. Finally, we opened our first office in the United States in September; an initiative that we strongly believe will lead to a growing presence in the U.S. market."
First Quarter 2012 Financial and Operating Results
The following table provides selected financial information for the three-month period ended December 31, 2011 compared to the same periods in 2010.
| 3 months ended | ||||
| December 31, 2011 ('000) |
December 31, 2010 ('000) |
|||
| AUM (in millions) | 28,920 | 29,268 | ||
| Revenue | ||||
| Base management fees | 15,246 | 16,678 | ||
| Performance fees | 885 | 1,879 | ||
| 16,131 | 18,557 | |||
| Operating Expenses | 12,719 | 11,656 | ||
| EBITDA | 3,413 | 6,900 | ||
| Adjusted EBITDA | 2,639 | 5,420 | ||
| Net Earnings | 829 | 2,815 | ||
| Adjusted EBITDA per share | 0.07 | 0.15 | ||
| Earnings per share | 0.02 | 0.08 | ||
| Earnings per share (excluding non-recurring items) | 0.04 | 0.10 | ||
Revenue for the three-month period ended December 31, 2011 decreased by $2.4 million or 13.1% to $16.1 million compared to $18.6 million for the comparable period in prior year. The shortfall in revenue is due mainly to the decrease in AUM in the private wealth and retail sectors and in the externally managed mandates. The negative variation was offset by new net inflows from existing and new clients combined with a market appreciation. The impact of these movements on revenue was $1.4 million combined with lower performance fees of $1.0 million.
Operating expenses were $12.7 million for the three-month period ended December 31, 2011, a 9.1% increase compared to $11.7 million for the same period in 2010. The increase was due primarily to increased SG&A expense, including $1.2 million in increased compensation expense for investment teams whose results significantly outperformed the market. The increase was offset in part by a decline of $0.7 million for external manager expenses for the three months ended December 31, 2011.
For the first quarter of 2012, earnings before interest, taxes, depreciation and amortization ("EBITDA") decreased by 50.5% or $3.5 million to $3.4 million. Adjusted EBITDA, which eliminates the effect of performance fees, was $2.6 million for the three-month period ended December 31, 2011, a decrease of $2.8 million compared to $5.4 million for the same period last year.
Non-recurring expenses for strategic initiatives including acquisitions were $0.9 million. The expenses covered professional and other costs for the recently announced acquisition of NATCAN Investment Management; Fiera's share of expenses during the first quarter for the launch of a joint venture partner, and for the opening of a new office in the United States.
For the three-month period ended December 31, 2011, net earnings were $0.8 million compared to $2.8 million for the same period in the prior fiscal year. The net earnings were impacted by non-recurring costs related to the aforementioned transaction of $0.9 million ($0.6 million net of income taxes) or a $0.02 (basic and fully diluted) per share impact. Excluding these expenses, net earnings for the current quarter would have been $1.5 million or $0.04 (basic and fully diluted) earnings per share.
Dividend
The Board of Directors has declared a dividend of $0.08 per Class A Subordinate Voting share and Class B Special Voting share of Fiera, payable on April 23, 2012 to shareholders of record at the close of business on March 26, 2012. The dividend is an eligible dividend for income tax purposes.
Forward-Looking Statements
This document may contain certain forward-looking statements. These statements relate to future events or future performance, and reflect management's expectations or beliefs regarding future events, including business and economic conditions and Fiera Sceptre's growth, results of operations, performance and business prospects and opportunities. Such forward-looking statements reflect management's current beliefs and are based on information currently available to management. In some cases, forward-looking statements can be identified by terminology such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential", "continue", "target", "intend" or the negative of these terms, or other comparable terminology.
By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and a number of factors could cause actual events or results to differ materially from the results discussed in the forward-looking statements. In evaluating these statements, readers should specifically consider various factors that may cause actual results to differ materially from any forward-looking statement.
These factors include, but are not limited to, market and general economic conditions, the nature of the financial services industry, and the risks and uncertainties detailed from time to time in Fiera Sceptre's interim and annual consolidated financial statements, and its Annual Report and Annual Information Form filed on www.sedar.com. These forward-looking statements are made as of the date of this document, and Fiera Sceptre assumes no obligation to update or revise them to reflect new events or circumstances.
About Fiera Sceptre
Fiera Sceptre is a leading publicly traded, independent investment firm. The Firm is one of only a handful of full service, multi-product investment firms in Canada, offering clients a proven top tier track record in equity and fixed income management as well as depth and expertise in asset allocation and alternative investments. www.fierasceptre.ca
Mélanie Tardif, CMA
NATIONAL Public Relations
514 843-2060
Additional information relating to the Company, including the Company's annual information form, is on SEDAR at www.sedar.com.
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