TORONTO, March 5, 2015 /CNW/ - Sprott Inc. (TSX: SII) ("Sprott" or the "Company") today announced its financial results for the year ended December 31, 2014.
2014 Financial Overview
- Assets Under Management ("AUM") were $7.0 billion as at December 31, 2014, compared to $7.0 billion as at December 31, 2013 and $7.4 billion as at September 30, 2014
- Assets Under Administration ("AUA") were $1.9 billion as at December 31, 2014, compared to $2.3 billion as at December 31, 2013 and $2.2 billion as at September 30, 2014
- Management fees were $78.4 million reflecting a decrease of $6.3 million (7.4%) from the year ended December 31, 2013
- Commission revenues were $7.8 million reflecting an increase of $1.6 million (26.0%) from the year ended December 31, 2013
- Adjusted EBITDA was $41.7 million ($0.17 per share), reflecting an increase of $6.6 million (18.8%), from the year ended December 31, 2013
- Adjusted base EBITDA was $38.1 million ($0.15 per share), reflecting an increase of $5.9 million (18.2%) from the year ended December 31, 2013
- Net income was $19.4 million ($0.08 per share), reflecting an increase of $100.7 million (123.9%), as compared with a loss of $81.3 million ($0.39 per share) for the year ended December 31, 2013
- Invested capital stood at $359.7 million, reflecting a $42.0 million (13.2%) increase from December 31, 2013.
Significant events for the year ended December 31, 2014 and year-to-date 2015
- Named John Wilson, CEO of Sprott Asset Management
- Completed transition of funds managed by Eric Sprott
- Acquired three real assets focused funds sub-advised by Capital Innovations Ltd., Inc.
- Launched Sprott Gold Miners ETF on the New York Stock Exchange
- Launched the Sprott Bridging Income Fund LP
- Strengthened investment team with addition of three new portfolio managers
"In many ways, 2014 was a year of transition for Sprott. Although our AUM remained largely unchanged from the end of 2013 at $7.0 billion, there were meaningful shifts within the composition of our AUM. These changes are reflective of our overall strategy of growing both our diversified asset management platform in Canada and our global presence as leading resource investors. In Canada, for the first time, our diversified asset management business ended the year with the majority of its actively-managed AUM in non-resource strategies. This shift was driven by the successful growth of our Enhanced products franchise as well as the expansion of other areas such as our specialty lending products."
"We continued to expand our passive product offerings in 2014 with the successful launch of our first ETF, the Sprott Gold Miners ETF ("SGDM")," added Mr. Grosskopf. "We are pleased with the early results of this effort, as SGDM has grown to approximately $275 million in assets since it was launched in July of 2014. We expect to launch our second ETF, the Sprott Junior Gold Miners ETF, during the second quarter of this year and will continue to build out our ETF offerings in the future."
The breakdown of AUM by investment product type on a year-over-year basis is as follows:
| $ (in millions) |
AUM December 31, 2013 |
Net Sales / (Redemptions) |
Net Market Value Change |
Acquisitions / (Divestitures) |
AUM December 31, 2014 |
|||||
| Bullion Funds |
3,542 |
(384) |
27 |
— |
3,185 |
|||||
| Mutual Funds |
1,483 |
289 |
13 |
53 |
1,838 |
|||||
| Alternative Investment Strategies |
938 |
(147) |
27 |
(35) |
783 |
|||||
| Managed Companies |
521 |
415 |
(117) |
(49) |
770 |
|||||
| Managed Accounts |
122 |
3 |
(14) |
— |
111 |
|||||
| Fixed Term Limited Partnerships |
361 |
27 |
(48) |
— |
340 |
|||||
| Total |
6,967 |
203 |
(112) |
(31) |
7,027 |
|||||
Assets Under Management
AUM was $7.0 billion as at December 31, 2014, largely unchanged from the year ended December 31, 2013. Average AUM for the year ended December 31, 2014, was $7.5 billion, reflecting a decrease $0.5 billion (6.5%), from average AUM levels for the year ended December 31, 2013.
Income Statement
Management fees were $78.4 million on a year ended basis, reflecting a decrease of $6.3 million (7.4%) from the year ended December 31, 2013. The decrease was largely due to a decline in overall average AUM year-over-year. Management fees as a percentage of average AUM were 0.9%, which was down 0.1% from the prior period.
Gross performance fees were $10.7 million on a year ended basis, reflecting an increase of $1.7 million (18.9%) from the year ended December 31, 2013.
Commission revenues were $7.8 million on a year ended basis, reflecting an increase $1.6 million (26.0%) from the prior period. The increase was due to increased private placement activity in SGRIL and SPW.
Interest income was $20.2 million on a year ended basis, reflecting an increase of $10.3 million (105.0%) from the year ended December 31, 2013. Interest income is generated primarily by SRLC which was acquired (and its results consolidated), by the Company in the third quarter of 2013.
Losses on proprietary investments were $4.6 million, reflecting a decrease in losses of $9.9 million (68.3%) from the year ended December 31, 2013. The decreased losses were primarily the result of improved market performance in certain seeded alternative investment funds.
Other income was $11.4 million on a year ended basis, reflecting a decrease of $7.7 million (40.2%) from the year ended December 31, 2013.
Total expenses were $95.9 million on a year ended basis, reflecting a decrease of $104.5 million (52.1%) from the year ended December 31, 2013.
Adjusted EBITDA was $41.7 million on a year ended basis, reflecting an increase of $6.6 million (18.8%), from the year ended December 31, 2013
Adjusted base EBITDA was $38.1 million on a year ended basis, reflecting an increase of $5.9 million (18.2%) respectively, from the year ended December 31, 2013.
Net income was $19.4 million ($0.08 per share) on a year ended basis, reflecting an increase of $100.7 million (123.9%), respectively, from the year ended December 31, 2013.
Basic and diluted earnings per share for the year ended December 31, 2013 were $0.08, versus negative $0.39 for the year ended December 31, 2013.
Dividends
On March 4, 2015, a dividend of $0.03 per common share was declared for the quarter ended December 31, 2014.
Conference Call and Webcast
A conference call and webcast will be held today, Thursday, March 5, 2015 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 and provide conference ID 94636067 ten minutes prior to the scheduled start of the call. A taped replay of the conference call will be available until Thursday, March 5, 2015 by calling 416-849-0833 or 1-855-859-2056, reference number 94636067. 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
Certain statements in this press release contain forward-looking information (collectively referred to herein as the "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 press release contains Forward-Looking Statements pertaining to: (i) the Company's overall strategy of growing both its diversified asset management platform in Canada and its global presence as leading resource investors; (ii) expectations regarding the launching of the Company's second ETF, the Sprott Junior Gold Miners ETF, during the second quarter of this year and the continued building of the Company's ETF offerings in the future; and (iii) the declaration, payment and designation of dividends.
Although the Company believes that the Forward-Looking Statements are reasonable, they are not guarantees of future results, performance or achievements. A number of factors or assumptions have been used to develop the Forward-Looking Statements, including: (i) the impact of increasing competition in each business in which the Company operates will not be material; (ii) quality management will be available; and (iii) the effects of regulation and tax laws of governmental agencies will be consistent with the current environment. Actual results, performance or achievements could vary materially from those expressed or implied by the Forward-Looking Statements should assumptions underlying the Forward-Looking Statements prove incorrect or should one or more risks or other factors materialize, including: (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) foreign exchange risk relating to the relative value of the U.S. dollar; * litigation risk; (xi) employee errors or misconduct could result in regulatory sanctions or reputational harm; (xii) failure to implement effective information security policies, procedures and capabilities; (xiii) failure to develop effective business resiliency plans; (xiv) failure to obtain or maintain sufficient insurance coverage on favourable economic terms; (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; and (xvii) those risks described under the heading "Risk Factors" in the Company's annual information form dated March 4, 2015. 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 speak only as of the date hereof, unless otherwise specifically noted, and the Company does not assume any obligation to publicly update any Forward-Looking Statements, whether as a result of new information, future events or otherwise, except as may be expressly required by applicable Canadian 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.
Investor contact information: Glen Williams, Director of Communications, (416) 943-4394, [email protected]
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