- Reported diluted earnings per share of $0.19
- Mutual fund gross sales of $914 million for the fourth quarter
of 2021, an improvement of 35% year-over-year
- Mutual fund net sales of $352 million for the quarter
- Total assets under management and fee-earning assets1 of $42.6
billion
AGF Management Limited (AGF or the Company)
(TSX: AGF.B) today announced financial results for the fourth
quarter and fiscal year ended November 30, 2021.
AGF reported total assets under management and
fee-earning assets1 of $42.6 billion compared
to $43.4 billion as at August 31, 2021 and $38.3 billion
as at November 30, 2020.
“As we marked our second fiscal year-end of the
pandemic, we have continued to work effectively and execute against
our long-term strategy and stated goals, including the growth of
our private alternatives business and securing key hires intended
to help us accelerate our growth,” said Kevin McCreadie, Chief
Executive Officer and Chief Investment Officer, AGF. “Over the
course of the year we built terrific sales momentum and delivered
risk-adjusted performance, while providing our clients with an
essential service.”
“Critical to advancing our strategy we will
continue to strategically deploy capital to effectively secure our
place as an alternatives provider of choice for our clients while
looking to maintain, and build upon, the positive sales momentum we
have experienced over this past year,” added McCreadie.
AGF’s mutual fund gross sales were $914 million
for the quarter compared to $679 million in the comparative period,
a 35% improvement year over year. AGF’s gross sales have continued
to outpace the industry. Year over year, retail mutual fund gross
sales2 improved by 39% compared to 18% for the industry3. AGF’s
mutual funds net sales improved $264 million year-over-year, with
total net sales of $352 million in Q4 2021, compared to $88 million
in Q4 2020.
Mutual fund sales momentum has continued into
the first quarter of 2022, with net sales of $115 million as at
January 21, 2022, compared to net sales of $104 million for the
same time last year. Mutual fund gross sales were up 3%
year-over-year.
“This year, we returned retail sales to net
inflows, experiencing year-over-year improvements across all
channels with strong flows into multiple categories,” said Judy
Goldring, President and Head of Global Distribution, AGF.
“I believe this success is the result of
evolving our client base across channels and providing products
that are responsive to market trends, while addressing growing
interest in private alternatives, fee-based series and separately
managed accounts.”
__________________1 Fee-earning assets
represents assets in which AGF has carried interest ownership and
earns recurring fees but does not have ownership interest in the
managers.2 Retail mutual fund gross sales are calculated as
reported mutual fund gross sales less non-recurring institutional
gross sales in excess of $5 million invested in our mutual funds.3
Long-term funds.
Key Business Highlights:
- On
November 22, 2021, AGF announced the evolution of its long-standing
relationship with PFSL Investments Canada Ltd. (PFSL) with the
establishment of a new multi-year product and services distribution
arrangement being named as one of only two asset management firms
set to initially launch on PFSL’s evolving distribution
platform.
- In
December, AGF announced that Ash Lawrence will be joining AGF in a
new role as Senior Vice-President & Head of Alternatives and as
a member of the Executive Management Team. Ash’s leadership
combined with AGF’s scale and strong balance sheet position the
firm well to strategically deploy capital, and build on its strong
momentum, to accelerate the growth of its alternatives
business.
- AGF
appointed Ian Clarke to its Board of Directors. He is an
accomplished leader bringing a wealth of unique experiences in
strategic planning, business operations, risk management assessment
and corporate transactions that complement the experiences of our
current directors.
- During
the quarter, Arlette Edmunds also joined AGF in the role of Chief
Human Resources Officer bringing experience and tenure to support
the evolution of the workplace, including AGF’s focus on advancing
its diversity, equity and inclusion agenda.
- AGF
finalized an agreement with Vestmark and had its separately managed
account (SMA) models approved to be added to the Envestnet
platform, providing U.S. clients access to in-demand SMA strategies
as the firm continues to expand its offerings and client-base in
the U.S.
- AGF
became a founding participant in Climate Engagement Canada (CEC) –
a finance-led initiative that aims to drive dialogue between the
financial community and Canadian corporations to promote a just
transition to a net zero economy.
- AGF also
joined CDP’s 2021 Science-Based Targets campaign calling on the
world’s highest impact companies to urgently set science-based
emissions reduction targets in line with 1.5°C warming scenarios.
CDP is a not-for-profit charity that runs the global disclosure
system for investors, companies, cities, states, and regions to
manage their environmental impacts.
- In
support of AGF’s continued advocacy for gender equality, the firm
became a corporate sponsor of 100 Women in Finance (100WF).
For further information on AGF’s pandemic response plan
statement visit AGF.com.
Financial Highlights:
- Management,
advisory, administration fees and deferred sales charges were
$114.6 million and $438.5 million for the three months and year
ended November 30, 2021, compared to $97.5 million and $380.7
million in prior year comparative periods. The increase in revenue
is attributable to higher net sales, increase in AUM and a higher
average revenue rate as a result of product mix.
- The continued
trend of net sales, combined with improved financial results,
resulted in higher variable selling, general and administrative
costs in the three and twelve months ended November 30, 2021.
Selling, general and administrative costs were $49.9 million and
$195.1 million for the three months and year ended November 30,
2021, compared to $43.1 million and $174.7 million in prior year
comparative periods.
- Adjusted EBITDA
before commissions for the three months and year ended November 30,
2021, excluding EBITDA from S&WHL which was sold in 2020,
improved 12.3% and 27.8% to $35.5 million and $127.7 million,
compared to $31.6 million and $99.9 million in the prior year
comparative periods.
- Deferred selling
commissions (DSC) for the three months and year ended November 30,
2021 increased to $15.3 million and $62.6 million, compared to
$10.3 million and $42.0 million in the prior year comparative
periods, driven by higher gross sales.
- Net income for
the three months and year ended November 30, 2021 was $13.8 million
($0.19 diluted EPS) and $39.3 million ($0.55 diluted EPS), compared
to $110.4 million ($1.43 diluted EPS) and $173.9 million
($2.22 diluted EPS) in the prior year comparative periods.
Excluding earnings from S&WHL and one-time items, adjusted
diluted earnings per share was $0.19 and $0.42 in the comparative
prior year periods.
- EPS in the quarter of $0.19
reflects growth in top line revenue, which was offset in the period
by higher DSC and performance-based compensation incurred related
to sales growth.
|
|
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|
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|
|
|
|
|
|
|
|
|
|
Three months ended |
Years ended |
|
|
November 30, |
|
|
August 31, |
|
|
November 30, |
|
|
November 30, |
|
|
November 30, |
|
(in
millions of Canadian dollars, except per share data) |
|
2021 |
|
|
2021 |
|
|
20201 |
|
|
2021 |
|
|
20201 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management, advisory, administration fees |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and deferred sales charges |
$ |
114.6 |
|
$ |
112.4 |
|
$ |
97.5 |
|
$ |
438.5 |
|
$ |
380.7 |
|
Share of profit of joint ventures |
|
0.1 |
|
|
2.2 |
|
|
1.6 |
|
|
3.1 |
|
|
2.9 |
|
Other income from fee-earning arrangements |
|
0.8 |
|
|
0.7 |
|
|
– |
|
|
1.9 |
|
|
– |
|
Dividend income, net of currency hedge (S&WHL) |
|
– |
|
|
– |
|
|
– |
|
|
– |
|
|
45.8 |
|
Gain on sale of assets classified as held for sale, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
net of currency hedge (S&WHL) |
|
– |
|
|
– |
|
|
104.4 |
|
|
– |
|
|
104.4 |
|
Fair value adjustments and other income |
|
6.4 |
|
|
7.8 |
|
|
5.9 |
|
|
18.1 |
|
|
10.1 |
|
Total Income |
$ |
121.9 |
|
$ |
123.1 |
|
$ |
209.4 |
|
$ |
461.6 |
|
$ |
543.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative |
|
49.9 |
|
|
50.1 |
|
|
43.1 |
|
|
195.1 |
|
|
174.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred selling
commissions |
|
15.3 |
|
|
14.1 |
|
|
10.3 |
|
|
62.6 |
|
|
42.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA before
commissions2 |
|
35.5 |
|
|
37.5 |
|
|
137.0 |
|
|
127.7 |
|
|
251.1 |
|
Adjusted EBITDA before
commissions2 |
|
35.5 |
|
|
37.5 |
|
|
31.6 |
|
|
127.7 |
|
|
113.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
|
20.2 |
|
|
23.4 |
|
|
126.7 |
|
|
65.1 |
|
|
209.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
13.8 |
|
|
14.9 |
|
|
110.4 |
|
|
39.3 |
|
|
173.9 |
|
Adjusted net income2 |
|
13.8 |
|
|
14.9 |
|
|
15.0 |
|
|
39.3 |
|
|
46.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share |
|
0.19 |
|
|
0.21 |
|
|
1.43 |
|
|
0.55 |
|
|
2.22 |
|
Adjusted diluted earnings per
share2 |
|
0.19 |
|
|
0.21 |
|
|
0.19 |
|
|
0.55 |
|
|
0.59 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow2 |
|
12.5 |
|
|
21.5 |
|
|
9.9 |
|
|
54.8 |
|
|
46.1 |
|
Dividends per share |
|
0.09 |
|
|
0.09 |
|
|
0.08 |
|
|
0.34 |
|
|
0.32 |
|
Long-term debt |
|
– |
|
|
– |
|
|
– |
|
|
– |
|
|
– |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(end of period) |
Three months ended |
Years ended |
|
|
November 30, |
|
|
August 31, |
|
|
November 30, |
|
|
November 30, |
|
|
November 30, |
|
(in millions of Canadian dollars) |
|
2021 |
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mutual fund Assets Under
Management (AUM)3 |
$ |
24,006 |
|
$ |
23,792 |
|
$ |
20,322 |
|
$ |
24,006 |
|
$ |
20,322 |
|
Institutional, sub-advisory
and ETF accounts AUM |
|
9,371 |
|
|
10,302 |
|
|
9,638 |
|
|
9,371 |
|
|
9,638 |
|
Private client AUM |
|
7,077 |
|
|
7,073 |
|
|
6,043 |
|
|
7,077 |
|
|
6,043 |
|
Private
alternatives AUM4 |
|
73 |
|
|
99 |
|
|
227 |
|
|
73 |
|
|
227 |
|
Total AUM4 |
$ |
40,527 |
|
$ |
41,266 |
|
$ |
36,230 |
|
$ |
40,527 |
|
$ |
36,230 |
|
Private
alternatives fee-earning assets4,5 |
|
2,108 |
|
|
2,094 |
|
|
2,038 |
|
|
2,108 |
|
|
2,038 |
|
Total AUM and fee-earning assets5 |
|
42,635 |
|
|
43,360 |
|
|
38,268 |
|
|
42,635 |
|
|
38,268 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mutual fund net sales
(redemptions)3 |
|
352 |
|
|
288 |
|
|
88 |
|
|
1,432 |
|
|
(371 |
) |
Average
daily mutual fund AUM3 |
|
23,896 |
|
|
23,104 |
|
|
19,487 |
|
|
22,532 |
|
|
18,804 |
|
1 Refer to Note 3 in the 2020 Consolidated
Financial Statements for more information on the adoption of IFRS
16.2 EBITDA before commissions (earnings before interest, taxes,
depreciation, amortization and deferred selling commissions), 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,
pooled fund AUM and institutional client AUM invested in customized
series offered within mutual funds.4 Total AUM and Private
alternatives AUM have been reclassified and restated to exclude
co-investment AUM for comparative purposes.5 Fee-earning assets
represents assets in which AGF has carried interest ownership and
earns recurring fees but does not have ownership interest in the
managers.
For further information and detailed financial
statements for the fourth quarter and fiscal year ended November
30, 2021, 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/mmc/p/js6kjke3. Alternatively, the
call can be accessed toll-free in North America by dialing
1 (800) 708-4540 (Passcode #: 50263502).
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 over $43 billion in total assets under management and
fee-earning assets, AGF serves more than 800,000 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
Courtney Learmont Vice-President,
Finance647-253-6804, 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, the possible effects of war or terrorist
activities, outbreaks of disease or illness that affect local,
national or international economies (such as COVID-19), natural
disasters and disruptions to public infrastructure, such as
transportation, communications, power or water supply or other
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 2021 Annual MD&A.
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