- Reported quarterly diluted earnings per share of $0.26
- Positive mutual fund net sales of $221 million for the
quarter
- Increased quarterly dividend to $0.11 per share
AGF Management Limited (AGF or the Company)
(TSX: AGF.B) today announced financial results for the first
quarter ended February 28, 2023.
AGF reported total assets under management and
fee-earning assets1 of $41.9 billion compared
to $41.8 billion as at November 30, 2022 and $42.0
billion as at February 28, 2022. Year-over-year, the slight AUM
decline was driven by market volatility, offset by positive net
sales.
“During a time of market uncertainty, we remain
focused on providing our clients with consistency when it comes to
our performance, our investment approach and our client
interactions,” said Kevin McCreadie, Chief Executive Officer and
Chief Investment Officer, AGF. “We are well-positioned with a
robust platform of global strategies across multiple vehicles and
asset classes designed to meet the ever-evolving needs of our
clients.”
AGF’s mutual fund gross sales were $982 million
for the quarter compared to $989 million in the comparative period.
Mutual fund net sales were $221 million compared to $330 million in
the comparative period, marking the 10th consecutive quarter of
positive net sales. AGF’s sales have continued to outpace the
industry. During the quarter, the industry2 reported net
redemptions, while AGF mutual funds remained in net sales.
“Given AGF’s solid performance this quarter, we
continued to experience strong flows and positive net sales, while
leveraging our partnerships,” said Judy Goldring, President and
Head of Global Distribution, AGF. “We are seeing success with our
sales strategy as we focus on the IIROC channel in Canada and gain
momentum through our turnkey asset management programs in the
U.S.”
“We take a thoughtful approach to expense
management,” added McCreadie. “However, our strong investment
performance and continued execution against our sales strategy will
have an initial short-term impact on our profitability driven by an
increase in success-based expenses.”
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 |
Total long-term mutual funds in the Canadian mutual funds industry
per Investment Funds Institute of Canada (IFIC). |
Key Business Highlights:
- AGF announced a 10% increase to its first quarter dividend to
$0.11 per share payable on April 21, 2023 to shareholders on record
as at April 11, 2023.
- As at February 28, 2023, AGF’s investment performance
outperformed its one- and three-year targets (50% and 40%
respectively, with 1st percentile being best possible performance)
with an average one-year percentile of 36%, up from 56% in 2022,
and an average three-year percentile of 33%, up from 46% in
2022.
- The firm’s investment performance spans across a broad range of
categories and styles, where 70% and 75% of its strategies
outperformed their peers on a 1- and 3-year basis, respectively,
based on gross returns (before fees) within the same category.
- Over 60% of AGF’s Series F funds available in Canada managed by
AGF Investments Inc. have a 4 or 5-star Overall Morningstar Rating™
across all asset classes as of February 28, 2023.*
- AGF Investments Inc. was recognized with FundGrade A+® Awards
for AGF American Growth Class, AGF Fixed Income Plus Fund, AGF
Global Convertible Bond Fund and AGF Global Select
Fund.**
- In January, the firm announced new ETF and mutual fund names
unified under the AGF brand in order to better reflect the
continued integration of AGF’s quantitative and fundamental
investing teams.
- W. Robert (Bob) Farquharson has retired from the AGF Board of
Directors and has been named Vice-Chairman Emeritus in recognition
of his long and successful career at AGF. He first joined AGF in
1963 as an analyst and over a period of 60 years, managed a number
of AGF funds and served the company in senior executive and
director roles.
Financial Highlights:
- Total net revenue, was $80.1 million for the three months ended
February 28, 2023, compared to $81.7 million for the three months
ended November 30, 2022, and $89.3 million for the comparative
prior year period. The decline was influenced by lower income on
Private Capital long-term investments, which can be variable
quarter to quarter and impacted by the timing of monetizations and
cash distributions.
- Selling, general and administrative costs were $53.0 million
for the three months ended February 28, 2023, compared to $49.3
million in 2022. The increase in SG&A was influenced by the
continued improvement in investment performance and a 39% increase
in the AGF.B share price.
- EBITDA before commissions for the three months ended February
28, 2023 was $27.1 million, compared to $40.0 million in the prior
year comparative period.
- Net income for the three months ended February 28, 2023 was
$17.6 million ($0.26 diluted EPS), compared to $12.9 million
($0.18 diluted EPS) in the prior year comparative period.
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Three months ended |
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February 28, |
|
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November 30, |
|
|
February 28, |
|
|
(in
millions of Canadian dollars, except per share data) |
|
2023 |
|
|
2022 |
|
|
2022 |
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Revenues |
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|
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Management, advisory and administration fees |
$ |
106.8 |
|
$ |
103.0 |
|
$ |
112.6 |
|
|
Trailing commissions and investment advisory fees |
|
(33.8) |
|
|
(32.5) |
|
|
(35.6) |
|
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Net management, advisory and administration fees1 |
$ |
73.0 |
|
$ |
70.5 |
|
$ |
77.0 |
|
|
Deferred sales charges |
|
1.8 |
|
|
1.8 |
|
|
1.5 |
|
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Share of profit (loss) of joint ventures |
|
0.3 |
|
|
0.5 |
|
|
(0.6) |
|
|
Other income from fee-earning arrangements |
|
0.7 |
|
|
0.8 |
|
|
0.8 |
|
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Fair value adjustments and other income |
|
4.3 |
|
|
8.1 |
|
|
10.6 |
|
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Total net revenue1 |
|
80.1 |
|
|
81.7 |
|
|
89.3 |
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Selling, general and
administrative |
|
53.0 |
|
|
51.5 |
|
|
49.3 |
|
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|
|
|
|
|
|
|
|
|
|
|
Deferred selling
commissions |
|
– |
|
|
– |
|
|
19.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA before
commissions1 |
|
27.1 |
|
|
30.2 |
|
|
40.0 |
|
|
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|
|
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|
|
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|
EBITDA1 |
|
27.1 |
|
|
30.2 |
|
|
20.7 |
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Net income |
|
17.6 |
|
|
21.6 |
|
|
12.9 |
|
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|
|
|
|
|
|
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Diluted earnings per
share |
|
0.26 |
|
|
0.32 |
|
|
0.18 |
|
|
|
|
|
|
|
|
|
|
|
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Free cash flow1 |
|
19.3 |
|
|
24.1 |
|
|
13.3 |
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|
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Dividends per share |
|
0.10 |
|
|
0.10 |
|
|
0.09 |
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|
(end of period) |
Three months ended |
|
|
|
February 28, |
|
|
November 30, |
|
|
February 28, |
|
|
(in
millions of Canadian dollars) |
|
2023 |
|
|
2022 |
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Mutual fund Assets Under
Management (AUM)2 |
$ |
24,029 |
|
$ |
23,898 |
|
$ |
23,625 |
|
|
Institutional, sub-advisory
and ETF accounts AUM |
|
8,511 |
|
|
8,514 |
|
|
8,751 |
|
|
Private Wealth AUM |
|
7,252 |
|
|
7,275 |
|
|
7,410 |
|
|
Private
Capital AUM |
|
54 |
|
|
55 |
|
|
69 |
|
|
Total AUM |
$ |
39,846 |
|
$ |
39,742 |
|
$ |
39,855 |
|
|
Private
Capital fee-earning assets3 |
|
2,082 |
|
|
2,077 |
|
|
2,100 |
|
|
Total AUM and fee-earning
assets3 |
|
41,928 |
|
|
41,819 |
|
|
41,955 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Mutual fund net sales2 |
|
221 |
|
|
251 |
|
|
330 |
|
|
Average
daily mutual fund AUM2 |
|
23,782 |
|
|
22,504 |
|
|
24,075 |
|
1 |
Net management, advisory and administration fees, total net
revenue, EBITDA before commissions, EBITDA, 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. |
2 |
Mutual fund AUM includes retail AUM, pooled fund AUM and
institutional client AUM invested in customized series offered
within mutual funds. |
3 |
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 first quarter ended February 28, 2023, 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/ovjgdyso.
Alternatively, the call can be accessed over the phone
by registering here or in the Investor Relations section
of AGF’s website at www.agf.com, to receive the dial-in
numbers and unique PIN.
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 delivering excellence in
investing in the public and private markets through its three
distinct business lines: AGF Investments, AGF Private Capital and
AGF Private Wealth.
AGF brings a disciplined approach focused on providing an
exceptional client experience and incorporating sound responsible
and sustainable practices. The firm’s investment solutions, driven
by its fundamental, quantitative and private investing
capabilities, extends globally to a wide range of clients, from
financial advisors and their clients to high-net worth and
institutional investors including pension plans, corporate plans,
sovereign wealth funds, endowments and foundations.
Headquartered in Toronto, Canada, AGF has investment operations
and client servicing teams on the ground in North America and
Europe. With nearly $42 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:
Courtney LearmontVice-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 2022 Annual MD&A.
*About Morningstar
Morningstar Ratings reflect performance as of
February 28, 2023 and are subject to change monthly. The Overall
Morningstar Rating™ measures risk-adjusted returns and is derived
from a weighted average of the performance figures associated with
its 3-, 5- and 10-year (if applicable) ratings. For more
information see www.morningstar.ca.
© 2023 Morningstar Inc., All Rights Reserved.
The information contained herein: (1) is proprietary to Morningstar
and/or its content providers; (2) may not be copied or distributed;
and (3) is not warranted to be accurate, complete or timely.
Neither Morningstar nor its content providers are responsible for
any damages or losses arising from any use of this information.
Past performance is no guarantee of future results.
Learn More:
https://www.agf.com/en/top-performers/index.jsp
**About the Fundata FundGrade A+
Rating
FundGrade A+® is used with permission from Fundata Canada Inc.,
all rights reserved. The annual FundGrade A+® Awards are presented
by Fundata Canada Inc. to recognize the “best of the best” among
Canadian investment funds. The FundGrade A+® calculation is
supplemental to the monthly FundGrade ratings and is calculated at
the end of each calendar year. The FundGrade rating system
evaluates funds based on their risk-adjusted performance, measured
by Sharpe Ratio, Sortino Ratio, and Information Ratio. The score
for each ratio is calculated individually, covering all time
periods from 2 to 10 years. The scores are then weighted equally in
calculating a monthly FundGrade. The top 10% of funds earn an A
Grade; the next 20% of funds earn a B Grade; the next 40% of funds
earn a C Grade; the next 20% of funds receive a D Grade; and the
lowest 10% of funds receive an E Grade. To be eligible, a fund must
have received a FundGrade rating every month in the previous year.
The FundGrade A+® uses a GPA-style calculation, where each monthly
FundGrade from “A” to “E” receives a score from 4 to 0,
respectively. A fund’s average score for the year determines its
GPA. Any fund with a GPA of 3.5 or greater is awarded a FundGrade
A+® Award. For more information,
see https://www.FundGradeAwards.com. Although Fundata makes
every effort to ensure the accuracy and reliability of the data
contained herein, the accuracy is not guaranteed by Fundata.
AGF American Growth Class won in the U.S. Equity CIFSC Category,
out of 836 funds. The FundGrade A+ start date was 1/31/2013 and the
FundGrade A+ end date was 12/31/2022.
AGF Fixed Income Plus Fund won in the Canadian Fixed Income
CIFSC Category, out of 311 funds. The FundGrade A+ start date was
1/31/2013 and the FundGrade A+ end date was 12/31/2022.
AGF Global Convertible Fund won in the High Yield Fixed Income
CIFSC Category, out of 191 funds. The FundGrade A+ start date was
1/31/2016 and the FundGrade A+ end date was 12/31/2022.
AGF Global Select Fund won in the Global Equity CIFSC Category,
out of 1146 funds. The FundGrade A+ start date was 1/31/2013 and
the FundGrade A+ end date was 12/31/2022.
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