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Press release from CNW Group

Sprott Inc. announces 2013 first quarter results

Wednesday, May 08, 2013

Sprott Inc. announces 2013 first quarter results

07:00 EDT Wednesday, May 08, 2013

TORONTO, May 8, 2013 /CNW/ - Sprott Inc. (TSX: SII) ("Sprott" or the "Company") today announced its financial results for the three months ended March 31, 2013.

Q1 2013 Overview

  • Assets Under Management ("AUM") were $9.1 billion as at March 31, 2013, compared to $9.7 billion as at March 31, 2012 and $9.9 billion as at December 31, 2012

  • Assets Under Administration ("AUA") were $3.3 billion as at March 31, 2013, compared to $4.6 billion as at March 31, 2012 and $3.7 billion as at December 31, 2012

  • Management Fees were $26.0 million, a decrease of 21.3% compared with the three months ended March 31, 2012

  • EBITDA was $10.4 million ($0.06 per share), compared with $16.2 million ($0.10 per share) for the three months ended March 31, 2012, a decrease of 35.6%

  • Net income was $2.1 million ($0.01 per share) for the three months ended March 31, 2013, a decrease of 87.7% from $16.9 million ($0.10 per share) in the three months ended March 31, 2012

  • Named John Wilson and Scott Colbourne Co-Chief Investment Officers of Sprott Asset Management LP

  • Completed non-brokered private placement with an institutional investor for gross proceeds of $25 million and seeded Sprott Macro Managers Fund

  • Resource Capital Investment Corporation raised US$35 million in a new fixed-term limited partnership

  • Signed joint venture agreement to launch new global mining fund with Zijin Mining Group Co., Ltd.

"The first quarter and subsequent month have continued to be challenging for Sprott and our strategies concentrated on investments in precious metals and their related equities," said Peter Grosskopf, Chief Executive Officer of Sprott. "While we remain confident that this positioning will be rewarded with much better performance once markets become less comfortable with the results of quantitative easing, we also continue to build other areas of our firm to incorporate a broader range of investment strategies. We are pleased with the growth of our enhanced equity, private equity and lending and fixed income areas."

"One of our priorities is to make our products more attractive to institutional investors," continued Mr. Grosskopf. "During the first quarter, we took an important step in this process with the launch of our first institutionally-focused hedge fund, which will draw on the combined strengths of our organization."

"We have also recently increased our international presence through an agreement to launch a global mining fund with Zijin Mining Co., Ltd., one of China's largest gold and copper miners," added Mr. Grosskopf. "Our global brand positioning has led to a number of new opportunities to co-invest with international partners and we expect this to become a growing part of our business going forward."

  For the three
months ended
 
  March 31,  
($ in millions) 2013 2012
     
AUM, beginning of period 9,931 9,137
Net sales (redemptions) (274) 540
Market value appreciation (depreciation) of portfolios (547) 6
AUM, end of period 9,110 9,683

Assets Under Management

At March 31, 2013, AUM decreased by 5.9% to $9.1 billion from $9.7 billion at March 31, 2012.

Net redemptions for the three months ended March 31, 2013 were $0.3 billion. Collectively, the Company's other Mutual Funds, Managed Accounts and Domestic Alternative Investment Strategies experienced net redemptions of approximately $0.2 billion for the three months ended March 31, 2013. The Offshore Funds collectively, had redemptions resulting in net outflows for the three months ended March 31, 2013 of approximately $49 million or 25.6% of offshore AUM at the beginning of the year. The launch of Resource Capital Investment Corporation added $35 million to AUM.

Average AUM for the three months ended March 31, 2013 was $9.5 billion compared with $10.1 billion for the three months ended March 31, 2012, a decrease of 6%.

Income Statement

Total revenue for the three months ended March 31, 2013, decreased by 37.9% to $27.6 million from $44.4 million for the three months ended March 31, 2012.

For the three months ended March 31, 2013, management fees decreased by 21.3% to $26.0 million from $33.0 million in the three months ended March 31, 2012.  The decrease in management fees is primarily attributable to both the lower average AUM for the three months ended March 31, 2013 as well as an increase in lower fee products such as the physical bullion trusts and fixed-income funds.

Losses from proprietary investments, which include investments in products that Sprott manages, certain other resource-related stocks and warrants, and bullion, totaled $3.0 million, compared with gains of $4.2 million in the three months ended March 31, 2012.

Commission revenue for the three months ended March 31, 2013, decreased by $3.8 million to $1.9 million from $5.7 million during the three months ended March 31, 2012.

Total expenses for the three months ended March 31, 2013 were $23.7 million, an increase of 2.3% from $23.2 million in the three months ended March 31, 2012.

EBITDA, which excludes the impact of income taxes and certain non-cash expenses, decreased by 35.6% to $10.4 million from $16.2 million in the three months ended March 31, 2012.

Net income for the three months ended March 31, 2013 was $2.1 million ($0.01 per share), compared with  $16.9 million ($0.10 per share) earned during the three months ended March 31, 2012.

Dividends

On March 26, 2013, a dividend of $0.03 per common share was declared for the quarter ended December 31, 2012.  The dividend was paid on April 23, 2013 to shareholders of record at the close of business on April 8, 2013.

On May 7, 2013, a dividend of $0.03 per common share was declared for the quarter ended March 31, 2013.

Conference Call and Webcast

A conference call and webcast will be held today, Wednesday, May 8, 2013 at 11:00am ET to discuss the Company's financial results. To participate in the call, please dial 1-877-856-6014 ten minutes prior to the scheduled start of the call and either provide the name of the call or enter reference number 63961026. A taped replay of the conference call will be available until Tuesday, May 14, 2013 by calling 416-849-0833 or 1-855-859-2056, reference number 63961026.

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 Statements

This release contains "forward-looking statements" which reflect the current expectations of the Company. These statements reflect management's current beliefs with respect to future events and are based on information currently available to management. Forward-looking statements involve significant known and unknown risks, uncertainties and assumptions. Many factors could cause actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements including, without limitation, those listed under the heading "Risk Factors" in the Company's annual information form dated March 26, 2013. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results, performance or achievements could vary materially from those expressed or implied by the forward-looking statements contained in this release. Although the forward-looking statements contained in this release are based upon what the Company believes to be reasonable assumptions, the Company cannot assure investors that actual results, performance or achievements will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this release and the Company does not assume any obligation to update or revise them to reflect new events or circumstances.

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 through four business units: Sprott Asset Management LP, Sprott Private Wealth LP, Sprott Consulting LP, 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 provides management, administrative and consulting services to other companies. 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.

For further information:

Investor contact information:

Glen Williams

Director of Communications

Sprott Inc.

(416) 943-4394

gwilliams@sprott.com

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