Sprott Inc. reported a 6.3-per-cent gain in third-quarter profit from a year ago, but revenue tumbled on lower margins from its growing physical bullion and fixed-income funds.
“After a challenging first half of the year, our investment performance improved during the third quarter due largely to a rebound in precious metals and their related equities,” Sprott’s chief executive officer Peter Grosskopf said in a statement on Wednesday.
The lower-fee closed-end bullion funds make up about 46 per cent of Sprott’s total assets, while precious metals stocks make up a big chunk of some portfolios.
“With the U.S. Federal Reserve Board’s open-ended extension of its quantitative easing programs and the ongoing instabiliy of Europe, we are confident in our positioning,” said Mr. Grosskopft.
During the latest quarter, Sprott raised more than $600-million (U.S.) through follow-on offerings of Sprott Physical Silver Trust and Sprott Physical Gold Trust. Sprott plans to expand its physical bullion business before year end with the launch of the Sprott Physical Platinum and Palladium Trust.
Profit at the Toronto-based wealth management company rose to $11-million, or 7 cents a share, for the latest quarter, from $10.4-million, or 6 cents a share, a year earlier. Revenue fell 19.3 per cent to $35.8-million from a year ago. Management fees fell by 30.1 per cent to $28.2-million.
Assets under management at Sprott rose marginally to $10.3-billion in the third quarter from $9.9-billion in the year-earlier period. Assets under administration fell to $4-billion from $4.9-billion.