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Canaccord Genuity Group CEO Dan Daviau says things are looking up for the company.

Radio silence.

That's what greeted management after the operator opened the telephone line to questions from analysts on Canaccord Genuity Group Inc.'s earnings call on Thursday.

Checking to make sure she'd been heard, the operator repeated instructions for entering the queue. In an attempt to lighten the mood, chief executive officer Dan Daviau piped in: "I love the summer, operator. Thank you."

Crickets on a conference call likely signal an uneventful quarter. But perhaps boring is exactly what Canaccord needed after the past 18 months of upheaval in the independent brokerage industry.

Canaccord was back in the black for the quarter ended June 30 after posting three straight quarterly losses. Expenses continue to fall. The U.K. and European wealth unit, consistently one of Canaccord's strongest segments, made $6.4-million in profit on a pretax basis. Advisory fees gleaned from mergers and acquisitions jumped 81 per-cent year over year to $39.3-million.

"Things are looking up," Mr. Daviau said in an interview following the analyst call.

In a note to clients, CIBC World Markets analyst Paul Holden wrote that "management has delivered on its expense reduction plan and that should help the business operate at break-even or slightly better during this revenue-challenged period."

Still, the company couldn't catch a break in trading Thursday with the shares down over 5 per cent at one point.

One weak spot was investment banking revenue, specifically new issue revenue, which was down 43 per cent year over year. The company pointed to softness in its U.K. and European operations due to uncertainty around Brexit.

Canaccord expects more of the same for the time being, saying in a regulatory filing that ongoing Brexit uncertainty "will continue to put pressure on near- to medium-term capital-raising activities" in Europe.

Meanwhile, the Canadian retail wealth management arm, which hadn't made money in almost five years, posted a modest profit in the latest quarter. With the unit profitable again, what are the chances of selling it?

"Zero chance," Mr. Daviau said.

Canaccord's retail arm comes in handy for distribution on bought deals, but also crucially acts as "differentiator" versus the competition, Mr. Daviau said. Very few independents have strong retail franchises.

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 28/03/24 2:31pm EDT.

SymbolName% changeLast
CF-T
Canaccord Genuity Group Inc
+0.91%8.83
CM-N
Canadian Imperial Bank of Commerce
+1.24%50.69
CM-T
Canadian Imperial Bank of Commerce
+1.08%68.63

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