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AGF Management Limited Reports Fourth Quarter and Fiscal Year 2023 Financial Results

GlobeNewswire - Wed Jan 24, 7:00AM CST

TORONTO, Jan. 24, 2024 (GLOBE NEWSWIRE) --

  • Reported quarterly adjusted diluted earnings per share of $0.28
  • Total assets under management and fee-earning assets of $42.2 billion
  • Growth of 18.5% in ETFs and SMA AUM year over year
  • Quarterly dividend of $0.11 per share

AGF Management Limited (AGF or the Company) (TSX: AGF.B) today announced financial results for the fourth quarter and fiscal year ended November 30, 2023.

AGF reported total assets under management and fee-earning assets1 of $42.2 billion compared to $42.3 billion as at August 31, 2023 and $41.8 billion as at November 30, 2022.

“In a year characterized by challenging business and market conditions, we demonstrated our resilience and continued to execute on our long-term plan to diversify our business across asset classes and client channels, giving us the stability to persevere and grow,” said Kevin McCreadie, Chief Executive Officer and Chief Investment Officer, AGF. “Looking ahead, we have a strong balance sheet and are well-positioned to deliver on our 2024 business plans.”

Mutual fund net redemptions were $224 million compared to net sales of $251 million in the comparative period, however AGF Investments reported ETFs and SMA AUM of $1.5 billion as at November 30, 2023 as compared to $1.2 billion in the comparative period.

“These results reflect the continued progress of our sales strategy in 2023 as we focused on diversifying and expanding our client base, while evolving our product offerings and varying our product structures to provide access to our investment capabilities in multiple ways,” said Judy Goldring, President and Head of Global Distribution, AGF.

1Fee-earning assets represents assets in which AGF has carried interest ownership and earns recurring fees but does not have ownership interest in the managers.

Key Business Highlights:

  • AGF was recognized as one of Greater Toronto’s Top Employers 2024. This honour stands as a testament to the firm's strong culture and the work being done to invest in its people.
  • AGF Private Capital Inc. – AGF’s private markets business – signed definitive agreements to acquire a majority interest in Kensington Capital Partners Limited, one of Canada’s leading alternative investment firms, as part of AGF’s strategic imperative to grow its private markets business. The transaction is expected to close in fiscal Q2-2024 and is subject to the receipt of certain regulatory approvals and closing conditions.
  • W. Robert (Bob) Farquharson retired from the AGF Board of Directors and was 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.
  • AGF announced the appointment of industry veteran Ken Tsang to the position of Chief Financial Officer. He is a respected and seasoned leader with nearly 30 years of experience as a strategic finance and corporate development leader in Financial Services.
  • Taking a vehicle agnostic approach, AGF Investments expanded its lineup with the launch of AGF Enhanced U.S. Equity Income Fund and AGF Emerging Markets ex China Fund, which are both available as a mutual fund with an ETF series option.
  • The firm celebrated 55 years of AGF Management Limited’s stock being listed on the TSX with a Market Open event at the TMX. This longevity is a testament to AGF’s history of innovation, a disciplined investment approach and an unwavering commitment to our clients.
  • AGF International Advisors Company Limited, a subsidiary of AGF, was once again accepted as a signatory to the UK Stewardship Code, a best-practice benchmark in investment stewardship. 
  • AGF European Equity Class (Series F) won a 2023 LSEG Lipper Fund Award in the European Equity category of 20 funds.  
  • AGF Investments 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.

Financial Highlights:

  • Adjusted EBITDA1 for the three months and year ended November 30, 2023, was $27.6 million and $132.5 million, compared to $32.7 million and $105.9 million in the prior year comparative period. Results were adjusted for severance, corporate development and acquisition related expenses of $2.2m and $3.4m for the three months and year ended November 30, 2023 ($2.5m and $4.4m in prior comparative period).
  • Net management, advisory and administration fees1 were $72.0 million and $294.4 million for the three months and year ended November 30, 2023, compared to $70.5 million and $294.5 million for the comparative prior year periods.
  • Revenue from Private Capital for the three months and year ended November 30, 2023, was $3.9 million and $33.3 million, compared to $8.5 million and $28.1 million for the comparative prior year period. The decrease quarter over quarter was driven by lower fair value adjustments on AGF’s investment in Private Capital long-term investments. Private Capital long-term investments can be variable quarter to quarter and can be impacted by fair value adjustments, timing of monetizations and cash distributions as well as changes in foreign currency translation as a portion of the investments are held in USD. On an annualized basis, AGF saw an increase in both results from Private Capital Managers and AGF’s investment in Private Capital long-term investments.
  • Adjusted selling, general and administrative costs1 were $50.7 million and $205.6 million for the three months and year ended November 30, 2023, compared to $49.0 million and $190.2 million in 2022. The year-over-year increase was impacted by higher incentive compensation, strategic investments made into the business to support our growth plan, including Private Capital, and increases driven by the market environment.
  • Adjusted net income1 was $18.5 million ($0.28 adjusted diluted EPS1) and $90.3 million ($1.34 adjusted diluted EPS1), compared to $23.5 million ($0.35 adjusted diluted EPS) and $70.0 million ($1.01 adjusted diluted EPS).

               
               
 Three months endedYears ended
  November 30,   August 31,   November 30,   November 30,   November 30, 
(in millions of Canadian dollars, except per share data) 2023   2023   2022   2023   2022 
               
Revenues              
Management, advisory and administration fees$104.2  $107.4  $103.0  $428.2  $430.3 
Trailing commissions and investment advisory fees (32.2)  (33.6)  (32.5)  (133.8)  (135.8)
Net management, advisory and administration fees1$72.0  $73.8  $70.5  $294.4  $294.5 
Deferred sales charges 1.9   1.8   1.8   7.5   7.2 
Revenue from Private Capital1 3.9   7.3   8.5   33.3   28.1 
Other revenue1 0.5   1.1   0.9   2.9   3.4 
Total net revenue1 78.3   84.0   81.7   338.1   333.2 
               
Selling, general and administrative 52.9   50.2   51.5   209.0   194.6 
Adjusted selling, general and administrative1 50.7   50.3   49.0   205.6   190.2 
               
Deferred selling commissions             37.1 
               
EBITDA before commissions1 25.4   33.8   30.2   129.1   138.6 
Adjusted EBITDA before commissions1 27.6   33.7   32.7   132.5   143.0 
               
EBITDA1 25.4   33.8   30.2   129.1   101.5 
Adjusted EBITDA1 27.6   33.7   32.7   132.5   105.9 
               
Net income 16.8   23.0   21.6   87.7   66.6 
Adjusted net income1 18.5   22.9   23.5   90.3   70.0 
               
Diluted earnings per share 0.25   0.34   0.32   1.30   0.96 
               
Adjusted diluted earnings per share1 0.28   0.34   0.35   1.34   1.01 
               
Free cash flow1 18.3   23.0   24.1   80.4   70.3 
               
Dividends per share 0.11   0.11   0.10   0.43   0.39 
               


                
(end of period)Three months endedYears ended
  November 30,   August 31,   November 30,  November 30,   November 30, 
(in millions of Canadian dollars) 2023   2023   2022  2023   2022 
                
Mutual fund Assets Under Management (AUM)2$24,459  $24,377  $23,898 $24,459  $23,898 
ETF's and SMA AUM 1,465   1,332   1,236  1,465   1,236 
Segregated accounts and sub-advisory AUM 6,774   7,058   7,204  6,774   7,204 
Total AGF Investments AUM 32,698   32,767   32,338  32,698   32,338 
Private Wealth AUM 7,341   7,360   7,349  7,341   7,349 
Private Capital AUM 46   42   55  46   55 
Total AUM$40,085  $40,169  $39,742 $40,085  $39,742 
Private Capital fee-earning assets3 2,095   2,090   2,077  2,095   2,077 
Total AUM and fee-earning assets3 42,180   42,259   41,819  42,180   41,819 
                
Mutual fund net sales2 (224)  (151)  251  (77)  765 
Average daily mutual fund AUM2 23,840   24,168   22,504  23,952   22,992 
                

1Net management, advisory and administration fees, revenue from Private Capital, other revenue, total net revenue, adjusted selling, general and administrative, EBITDA before commissions, adjusted EBITDA before commissions, EBITDA, adjusted EBITDA, adjusted net income, adjusted diluted earnings per share, 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.
2Mutual fund AUM includes retail AUM, pooled fund AUM and institutional client AUM invested in customized series offered within mutual funds.
3Fee-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 year ended November 30, 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.sedarplus.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/5oqk38wy. 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. Our companies deliver excellence in investing in the public and private markets through 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 across its businesses. The firm’s collective 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 $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.

About AGF Investments

AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), AGF Investments America Inc. (AGFA), AGF Investments LLC (AGFUS) and AGF International Advisors Company Limited (AGFIA). The term AGF Investments may refer to one or more of these subsidiaries or to all of them jointly. This term is used for convenience and does not precisely describe any of the separate companies, each of which manages its own affairs. AGF Investments entities only provide investment advisory services or offers investment funds in the jurisdiction where such firm and/or product is registered or authorized to provide such services.

Commissions, trailing commissions, management fees and expenses all may be associated with investment fund investments. Please read the prospectus before investing. Investment funds are not guaranteed, their values change frequently, and past performance may not be repeated.

AGF Management Limited shareholders, analysts and media, please contact:

Courtney Learmont
Vice-President, Finance
647-253-6804, 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 2023 Annual MD&A.

LSEG Lipper Fund Awards Canada

LSEG Lipper Fund Awards Canada 2023 Winner, AGF European Equity Class (F Series), Best European Equity Fund Over 3 years out of a classification total of 20 funds, for the period ending July 31, 2023. The corresponding Lipper Leader ratings of the Fund for the period ending July 31, 2023 are as follows: N/A (one year), 5 (three years), 4 (five years), 1 (ten years). The fund’s performance for the period ending September 30, 2023 is 36.6% (one year), 13.8% (three years), 5.6% (five years) and 4.5% (10 years).

The LSEG Lipper Fund Awards, granted annually, highlight funds and fund companies that have excelled in delivering consistently strong risk-adjusted performance relative to their peers. The LSEG Lipper Fund Awards are based on the Lipper Leader for Consistent Return rating, which is an objective, quantitative, risk-adjusted performance measure calculated over 36, 60 and 120 months. The fund with the highest Lipper Leader for Consistent Return (Effective Return) value in each eligible classification wins the LSEG Lipper Fund Award. The highest 20% of funds in each classification are named Lipper Leaders for Consistent Return and receive a rating of 5; the next 20% receive a rating of 4; the middle 20% are rated 3; the next 20% are rated 2; and the lowest 20% are rated 1. Lipper Leader ratings are subject to change every month. For more information, see lipperfundawards.com. Although LSEG Lipper makes reasonable efforts to ensure the accuracy and reliability of the data used to calculate the awards, their accuracy is not guaranteed.

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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