Guardian Capital Group Limited (TSX: GCG; GCG.A) Announces 2021 First Quarter Operating Results
EQNX::TICKER_START (TSX:GCG.TO),(TSX:GCG-A.TO), EQNX::TICKER_END
All per share figures disclosed below are stated on a diluted basis.
For the three months ended March 31 ($ in thousands, except per share amounts) 2021 2020 Net revenue $ 64,694 $ 49,901 Operating earnings 17,504 10,813 Net gains (losses) 41,971 (161,289 ) Net earnings (loss) attributable to shareholders 49,625 (136,368 ) Attributable to shareholders: EBITDA $ 21,211 $ 14,370 Adjusted cash flow from operations 18,492 13,320 Attributable to shareholders, per share: Net earnings (loss) $ 1.83 $ (5.35 ) EBITDA 0.78 0.53 Adjusted cash flow from operations 0.68 0.49 As at 2021 2020 ($ in millions, except per share amounts) March 31 December 31 March 31 Assets under management $ 47,643 $ 45,984 $ 27,527 Assets under administration 28,680 22,289 18,152 Shareholders' equity 737 700 563 Securities 654 633 524 Per share: Shareholders' equity $ 27.14 $ 25.69 $ 20.94 Securities 24.05 23.23 19.50
The Company is reporting another set of record highs in both assets under management ("AUM") and assets under administration ("AUA") this quarter, for a total of $76.3 billion in total client assets. This growth was achieved while navigating through the challenging environment over the past year. The Company has continued the practice stated in its 2020 Annual Report, whereby it has not furloughed any employees as a result of the pandemic, nor has it accessed any government wage subsidies or support throughout this period.
The Company's AUM grew to $47.6 billion as at March 31, 2021, a 4% increase from $46.0 billion as at December 31, 2020, and a 73% increase from $27.5 billion as at March 31, 2020. The continued recovery in the global financial markets, the strong inflow of assets experienced by GuardCap Asset Management Limited ("GuardCap"), the UK-based investment management subsidiary, and the addition of assets through acquisitions drove the growth in AUM. The AUM managed by GuardCap has grown to $12.2 billion as at March 31, 2021, $1.5 billion growth since the beginning of the quarter, and tripling from the $4.0 billion reported at the end of 2019.
The Company's AUA grew to $28.7 billion as at March 31, 2021, a 29% increase from $22.3 billion as at December 31, 2020 and a 58% increase from $18.2 billion as at March 31, 2020. The acquisition of a Canadian wealth management business on March 1, 2021, which was subsequently renamed Guardian Partners Inc. ("GPI") added $5.4 billion in total client assets, of which $5.1 billion is included in AUA and $0.3 billion in AUM.
The Company is reporting Operating earnings of $17.5 million for the quarter ended March 31, 2021, 62% or $6.7 million higher than the $10.8 million reported in the first quarter of 2020. The significant growth experienced by the Company's businesses was led by GuardCap, IDC Worldsource Insurance Network Inc., the MGA subsidiary and, to a lesser extent, the contributions from the businesses acquired over the past two quarters.
The Net revenue for the current quarter grew to a historic high of $64.7 million, 30% or $14.8 million higher than the $49.9 million reported in the same quarter in the prior year. The increase reflects our successful organic growth in revenues since March 31, 2020, and to a lesser extent the addition of revenues from the acquired businesses.
Expenses in the current quarter were $47.2 million, an $8.1 million increase from $39.1 million in the same quarter in the prior year. The higher expenses reflect the growth in our businesses, and the addition of $4.0 million in new expenses from the acquired businesses.
The global equities markets continued to experience positive performance since the pandemic induced steep decline in the first quarter of 2020. As a result, the Company's Net gains in the current quarter were $42.0 million, compared to Net losses of $161.3 million in the first quarter of 2020.
As a result of the Net gains and Operating earnings described above, the Company's Net earnings attributable to shareholders in the current quarter were $49.6 million, compared to a Net loss of $136.4 million in the same quarter in 2020.
EBITDA attributable to shareholders for the current quarter was $21.2 million, compared to $14.4 million in the same period in the prior year. Adjusted cash flow from operations attributable to shareholders for the current quarter was $18.5 million, compared to $13.3 million in the same quarter in the prior year. The increases of 47% and 38%, respectively, in these measures are reflective of the growth delivered by the Company's operating businesses.
The Company's Shareholders' equity as at March 31, 2021 increased to $737 million, or $27.14 per share, from $700 million, or $25.69 per share as at December 31, 2020, and $563 million or $20.94 per share as at March 31, 2020. The fair value of the Company's Securities as at March 31, 2021 increased to $654 million, or $24.05 per share, from $633 million, or $23.23 per share as at December 31, 2020 and $524 million or $19.50 per share as at March 31, 2020.
The Board of Directors has declared a quarterly eligible dividend of $0.18 per share, payable on July 19, 2021, to shareholders of record on July 12, 2021.
The Company's financial results for the past eight quarters are summarized in the following table.
Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 As at ($ in millions) Assets under management $ 47,643 $ 45,984 $ 32,734 $ 31,196 $ 27,527 $ 31,147 $ 30,243 $ 30,088 Assets under administration 28,680 22,289 20,755 20,010 18,152 20,248 19,040 18,784 For the three months ended ($ in thousands) Net revenue $ 64,694 $ 63,724 $ 52,042 $ 50,124 $ 49,901 $ 49,865 $ 45,983 $ 45,963 Operating earnings 17,504 18,493 12,108 13,427 10,813 13,030 12,105 12,590 Net gains (losses) 41,971 80,983 35,739 43,254 (161,289 ) 24,140 (1,274 ) 7,957 Net earnings (loss) 50,861 87,083 42,652 51,244 (134,911 ) 31,808 8,952 17,601 Net earnings (loss) attributable to shareholders 49,625 86,039 42,201 50,486 (136,368 ) 30,787 8,275 16,838 Net earnings (loss) attributable to shareholders: Class A and Common per share (in $) Basic $ 1.95 $ 3.38 $ 1.66 $ 1.99 $ (5.35 ) $ 1.20 $ 0.32 $ 0.65 Diluted 1.83 3.16 1.56 1.87 (5.35 ) 1.13 0.31 0.62 Dividends paid on Class A and Common shares (in $) $ 0.160 $ 0.160 $ 0.160 $ 0.160 $ 0.150 $ 0.150 $ 0.150 $ 0.150 As at Shareholders' equity ($ in thousands) $ 737,363 $ 699,610 $ 631,863 $ 596,265 $ 562,821 $ 682,777 $ 653,983 $ 647,983 Per Class A and Common share (in $) Basic $ 29.02 $ 27.54 $ 24.80 $ 23.50 $ 22.18 $ 26.73 $ 25.49 $ 25.26 Diluted 27.14 25.75 23.25 22.07 20.94 25.01 23.93 23.73 Total Class A and Common shares outstanding (shares in thousands) 27,691 27,740 27,758 27,758 27,758 27,839 27,956 27,956
Guardian Capital Group Limited is a diversified financial services company founded in 1962. The Company is headquartered in Canada and has offices in the United Kingdom, the United States and the Caribbean. It provides institutional and high net worth investment management services to clients; financial services to international investors; and services to financial advisors in its national mutual fund dealer, securities dealer, and life insurance managing general agency. Its Common and Class A shares are listed on The Toronto Stock Exchange.
For further information, contact:
Donald Yi George Mavroudis Chief Financial Officer President and Chief Executive Officer (416) 350-3136 (416) 364-8341
The Company's management uses EBITDA attributable to shareholders (formerly EBITDA), including the per share amount, Adjusted cash flow from operations attributable to shareholders (formerly Adjusted cash flow from operations), including the per share amount, Shareholders' equity per share and Securities per share to evaluate and assess the performance of its business. These measures do not have standardized measures under International Financial Reporting Standards ("IFRS"), and are therefore unlikely to be comparable to similar measures presented by other companies. However, management believes that most shareholders, creditors, other stakeholders and investment analysts prefer to include the use of these measures in analyzing the Company's results. The Company defines EBITDA as net earnings before interest, income taxes, amortization, stock-based compensation, net gains or losses, less amounts attributable to non-controlling interests. The Company defines Adjusted cash flow from operations attributable to shareholders (formerly Adjusted cash flow from operations) as net cash from operating activities, net of changes in non-cash working capital items and non-controlling interests. The most comparable IFRS measures are Net earnings, which were $50.9 million in 2021 (2020 - Net Loss $134.9 million), and Net cash from operating activities, which was $6.1 million in 2021 (2020 - $4.3 million). The per share amounts for EBITDA attributable to shareholders, Adjusted cash flow from operations attributable to shareholders, Shareholders' equity and Securities are calculated by dividing the amounts by diluted shares, which Is calculated in a manner similar to net earnings attributable to shareholders per share. More detailed descriptions of these non-IFRS measures are provided in the Company's Management's Discussions and Analysis, including a reconciliation of these measures to their most comparable IFRS measures.