Corrected Press Release: Guardian Capital Group Limited (TSX: GCG; GCG.A) Announces 2019 First Quarter Operating Results
Guardian Capital Group Limited is issuing this corrected press release to revise the assets under management figures shown in today's earlier press release. Total assets under management in this corrected press release is revised upward by $207 million to a total of $29,621 million.
All per share figures disclosed below are stated on a diluted basis.
For the three months ended March 31 ($ in thousands, except per share amounts) 2019 2018 Net revenue $ 44,291 $ 41,516 Operating earnings 11,176 10,504 Net gains (losses) 65,883 (15,932 ) Net earnings (loss) attributable to shareholders 67,220 (6,208 ) EBITDA $ 14,509 $ 12,471 Adjusted cash flow from operations 10,504 8,764 Per share: Net earnings (loss) attributable to shareholders $ 2.43 $ (0.23 ) EBITDA 0.53 0.44 Adjusted cash flow from operations 0.38 0.31 As at 2019 2018 ($ in millions, except per share amounts) March 31 December 31 March 31 Assets under management $ 29,621 $ 26,962 $ 29,457 Assets under administration 18,745 17,385 17,601 Shareholders' equity 656 599 624 Securities 674 627 648 Per share: Shareholders' equity $ 23.66 $ 21.57 $ 21.98 Securities 24.30 22.58 22.84
The Company's Operating earnings for the quarter ended March 31, 2019 were $11.2 million, compared to $10.5 million during the same quarter in the prior year.
The Net revenue increased to $44.3 million in the current quarter, $2.8 million higher than $41.5 million in the same quarter in the prior year. The increase in Net revenue is primarily due to the growth in insurance commission revenue, benefiting from the successful advisor recruitments completed in 2018, together with increases in interest income and administrative services income earned in both the Investment Management and the Financial Advisory Segments.
Partially offsetting the increase in Net revenue were increases in expenses which, in the current quarter, were $2.1 million higher than in the prior year. The increased expenses were incurred largely in the Financial Advisory Segment.
The volatility in the global financial markets continues to drive significant fluctuations in the quarterly Net gains (losses) associated with our Securities. In the current quarter, Net gains were $65.9 million, which resulted largely from the increase in fair value of Securities, compared $15.9 million of Net losses in the prior year. During the current quarter, the Company disposed of 100,000 shares of the Bank of Montreal and disposed of an additional 100,000 shares subsequent to March 31, 2019.
As a result of the Net gains and improved Operating earnings described above, the Company's Net earnings attributable to shareholders in the current quarter increased to $67.2 million, compared to a Net loss attributable to shareholders of $6.2 million in the first quarter of the prior year.
The Company's Assets Under Management ("AUM") was $29.6 billion as at March 31, 2019, compared to $27.0 billion at the end of 2018 and $29.5 billion as at March 31, 2018. The increase in AUM in the quarter is due to the combination of positive financial market performance and successes in attracting net new assets. The new client asset flow was most significant into the Fundamental Global Equity strategy managed by our UK operations, which more than doubled its AUM during the quarter to $2.3 billion. This net inflow was partially offset by outflows in the domestic business. The Company's assets under administration were $18.7 billion as at March 31, 2019, compared to $17.4 billion at the end of 2018 and $17.6 billion as at March 31, 2018.
EBITDA for the current quarter was $14.5 million, or $0.53 per share, compared to $12.5 million, or $0.44 per share for 2018. Adjusted cash flow from operations for the current quarter was $10.5 million, or $0.38 per share, compared to $8.8 million, or $0.31 per share for 2018. Both measures increased compared to last year due to improved Operating earnings and to a lesser degree the initial adoption of a new accounting standard, IFRS 16 - Leases. The Company elected to apply the new standard on a modified retrospective basis, which does not require restatement of prior periods. As a result, the 2018 figures have not been restated and are not entirely comparable with current period figures. The adoption of the new standard resulted in increases to EBITDA and Adjusted cash flow from operations of $0.6 million and $0.5 million, respectively, in the current quarter, compared to what they would have been under the previous standard.
The Company's Shareholders' equity as at March 31, 2019 was $656 million, or $23.66 per share, compared to $599 million, or $21.57 per shareas at December 31, 2018, and $624 million, or $21.98 per share, as at March 31, 2018. The fair value of the Company's Securities as at March 31, 2019 was $674 million, or $24.30 per share, compared to $627 million, or $22.58 per share, as at December 31, 2018, and $648 million or $22.84 per share, as at March 31, 2018.
The Board of Directors has declared a quarterly eligible dividend of $0.15 per share, payable on July 18, 2019, to shareholders of record on July 11, 2019.
The following table summarizes the Company's financial results for the past eight quarters.
For the three months ended Mar 31, Dec 31, Sep 30, Jun 30, Mar 31, Dec 31, Sep 30, Jun 30, 2019 2018 2018 2018 2018 2017 2017 2017 ($ in thousand, except per share amounts) Net revenue $ 44,291 $ 44,300 $ 42,773 $ 42,924 $ 41,516 $ 39,097 $ 36,315 $ 37,208 Operating earnings 11,176 12,137 12,444 11,302 10,504 13,046 10,505 12,160 Net gains (losses) 65,883 (89,001 ) 28,481 20,800 (15,932 ) 38,186 4,068 (3,603 ) Net earnings (loss) 68,099 (69,652 ) 35,079 26,245 (5,279 ) 44,466 12,555 7,493 Net earnings (loss) attributable to shareholders 67,220 (70,449 ) 34,320 25,385 (6,208 ) 43,982 12,310 7,242 Shareholders' equity 656,167 599,311 670,382 644,956 623,511 634,416 608,013 603,428 Per Class A and Common share (in $) Net earnings (loss) attributable to shareholders $ 2.43 $ (2.63 ) $ 1.21 $ 0.90 $ (0.23 ) $ 1.51 $ 0.42 $ 0.25 Shareholders' equity $ 23.66 $ 21.57 $ 23.57 $ 22.74 $ 21.98 $ 21.88 $ 20.67 $ 20.54 Dividends paid $ 0.125 $ 0.125 $ 0.125 $ 0.125 $ 0.100 $ 0.100 $ 0.100 $ 0.100
Guardian Capital Group Limited is a diversified financial services company founded in 1962. Its Common and Class A shares are listed on The Toronto Stock Exchange and the Company is celebrating its 50 anniversary as a listed company.. The Company 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 insurance distribution network.
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, EBITDA per share, Adjusted cash flow from operations, Adjusted cash flow from operations per share, 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 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 (loss), which were $68.1 million for the three months ended March 31, 2019 (2018 - ($5.3) million), and Net cash from (used in) operating activities, which was ($5.3) million for the three months ended March 31, 2019 (2018 - ($5.4) million). The per share amounts for EBITDA, Adjusted cash flow from operations, Shareholders' equity and Securities are calculated by dividing the amounts by diluted shares, which Is calculated in a similar manner as net earnings available 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.