AGF Management Limited Reports Second Quarter Financial Results
TORONTO | June 26, 2013
AGF Management Limited (AGF or the Company) today announced financial results for the second quarter ended May 31, 2013, reporting adjusted diluted earnings per share of $0.17. The Company recorded a $25.9 million tax provision during the quarter, leading to a diluted loss from continuing operations of $0.12 per share compared to earnings of $0.17 per share for the three months ended May 31, 2012.
Total assets under management (AUM) were $37.6 billion for the second quarter of 2013 compared to $43.2 billion during the second quarter of 2012. Total retail fund AUM, including retail pooled funds, were $19.5 billion as of May 31, 2013, compared to $20.8 billion as of May 31, 2012. Institutional and sub-advisory AUM were $14.4 billion as of May 31, 2013, compared to $19.0 billion as of May 31, 2012. High-net-worth AUM increased for the third consecutive quarter ended May 31, 2013, with a 12.2% increase to $3.7 billion, compared to $3.3 billion for the corresponding period in 2012.
Redemption levels improved during the quarter, declining 10.2% from the first quarter of 2013 and 4.2% lower than 2012 levels. Gross sales remained constant over the same quarter in 2012. AGF’s Floating Rate Income Fund continued its strong gross sales performance with $75.0 million in sales during the quarter and over $200.0 million since the fund’s launch in May 2012. The fund was also added to the recommended list of a distribution partner during the quarter. Also in the quarter, AGF was successful in its institutional and sub-advisory business as it was awarded mandates by two major Canadian institutions as well as one of the largest local authorities in the U.K. These mandates represent over $636.0 million of AUM expected to fund in the third quarter of 2013.
“We are optimistic about the business going into the second half of 2013. From encouraging macroeconomic signals to some significant business wins for AGF, we are well positioned to take advantage of the improving economic climate and demand for global mandates,” said AGF Chairman and Chief Executive Officer Blake C. Goldring.
Revenue from continuing operations was $126.9 million for the three months ended May 31, 2013, compared to $133.5 million for the three months ended May 31, 2012, driven primarily by lower AUM levels. Earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations was $46.1 million, compared to $50.3 million in the second quarter of 2012. For the three months ended May 31, 2013, net loss from continuing operations was $10.4 million compared to earnings of $16.8 million for the three months ended May 31, 2012.
The Company expects to receive a notice of reassessment from the Canada Revenue Agency (CRA) relating to the transfer pricing and allocation of income between one of the Company’s Canadian legal entities and a foreign subsidiary. The Company believes its tax filing positions continue to be reasonable based on its transfer pricing methodology, and the Company is contesting the CRA’s position. However, to reflect the uncertainties of the CRA’s appeals process, the Company has recorded a tax provision of $25.9 million related to this matter in the second quarter of 2013.
In keeping with our commitment to return value to shareholders, dividends paid, including dividends reinvested, on Class A Voting common shares and Class B Non-Voting shares were $24.1 million in the second quarter of 2013. For the three months ended May 31, 2013, AGF declared a 27 cent per share dividend on Class A Voting common shares and Class B Non-Voting shares. During the quarter, under the current normal course issuer bid, 1,508,565 Class B Non-Voting shares were repurchased for a total consideration of $17.1 million.
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 http://www.media-server.com/m/p/xazd88uf. Alternatively, the call can be accessed toll-free in North America by dialing 1-800-447-0521 (Passcode #: 34902445).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.
AGF Management Limited is one of Canada's premier independent investment management firms with offices across Canada and subsidiaries around the world. AGF's products include a diversified family of award-winning mutual funds, mutual fund wrap programs and pooled funds. AGF also manages assets on behalf of institutional investors including pension plans, foundations and endowments as well as for private clients. With approximately $38 billion in total assets under management, AGF serves more than one million investors. AGF trades on the Toronto Stock Exchange under the symbol AGF.B.
Robert J. Bogart
Executive Vice-President and Chief Financial Officer
Senior Vice-President, Finance
This release includes forward-looking statements. 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,’ ‘anticipates,’ ‘intends,’ ‘plans,’ ‘believes’ or negative versions thereof and similar expressions, or future or conditional verbs such as ‘may,’ ‘will,’ ‘should,’ ‘would’ and ‘could.’ Forward-looking statements are based on certain factors and assumptions, including expected growth, results of operations, economic factors, business prospects, business performance and opportunities. While the company considers these factors and assumptions to be reasonable based on information currently available, they may prove to be incorrect. Forward-looking statements are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied by forward-looking statements due to, but not limited to, important risk factors such as level of assets under management, volume of sales and redemptions of investment products, performance of investment funds and of investment managers and advisors, 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 interest and foreign-exchange rates, taxation, changes in government regulations, unexpected judicial or regulatory proceedings, and the company’s ability to complete strategic transactions and integrate acquisitions. The company cautions 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. Forward-looking statements are given only as at the date of this release and other than specifically required by applicable laws, the company is under no obligation (and expressly disclaims any such obligation) to update or alter the forward-looking statements, whether as a result of new information, future events or otherwise. Additional risks and uncertainties can be found in our MD&A for the fiscal year ended November 30, 2012 under the headings “Caution Regarding Forward-Looking Statements” and “Risk Factors and Management of Risk” and in our other filings with Canadian securities regulatory authorities.