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AGF Management Limited Reports Second Quarter 2019 Financial Results

June 26, 2019 • Quarterly Reports/Dividends
  • Reported assets under management of $38.3 billion
  • Reported diluted EPS of $0.14 for the second quarter of 2019

AGF Management Limited (AGF or the Company) (TSX: AGF.B) today announced financial results for the second quarter ended May 31, 2019.

AGF reported total assets under management (AUM) of $38.3 billion compared to $38.5 billion in the same period in 2018.

Mutual fund industry sales have softened in recent months declining 82% for the period March to May 2019 as compared to 2018. AGF retail mutual funds net redemptions were $169 million for the quarter, adjusting for net flows from institutional clients invested in mutual funds, compared to net sales of $85 million in prior year1. Reported mutual funds net redemptions were $498 million for the quarter, compared to net sales of $100 million in Q2 2018.

“In today’s uncertain markets, we understand that it is important to consider various investment styles and approaches in order to achieve long-term performance and manage volatility,” said Kevin McCreadie, Chief Executive Officer and Chief Investment Officer, AGF. “At the same time, we are taking a different approach to building our business with continued investment in our capabilities where strong growth is anticipated – global, alternatives, factor-based investing and ETFs,” added McCreadie. “This quarter, we launched two new U.S.-listed AGFiQ ETFs reinforcing our commitment to providing U.S. investors with alternative solutions, while strategically growing AGF’s footprint in key markets like the U.S.”

Key Business Highlights:

  • AGFiQ Global Infrastructure ETF (GLIF) and AGFiQ Dynamic Hedged U.S. Equity ETF (USHG), began trading on the NYSE Arca, Inc. on May 23, 2019.  
  • Effective May 6, AGF’s Boston-based subsidiary, FFCM LLC, officially changed its name to AGF Investments LLC, following the successful integration of AGF’s acquisition last summer.
  • AGF was a finalist at the annual Wealth Professional Awards in four categories: CEO of the Year, Fund Provider of the Year, Employer of Choice and Advertising Campaign of the Year.
  • Over the quarter, AGF announced a number of changes and enhancements to its product suite to further support the firm’s efforts to simplify its offering to best meet the needs of investors.

Income for the three months ended May 31, 2019 was $109.8 million, compared to $114.2 million for the three months ended May 31, 2018. EBITDA before commissions from continuing operations was $29.2 million for the three months ended May 31, 2019, compared to $20.6 million for the same period in 2018. Adjusting for one-time items in prior year, EBITDA before commissions from continuing operations was $29.2 million for the three months ended May 31, 2019, compared to $25.8 million in 2018.

Diluted earnings per share (EPS) from continuing operations for the three months ended May 31, 2019 was $0.14, compared to $0.21 for the comparative period. Adjusting for one-time items in prior year, diluted EPS for the three months ended May 31, 2019 was $0.14, compared to $0.14 in 2018.

For the three months ended May 31, 2019, AGF declared an eight cent per share dividend on Class A Voting common shares and Class B Non-Voting shares, payable July 18, 2019 to shareholders on record as at July 10, 2019.

(from continuing operations) Three months ended Six months ended
(in millions of Canadian dollars, except per share data) May 31, 20192  February 28, 20192 May 31, 2018 May 31, 20192 May 31, 2018
Income  109.8  105.0  114.2  214.8  225.2
Net income (loss) attributable to equity owners of the Company  11.5  (0.2)  17.0  11.3  38.5
EBITDA before commissions3  29.2  12.9  20.6  42.1  45.6
Adjusted EBITDA before commissions3  29.2  27.3  25.8  56.5  50.8
Diluted earnings per share attributable to equity owners of the Company  0.14  —  0.21  0.14  0.47
Adjusted diluted earnings per share attributable to equity owners of the Company 3  0.14  0.14  0.14  0.28  0.28
Free Cash Flow3  8.2  16.6  2.1  24.8  12.6
Dividends per share  0.08  0.08  0.08  0.16  0.16
Long-term debt  164.9  168.7  168.6  164.9  168.6

 

(end of period) Three months ended
(in millions of Canadian dollars) May 31, 2019 February 28, 2019 November 30, 2018 August 31, 2018 May 31, 2018
Mutual fund assets under management (AUM)4
 (including retail pooled funds)
 18,725  19,028  18,713  19,401  19,118
Institutional, sub-advisory and ETF accounts AUM  11,712  12,023  12,475  12,694  12,823
Private client AUM  5,722  5,633  5,513  5,714  5,521
Alternative asset management platform AUM5  2,179  2,140  1,011  1,009  1,009
Total AUM, including alternative asset management platform  38,338  38,824  37,712  38,818  38,471
Net mutual fund sales (redemptions)4  (498)  (104)  111  (9)  100
Average daily mutual fund AUM4  18,497  17,762  18,382  18,788  18,727

Net sales (redemptions) in retail mutual funds are calculated as reported mutual fund net sales (redemptions) less non-recurring institutional net sales (redemptions) in excess of $5.0 million invested in our mutual funds.

Refer to Note 3 in the Condensed Consolidated Interim Financial Statements for more information on the adoption of IFRS 15.

3 EBITDA before commissions (earnings before interest, taxes, depreciation, amortization and deferred selling commissions), adjusted EBITDA before commissions, 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.

4  Mutual fund AUM includes retail AUM and institutional client AUM invested in customized series offered within mutual funds.

5   Represents fee-earning committed and/or invested capital from AGF and external investors held through joint ventures. AGF’s portion of this commitment is $225.0 million, of which $135.6 million has been funded as at May 31, 2019, which includes $29.5 million return of capital related to the monetization of its seed assets.

For further information and detailed financial statements for the second quarter ended May 31, 2019, 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.sedar.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/m6/p/4t9r2ymx. Alternatively, the call can be accessed toll-free in North America by dialing 1 (800) 708-4540 (Passcode #: 48660180).

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. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.

AGF has investment operations and client servicing teams on the ground in North America, Europe and Asia. With over $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.

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

Adrian Basaraba
Senior Vice-President and Chief Financial Officer
416-865-4203, InvestorRelations@agf.com   

Baoqin Guo
Vice-President, Finance
416-865-4228, 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, 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 2018 Annual MD&A.

MEDIA

Media Contact

Amanda Marchment
Director, Corporate Communications
Phone: 416-865-4160
Email: amanda.marchment@agf.com

Karrie Van Belle
SVP, Head of Marketing and Communications
Phone: 416-865-4320

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