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AGF Management Limited Reports Fourth Quarter and Fiscal Year 2022 Financial Results

January 25, 2023 • Quarterly Reports/Dividends
  • Reported quarterly diluted earnings per share of $0.32
  • Mutual fund net sales of $251.0 million for the quarter
  • Announced quarterly dividend of $0.10 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, 2022.

AGF reported total assets under management and fee-earning assets 1 of $41.8 billion compared to $39.6 billion as at August 31, 2022 and $42.6 billion as at November 30, 2021. Year-over-year, the AUM decline was driven by market volatility.

“In a tumultuous market environment, we continued to outperform the industry, and this is a testament to our disciplined investment approach, risk management process and a product line-up that was designed to be resilient through all market conditions,” said Kevin McCreadie, Chief Executive Officer and Chief Investment Officer, AGF.

“Looking ahead, I am excited about our momentum and the opportunities we have in front of us. Not only is our performance strong, but our brand is resonating, and our balance sheet is solid,” added McCreadie.

AGF’s mutual fund gross sales were $914 million for the quarter compared to $914 million in the comparative period, while net sales were $251 million compared to $352 million in the comparative period. AGF’s sales have continued to outpace the industry. During the quarter the industry 2 reported net redemptions, while AGF mutual funds remained in net sales.

“Throughout the past 12 months, we have been focused on maintaining and building upon our impressive momentum as we continue to build key relationships and deliver strong performance,” said Judy Goldring, President and Head of Global Distribution, AGF. “Our positive retail mutual fund sales continued through the quarter as the majority of our best-in-class F-Series Funds received 4 or 5-stars Morningstar Canada ratings.” 3

Fee-earning assets represents assets in which AGF has carried interest ownership and earns recurring fees but does not have ownership interest in the managers..
Total long-term mutual funds in the Canadian mutual funds industry per Investment Funds Institute of Canada (IFIC).
Source: https://www.agf.com/en/top-performers/index.jsp?gclid=EAIaIQobChMIqYnWh6C-_AIVYvfjBx0BjAAJEAAYASAAEgJQsPD_BwE

 

Key Business Highlights:

  • Over the last year, AGF transitioned to a hybrid work model as employees moved to a new head office at CIBC SQUARE. The state-of-the-art building provides employees with a flexible workspace, enhanced collaboration and greater communication, while continuing to advance the reduction of the firm’s office footprint by approximately 22%.
  • Ash Lawrence joined AGF as Head of AGF Private Capital this year and has started efforts to expand the team. Ash has been charged with leading the continued growth of AGF’s private capital business and has presented a formalized strategic plan to the Board.
  • AGF appointed Cybele Negris, CEO and Co-Founder of Webnames.ca Inc., to the AGF Board of Directors effective September 27, 2022. As an accomplished tech entrepreneur and seasoned board member, she further diversifies the collective experience, expertise and perspective of AGF’s Board.
  • AGF Board member Ian Clarke will succeed Douglas L. Derry as Chair of the Audit Committee. Mr. Derry, subsequent to the year-end, is retiring from the Board. AGF thanks Mr. Derry for his contributions over the last 25 years, which included time on both the AGF Board of Directors and the AGF Funds Board.
  • AGF’s separately managed accounts (SMA) business gained momentum in 2022. To date, the firm has successfully onboarded SMA strategies onto several U.S. SMA platforms, including Vestmark, SMArtX Advisory Solutions LLC and Envestnet.
  • As at November 30, 2022, AGF’s Canadian mutual funds outperformed one-year and three-year investment targets with average percentiles of 41% (target 50%) and 30% (target 40%), respectively, with 1st percentile being best possible performance.
  • On November 14, 2022, AGF announced the completion of its substantial issuer bid (SIB). AGF purchased for cancellation 3,488,646 Class B non-voting shares at a price of $6.75 per share for a total cost of $23.5 million, which represented approximately 5.1% of the total number of AGF’s issued and outstanding Class B Non-Voting Shares as of October 3, 2022, the date the SIB was commenced.
  • In 2022, AGF celebrated its 65th anniversary. The firm’s longevity is a testament to many things, including a history of innovation, a disciplined investment approach and an unwavering commitment to clients.

 

Financial Highlights:

  • Management, advisory, and administration fees were $103.0 million and $430.3 million for the three months and year ended November 30, 2022, compared to $113.0 million and $432.2 million in prior year comparative periods. The decrease in revenue is primarily attributable to a decrease in average mutual fund assets under management.
  • Selling, general and administrative costs were $51.5 million and $194.6 million for the three months and year ended November 30, 2022, compared to $49.9 million and $195.1 million in 2021.
  • EBITDA before commissions for the three months and year ended November 30, 2022 were $30.2 million and $138.6 million, compared to $35.5 million and $127.7 million in the prior year comparative periods.
  • Net income for the three months and year ended November 30, 2022 was $21.6 million ($0.32 diluted EPS) and $66.6 million ($0.96 diluted EPS), compared to $13.8 million ($0.19 diluted EPS) and $39.3 million ($0.55 diluted EPS) in the prior year comparative periods.

Three months ended Years ended
(in millions of Canadian dollars, except per share data) November 30, 2022 August 31, 2022 November 30, 2021 November 30, 2022 November 30, 2021
Income
      Management, advisory, administration fees and deferred sales charges  104.8  105.6  114.6  437.5  438.5
      Share of profit (loss) of joint ventures  0.5  0.1  (0.3)  3.1
      Other income from fee-earning arrangements  0.8  0.7  0.8  3.0  1.9
      Fair value adjustments and other income  8.1  6.2  6.4  28.8  18.1
Total Income  114.2  112.5  121.9  469.0  461.6
 
Selling, general and administrative  51.5  46.4  49.9  194.6  195.1
Deferred selling commissions  —  15.3  37.1  62.6
EBITDA before commissions 1  30.2  33.2  35.5  138.6  127.7
EBITDA  30.2  33.2  20.2  101.5  65.1
Net income   21.6  22.1  13.8  66.6  39.3
Diluted earnings per share   0.32  0.32  0.19  0.96  0.55
Free Cash Flow 1  24.1  20.6  12.5  70.3  54.8
Dividends per share  0.10  0.10  0.09  0.40  0.34

 

(end of period) Three months ended Years ended
(in millions of Canadian dollars) November 30, 2022 August 31, 2022 November 30, 2021 November 30, 2022 November 30, 2021
Mutual fund assets under management (AUM) 2  23,898  22,496  24,006  23,898  24,006
Institutional, sub-advisory and ETF accounts AUM  8,514  7,932  9,082  8,514  9,082
Private Wealth AUM  7,275  7,000  7,366  7,275  7,366
Private Capital AUM  55  60  73  55  73
Total AUM  39,742  37,488  40,527  39,742  40,527
Private Capital fee-earning assets 3  2,077  2,067  2,108  2,077  2,108
Total AUM and fee-earning assets 3  41,819  39,555  42,635  41,819  42,635
 
Mutual fund net sales 2  251  51  352  765  1,432
Average daily mutual fund AUM 2  22,504  22,207  23,896  22,992  22,532

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

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

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

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/veoauyqt. 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 delivering excellence in investing in the public and private markets through its 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. The firm’s 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 over $40 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.

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 2022 Annual MD&A.

MEDIA
Media Contact

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

Karrie Van Belle
Chief Marketing & Innovation Officer
Phone: 416-865-4320

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