AGF Management Limited Reports Second Quarter 2023 Financial Results

---
  • Reported quarterly diluted earnings per share of $0.45
  • AGF reported its 11th consecutive quarter of positive mutual fund sales reporting net sales of $77 million
  • Quarterly dividend of $0.11 per share

TORONTO, June 21, 2023 (GLOBE NEWSWIRE) -- AGF Management Limited (AGF or the Company) (TSX: AGF.B) today announced financial results for the second quarter ended May 31, 2023.

AGF reported total assets under management and fee-earning assets1 of $41.2 billion compared to $41.9 billion as at February 28, 2023 and $40.3 billion as at May 31, 2022.

“Today we are seeing the results of our collective teams’ efforts and we have made significant progress against our strategic imperatives,” said Kevin McCreadie, Chief Executive Officer and Chief Investment Officer, AGF. “We remain focused on the continued diversification of our business including the build out of our private markets platform, AGF Private Capital, and the onboarding of new clients across all channels.”

AGF’s mutual fund gross sales were $819 million for the quarter compared to $818 million in the comparative period. Mutual fund net sales were $77 million compared to $132 million in the comparative period, marking the 11th consecutive quarter of positive net sales. AGF’s sales have continued to outpace the industry. During the quarter, the industry2 reported net redemptions, while AGF mutual funds remained in net sales.

“Given current market volatility and industry pace, we are pleased with the continued success of our sales strategy,” said Judy Goldring, President and Head of Global Distribution, AGF. “The solid execution of our sales strategy has allowed us to diversify and expand our client base and focus on evolving our product offerings and varying product structures to provide access to our investment capabilities in multiple ways to meet their unique needs.”

“We continue to take a thoughtful approach to expense management, focusing on maintaining core expenses while also recognizing the importance of investing in our strategic growth areas including rewarding employees who contribute to the acceleration of our sales strategy and deliver investment outperformance, “added McCreadie.

Key Business Highlights:

  • AGF announced the appointment of industry veteran Ken Tsang to the position of Chief Financial Officer. He is a respected and seasoned leader with nearly 30 years of experience as a strategic finance and corporate development leader in Financial Services.
  • As part of an ongoing product review and AGF’s commitment to ensuring its lineup is responsive to market trends and regulatory changes, while also delivering competitive pricing, AGF Investments Inc. announced a host of product-related updates to its Canadian lineup, including selective pricing changes, preliminary prospectus filings for new funds and select fund/series closures.
  • AGF’s separately managed accounts (SMA) business continued to gain momentum over the quarter as the firm onboarded a sustainable investment strategy onto the U.S. SMA platform of a large global wealth management firm.
  • The firm relocated its Boston office to 99 High Street. The expanded space will deliver the same seamless in-office and at-home working experience offered to employees at CIBC SQUARE and AGF’s other locations while supporting the continued build-out of AGF’s U.S. business.  

Financial Highlights:

  • Total net revenue was $95.8 million for the three months ended May 31, 2023, compared to $82.7 million in the prior year. The increase was influenced by higher income on Private Capital long-term investments, which can be variable quarter to quarter and impacted by the timing of monetizations and cash distributions.
  • Selling, general and administrative costs were $53.0 million for the three months ended May 31, 2023, compared to $47.3 million in 2022. The year-over-year increase in SG&A was impacted by higher incentive compensation as a result of our track record of investment outperformance and the successful execution of our sales strategy, which is to increase our presence in the investment dealer channel. In addition, the increase incorporates strategic investments made into the business to support our growth plan, including Private Capital, as well as increases driven by the market environment.  AGF is committed to being an employer of choice, which means looking at responsible practices and initiatives to attract, develop and reward employees.
  • EBITDA before commissions for the three months ended May 31, 2023, was $42.8 million, compared to $35.4 million in the prior year comparative period.
  • Net income for the three months ended May 31, 2023, was $30.3 million ($0.45 diluted EPS), compared to $10.1 million ($0.14 diluted EPS) in the prior year comparative period. 
1 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).


                 
                 
  Three months endedSix months ended
   May 31,  February 28,  May 31,  May 31,  May 31, 
 (in millions of Canadian dollars, except per share data) 2023  2023  2022  2023  2022 
                 
 Revenues               
 Management, advisory and administration fees$109.8 $106.8 $111.0 $216.6 $223.6 
 Trailing commissions and investment advisory fees (34.1)  (33.8)  (34.8)  (67.9)  (70.4) 
 Net management, advisory and administration fees1$75.7 $73.0 $76.2 $148.7 $153.2 
 Deferred sales charges 2.1  1.8  2.1  3.9  3.6 
 Share of profit (loss) of joint ventures 0.8  0.3  (0.2)  1.1  (0.8) 
 Other income from fee-earning arrangements 0.9  0.7  0.7  1.6  1.5 
 Fair value adjustments and other income 16.3  4.3  3.9  20.6  14.5 
 Total net revenue1 95.8  80.1  82.7  175.9  172.0 
                 
 Selling, general and administrative 53.0  53.0  47.3  106.0  96.6 
                 
 Deferred selling commissions  –   –  17.8   –  37.1 
                 
 EBITDA before commissions1 42.8  27.1  35.4  69.9  75.4 
                 
 EBITDA1 42.8  27.1  17.6  69.9  38.3 
                 
 Net income 30.3  17.6  10.1  47.9  23.0 
                 
 Diluted earnings per share 0.45  0.26  0.14  0.71  0.32 
                 
 Free cash flow1 19.8  19.3  12.3  39.1  25.6 
                 
 Dividends per share 0.11  0.10  0.10  0.21  0.19 
                 


                 
                 
 (end of period)Three months ended
   May 31,  February 28,  November 30,  August 31,  May 31, 
 (in millions of Canadian dollars) 2023  2023  2022  2022  2022 
                 
 Mutual fund assets under management (AUM)2$23,631 $24,029 $23,898 $22,496 $22,849 
 Institutional, sub-advisory and ETF accounts AUM 8,276  8,439  8,440  7,860  8,039 
 Total AGF Investments AUM 31,907  32,468  32,338  30,356  30,888 
 AGF Private Wealth AUM 7,162  7,324  7,349  7,072  7,279 
 AGF Private Capital AUM 48  54  55  60  58 
 Total AUM$39,117 $39,846 $39,742 $37,488 $38,225 
 AGF Private Capital fee-earning assets3 2,087  2,082  2,077  2,067  2,052 
 Total AUM and fee-earning assets3$41,204 $41,928 $41,819 $39,555 $40,277 
                 
 Net mutual fund sales2 77  221  251  51  132 
 Average daily mutual fund AUM2 24,017  23,782  22,504  22,207  23,183 


1 Net management, advisory and administration fees, total net revenue, EBITDA before commissions, EBITDA, 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.

For further information and detailed financial statements for the second quarter ended May 31, 2023, 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/mmc/p/wpgusrjc. 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 $41 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.


AGF Management Limited Reports Second Quarter 2023 Financial Results

Related News

menu
menu