It's debatable if the fiduciary standard is 'higher' than suitability. But the better question might be, who's holding the bar?
In the first quarter of fiscal 2015, the quarter ended June 30, Canaccord Genuity Group generated $245.6 million in revenue.
Excluding significant items, the Company recorded net income of $24.0 million or net income of $20.0 million attributable to common shareholders.
Including all expense items, on an IFRS basis, the Company recorded net income of $18.9 million or net income attributable to common shareholders(2) of $15.1 million.
"Our fiscal first quarter results were characterized by the positive momentum in our Canadian capital markets business that started in the second half of fiscal 2014", said Paul Reynolds, President and CEO of Canaccord Genuity Group. "During the quarter, we made continued progress growing all of our businesses, reflecting the impact of our diversification strategy and the differentiated global service we provide."
According to its release on August 5, the Company noted the first quarter of fiscal 2015 vs. first quarter of fiscal 2014 results:
-Revenue of $245.6 million, an increase of 31 percent or $58.4 million from $187.2 million
-Excluding significant items, expenses of $215.9 million, up 24 percent or $41.4 million from $174.5 million
-Expenses of $222.3 million, an increase of 25 percent or $44.2 million from $178.1 million
-Excluding significant items, diluted earnings per common share of $0.20 compared to diluted EPS of $0.09(1)
-Excluding significant items, net income of $24.0 million compared to net income of $11.8 million(1)
-Net income of $18.9 million compared to net income of $7.9 million
-Diluted EPS of $0.15 compared to diluted EPS of $0.06
First quarter of fiscal 2015 vs. fourth quarter of fiscal 2014
-Revenue of $245.6 million, down 3 percent or $8.1 million from $253.7 million
-Excluding significant items, expenses of $215.9 million, down 1 percent or $1.9 million from $217.8 million(1)
-Expenses of $222.3 million, an increase of $0.6 million from $221.7 million
-Excluding significant items, diluted EPS of $0.20 compared to diluted EPS of $0.25(1)
-Excluding significant items, net income of $24.0 million compared to net income of $29.1 million (1)
-Net income of $18.9 million compared to net income of $25.9 million
-Diluted EPS of $0.15 compared to diluted EPS of $0.22
Financial condition at end of first quarter fiscal 2015 vs. fourth quarter fiscal 2014
-Cash and cash equivalents balance of $273.9 million, down $90.4 million from $364.3 million
-Working capital of $435.1 million, down $34.3 million from $469.4 million
-Total shareholders' equity of $1.12 billion, down $45.4 million from $1.17 billion
-Book value per diluted common share of $8.70, down $0.35 from $9.05(3)
-On August 5, the Board of Directors approved a quarterly dividend of $0.05 per common share payable on September 10, with a record date of August 29,
-On August 5, the Board of Directors also approved a cash dividend of $0.34375 per Series A Preferred Share payable on September 30, with a record date of September 19, and a cash dividend of $0.359375 per Series C Preferred Share payable on September 30, to Series C Preferred shareholders of record as at September 19,
SUMMARY OF OPERATIONS
-On May 23, Canaccord Genuity reported that Peter Brown stepped down as a Director and Honorary Chairman
-On June 20, Canaccord Genuity was added to the S&P/TSX Composite Index, the S&P/TSX Composite Dividend Index and the S&P/TSX High Beta Index
-On June 24, Canaccord Genuity reported the nomination of Kalpana Desai as an Independent Director for election at the upcoming annual general meeting of shareholders
-During the quarter, the Company purchased and cancelled 264,200 of its common shares under the terms of its normal course issuer bid
-On August 5, the Board of Directors approved the filing of an application to renew the NCIB to provide for the ability to purchase, at the Company's discretion, up to a maximum of 5,100,049 common shares through the facilities of the TSX during the period from August 13, to August 12, 2015. The purpose of any purchases under this program is to enable the Company to acquire shares for cancellation. The maximum number of shares that may be purchased represents 5.0 percent of the Company's outstanding common shares.
-Canaccord Genuity led or co-led 50 transactions globally, raising total proceeds of C$4.0 billion(4) during fiscal Q1/15
-Canaccord Genuity participated in 115 transactions globally, raising total proceeds of C$11.3 billion(4) during fiscal Q1/15
-Canaccord Genuity participated in the following significant investment banking transactions during fiscal Q1/15:
-US$828.7 million for Abengoa Yield on the NASDAQ
-GBP352.0 million for Zoopla Property Group PLC on the LSE
-US$316.8 million for 3D Systems on the NYSE
-GBP294.0 million for Polypipe Group PLC on the LSE
-C$289.8 million for Callidus Capital Corp. on the TSX
-GBP194.3 million for Cambian Group on the LSE
-EUR180.0 million for SLM Solutions AG on the FSE
-C$178.3 million for Pure Industrial Real Estate Trust on the TSX
-C$172.6 million for Bellatrix Exploration on the TSX and NYSE
-GBP154.4 million for OneSavings Bank PLC on the LSE
-C$125.0 million for Canacol Energy on the TSX
-GBP120.8 million for Game Digital PLC on the LSE
-AUD$120.0 million for Greencross Limited on the ASX
-C$115.7 million for Kinaxis on the TSX
-C$115.1 million for Artis Real Estate Investment Trust on the TSX
-C$115.0 million for Lumenpulse on the TSX
-GBP100.0 million for Volution Group PLC on the LSE
-US$90.5 million for ePlus on the NASDAQ
-GBP79.3 million for Patisserie Holdings PLC on AIM
-AUD$67.2 million for TFS Corp. Limited on the ASX
-US$62.0 million for SCYNEXIS on the NASDAQ
-US$57.5 million for Abraxas Petroleum on the NASDAQ
-US$56.1 million for Radius Health on the NASDAQ
-C$50.7 million for American Hotel Income Properties REIT on the TSX
-GBP50.0 million for HICL Infrastructure Company Limited on the LSE
-GBP41.5 million for River & Mercantile Group on AIM
-AUD$33.6 million for iBuy Group Limited on the ASX
-C$31.3 million for Merus Labs International on the TSX
-C$28.8 million for Mosaic Capital Corp. on the TSX-V
-GBP26.0 million for EKF Diagnostics on the LSE
-AUD$25.0 million for Rubik Financial Limited on the ASX
-GBP24.0 million for Rathbones on the LSE
-C$22.8 million for Transeastern Power Trust on the TSX
-US$22.5 million for Hydrogenics Corp. on the NASDAQ
-C$20.7 million for MBAC Fertilizer Corp. on the TSX
-AUD$20.4 million for Tiger Resources Limited on the ASX
-US$20.0 million for Venaxis on the NASDAQ
-In Canada, Canaccord Genuity participated in raising $342.8 million for government and corporate bond issuances during fiscal Q1/ 15
-Canaccord Genuity generated advisory revenues of $32.7 million during fiscal Q1/15, a decrease of 9 percent compared to the same quarter last year
-During fiscal Q1/15, Canaccord Genuity advised on the following M&A and advisory transactions:
-Yamana Gold on the C$3.9 billion joint acquisition with Agnico Eagle of Osisko Mining Corp.
-Iridium Communications on the amendment of its US$1.8 billionCoface export financing
-Jaguar Mining on its US$315.0 million recapitalization
-Viewpoint Construction Software on its recapitalization
-Chalet Bidco Limited on debt financing supporting the acquisition of Ogier Fiduciary Services Limited
-AIB, RBS and Santander on their disposal of Morethan Hotels Group to Somerston Capital and Lone Star
-Gaucho on the refinancing of its debt facilities
-HgCapital on its disposal of Americana International Limited
-Minova Insurance Holdings on its fundraise from Capital Z Partners Management
-EKF Diagnostics on its acquisition of DiaSpect Medical AB
-EKF Diagnostics on its acquisition of Selah Genomics
-Photomedex on its acquisition of LCA-Vision
Our solid results this quarter reflect the impact of our diversification strategy and the ongoing strength of our global platform. For the first three months of fiscal 2015, Canaccord Genuity Group earned $245.6 million in revenue, an increase of 31 percent compared to the same period last year.
While the strength of our global business and diversified revenue streams were the main drivers of our revenue growth, the impact of foreign currency translation, particularly the US dollar and British pound, further supported our revenue growth for the period.
We continue in our efforts to realize cost synergies across our global business. Despite higher expenses related to increased business activity and the occurrence of one-time costs associated with certain restructuring charges, our expenses as a percentage of revenue during the quarter decreased by 4.6 percent compared to the same period last year.
Canadian capital markets revenue increases 77 percent year-over- year
Driven by robust performance on the TSX, we are experiencing a welcome recovery in financing and advisory activity in Canada. On a year-over-year basis, our Canadian capital markets division experienced a 162 percent increase in investment banking revenue and a 166 percent increase in advisory fees, resulting in revenue of $58.2 million, an overall increase of 77 percent over the same period last year.
In addition to an improved market environment, the growth in our financing and advisory businesses is attributable to the long- standing relationships and track record of success we have historically achieved for our clients in the region. Our position as the leading Canadian independent firm for M&A advisory was reflected in our engagement by Yamana Gold on the C$3.9 billion acquisition of Osisko Mining Corp. Another example of our strong market position and differentiated global service level was demonstrated in our role as lead advisor and bookrunner to long time client, Amaya Gaming Group in a significant transaction that closed on August 1st.
Global assets under administration and management increase 24 percent
Further reflecting improved market conditions, our Canadian wealth management division increased revenues by 22 percent to $32.4 million and increased assets under administration to $11 billion, an improvement of 18 percent compared to the first quarter of last year. We continue to focus on growing our share of fee-based and discretionary managed accounts with existing Advisory Teams and through targeted recruitment. As a result of these initiatives, we have successfully increased Canadian assets under management by 44 percent year over year to $1.3 billion.
The momentum we are building in our Canadian wealth management division and the impact of strategic and operational changes led to a 56 percent reduction in year-over-year losses for this business.
Assets under management in our UK and Europe wealth management operations increased to $20.5 billion, an improvement of 27 percent over the same period last year.
We are committed to growing our global wealth management operations and we have begun to invest strategically in advancing the scale and scope of this business. The Canadian launch of our proprietary Global Portfolio Solutions (GPS) product is expected later in the fiscal year. In the UK, the November, projected launch of a new front- and back- office system will provide the necessary infrastructure for continued growth in the region.
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