Mr. Scott Davidson reports
CANACCORD FINANCIAL INC. REPORTS FISCAL FOURTH QUARTER AND FISCAL 2013 RESULTS
During the fourth quarter of fiscal 2013,
the quarter ended March 31, 2013, Canaccord Financial Inc. generated $218-million in revenue
and, excluding significant items, recorded net income of $15.6-million or 12 cents per diluted common
share. Under international financial reporting standards, the company recorded net income of $6.4-million or four cents per common share. Significant items totalling $11.5-million, or $9.2-million after tax, were incurred during
the quarter, including $6.4-million of restructuring charges related to
the company's U.K. advisory practice and the integration of Eden
Financial Ltd.'s wealth management business.
During the fiscal year ended March 31, 2013, Canaccord generated $797.1-million of revenue and, excluding significant items, recorded net income of $25.6-million or 14 cents per common share. On an
IFRS basis, the company recorded a net loss of $18.8-million, or 31
cents per common share, during the fiscal year.
Paul Reynolds, president and chief executive officer of Canaccord Financial, said:
"Fiscal 2013 was a pivotal year for Canaccord Financial as we
integrated the largest acquisition in the firm's history. In doing so,
we eliminated significant costs, aligned staffing levels with market
opportunities and grew our cross-border client services. Together,
these activities have strengthened our business and meaningfully
enhanced our operating margins since the beginning of the year."
Mr. Reynolds added: "Our acquisition of Collins Stewart enhanced our
sector coverage considerably, which has played an important role in our
ability to offset supressed resource sector activity. It also expanded
the scope of our international operations. In fact, over half of our
revenue is now generated from operations outside of Canada,
significantly improving the diversity and consistency of our revenue
streams."
Fiscal 2013 versus fiscal 2012
During the 12 months ended March 31, 2013, versus the 12 months ended March 31, 2012, the company had:
- Revenue of $797.1-million, up 32 per cent, or $192.2-million, from $604.9-million;
- Expenses of $820.8-million, up 32 per cent, or $199.8-million, from $621-million;
- A net loss of $18.8-million, compared with a net loss of $21.3-million;
- A diluted loss per common share of 31 cents, compared with a diluted loss per
share of 33 cents in the prior year.
Excluding significant items, the company had:
- Expenses of $766.9-million, up 36 per cent, or $202.7-million, from $564.2-million;
- Net income of $25.6-million, compared with net income of $25.2-million;
- Diluted earnings per share of 14 cents, compared with diluted EPS of
25 cents in fiscal 2012.
Fourth quarter of fiscal 2013 versus fourth quarter of fiscal 2012
During the three months ended March 31, 2013, versus the three months ended March 31, 2012, the company had:
- Revenue of $218-million, up 23 per cent, or $40.3-million, from $177.7-million;
- Expenses of $212-million, up 2 per cent, or $4.3-million, from $207.7-million;
- Net income of $6.4-million, compared with a net loss of $31.8-million;
- Diluted EPS of four cents, compared with a diluted loss per share of 42 cents.
Excluding significant items, the company had:
- Expenses of $200.5-million, up 20 per cent, or $34-million, from $166.5-million;
- Net income of $15.6-million, compared with net income of $2.1-million;
- Diluted EPS of 12 cents, compared with two cents in the fourth quarter of 2012.
Fourth quarter of fiscal 2013 versus third quarter of fiscal 2013
During the three months ended March 31, 2013, versus the three months ended Dec. 31, 2012, the company had:
- Revenue of $218-million, down 5 per cent, or $12-million, from $230-million;
- Expenses of $212-million, down 2 per cent, or $4.9-million, from $216.9-million;
- Net income of $6.4-million, compared with net income of $10.3-million;
- Diluted EPS of four cents, compared with diluted EPS of eight cents in the third
quarter of 2013.
Excluding significant items, the company had:
- Expenses of $200.5-million, down 2 per cent, or $4.5-million, from $205-million;
- Net income of $15.6-million, compared with net income of $20.5-million;
- Diluted EPS of 12 cents, compared with 17 cents in the third quarter of 2013.
The company's financial condition at the end of fourth quarter of 2013 versus the fourth quarter
of 2012 included:
- A Cash and cash equivalents balance of $491-million, down $323.2-million
from $814.2-million;
- Working capital of $393.7-million, up $62.6-million from $331.1-million;
-
Total shareholders' equity of $1,049.2-million, up $57.1-million from
$992.1-million;
- A book value per diluted common share for the period end of $7.68, down
7 per cent, or 58 cents, from $8.26;
On May 21, 2013, the board of directors approved a quarterly dividend of
five cents per common share, payable on June 10, 2013, with a record date of
May 31, 2013.
On May 21, 2013, the board of directors also approved a cash dividend of
34.375 cents per Series A preferred share, payable on July 2, 2013, with a
record date of June 21, 2013, and approved a cash dividend of 35.9375
cents per Series C preferred share, payable on July 2, 2013, and with a record
date of June 21, 2013.
Summary of operations
Corporate:
- On Feb. 1, 2013, Canaccord completed the integration of its U.K. wealth
management business with the business of Eden Financial Ltd.
- On March 1, 2013, Canaccord completed the integration of its U.K. and
European advisory practice, previously known as Canaccord Genuity
Hawkpoint, into its broader global investment banking division.
- Subsequent to the quarter, on May 1, 2013, Canaccord rebranded all
wealth management businesses on its platform as Canaccord Genuity Wealth Management.
This new global wealth management brand replaces:
- Canaccord Wealth Management (in Canada and Australia);
- Collins Stewart Wealth Management (in the United Kingdom and Europe);
- Eden Financial (in the U.K.).
Capital markets:
- Canaccord Genuity led or co-led 24 transactions globally, raising total
proceeds of $774-million during the fourth quarter of fiscal 2013.
- Canaccord Genuity participated in 94 transactions globally, raising
total proceeds of $7.5-billion during the fourth quarter of fiscal 2013.
- During the fourth quarter of fiscal 2013, Canaccord Genuity led or co-led:
- 695 million British pounds for esure Group on the London Stock Exchange;
- 167.3 million British pounds for HICL Infrastructure Company Ltd. on the LSE;
- $100.1-million for American Hotel Income Properties REIT LP on the Toronto Stock Exchange;
- $97.8-million (U.S.) for Insulet Corp. on the the Nasdaq Stock Market;
- $69.7-million for Pure Industrial Real Estate Trust on the TSX;
- A 60-million-British-pound retail bond for the Paragon Group of Companies;
- $57.5-million (U.S.) for Aveo Pharmaceuticals on Nasdaq;
- $47.9-million (U.S.) for CalAmp Corp. on Nasdaq;
- $40.4-million for Santacruz Silver Mining Ltd. on the TSX Venture Exchange;
- $35-million (Australian) for G8 Education Ltd. on the Australian Securities Exchange;
- $34.5-million for MBAC Fertilizer Corp. on the TSX;
- $30-million for Amaya Gaming Group Inc. on the TSX;
- $29-million for Labrador Iron Mines Holding Ltd. on the TSX;
- $25.9-million for Partners Real Estate Investment Trust on the TSX;
- 23.1 million British pounds for IGAS PLC on AIM;
- $21-million (U.S.) for Beacon Hill PLC on AIM;
- $20.1-million (U.S.) for IMRIS Inc. on the NASDAQ.
- Canaccord Genuity generated advisory revenues of $56.1-million during
the fourth quarter of fiscal 2013, an increase of 128 per cent compared with the same quarter last
year.
- During the fourth quarter of fiscal 2013, Canaccord Genuity advised:
- Primaris on its hostile defence, and sale to H & R REIT and KingSett
Capital;
- Fawkes Holdings Ltd. on its sale of 42 U.K. Marriott hotels;
- Sportingbet PLC on its acquisition by William Hill and assets of GVC Holdings;
- IPH and its management on its disposal to PAI Partners SAS;
- M3 Capital Partners (UK) LLP and Extra MSA Group on the acquisition of
Motorway Service Area;
- RBSM (Investments) Ltd. on its disposal of Malmaison/Hotel du Vin to
KSL Capital Partners;
- Wescast Industries on its acquisition by Sichuan Bohon Group;
- Investcorp on its acquisition of Hydrasun Holdings Ltd.;
- FFastFill PLC on its acquisition by Pattington Ltd.;
- Parkland Fuel Corp. on its acquisition of Elbow River Marketing;
- Iogen Corp. on its acquisition by Novosymes A/S;
- Punter Southall on its recapitalization;
- Geomagic Inc. on its acquisition by 3D Systems Corp.;
- Redknee Inc. on its acquisition of Nokia Siemens Networks' Business Support Systems;
- Wireless Matrix Inc. on its acquisition by CalAmp Corp.;
- Rio Verde Minerals Development Corp. on its acquisition by B&A Minercao;
- EndoChoice Inc. on its merger with Peer Medical Ltd.;
- JKX Oil & Gas PLC on its convertible bond issue;
- Omega Protein Corp. on its acquisition of Wisconsin Specialty
Protein LLC;
- Soitec on a development and licensing agreement with GT Advanced
Technologies.
Canaccord Genuity Wealth Management (global):
- On a global basis, Canaccord Genuity Wealth Management generated revenue
of $60.2-million in the fourth quarter of 2013.
- Total assets under administration in Canada, and assets under management in the U.K., Europe and Australia,
were $26.8-billion at the end of the fourth quarter of fiscal 2013.
Canaccord Genuity Wealth Management (North America and Australia):
- Canaccord Genuity Wealth Management generated $33.5-million in revenue
and recorded a net loss before tax of $7.4-million in the fourth quarter of 2013.
- Assets under administration in Canada were $10.4-billion, down 9 per cent from $11.4-billion at the end of
the third quarter of 2013 and down 30 per cent from $14.8-billion at the end of the fourth quarter of 2012.
- Assets under management in Canada (discretionary) were $835-million, up 6 per cent from $791-million at
the end of the third quarter of 2013 and up 23 per cent from $677-million at the end of the fourth quarter of 2012.
- As at March 31, 2013, Canaccord Genuity Wealth Management had 178
advisory teams, a decrease of 102 advisory teams from March 31, 2012, and a decrease of six from Dec. 31, 2012.
- Canaccord Genuity Wealth Management has 16 offices across Canada,
including eight operating on the independent wealth management platform.
Canaccord Genuity Wealth Management (U.K. and Europe):
- Wealth management operations in the U.K. and Europe generated $26.7-million in revenue and, excluding significant items, recorded net
income of $6.3-million before taxes.
- Assets under management (discretionary and non-discretionary) were $15.9-billion
(10.2 billion British pounds), up 5 per cent from $15.2-billion at the end
of the third quarter of 2013 and up 22 per cent from $13.1-billion at the end of the fourth quarter of 2012.
SELECTED FINANCIAL INFORMATION EXCLUDING SIGNIFICANT ITEMS
(in thousands of dollars, except per-share amounts)
Three months ended Year ended
March 31, March 31,
2013 2012 2013 2012
Total revenue per IFRS $ 217,971 $ 177,692 $ 797,122 $ 604,864
Total expenses per IFRS 211,984 207,731 820,824 620,983
Significant items recorded in Canaccord
Genuity
Restructuring costs 5,561 27,786 15,232 29,078
Acquisition-related costs - 6,323 388 10,466
Amortization of intangible assets 3,458 1,865 14,740 5,492
Significant items recorded in Canaccord
Genuity Wealth Management
Restructuring costs 884 900 15,485 900
Acquisition-related costs - 4,077 1,331 4,077
Amortization of intangible assets 1,600 - 5,855 -
Significant items recorded in corporate
and other
Restructuring costs - 275 900 5,275
Acquisition-related costs - - - 1,513
Total significant items 11,503 41,226 53,931 56,801
Total expenses excluding
significant items 200,481 166,505 766,893 564,182
Net income before income taxes,
adjusted $ 17,490 $ 11,187 $ 30,229 $ 40,682
Income taxes -- adjusted 1,911 9,098 4,585 15,489
Net income -- adjusted $ 15,579 $ 2,089 $ 25,644 $ 25,193
Earnings per common share,
basic, adjusted $ 0.14 $ 0.02 $ 0.16 $ 0.28
Earnings per common share,
diluted, adjusted $ 0.12 $ 0.02 $ 0.14 $ 0.25
Note: IFRS stands for international financial reporting standards.
Access to quarterly results information
Interested investors, the media and others may review this quarterly
earnings release and supplementary financial information at the company's website.
Conference call and webcast presentation
Interested parties are invited to listen to Canaccord's fourth quarter
and fiscal 2013 results conference call with analysts and institutional
investors through a live webcast or a toll-free number. The conference
call is scheduled for Tuesday, May 21, 2013, at 2:30 p.m. (Pacific
Time), 5:30 p.m. (Eastern Time) and 10:30 p.m. (U.K. Time), and at 5:30 a.m.
(China Standard Time) and 7:30 a.m. (Australia EST Time) on Wednesday,
May 22, 2013. At that time, senior executives will comment on the
results for the fourth quarter and fiscal 2013 year, and will respond to
questions from analysts and institutional investors.
The conference call may be accessed live and will be archived on a listen-only
basis through the Internet at the company's website.
Analysts and institutional investors can call in by telephone at:
- 647-427-7450 (within Toronto);
- 1-888-231-8191 (toll-free from outside Toronto);
- 0-800-051-7107 (toll-free from the U.K.);
- 10-800-714-1191 (toll-free from northern China);
- 10-800-140-1195 (toll free from southern China);
- 1-800-287-011 (toll-free from Australia).
Please request to participate in Canaccord Financial's fourth quarter of 2013 earnings
call.
A replay of the conference call can be accessed after 5:30 p.m. (Pacific
Time) (8:30 p.m. (Eastern Time)) on May 21, 2013, and after 1:30 a.m.
(U.K. Time), 8:30 a.m. (China Standard Time) and 10:30 a.m. (Australia
EST Time) on May 22, 2013, until July 4, 2013, at 416-849-0833 or
1-855-859-2056 by entering passcode 64087786 followed by the number sign.
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