Mr. Dan Daviau reports

CANACCORD GENUITY GROUP INC. REPORTS FOURTH QUARTER FISCAL 2017 RESULTS

During the fourth quarter of fiscal 2017, the quarter ended March 31, 2017, Canaccord Genuity Group Inc. generated $271.7-million in revenue. Excluding significant items (1), the company recorded net income of $32.7-million or net income of $28.1-million attributable to common shareholders (2) (earnings per common share of 27 cents). Including all expense items, on an IFRS (international financial reporting standards) basis, the company recorded net income of $31.0-million or net income of $26.3-million attributable to common shareholders (2) (earnings per common share of 26 cents). (All dollar amounts are stated in Canadian dollars, unless otherwise indicated.)

During the fiscal year ended March 31, 2017, the company generated $879.5-million in revenue. Excluding significant items (1), the company recorded net income of $49.2-million or net income of $32.8-million attributable to common shareholders (2) (earnings per common share of 32 cents). Including all expense items, on an IFRS basis, the company recorded net income of $43.2-million or net income of $27.0-million attributable to common shareholders (2) (earnings per common share of 27 cents).

"Fiscal 2017 was certainly a year of improved performance across our operations, and all businesses contributed to our profitability," said Dan Daviau, president and chief executive officer of Canaccord Genuity Group. "Throughout the year, we made important progress against our strategy to extract greater value from our existing operations, and the additional growth we have achieved in our global wealth management businesses has meaningfully contributed to a stronger net income result."

Fourth quarter of fiscal 2017, versus fourth quarter of fiscal 2016:

• Revenue of $271.7-million, an increase of 35.2 per cent or $70.7-million from $200.9-million;
• Excluding significant items, expenses of $232.2-million, an increase of 13.7 per cent or $27.9-million from $204.3-million (1);
• Expenses of $234.3-million, an increase of 2.6 per cent or $6.0-million from $228.2-million;
• Excluding significant items, diluted earnings per common shares (EPS) of 27 cents compared with a loss per common share of six cents (1);
• Excluding significant items, net income of $32.7-million compared with a net loss of $2.1-million (1);
• Net income of $31.0-million compared with a net loss of $22.7-million;
• Diluted EPS of 26 cents compared with a loss per common share of 29 cents.

Fourth quarter of fiscal 2017, versus third quarter of fiscal 2017:

• Revenue of $271.7-million, an increase of 30.5 per cent or $63.6-million from $208.1-million;
• Excluding significant items, expenses of $232.2-million, an increase of 15.9 per cent or $31.9-million from $200.3-million (1);
• Expenses of $234.3-million, an increase of 15.7 per cent or $31.9-million from $202.4-million;
• Excluding significant items, diluted EPS of 27 cents compared with diluted EPS of three cents (1);
• Excluding significant items, net income of $32.7-million compared with net income of $6.3-million (1);
• Net income of $31.0-million compared with net income of $4.5-million;
• Diluted EPS of 26 cents compared with diluted EPS of one cent.

Fiscal 2017, versus fiscal 2016:

• Revenue of $879.5-million, an increase of 11.6 per cent or $91.7-million from $787.8-million;
• Excluding significant items, expenses of $817.1-million, an increase of 2.9 per cent or $23.2-million from $793.9-million (1);
• Expenses of $825.7-million, a decrease of 28.3 per cent or $326.1-million from $1.2-billion (3);
• Excluding significant items, diluted EPS of 32 cents compared with a loss per common share of 21 cents (1);
• Excluding significant items, net income of $49.2-million compared with a net loss of $6.0-million (1);
• Net income of $43.2-million compared with a net loss of $358.6-million (3);
• Diluted EPS of 27 cents compared with a loss per common share of $4.09 (3).

Financial condition at the end of the fourth quarter fiscal 2017, versus the fourth quarter of fiscal 2016:

• Cash and cash equivalents balance of $677.8-million, an increase of $249.5-million from $428.3-million;
• Working capital of $488.5-million, an increase of $107.2-million from $381.3-million;
• Total shareholders' equity of $764.8-million, an increase of $14.9-million from $749.9-million;
• Book value per diluted common share of $5.08, an increase of nine cents from $4.99 (4).

On June 1, 2017, the board of directors established a revised dividend policy and in accordance with that policy approved a dividend of 10 cents per common share, payable on July 3, 2017, with a record date of June 16, 2017. This dividend comprises a one-cent base quarterly dividend and a nine-cent variable supplemental dividend as outlined below.

The revised dividend policy reflects the company's commitment to return a portion of earnings to shareholders, in balance with the inherent variability of its business, which is impacted by the overall condition of debt and equity markets, and the market for securities in specific growth sectors. In the context of this revised policy, the company expects to return 25 per cent to 50 per cent of net earnings attributable to common shareholders on an annual basis. The policy is anchored by a quarterly dividend of one cent per common share, which will be declared and paid quarterly, commencing with the fourth quarter of fiscal 2017. Following the end of each fiscal year, the board will review the capital position of the business in the context of the market environment in combination with capital allocation requirements for its strategic priorities and determine whether a supplemental dividend should be paid. Supplemental dividends, if declared, may be highly variable from year to year, given the nature of the company's operating environment, and the potential need to conserve cash and for certain corporate growth opportunities. Although dividends are expected to be declared and paid on a continuing basis, the board of directors, in its sole discretion, will determine the amount and timing of any dividends. All dividend payments will depend on general business conditions, the company's financial condition, results of operations, capital requirements and such other factors as the board determines to be relevant.

On June 1, 2017, the board of directors approved a cash dividend of 24.281 cents per Series A preferred share, payable on June 30, 2017, with a record date of June 16, 2017, and a cash dividend of 35.9375 cents per Series C preferred share, payable on June 30, 2017, with a record date of June 16, 2017.

Summary of operations

Corporate:

• On Feb. 9, 2017, Canaccord Genuity announced the appointment of Don MacFayden to the position of executive vice-president and chief financial officer, and the appointment of Adrian Pelosi to the position of executive vice-president, chief risk officer and treasurer, with immediate effect.

Capital markets (5):

• Canaccord Genuity participated in 111 investment banking transactions globally, raising total proceeds of $13.2-billion (Canadian) (5) during fiscal Q4 2017.
• Canaccord Genuity led or co-led 44 transactions globally, raising total proceeds of $2.3-billion (Canadian) (5) during fiscal Q4 2017.
• Significant investment banking transactions for Canaccord Genuity during fiscal Q4 2017 include:
  • 27.8 million pounds sterling for Harworth Group PLC on the London Stock Exchange;
  • 32.0-million-pound-sterling IPO (initial public offering) for GBGI Ltd. on the LSE;
  • 260.0 million pounds sterling for HICL Infrastructure Co. Ltd. on the LSE;
  • 110.0 million pounds sterling for TRIG on the LSE;
  • 41.0 million pounds sterling for Eurocell on the LSE;
  • $45.0-million (Australian) for AirXpanders Inc. on the Australian Securities Exchange;
  • $61.0-million (Australian) for Galaxy Resources Ltd. on the ASX;
  • $35.0-million (Australian) for Blackham Resources Ltd. on the ASX;
  • $33.3-million (Australian) IPO for Visioneering Technologies Inc. on the ASX;
  • $151.2-million (Australian) for Cooper Energy Ltd. on the ASX;
  • $17.0-million for Galena Biopharma on the Nasdaq Stock Market;
  • $69.0-million (U.S.) for Abraxas Petroleum Corp. on the Nasdaq;
  • $125.0-million (U.S.) for Synergy Pharmaceuticals Inc. on the Nasdaq;
  • $46.0-million (U.S.) for MeetMe Inc. on the Nasdaq;
  • $86.3-million (U.S.) for Kratos Defense & Security Solutions Inc. on the Nasdaq;
  • $42.0-million (U.S.) for Health Insurance Innovations Inc. on the Nasdaq;
  • $75.0-million (Canadian) for Aurora Cannabis Inc. on the TSX Venture Exchange;
  • $20.0-million (Canadian) for iAnthus Capital Holdings Inc. on the Canadian Securities Exchange;
  • $82.2-million (Canadian) for Osisko Mining Inc. on the Toronto Stock Exchange;
  • $22.5-million (Canadian) for Aveda Transportation and Energy Services Inc. on the TSX-V;
  • $160.0-million (Canadian) for Acasta Enterprises Inc. on the TSX;
  • $46.2-million (Canadian) for Automotive Properties Real Estate Investment Trust on the TSX;
  • $20.0-million (Canadian) for Advantage Lithium Corp. on the TSX-V;
  • $40.0-million (Canadian) for North American Energy Partners Inc. on the TSX;
  • $17.3-million (Canadian) for Augyva Mining Resources Inc. on the TSX-V;
  • $17.3-million (Canadian) for eCobalt Solutions Inc. on the TSX;
  • $16.2-million (Canadian) for Invictus MD Strategies Corp. on the CSE;
  • $19.6-million (Canadian) for UrtheCast Corp. on the TSX;
  • $15.0-million (Canadian) for Lithium X Energy Corp. on the TSX-V;
  • $15.0-million (Canadian) for CannaRoyalty Corp. on the CSE.
• In Canada, Canaccord Genuity participated in raising $205.8-million for government and corporate bond issuances during fiscal Q4 2017.
• Advisory fees recorded during fiscal Q4 2017 were $52.5-million, a decrease of $2.5-million or 4.5 per cent compared with the same quarter last year.
• During fiscal Q4 2017, significant M&A (mergers and acquisitions) and advisory transactions included:
  • DP World on its $3.7-billion (U.S.) investment vehicle in partnership with Caisse de depot et placement du Quebec;
  • ThinkSmart Ltd. on its admission to the Alternative Investment Market;
  • Learning Technologies Group PLC on its successful offer for AIM-listed NetDimensions;
  • Sirius Real Estate Ltd. on its move from AIM to the main market.
  • Lavendon Group PLC on its sale to Loxam SAS;
  • Chequers Capital on its acquisition of Alkern from Fondations Capital;
  • CM-CIC Investissement on the financing of La Croissanterie;
  • ICG PLC on the sale of Groupe Viasphere;
  • ICG PLC on the sale of Via Location;
  • Besso Insurance Group Ltd. on its sale to BGC Partners;
  • Exxellia on its IK Investment Partners-backed debt refinancing;
  • Erin Energy on its $100-million (U.S.) three-year secured pre-export finance facility agreement with The Mauritius Commercial Bank Ltd.;
  • Westgold Resources on the toll processing and $80-million (Australian) purchase agreement with RNC Minerals for its South Kalgoorlie operations;
  • Fishbowl Inc. on its sale to Symphony Technology Group;
  • Dakota Plains Holdings Inc. on its sale to BioUrja Trading LLC pursuant to paragraph 363 of the U.S. Bankruptcy Code;
  • Pristine Environments Inc. on its sale to PE Facility Services LLC.

Canaccord Genuity Wealth Management (global):

• Globally, Canaccord Genuity Wealth Management generated $74.7-million in revenue during Q4 2017.
• Assets under administration in Canada, and assets under management in the United Kingdom and Europe and Australia, were $38.6-billion at the end of Q4 2017 (4), an increase of 6.9 per cent or $2.5-billion at the end of the previous quarter, and an increase of 18.0 per cent or $5.9-billion at the end of fiscal Q4 2016.

Canaccord Genuity Wealth Management (North America):

• Canaccord Genuity Wealth Management (North America) generated $40.3-million in revenue and, after intersegment allocations and before taxes, recorded a net income of $1.5-million during Q4 2017.
• Assets under administration in North America were $13.2-billion as at March 31, 2017, an increase of 10.5 per cent from $12.0-billion at the end of the previous quarter and an increase of 43.9 per cent from $9.2-billion at the end of fiscal Q4 2016 (4).
• Assets under management in North America (discretionary) were $2.6-billion as at March 31, 2017, an increase of 4.4 per cent from $2.5-billion at the end of the previous quarter and an increase of 109.8 per cent from $1.3-billion at the end of fiscal Q4 2016 (4) (included in assets under administration).
• Canaccord Genuity Wealth Management had 141 advisory teams (6) at the end of fiscal Q4 2017, an increase of two advisory teams from Dec. 31, 2016, and from March 31, 2016.

Canaccord Genuity Wealth Management (United Kingdom and Europe):

• Wealth management operations in the U.K. and Europe generated $33.1-million in revenue and, after intersegment allocations and excluding significant items, recorded net income of $5.5-million before taxes during Q4 2017 (1).
• Assets under management (discretionary and non-discretionary) were $24.5-billion (14.7 billion pounds sterling) as at March 31, 2017, an increase of 4.7 per cent from $23.4-billion (14.1 billion pounds sterling) as at the end of the previous quarter and an increase of 7.6 per cent from $22.8-billion (12.2 billion pounds sterling) as at March 31, 2016 (4). In local currency (pounds sterling), assets under management at March 31, 2017, increased by 3.9 per cent compared with Dec. 31, 2016, and by 19.9 per cent compared with Q4 2016 (4).
• On March 3, 2017, Canaccord Genuity Wealth Management in the U.K. and Europe acquired client portfolios from Duncan Lawrie Private Banking in the Isle of Man.
• On March 24, 2017, Canaccord Genuity Wealth Management in the U.K. and Europe acquired the U.K.-based investment dealing and custody business from C. Hoare & Co.

Non-IFRS measures

The non-IFRS measures presented include assets under administration, assets under management, book value per diluted common share and figures that exclude significant items. Significant items include restructuring costs, amortization of intangible assets acquired in connection with a business combination, impairment of goodwill and other assets, and acquisition-related expense items, which include costs recognized in relation to both prospective and completed acquisitions, gains or losses related to business disposals, including recognition of realized translation gains on the disposal of foreign operations, as well as certain expense items, typically included in development costs, which are considered by management to reflect a singular charge of a non-operating nature. Book value per diluted common share is calculated as total common shareholders' equity adjusted for assumed proceeds from the exercise of options and warrants, and conversion of convertible debentures, divided by the number of diluted common shares outstanding, including estimated amounts in respect of share issuance commitments, including options, warrants and convertible debentures, and, commencing in Q1 2014, adjusted for shares purchased under the company's normal course issuer bid (NCIB) and not yet cancelled, and estimated forfeitures in respect of unvested share awards under share-based payment plans.

Management believes that these non-IFRS measures will allow for a better evaluation of the operating performance of the company's business and facilitate meaningful comparison of results in the current period with those in prior periods and future periods. Figures that exclude significant items provide useful information by excluding certain items that may not be indicative of the company's core operating results. A limitation of utilizing these figures that exclude significant items is that the IFRS accounting effects of these items do in fact reflect the underlying financial results of the company's business; thus, these effects should not be ignored in evaluating and analyzing the company's financial results. Therefore, management believes that the company's IFRS measures of financial performance and the respective non-IFRS measures should be considered together.

                 SELECTED FINANCIAL INFORMATION EXCLUDING SIGNIFICANT ITEMS (1)
                  (in thousands of Canadian dollars, except per-share amounts)

                                                             Three months ended                  Years ended
                                                                       March 31                     March 31
                                                             2017          2016             2017        2016

Total revenue per IFRS                                 $  271,656    $  200,912       $  879,546  $  787,805
Total expenses per IFRS                                   234,251       228,210          825,662   1,151,776
Revenue 
Significant items included in Canaccord Genuity  
Realized translation gains on disposal of Singapore             -             -            1,193           -
Total revenue excluding significant items                 271,656       200,912          878,353     787,805
Expenses
Significant items recorded in Canaccord Genuity 
Amortization of intangible assets                             830         1,346            3,304       5,409
Impairment of goodwill and other assets                         -             -                -     321,037
Restructuring costs                                             -         8,328                -      11,305
Development costs                                               -         1,157                -       1,157
Significant items recorded in Canaccord Genuity 
Wealth Management
Amortization of intangible assets                           1,260         1,471            5,262       6,055
Restructuring                                                   -           165                -         165
Significant items recorded in corporate and other
Restructuring costs                                             -         4,582                -       5,882
Development costs                                               -         6,904                -       6,904
Total significant items                                     2,090        23,953            8,566     357,914
Total expenses excluding significant items                232,161       204,257          817,096     793,862
Net income (loss) before taxes -- adjusted                 39,495        (3,345)          61,257      (6,057)
Income taxes (recovery) -- adjusted                         6,755        (1,232)          12,061         (62)
Net income (loss) -- adjusted                              32,740        (2,113)          49,196      (5,995)
Earnings (loss) per common share -- basic, adjusted    $     0.31    $    (0.06)      $     0.36  $    (0.21)
Earnings (loss) per common share -- diluted, adjusted  $     0.27    $    (0.06)      $     0.32  $    (0.21)

(1) Figures excluding significant items are non-IFRS measures. 

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 Genuity's fourth quarter and fiscal year-end results conference call, via live webcast or a toll-free number. The conference call is scheduled for Friday, June 2, 2017, at 5 a.m. Pacific Time (8 a.m. Eastern Time) (1 p.m. United Kingdom time) (8 p.m. China Standard Time) (10 p.m. Australia Eastern Standard Time). During the call, senior executives will comment on the results and respond to questions from analysts and institutional investors.

The conference call may be accessed live and archived on a listen-only basis at the company's website.

Analysts and institutional investors can call in via telephone at:

• 647-427-7450 (within Toronto);
• 1-888-231-8191 (toll-free outside Toronto);
• 0-800-051-7107 (toll-free from the United Kingdom);
• 0-800-91-7449 (toll-free from France);
• 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);
• 800-017-8071 (toll-free from United Arab Emirates).

Please ask to participate in the Canaccord Genuity Group Q4 2017 results call. If a passcode is requested, please use 78806495.

A replay of the conference call will be available on June 2, 2017, after 8 a.m. Pacific Time (11 a.m. Eastern Time) (4 p.m. United Kingdom time) (11 p.m. China Standard Time), and on June 3, 2017, at 1 a.m. Australia Eastern Standard Time, until July 17, 2017, at 416-849-0833 or 1-855-859-2056 by entering passcode 78806495 followed by the pound sign.

About Canaccord Genuity Group Inc.

Through its principal subsidiaries, Canaccord Genuity is a leading independent, full-service financial services firm, with operations in two principal segments of the securities industry: wealth management and capital markets. Since its establishment in 1950, the company has been driven by an unwavering commitment to building lasting client relationships. It achieves this by generating value for its individual, institutional and corporate clients through comprehensive investment solutions, brokerage services and investment banking services.

Notes:

1. Figures excluding significant items are non-IFRS measures.
2. Net income (loss) attributable to common shareholders is calculated as the net income (loss) adjusted for non-controlling interests and preferred share dividends.
3. Expenses in fiscal year 2016 included an impairment charge of $321-million related to goodwill and other assets.
4. These are non-IFRS measures.
5. Transactions over $1.5-million. Internally sourced information.
6. Advisory teams normally comprise one or more investment advisers (IAs), and their assistants and associates, who together manage a shared set of client accounts. Advisory teams that are led by, or only include, an IA who has been licensed for less than three years are not included in the company's advisory team count, as it typically takes a new IA approximately three years to build an average-sized book of business.