Mr. Peter Anderson reports
CI FINANCIAL REPORTS FOURTH QUARTER AND ANNUAL RESULTS
CI Financial Corp. has released audited financial results for the quarter and year ended Dec. 31, 2017.
ANNUAL RESULTS
(in millions except for per-share data)
Year ended Dec. 31, 2017 Year ended Dec. 31, 2016
Assets under management $143,028 $117,889
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Average assets under management 126,269 110,852
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Net income 499.9 503.0
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Adjusted net income 579.2 532.1
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Earnings per share 1.89 1.86
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Adjusted earnings per share 2.19 1.96
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EBITDA per share 3.32 3.10
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Adjusted EBITDA per share 3.49 3.24
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Free cash flow 648.4 604.7
QUARTERLY RESULTS
(in millions except for per-share data)
Quarter ended Dec. 31, 2017 Quarter ended Dec. 31, 2016
Average assets under management $142,469 $114,780
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Net income 128.6 121.0
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Adjusted net income 162.9 140.6
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Earnings per share 0.47 0.45
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Adjusted earnings per share 0.59 0.53
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EBITDA per share 0.78 0.75
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Adjusted EBITDA per share 0.94 0.85
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Free cash flow 180.6 154.0
OTHER QUARTERLY METRICS
Quarter ended Dec. 31, 2017 Quarter ended Dec. 31, 2016
Dividends paid per share (in $) $0.3525 $0.3450
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Long-term debt (in millions;
including current portion) 1,118.1 758.7
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Net debt (in millions) 860.9 572.9
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SG&A expenses 36.4 bps 35.5 bps
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Return on equity 33.0% 29.2%
CI reported earnings per share of 47 cents for the fourth quarter of 2017, compared with 45 cents for the same quarter of 2016. Both quarters included provisions for compensation, legal and tax costs, and the fourth quarter of 2017 included a fair value adjustment to contingent consideration. Excluding these items, earnings per share in the fourth quarter of 2017 were 59 cents, up 11 per cent from 53 cents for the same quarter of 2016 and up 7 per cent from 55 cents for the third quarter of 2017. For the year, adjusted earnings per share were $2.19, up 12 per cent from $1.96 for the prior year.
"Two thousand seventeen was a solid year for CI, with strong growth in key metrics including a 12-per-cent increase in adjusted earnings per share and 7-per-cent gain in free cash flow," said Peter W. Anderson, CI chief executive officer. "During the year, we made two important strategic acquisitions, Sentry Investments and BBS Securities, and we continue to strengthen our existing asset management and advisory businesses. In a challenging environment that includes increased market volatility, we remain focused on executing our long-term strategy to grow our business."
Average assets under management reached $126.3-billion for 2017, an increase of 14 per cent from 2016. Fourth quarter average assets were up 24 per cent year over year primarily due to strong market performance and the acquisition of Sentry Investments Corp. on Oct. 2, 2017. At Dec. 31, 2017, CI's assets under management were $143.0-billion, up $25.1-billion or 21 per cent from $117.9-billion at Dec. 31, 2016.
CI's Canadian business, excluding products closed to new investors, had net sales for the year of $341-million. CI's international retail business (GSFM) had a very strong 2017 with $468-million in net sales. In total, CI had $1.5-billion in net redemptions for 2017, primarily due to $1.2-billion in net redemptions from business closed to new investors.
For the quarter ended Dec. 31, 2017, CI's Canadian business, excluding products closed to new investors, had $938-million in net redemptions, due to net outflows from Sentry's funds. While these redemptions were anticipated, CI has been implementing strategies to improve sales. In total, CI had $1.4-billion in net redemptions for the fourth quarter of 2017.
Selling, general and administrative (SG&A) expenses for the fourth quarter of 2017 were $130.8-million compared with $102.4-million in the same quarter of 2016. The increase in SG&A was primarily due to the addition of Sentry, BBS Securities Inc. and Grant Samuel Funds Management (GSFM) for a full quarter (GSFM was acquired on Nov. 15, 2016).
CI generated $648.4-million in free cash flow during the year ended Dec. 31, 2017, compared with $604.7-million in 2016. During the year, CI repurchased $413.2-million in shares and paid $368.0-million in dividends. As at Jan. 31, 2018, CI had 270,119,547 shares outstanding.
The board of directors declared a monthly cash dividend of 11.75 cents per share, payable on each of March 15, 2018, April 13, 2018, and May 15, 2018, to shareholders of record on Feb. 28, 2018, March 31, 2018, and April 30, 2018, respectively. The monthly dividend represented a yield of 5.1 per cent on CI's closing share price of $27.82 on Feb. 14, 2018.
For detailed financial statements for the quarter and year ended Dec. 31, 2017, including management's discussion and analysis, which contains discussions of non-IFRS (international financial reporting standards) measures, please refer to CI's website under financial information, or contact the company.
Annual general meeting of shareholders
CI Financial will hold its annual general meeting of shareholders on June 18, 2018, in Toronto at 2 p.m. Eastern Daylight Time. The meeting will be held at CI's offices, located at 15 York St., on the second floor. In addition to the formal business of the meeting, there will be presentations by the CI executive team. The notice of meeting and management information circular will be available at SEDAR and the company's website in the news and events section.
Analyst conference call
CI will hold a conference call with analysts today at 4 p.m. Eastern Time, led by chief executive officer Peter Anderson and chief financial officer Douglas Jamieson. The call and a slide presentation will be accessible through a webcast at the company's website. Alternatively, investors may listen to the discussion by dialling: 416-406-0743 or 1-800-898-3989 (passcode: 3773238 followed by the number sign).
A replay of the call will be available until March 1, 2018, at 11:59 p.m. at 905-694-9451 or 1-800-408-3053 (pass code: 2377248 followed by the number sign). The webcast will be archived at the company's website.
About CI Financial Corp.
CI Financial is an independent Canadian company offering global asset management and wealth management advisory services. Its primary operating businesses are CI Investments Inc., Sentry Investments Inc., Assante Wealth Management (Canada) Ltd., Stonegate Private Counsel, Grant Samuel Funds Management Pty. Ltd. of Australia, First Asset Investment Management Inc. and BBS Securities Inc.
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