18:37:14 EDT Sat 25 Mar 2023
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Hampton Financial Corp
Symbol HFC
Shares Issued 15,410,370
Close 2023-01-20 C$ 0.66
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Hampton Financial loses $588,000 in Q1

2023-01-31 01:41 ET - News Release

Mr. Peter Deeb reports


Hampton Financial Corp. has released its financial results for the first quarter ended Nov. 30, 2022.

"The first quarter results are indicative of the challenges faced across the industry during the fall of 2022. Capital markets activity slowed drastically as interest rates continued to rise, and equity markets declined. In light of the challenging market conditions, a number of capital markets activities and transactions were deferred to subsequent quarters. With that being the case, we continue to remain optimistic for the balance of the fiscal year," said Hampton Financial executive chairman and chief executive officer Peter Deeb.

First quarter fiscal highlights

First quarter ended Nov. 30, 2022:

  • Q1 revenues of $2,409,000, a decrease of 60 per cent year over year;
  • Q1 net losses of ($588,000) or (two cents) per share;
  • Q1 EBITDA (earnings before interest, taxes, depreciation and amortization) of ($244,000) versus $1,344,000 in the comparative quarter last year.

Summary of corporate developments

In addition to being a tough quarter for the industry, the first quarter of fiscal 2023 was always going to be a difficult comparison with Q1 2022, as it rolled into last year with the strongest markets it had seen in some time, completing a record number of capital market transactions. Many transactions it had hoped to close in Q1 of this year did not materialize. That said, it has been considerably more active in second quarter, and it hopes to recover lost ground over the balance of fiscal 2023. Additionally, the first quarter's results include several non-cash and extraordinary items, including: a $117,000 employee benefit expense and a $205,000 net loss on revaluation of the inventory of broker warrants.

Despite challenging markets, in the first quarter, it raised a total of $4,163,000 in new convertible subordinated debentures bearing 9 per cent, an improvement of approximately 400 basis points in the spread over five-year treasuries from a year earlier. As well, it redeemed all of its 12 per cent notes payable and retired all of its preferred shares, streamlining its balance sheet while raising additional working capital.

During the first quarter and on into second quarter, wealth management continued to perform with consistent strength, and its treasury operations are accelerating. As such, it looks forward to reporting progress during the second quarter.

The company, through its wholly owned subsidiary, Hampton Securities Ltd. (HSL), continues to develop its wealth management, advisory team and principal agent programs, which offer the industry's most experienced wealth managers a unique and flexible operating platform that provides additional freedom, financial support and tax effectiveness as they build and manage their professional practice. Its corporate finance group provides early-stage, growing companies the capital they need to create value for investors. Its treasury group works to maximize returns from its balance sheet and strengthen its competitive position as one of Canada's leading independent financial institutions.

Copies of Hampton's unaudited interim financial statements and its management's discussion and analysis for the three months ended Nov. 30, 2022, can be viewed on SEDAR.

About Hampton Financial Corp.

Hampton Financial is a unique private equity firm that seeks to build shareholder value through long-term strategic investments. Through HSL, Hampton Financial is actively engaged in family office, wealth management, institutional service and capital market activities. HSL is a full-service investment dealer, regulated by IIROC (Investment Industry Regulatory Organization of Canada) and registered in Alberta, British Columbia, Manitoba, Saskatchewan, Nova Scotia, Northwest Territories, Ontario and Quebec. In addition, the company provides investment banking services, which include assisting companies with raising capital, advising on mergers and acquisitions, and aiding issuers in obtaining a listing on recognized securities exchanges in Canada and abroad. The company is also exploring opportunities to diversify its sources of revenue by way of strategic investments in both complementary business and non-core sectors that can leverage the expertise of its board and the diverse experience of its management team.

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