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AGF Management Limited Reports Third Quarter 2023 Financial Results
AGÊNCIA DE COMUNICAÇÃO Conteúdo de responsabilidade da empresa 2 de outubro de 2023
AGF Management Ltd.
TORONTO, Sept. 27, 2023 (GLOBE NEWSWIRE) —
- Reported quarterly diluted earnings per share of $0.34
- AGF reported mutual fund net redemptions of $151 million
- AGF saw growth of 43% in its ETFs and SMA AUM year over year
- Quarterly dividend of $0.11 per share
AGF Management Limited (AGF or the Company) (TSX: AGF.B) today announced financial results for the third quarter ended August 31, 2023.
AGF reported total assets under management and fee-earning assets1 of $42.3 billion compared to $41.2 billion as at May 31, 2023 and $39.6 billion as at August 31, 2022.
We continue to see the results of implementing our long-term strategic plan to diversify our business across asset classes and client channels allowing us to persevere through different market cycles, said Kevin McCreadie, Chief Executive Officer and Chief Investment Officer, AGF. Our flows continue to exceed the industry at a time of heightened market volatility and against a backdrop where investors are feeling pressure due to higher inflation and higher interest rates.
AGFs mutual fund gross sales were $633 million for the quarter compared to $594 million in the comparative period. Mutual fund net redemptions were $151 million compared to sales of $51 million in the comparative period. AGF reported ETFs and SMA AUM of $1.3 billion as at August 31, 2023 as compared to $0.9 billion in the comparative period.
Key to our continued success during this time of market uncertainty is the diversification of our product lineup, said Judy Goldring, President and Head of Global Distribution, AGF. As our clients embrace different ways of accessing our investment capabilities, we are seeing the benefits of our vehicle agnostic approach in the form of consistent, strong growth in separately managed accounts both here in Canada as well as in the U.S.
Key Business Highlights:
- In August, AGF Investments Inc. expanded its lineup with the launch of AGF Enhanced U.S. Equity Income Fund, which is available as a mutual fund with an ETF series option. As the firm takes a more vehicle agnostic approach, this is the first in a series of strategies expected to launch or to be made available in a mutual fund and ETF.
- AGF continued to experience a better than industry redemption rate of 13% in Canadian mutual funds, compared to the industry average of 15% for IFIC reporting firms.2
- The firm celebrated 55 years of AGF Management Limiteds stock being listed on the TSX with a Market Open event at the TMX. This longevity is a testament to AGFs history of innovation, a disciplined investment approach and an unwavering commitment to our clients.
- AGF International Advisors Company Limited, a subsidiary of AGF, was once again accepted as a signatory to the UK Stewardship Code, a best-practice benchmark in investment stewardship.
- Judy Goldring has been named Chair of the Investment Funds Institute of Canada (IFIC). In this role, she leads an experienced Board that provides oversight and guidance to IFIC as it carries out its important advocacy work as the voice of Canada’s investment funds industry.
1 Fee-earning assets represents assets in which AGF has carried interest ownership and earns recurring fees but does not have ownership interest in the managers.
2 Long-term mutual funds in the Canadian mutual fund industry on a trailing-twelve-months basis as of June 2023. Source: IFIC and Investor Economics.
Financial Highlights:
- EBITDA for the three months ended August 31, 2023, was $33.8 million, compared to $33.2 million in the prior year comparative period.
- Net management, advisory and administration fees were $73.8 million for the three months ended August 31, 2023, compared to $70.9 million for the comparative prior year period. Net management, advisory and administration fees are directly related to our AUM levels, the proportion of AUM invested in various strategies (i.e., equity fund vs. fixed income fund) and commission fee structures (i.e., fee-based, front-end, or deferred sales commission basis).
- Revenue from Private Capital for the three months ended August 31, 2023, was $7.3 million, compared to $6.6 million for the comparative prior year period. Of the $7.3 million, $2.5 million was generated from AGFs interest in Private Capital Managers and $4.8 million was generated from AGFs investment in Private Capital long-term investments, compared to $0.7 million and $5.9 million in the comparative prior year period.
- Selling, general and administrative costs were $50.2 million for the three months ended August 31, 2023, compared to $46.4 million in 2022. The year-over-year increase in SG&A was impacted by higher incentive compensation as a result of our track record of investment outperformance and the successful execution of our sales strategy, which is to increase our presence in the investment dealer channel. In addition, the increase incorporates strategic investments made into the business to support our growth plan, including Private Capital, as well as increases driven by the market environment. AGF is committed to being an employer of choice, which means looking at responsible practices and initiatives to attract, develop and reward employees.
- Net income for the three months ended August 31, 2023, was $23.0 million ($0.34 diluted EPS), compared to $22.1 million ($0.32 diluted EPS) in the prior year comparative period.
| Three months ended | Nine months ended | ||||||||||||||||||
| (in millions of Canadian dollars, | August 31, | May 31, | August 31, | August 31, | August 31, | ||||||||||||||
| except per share data) | 2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||
| Revenues | |||||||||||||||||||
| Management, advisory and administration fees | $ | 107.4 | $ | 109.8 | $ | 103.8 | $ | 324.0 | $ | 327.4 | |||||||||
| Trailing commissions and investment advisory fees | (33.6 | ) | (34.1 | ) | (32.9 | ) | (101.5 | ) | (103.3 | ) | |||||||||
| Net management, advisory and administration fees1 | $ | 73.8 | $ | 75.7 | $ | 70.9 | $ | 222.5 | $ | 224.1 | |||||||||
| Deferred sales charges | 1.8 | 2.1 | 1.8 | 5.7 | 5.4 | ||||||||||||||
| Revenue from Private Capital1 | 7.3 | 18.0 | 6.6 | 29.4 | 19.6 | ||||||||||||||
| Other revenue1 | 1.1 | 0.3 | 2.4 | 2.4 | |||||||||||||||
| Total net revenue1 | 84.0 | 95.8 | 79.6 | 260.0 | 251.5 | ||||||||||||||
| Selling, general and administrative | 50.2 | 53.0 | 46.4 | 156.2 | 143.0 | ||||||||||||||
| Deferred selling commissions | 37.1 | ||||||||||||||||||
| EBITDA before commissions1 | 33.8 | 42.8 | 33.2 | 103.8 | 108.5 | ||||||||||||||
| EBITDA1 | 33.8 | 42.8 | 33.2 | 103.8 | 71.4 | ||||||||||||||
| Net income | 23.0 | 30.3 | 22.1 | 70.9 | 45.1 | ||||||||||||||
| Diluted earnings per share | 0.34 | 0.45 | 0.32 | 1.05 | 0.64 | ||||||||||||||
| Free cash flow1 | 23.0 | 19.8 | 20.6 | 62.1 | 46.2 | ||||||||||||||
| Dividends per share | 0.11 | 0.11 | 0.10 | 0.32 | 0.29 | ||||||||||||||
