AGF Management Limited Reports First Quarter 2022 Financial Results
TORONTO, March 30, 2022 (GLOBE NEWSWIRE) —
- Reported diluted earnings per share of $0.18
- Mutual fund net sales of $330 million for the quarter
- Announces increase in quarterly dividend from $0.09 to $0.10 per share
AGF Management Limited (AGF or the Company) (TSX: AGF.B) today announced financial results for the first quarter ended February 28, 2022.
AGF reported total assets under management and fee-earning assets1 of $42.0 billion compared to $42.6 billion as at November 30, 2021 and $39.3 billion as at February 28, 2021.
“For the sixth consecutive quarter we are pleased to report positive mutual fund net sales while continuing to deliver strong risk-adjusted performance and maintaining a steadfast focus against our long-term strategy despite a volatile start to the year against the backdrop of rising interest rates and the financial fallout from the Russia-Ukraine war,” said Kevin McCreadie, Chief Executive Officer and Chief Investment Officer, AGF. “With these results, our strong balance sheet, and net cash, we are in the position to increase our quarterly dividend for the second year in a row.”
“We have spent considerable time over the past year planning and looking ahead to a post-pandemic future of work that will embrace flexibility as part of AGF’s new hybrid model,” added McCreadie. “We believe hybrid work will better support our workforce with a seamless in-office and home working environment that supports work-life balance, while encouraging greater collaboration to enable our best work as we continue to deliver for our clients, shareholders and our employees.”
AGF’s mutual fund gross sales were $989 million for the quarter compared to $1,042 million in the comparative period, while net sales were $330 million compared to $385 million in the comparative period. AGF’s sales have continued to outpace the industry. Year over year, retail mutual fund gross sales2 declined slightly by 4% compared to an 8% decline for the industry3 and retail mutual fund net sales2 declined by 12% compared to an 55% decline for the industry3.
“We continued to outperform the industry this quarter and this can be attributed to the diversity of our distribution strategy,” said Judy Goldring, President and Head of Global Distribution, AGF. “At AGF we are focused on building distribution channels that cater to our institutional clients, wealth advisory segments, and our strategic partners, including a focus on the mass affluent, a segment that is expected to grow over the next decade4.”
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 Retail mutual fund gross and net sales are calculated as reported mutual fund gross and net sales less non-recurring institutional gross and net sales in excess of $5 million invested in our mutual funds.
3 Long-term funds.
4 Source: Household Balance Sheet Report – Canada 2021, Investor Economics.
Key Business Highlights:
- March 2022 marked the two-year anniversary of the COVID-19 pandemic. After operating as a mostly virtual firm for two years, AGF’s offices have reopened, and employees are gradually increasing their time in the office with acknowledgement of a longer-term shift to a hybrid mix of in-office and at-home work environment.
- On February 14, AGF officially welcomed Ash Lawrence to the firm as Senior Vice-President, Head of Alternatives, and as a member of the Executive Management Team. As stated previously, Ash’s leadership and focus will allow AGF to build on its strong momentum and strategically deploy capital to effectively grow the firm’s private alternatives business.
- AGF Investments Inc. was recognized with FundGrade A+® Awards for AGF Global Select Fund, AGF U.S. Small-Mid Cap Fund, AGF Global Convertible Bond Fund and AGFiQ Global Multi-Sector Bond ETF.
- The firm continues to actively increase returns to shareholders through the use of its Normal Course Issuer Bid (NCIB). In addition, AGF’s Board of Directors has approved an 11% increase to the quarterly dividend for shareholders of record on April 8, 2022.
- Management, advisory, administration fees and deferred sales charges were $114.1 million for the three months ended February 28, 2022, compared to $102.9 million in 2021. The increase in revenue is attributable to a 7.2% increase in assets under management.
- Selling, general and administrative costs were $49.3 million for the three months ended February 28, 2022, compared to $48.0 million in 2021. Excluding severance of $1.4 million incurred in the quarter, SG&A of $47.9 million remained flat compared to the prior year period.
- EBITDA before commissions for the three months ended February 28, 2022 was $40.0 million, compared to $26.8 million in the prior year comparative period.
- Net income for the three months ended February 28, 2022 was $12.9 million ($0.18 diluted EPS), compared to $5.6 million ($0.08 diluted EPS) in the prior year comparative period.
- EPS in the quarter of $0.18 reflects growth in top line revenue, which was partially offset in the period by higher deferred selling commissions.
|Three months ended|
|February 28,||November 30,||February 28,|
|(in millions of Canadian dollars, except per share data)||2022||2021||2021|
|Management, advisory, administration fees|
|and deferred sales charges||$||114.1||$||114.6||$||102.9|
|Share of profit (loss) of joint ventures||(0.6||)||0.1||0.8|
|Other income from fee-earning arrangements||0.8||0.8||–|
|Fair value adjustments and other income||10.6||6.4||3.6|
|Selling, general and administrative||49.3||49.9||48.0|
|Deferred selling commissions||19.3||15.3||15.5|
|EBITDA before commissions1||40.0||35.5||26.8|
|Diluted earnings per share||0.18||0.19||0.08|
|Free cash flow1||13.3||12.5||10.5|
|Dividends per share||0.09||0.09||0.08|
|(end of period)||Three months ended|
|February 28,||November 30,||February 28,|
|(in millions of Canadian dollars)||2022||2021||2021|
|Mutual fund assets under management (AUM)2||$||23,625||$||24,006||$||21,394|
|Institutional, sub-advisory and ETF accounts AUM||9,059||9,371||9,403|
|Private client AUM||7,102||7,077||6,300|
|Private alternatives AUM3,4||69||73||142|
|Private alternatives fee-earning assets3,4||2,100||2,108||2,012|
|Total AUM and fee-earning assets4||$||41,955||$||42,635||$||39,251|
|Net mutual fund sales2||330||352||385|
|Average daily mutual fund AUM3||24,075||23,896||21,118|
1 EBITDA before commissions (earnings before interest, taxes, depreciation, amortization and deferred selling commissions), adjusted EBITDA before commissions, adjusted net income, adjusted diluted earnings per share and Free Cash Flow are not standardized measures prescribed by IFRS. The Company utilizes non-IFRS measures to assess our overall performance and facilitate a comparison of quarterly and full-year results from period to period. They allow us to assess our investment management business without the impact of non-operational items. These non-IFRS measures may not be comparable with similar measures presented by other companies. These non-IFRS measures and reconciliations to IFRS, where necessary, are included in the Management’s Discussion and Analysis available at www.agf.com.
2 Mutual fund AUM includes retail AUM, pooled fund AUM and institutional client AUM invested in customized series offered within mutual funds.
3 Total AUM and Private alternatives AUM have been reclassified and restated to exclude co-investment AUM for comparative purposes.
4 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.
For further information and detailed financial statements for the first quarter ended February 28, 2022, including Management’s Discussion and Analysis, which contains discussions of non-IFRS measures, please refer to AGF’s website at www.agf.com under ‘About AGF’ and ‘Investor Relations’ and at www.sedar.com.
AGF will host a conference call to review its earnings results today at 11 a.m. ET.
The live audio webcast with supporting materials will be available in the Investor Relations section of AGF’s website at www.agf.com or at https://edge.media-server.com/
A complete archive of this discussion along with supporting materials will be available at the same webcast address within 24 hours of the end of the conference call.
About AGF Management Limited
Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.
AGF has investment operations and client servicing teams on the ground in North America, Europe and Asia. With $42 billion in total assets under management and fee-earning assets, AGF serves more than 800,000 investors. AGF trades on the Toronto Stock Exchange under the symbol AGF.B.
AGF Management Limited shareholders, analysts and media, please contact:
Senior Vice-President and Chief Financial Officer
Caution Regarding Forward-Looking Statements
This press release includes forward-looking statements about the Company, including its business operations, strategy and expected financial performance and condition. Forward-looking statements include statements that are predictive in nature, depend upon or refer to future events or conditions, or include words such as ‘expects,’ ‘estimates,’ ‘anticipates,’ ‘intends,’ ‘plans,’ ‘believes’ or negative versions thereof and similar expressions, or future or conditional verbs such as ‘may,’ ‘will,’ ‘should,’ ‘would’ and ‘could.’ In addition, any statement that may be made concerning future financial performance (including income, revenues, earnings or growth rates), ongoing business strategies or prospects, fund performance, and possible future action on our part, is also a forward-looking statement. Forward-looking statements are based on certain factors and assumptions, including expected growth, results of operations, business prospects, business performance and opportunities. While we consider these factors and assumptions to be reasonable based on information currently available, they may prove to be incorrect. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about our operations, economic factors and the financial services industry generally. They are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied by forward-looking statements made by us due to, but not limited to, important risk factors such as level of assets under our management, volume of sales and redemptions of our investment products, performance of our investment funds and of our investment managers and advisors, client-driven asset allocation decisions, pipeline, competitive fee levels for investment management products and administration, and competitive dealer compensation levels and cost efficiency in our investment management operations, as well as general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, taxation, changes in government regulations, unexpected judicial or regulatory proceedings, technological changes, cybersecurity, the possible effects of war or terrorist activities, outbreaks of disease or illness that affect local, national or international economies (such as COVID-19), natural disasters and disruptions to public infrastructure, such as transportation, communications, power or water supply or other catastrophic events, and our ability to complete strategic transactions and integrate acquisitions, and attract and retain key personnel. We caution that the foregoing list is not exhaustive. The reader is cautioned to consider these and other factors carefully and not place undue reliance on forward-looking statements. Other than specifically required by applicable laws, we are under no obligation (and expressly disclaim any such obligation) to update or alter the forward-looking statements, whether as a result of new information, future events or otherwise. For a more complete discussion of the risk factors that may impact actual results, please refer to the ‘Risk Factors and Management of Risk’ section of the 2021 Annual MD&A.
About the Fundata FundGrade A+ Rating
FundGrade A+® is used with permission from Fundata Canada Inc., all rights reserved. The annual FundGrade A+® Awards are presented by Fundata Canada Inc. to recognize the “best of the best” among Canadian investment funds. The FundGrade A+® calculation is supplemental to the monthly FundGrade ratings and is calculated at the end of each calendar year. The FundGrade rating system evaluates funds based on their risk-adjusted performance, measured by Sharpe Ratio, Sortino Ratio, and Information Ratio. The score for each ratio is calculated individually, covering all time periods from 2 to 10 years. The scores are then weighted equally in calculating a monthly FundGrade. The top 10% of funds earn an A Grade; the next 20% of funds earn a B Grade; the next 40% of funds earn a C Grade; the next 20% of funds receive a D Grade; and the lowest 10% of funds receive an E Grade. To be eligible, a fund must have received a FundGrade rating every month in the previous year. The FundGrade A+® uses a GPA-style calculation, where each monthly FundGrade from “A” to “E” receives a score from 4 to 0, respectively. A fund’s average score for the year determines its GPA. Any fund with a GPA of 3.5 or greater is awarded a FundGrade A+® Award. For more information, see www.FundGradeAwards.com. Although Fundata makes every effort to ensure the accuracy and reliability of the data contained herein, the accuracy is not guaranteed by Fundata.
AGF Global Select Fund won in the Global Equity CIFSC Category, out of 1127 funds. The FundGrade A+ start date was 1/31/2012 and the FundGrade A+ end date was 12/31/2021. AGF U.S. Small-Mid Cap Fund won in the U.S. Small/Mid Cap Equity CIFSC Category, out of 142 funds. The FundGrade A+ start date was 1/31/2012 and the FundGrade A+ end date was 12/31/2021. AGF Global Convertible Bond Fund won in the High Yield Fixed Income CIFSC Category, out of 242 funds. The FundGrade A+ start date was 1/31/2016 and the FundGrade A+ end date was 12/31/2021. AGFiQ Global Multi-Sector Bond ETF (QGB) won in the Global Fixed Income CIFSC Category, out of 251 funds. The FundGrade A+ start date was 1/31/2019 and the FundGrade A+ end date was 12/31/2021.