Historical Stock Chart
1 Year : From Dec 2018 to Dec 2019
Sprott Inc. (TSX: SII) (“Sprott” or the “Company”) today announced its financial results for the three months ended March 31, 2019.
Financial Overview (3 months results)
- Assets Under Management (“AUM”) were $10.6 billion as at March 31, 2019, down slightly from December 31, 2018
- Investable capital stood at $203 million as at March 31, 2019, up $1 million (1%) from December 31, 2018
- Total net revenues (net of commission expenses, trailer fees and sub-advisor fees, carried interest and performance fee payouts) were $19.4 million, reflecting a decrease of $7.8 million (29%) from the quarter ended March 31, 2018. Last year's net revenues contained $4.2 million of proceeds from the sale of our non-core client assets as well as $0.6 million of net performance fees.
- Total expenses (excluding commission expenses, trailer fees and sub-advisor fees, carried interest and performance fee payouts) were $14.7 million, reflecting a decrease of $1.6 million (10%) from the quarter ended March 31, 2018.
- Net income was $3.8 million ($0.02 per share), reflecting a decrease of $9.9 million (72%) from the quarter ended March 31, 2018. Last year's net income contained $4.2 million of proceeds from the sale of our non-core private wealth business as well as $0.6 million of net performance fees.
- Adjusted Base EBITDA was $9.2 million ($0.04 per share), a decrease of $0.8 million (8%) from the quarter ended March 31, 2018.
"Precious metal prices have come under pressure recently, as global central banks have abandoned their short-lived programs to increase interest rates," said Peter Grosskopf, CEO of Sprott. "With highly-correlated markets moving in lockstep to all-time highs, we continue to believe an allocation to gold will protect our clients from the inevitable consequences of unsustainable global debt levels and we have positioned our portfolios accordingly."
"Our AUM was relatively flat in the first quarter of 2019 at $10.6 billion, as the addition of new AUM in our lending business was offset by declines in our exchange-listed products business line," added Mr. Grosskopf. "We continue to focus on driving growth in our core businesses by expanding our global client base and exploring in-market acquisitions."
Assets Under Management (3 months results)
|In millions $||AUMDec. 31, 2018||Net Sales& Capital Calls||MarketValue Change||Distributions, Acquisitions& Divestitures||AUMMar. 31, 2019|
|Exchange Listed Products|| || || || || |
|- Physical Trusts||7,927|| ||(260||)||(186||)||—|| ||7,481|| |
|- ETFs||237|| ||17|| ||15|| ||—|| ||269|| |
| ||8,164|| ||(243||)||(171||)||—|| ||7,750|| |
| || || || || || |
|Lending||498|| ||264|| ||(16||)||(15||) (1)||731|| |
| || || || || || |
|Managed Equities|| || || || || |
|- In-house||295|| ||27|| ||31|| ||—|| ||353|| |
|- Sub-advised||505|| ||19|| ||(1||)||—|| ||523|| |
|- Fixed Term LPs||243|| ||—|| ||(2||)||—|| ||241|| |
| ||1,043|| ||46|| ||28|| ||—|| ||1,117|| |
| || || || || || |
|Other||873|| ||72|| ||26|| ||—|| ||971|| |
| || || || || || |
|Total||10,578|| ||139|| ||(133||)||(15||)||10,569|| |
(1) Distributions of principal receipts to clients of our lending LPs
On May 9, 2019, a dividend of $0.03 per common share was declared for the quarter ended March 31, 2019.
Conference Call and Webcast
A conference call and webcast will be held today, May 10, 2019 at 10:00 am ET to discuss the Company's financial results. To participate in the call, please dial (855) 458-4215 ten minutes prior to the scheduled start of the call and provide conference ID7398085. A taped replay of the conference call will be available until Friday, May 17, 2019 by calling (855) 859-2056, reference number 7398085. The conference call will be webcast live at www.sprott.com and https://edge.media-server.com/m6/p/bhpbpvnm
*Non-IFRS Financial Measures
This press release includes financial terms (including AUM, investable capital, net revenues, expenses, adjusted base EBITDA and net sales) that the Company utilizes to assess the financial performance of its business that are not measures recognized under International Financial Reporting Standards (“IFRS”). These non-IFRS measures should not be considered alternatives to performance measures determined in accordance with IFRS and may not be comparable to similar measures presented by other issuers. For additional information regarding the Company's use of non-IFRS measures, including the calculation of these measures, please refer to the “Non-IFRS Financial Measures” section of the Company's Management's Discussion and Analysis and its financial statements available on the Company's website at www.sprottinc.com and on SEDAR at www.sedar.com.
A reconciliation from net income to adjusted base EBITDA is shown below:
| ||3 months ended|
|(in thousands $)||Mar. 31, 2019||Mar. 31, 2018|
| || || |
|Net income (loss) for the periods||3,784|| ||13,657|| |
|Adjustments:|| || |
|Interest expense||324|| ||66|| |
|Provision (recovery) for income taxes||877|| ||(2,772||)|
|Depreciation and amortization||1,101|| ||688|| |
|EBITDA||6,086|| ||11,639|| |
| || || |
|Other adjustments:|| || |
|(Gains) losses on proprietary investments||(73||)||1,879|| |
|(Gains) losses on foreign exchange||1,025|| ||(857||)|
|Non-cash stock-based compensation||1,658|| ||1,418|| |
|Net proceeds from Sale Transaction||—|| ||(4,200||)|
|Unamortized placement fees||—|| ||(268||)|
|Other expenses||488|| ||974|| |
|Adjusted EBITDA||9,184|| ||10,585|| |
| || || |
|Other adjustments:|| || |
|Carried interest and performance fees||—|| ||(1,117||)|
|Carried interest and performance fee related expenses||—|| ||559|| |
|Adjusted base EBITDA||9,184|| ||10,027|| |
Forward Looking Statements
Certain statements in this press release contain forward-looking information (collectively referred to herein as the "Forward-Looking Statements") within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify Forward-Looking Statements. In particular, but without limiting the forgoing, this press release contains Forward-Looking Statements pertaining to: (i) market outlook and our belief that an allocation to gold will protect our clients from the inevitable consequences of unsustainable global debt levels; (ii) continued focus on driving growth in our core businesses by expanding our global client base and exploring the acquisition of complementary products and management teams; and (iii) the declaration, payment and designation of dividends.
Although the Company believes that the Forward-Looking Statements are reasonable, they are not guarantees of future results, performance or achievements. A number of factors or assumptions have been used to develop the Forward-Looking Statements, including: (i) the impact of increasing competition in each business in which the Company operates will not be material; (ii) quality management will be available; (iii) the effects of regulation and tax laws of governmental agencies will be consistent with the current environment; and (iv) those assumptions disclosed under the heading "Significant Accounting Judgments, Estimates and Changes in Accounting Policies" in the Company’s MD&A for the period ended March 31, 2019. Actual results, performance or achievements could vary materially from those expressed or implied by the Forward-Looking Statements should assumptions underlying the Forward-Looking Statements prove incorrect or should one or more risks or other factors materialize, including: (i) difficult market conditions; (ii) poor investment performance; (iii) failure to continue to retain and attract quality staff; (iv) employee errors or misconduct resulting in regulatory sanctions or reputational harm; (v) performance fee fluctuations; (vi) a business segment or another counterparty failing to pay its financial obligation; (vii) failure of the Company to meet its demand for cash or fund obligations as they come due; (viii) changes in the investment management industry; (ix) failure to implement effective information security policies, procedures and capabilities; (x) lack of investment opportunities; (xi) risks related to regulatory compliance; (xii) failure to manage risks appropriately; (xiii) failure to deal appropriately with conflicts of interest; (xiv) competitive pressures; (xv) corporate growth which may be difficult to sustain and may place significant demands on existing administrative, operational and financial resources; (xvi) failure to comply with privacy laws; (xvii) failure to successfully implement succession planning; (xviii) foreign exchange risk relating to the relative value of the U.S. dollar; (xix) litigation risk; (xx) failure to develop effective business resiliency plans; (xxi) failure to obtain or maintain sufficient insurance coverage on favourable economic terms; (xxii) historical financial information being not necessarily indicative of future performance; (xxiii) the market price of common shares of the Company may fluctuate widely and rapidly; (xxiv) risks relating to the Company’s investment products; (xxv) risks relating to the Company's proprietary investments; (xxvi) risks relating to the Company's lending business; (xxvii) risks relating to the Company’s merchant bank and advisory business; (xxviii) those risks described under the heading "Risk Factors" in the Company’s annual information form dated February 27, 2019; and (xxix) those risks described under the headings "Managing Risk: Financial" and "Managing Risk: Non-Financial" in the Company’s MD&A for the period ended March 31, 2019. In addition, the payment of dividends is not guaranteed and the amount and timing of any dividends payable by the Company will be at the discretion of the Board of Directors of the Company and will be established on the basis of the Company’s earnings, the satisfaction of solvency tests imposed by applicable corporate law for the declaration and payment of dividends, and other relevant factors. The Forward-Looking Statements speak only as of the date hereof, unless otherwise specifically noted, and the Company does not assume any obligation to publicly update any Forward-Looking Statements, whether as a result of new information, future events or otherwise, except as may be expressly required by applicable Canadian securities laws.
About SprottSprott is an alternative asset manager and a global leader in precious metal and real asset investments. Through its subsidiaries in Canada, the US and Asia, the Corporation is dedicated to providing investors with best-in-class investment strategies that include Exchange Listed Products, Lending, Managed Equities and Brokerage. Sprott is based in Toronto with offices in New York, Carlsbad and Vancouver and its common shares are listed on the Toronto Stock Exchange under the symbol (TSX:SII). For more information, please visit www.sprott.com.
Investor contact information:
Glen WilliamsManaging DirectorInvestor Relations and Corporate Communications(416) firstname.lastname@example.org
Source: Sprott Inc.