Sprott Inc. (TSX:SII) (“Sprott” or the “Company”) today announced
its financial results for the year ended December 31, 2017.
Financial Overview for the year-ended
December 31, 2017:
- Assets Under Management (“AUM”) were $7.3 billion as at
December 31, 2017, compared to $9.2 billion as at December 31,
2016. In January 2018, after giving effect to the acquisition of
CFCL, total AUM increased to $11.5 billion.
- Total net revenues (net of commission expenses, trailer fees,
sub-advisor fees and performance fee payouts) were $121.8 million,
reflecting a decrease of $11.4 million (9%) from the year ended
December 31, 2016.
- Total expenses (excluding commission expenses, trailer and
sub-advisor fees and performance fee payouts) were $78.5 million,
reflecting a decrease of $16.9 million (18%) from the year ended
December 31, 2016.
- Net income was $37.5 million ($0.16 per share), reflecting an
increase of $6.0 million (19%) from the year ended December 31,
2016.
- Adjusted base EBITDA was $40.2 million ($0.16 per share),
reflecting an increase of $16.1 million from the year ended
December 31, 2016.
- Investable capital stood at $293 million as at
December 31, 2017, compared to $309 million as at
December 31, 2016.
Significant events for the
year-ended December 31, 2017 and year-to-date
2018:
- Sold Canadian diversified fund assets and private wealth client
business for $46 million (the "Sale Transaction")
- Launched merchant banking business, Sprott Capital
Partners
- Closed inaugural Private Lending LPs, raising US$640
million
- Completed strategic acquisition of Central Fund of Canada Ltd.
("CFCL"), adding $4.3 billion in assets to physical bullion
franchise and increasing total AUM to $11.5 billion
"In 2017, we completed the repositioning of the
business to focus on our historical strengths in precious metal and
real asset investments," said Peter Grosskopf, CEO of Sprott. "As
we have refocused to our core strengths, we have also delivered
steadily improving financial results. Over the past three years, we
have shifted our asset base to higher EBITDA margin products,
causing our EBITDA to more than double from $16.2 million in 2015
to $40.2 million in 2017. We continue to grow our asset base both
organically and through strategic acquisitions. Our AUM
currently stands at approximately $11.5 billion, 90% of which is
concentrated in precious metal and natural resource
investments."
"Our focus this year is driving profitable
growth in each of our operating segments while selectively
evaluating opportunities to cement our leadership position as
global leaders in precious metal investments through complementary
acquisitions and strategic partnerships," added Mr. Grosskopf.
Assets Under Management
$ (in millions) |
AUM December 31,2016 |
Net Sales /(Redemptions) |
Net MarketValue Change |
Transfers /Acquisitions
/(Divestitures) |
AUM December 31,2017 |
|
|
|
|
|
|
Exchange
Listed Products |
4,412 |
|
50 |
|
172 |
|
— |
|
4,634 |
|
|
|
|
|
|
|
Alternative Asset Management: |
|
|
|
|
|
Mutual Funds
(1) |
2,465 |
|
(235 |
) |
(109 |
) |
(1,231 |
) |
890 |
|
Alternative
Investment Funds (2) |
1,085 |
|
54 |
|
18 |
|
(980 |
) |
177 |
|
Managed
Accounts |
104 |
|
(42 |
) |
(1 |
) |
(13 |
) |
48 |
|
|
|
|
|
|
|
Private
Resource Investments: |
|
|
|
|
|
Private Resource
Lending Funds |
49 |
|
193 |
|
10 |
|
— |
|
252 |
|
Fixed-term
limited partnerships |
343 |
|
— |
|
(35 |
) |
— |
|
308 |
|
Managed
Companies |
653 |
|
32 |
|
22 |
|
— |
|
707 |
|
Managed Accounts |
137 |
|
— |
|
26 |
|
144 |
|
307 |
|
Total Enterprise AUM |
9,248 |
|
52 |
|
103 |
|
(2,080 |
) |
7,323 |
|
(1) As part of the Sale Transaction, the Company sold $1.9
billion of Mutual fund AUM and concurrent with this began
sub-advising $0.7 billion of those same assets effective August 1,
2017(2) As part of the Sale Transaction, the Company sold
$0.9 billion of Alternative fund AUM and concurrent with this began
sub-advising $0.1 billion of those same assets effective August 1,
2017
Dividends
On March 1, 2018, a dividend of $0.03 per common
share was declared for the quarter ended December 31,
2017.
Sprott Adopts Advance Notice By-Law
Amendment
On March 2, 2018 Sprott's board of directors
(the “Board”) adopted amendments to its By-Law No. 1 (the
“Amendments”) to include advance notice provisions (the “Advance
Notice Provisions”) requiring that advance notice be provided to
the Company in circumstances where nominations of persons for
election to the Board are made by shareholders other than pursuant
to: (i) a requisition to call a shareholders meeting; or (ii) a
shareholder proposal, in each case as made in accordance with the
provisions of the Business Corporations Act (Ontario) (the
“Act”).
Among other things, the Advance Notice
Provisions fix a deadline by which shareholders must notify the
Company of nominations of persons for election to the Board and set
forth the information that a shareholder must include in the notice
for it to be valid.
In the case of an annual meeting of
shareholders, notice to the Company must be made not less than 30
days prior to the date of the annual meeting; provided however,
that in the event that the annual meeting is to be held on a date
that is less than 50 days after the date on which the first public
announcement of the date of the annual meeting was made, notice may
be made not later than the close of business on the 10th day
following such public announcement. In the case of a special
meeting of shareholders (which is not also an annual meeting)
notice to the Company must be made no later than the close of
business on the 15th day following the day on which the first
public announcement of the date of the special meeting was made.
However, if “notice and access” is used for the delivery of
proxy-related materials for an annual general or special meeting
and the initial public announcement is not less than 50 days before
the date of the meeting, notice must be made not less than 40 days
prior to the date of the meeting. The Board may, in its discretion,
waive any requirement of the Advance Notice Provisions.
The Advance Notice Provisions provide a clear
process for shareholders to follow to nominate directors and set
out a reasonable time frame for nominee submissions along with a
requirement for accompanying information. The purpose of the
Advance Notice Provisions is to treat all shareholders fairly by
ensuring that all shareholders, including those participating in a
meeting by proxy rather than in person, receive adequate notice of
the nominations to be considered at a meeting and can thereby
exercise their voting rights in an informed manner. In addition,
the Advance Notice Provisions should assist in facilitating an
orderly and efficient meeting process.
The Amendments are effective immediately. In
accordance with the provisions of the Act, the Amendments will be
subject to confirmation by shareholders at the annual and special
meeting of shareholders of the Company, which will be held on May
11, 2018.
A copy of the Amendments have been filed under
the Company’s profile on SEDAR at www.sedar.com.
Conference Call and Webcast
A conference call and webcast will be held
today, March 2, 2018 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 ID 2197549. A taped replay of the conference
call will be available until Friday, March 10, 2018 by calling
(855) 859-2056, reference number 2197549. The conference call will
be webcast live at www.sprott.com and
http://edge.media-server.com/m/p/hzahzuhc.
*Non-IFRS Financial Measures
This press release includes financial terms
(including AUM, EBITDA, 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.
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) growth of our asset
base; (ii) our focus this year on driving profitable growth in each
of our operating segments while selectively evaluating
opportunities to cement our leadership position as global leaders
in precious metal investments through complementary acquisitions
and strategic partnerships; 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
herein under the heading "Significant Accounting Judgments and
Estimates" in the Company’s MD&A for the period ended December
31, 2017. 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 could result in regulatory sanctions or reputational
harm; (v) performance fee fluctuations; (vi) changes in the
investment management industry; (vii) failure to implement
effective information security policies, procedures and
capabilities; (viii) lack of investment opportunities; (ix) risks
related to regulatory compliance; (x) failure to manage risks
appropriately; (xi) failure to deal appropriately with conflicts of
interest; (xii) competitive pressures; (xiii) corporate growth may
be difficult to sustain and may place significant demands on
existing administrative, operational and financial resources; (xiv)
failure to successfully implement succession planning; (xv) foreign
exchange risk relating to the relative value of the U.S. dollar;
(xvi) litigation risk; (xvii) failure to develop effective business
resiliency plans; (xviii) failure to obtain or maintain sufficient
insurance coverage on favourable economic terms; (xix) historical
financial information is not necessarily indicative of future
performance; (xx) the market price of common shares of the Company
may fluctuate widely and rapidly; (xxi) risks relating to the
Company’s investment products; (xxii) risks relating to the
Company's proprietary investments; (xxiii) risks relating to the
Company's lending business; (xxiv) risks relating to the Company’s
merchant bank and advisory business; (xxv) those risks described
under the heading "Risk Factors" in the Company’s annual
information form dated March 2, 2018; and (xxvi) those risks
described under the headings "Managing Risk: Financial" and
"Managing Risk: Non-Financial" in the Company’s MD&A for the
period ended December 31, 2017. 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, Alternative Asset Management and Private
Resource Investments. The Corporation also operates Merchant
Banking and Brokerage businesses in both Canada and the
US. 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 Director(416)
943-4394gwilliams@sprott.com
Source: Sprott Inc.
Sprott (TSX:SII)
Historical Stock Chart
From Feb 2024 to Mar 2024
Sprott (TSX:SII)
Historical Stock Chart
From Mar 2023 to Mar 2024