SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report
of Foreign Private Issuer Pursuant to Rule 13a-16 or 15d-16
of the Securities
Exchange Act of 1934
For the month of |
February |
|
2025 |
Commission File Number |
001-39298 |
|
|
Sprott Inc. |
(Translation of registrant’s name into English) |
|
Suite 2600, 200 Bay Street
Royal Bank Plaza, South Tower
Toronto, Ontario, Canada M5J 2J1 |
(Address of principal executive offices) |
Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F:
Form 20-F ¨
Form 40-F x
DOCUMENTS INCLUDED AS PART OF THIS REPORT
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
|
Sprott Inc. |
|
|
(Registrant) |
|
|
|
Date: |
February 26, 2025 |
|
By: |
/s/ Kevin Hibbert |
|
|
|
|
Name: |
Kevin Hibbert |
|
|
|
|
Title: |
Senior Managing Partner and Chief
Financial Officer |
Exhibit 99.1
SPROTT ANNOUNCES YEAR ENDED 2024 RESULTS
TORONTO, ON - February 26, 2025 -
Sprott Inc. (NYSE/TSX: SII) (“Sprott” or the “Company”) today announced its financial results for the year ended
December 31, 2024.
Management
commentary
"Sprott’s
Assets Under Management (“AUM”) ended the year at $31.5 billion, down 6% from $33.4 billion as at September 30, 2024,
but up 10% from $28.7 billion as at December 31, 2023. 2024 was our seventh consecutive year of double-digit AUM growth and, subsequent
to year-end, as at February 21, 2025, AUM had further increased to $33.5 billion, up $2 billion, or 6% from December 31, 2024,"
said Whitney George, Chief Executive Officer of Sprott. "During the year we benefited from strong precious metals prices as well
as $698 million in net sales, primarily in our physical trusts and uranium and critical materials ETFs."
"The
recent turmoil in precious metals markets has highlighted the importance of physical ownership, an area where Sprott offers best-in-class
solutions to individual and institutional investors. The realignment of global trade and a focus on energy security will create demand
for critical materials produced in “friendly” jurisdictions. We continue to develop new exchange-listed and actively-managed
critical materials strategies to capitalize on this powerful long-term trend. We have invested in our sales and marketing capabilities
to deliver our clients the highest levels of client service, while building on our position as thought leaders in our core themes. Sprott
is well positioned to create value for our clients and shareholders in the months and years ahead," continued Mr. George.
Key AUM highlights1
| · | AUM
ended the year at $31.5 billion as at December 31, 2024, down 6% from $33.4 billion
as at September 30, 2024 but was up 10% from $28.7 billion as at December 31, 2023.
Although fourth quarter AUM was negatively impacted by market value depreciation across most
of our funds and the termination of certain subadvised fund contracts, 2024 was nevertheless
our seventh consecutive year of double-digit AUM growth as we benefited from strong market
value appreciation in our precious metals physical trusts and net inflows to our exchange
listed products. |
Key revenue highlights
| · | Management
fees were $41.4 million for the quarter, up 20% from $34.5 million for the quarter ended
December 31, 2023 and $155.3 million on a full-year basis, up 17% from $132.3 million
for the year ended December 31, 2023. Carried interest and performance fees were $2.5
million for the quarter, up from $0.5 million for the quarter ended December 31, 2023
and $7.3 million on a full-year basis, up from $0.9 million for the year ended December 31,
2023. Net fees were $38.6 million for the quarter, up 24% from $31 million for the quarter
ended December 31, 2023 and $144.6 million on a full-year basis, up 22% from $118.8
million for the year ended December 31, 2023. Our revenue performance in the quarter
and on a full-year basis was primarily due to higher average AUM on strong market value appreciation
in our precious metals physical trusts and inflows to the majority of our exchange listed
products. We also benefited from carried interest and performance fee crystallization in
certain funds in our managed equities and private strategies segments. |
| · | Commission
revenues were $0.8 million for the quarter, down 38% from $1.3 million for the quarter ended
December 31, 2023 and $5.7 million on a full-year basis, down 31% from $8.3 million
for the year ended December 31, 2023. Net commissions were $0.4 million for the quarter,
down 47% from $0.7 million for the quarter ended December 31, 2023 and $2.7 million
on a full-year basis, down 43% from $4.6 million for the year ended December 31, 2023.
Commission revenue was lower in the quarter due to modest ATM activity in our critical materials
physical trusts. On a full-year basis, the decline in commission revenue was due to the sale
of our former Canadian broker-dealer in the second quarter of last year. |
| · | Finance
income was $1.4 million for the quarter, up 4% from the quarter ended December 31, 2023
and $8.9 million on a full-year basis, up 37% from $6.5 million for the year ended December 31,
2023. The increase in the quarter was due to higher income generation in co-investment positions
we hold in our LPs managed in our private strategies segment. The increase on a full-year
basis was due to higher income earned on streaming syndication activity in the second quarter. |
Key expense
highlights
| · | Net
compensation expense was $17 million for the quarter, up 11% from $15.3 million for the quarter
ended December 31, 2023 and $67.3 million on a full-year basis, up 10% from $61.2 million
for the year ended December 31, 2023. The increase in the quarter and on a full-year
basis was primarily due to increased Annual Incentive Program ("AIP") accruals
on higher net fee generation. Our net compensation ratio was 44% in the quarter (December 31,
2023 - 47%) and 45% on a full-year basis (December 31, 2023 - 49%). |
| · | SG&A
expense was $4.9 million for the quarter, up 25% from $4 million for the quarter ended December 31,
2023 and $18.8 million on a full-year basis, up 13% from $16.6 million for the year ended
December 31, 2023. The increase in the quarter and on a full-year basis was due to higher
professional services, marketing and technology costs. |
Earnings summary
| · | Net
income for the quarter was $11.7 million ($0.46 per share), up 21% from $9.7 million ($0.38
per share) for the quarter ended December 31, 2023 and was $49.3 million ($1.94 per
share) on a full-year basis, up 18% from $41.8 million ($1.66 per share) for the year ended
December 31, 2023. Our earnings in the quarter and on a full-year basis benefited from
higher average AUM on strong market value appreciation in our precious metals physical trusts
and inflows to the majority of our exchange listed products. We also benefited from carried
interest and performance fee crystallization in certain funds in our managed equities and
private strategies segments. |
| · | Adjusted
base EBITDA was $22.4 million ($0.88 per share) for the quarter, up 19% from $18.8 million
($0.75 per share) for the quarter ended December 31, 2023 and $85.2 million ($3.35 per
share) on a full-year basis, up 18% from $71.9 million ($2.85 per share) for the year ended
December 31, 2023. Adjusted base EBITDA in the quarter and on a full-year basis benefited
from higher average AUM on strong market value appreciation in our precious metals physical
trusts and inflows to the majority our exchange listed products |
1 See “non-IFRS financial measures”
section in this press release and schedule 2 and 3 of "Supplemental financial information"
Subsequent events
| · | Subsequent
to year-end, as at February 21, 2025, AUM was $33.5 billion, up 6% from $31.5 billion
at December 31, 2024. |
| · | On
February 25, 2025, the Sprott Board of Directors announced a quarterly dividend of $0.30
per share. |
Supplemental financial information
Please refer to the December 31, 2024 annual
financial statements of the Company and the related management discussion and analysis filed earlier this morning for further details
into the Company's financial position as at December 31, 2024 and the Company's financial performance for the three and twelve months
ended December 31, 2024.
Schedule 1 - AUM continuity
3 months results | |
(In millions $) | |
AUM Sep. 30, 2024 | | |
Net
inflows (1) | | |
Market value changes | | |
Other net inflows (1) | | |
AUM Dec. 31, 2024 | | |
Net management fee rate (2) | |
Exchange listed products | |
| | |
| | |
| | |
| | |
| | |
| |
- Precious metals physical trusts and ETFs | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
- Physical Gold Trust | |
| 8,617 | | |
| 35 | | |
| (44 | ) | |
| — | | |
| 8,608 | | |
| 0.35 | % |
- Physical Silver Trust | |
| 5,566 | | |
| 83 | | |
| (422 | ) | |
| — | | |
| 5,227 | | |
| 0.45 | % |
- Physical Gold and Silver Trust | |
| 5,225 | | |
| (69 | ) | |
| (143 | ) | |
| — | | |
| 5,013 | | |
| 0.40 | % |
- Precious Metals ETFs | |
| 404 | | |
| (10 | ) | |
| (40 | ) | |
| — | | |
| 354 | | |
| 0.33 | % |
- Physical Platinum& Palladium Trust | |
| 151 | | |
| 33 | | |
| (16 | ) | |
| — | | |
| 168 | | |
| 0.50 | % |
| |
| 19,963 | | |
| 72 | | |
| (665 | ) | |
| — | | |
| 19,370 | | |
| 0.39 | % |
- Critical materials physical trusts and ETFs | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
- Physical Uranium Trust | |
| 5,408 | | |
| 45 | | |
| (591 | ) | |
| — | | |
| 4,862 | | |
| 0.31 | % |
- Critical Materials ETFs | |
| 2,307 | | |
| 27 | | |
| (314 | ) | |
| — | | |
| 2,020 | | |
| 0.52 | % |
- Physical Copper Trust | |
| 103 | | |
| (1 | ) | |
| (12 | ) | |
| — | | |
| 90 | | |
| 0.32 | % |
| |
| 7,818 | | |
| 71 | | |
| (917 | ) | |
| — | | |
| 6,972 | | |
| 0.37 | % |
Total exchange listed products | |
| 27,781 | | |
| 143 | | |
| (1,582 | ) | |
| — | | |
| 26,342 | | |
| 0.39 | % |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Managed equities (3)(4) | |
| 3,276 | | |
| (55 | ) | |
| (221 | ) | |
| (127 | ) | |
| 2,873 | | |
| 0.90 | % |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Private strategies (4) | |
| 2,382 | | |
| (35 | ) | |
| (27 | ) | |
| — | | |
| 2,320 | | |
| 0.83 | % |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Total AUM (5) | |
| 33,439 | | |
| 53 | | |
| (1,830 | ) | |
| (127 | ) | |
| 31,535 | | |
| 0.47 | % |
12 months results | |
(In millions $) | |
AUM Dec. 31, 2023 | | |
Net inflows (1) | | |
Market value changes | | |
Other net inflows (1) | | |
AUM Dec. 31, 2024 | | |
Net management fee rate (2) | |
Exchange listed products | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
- Precious metals physical trusts and ETFs | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
- Physical Gold Trust | |
| 6,532 | | |
| 351 | | |
| 1,725 | | |
| — | | |
| 8,608 | | |
| 0.35 | % |
- Physical Silver Trust | |
| 4,070 | | |
| 339 | | |
| 818 | | |
| — | | |
| 5,227 | | |
| 0.45 | % |
- Physical Gold and Silver Trust | |
| 4,230 | | |
| (230 | ) | |
| 1,013 | | |
| — | | |
| 5,013 | | |
| 0.40 | % |
- Precious Metals ETFs | |
| 339 | | |
| (24 | ) | |
| 39 | | |
| — | | |
| 354 | | |
| 0.33 | % |
- Physical Platinum& Palladium Trust | |
| 116 | | |
| 75 | | |
| (23 | ) | |
| — | | |
| 168 | | |
| 0.50 | % |
| |
| 15,287 | | |
| 511 | | |
| 3,572 | | |
| — | | |
| 19,370 | | |
| 0.39 | % |
- Critical materials physical trusts and ETFs | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
- Physical Uranium Trust | |
| 5,773 | | |
| 311 | | |
| (1,222 | ) | |
| — | | |
| 4,862 | | |
| 0.31 | % |
- Critical materials ETFs | |
| 2,143 | | |
| 321 | | |
| (444 | ) | |
| — | | |
| 2,020 | | |
| 0.52 | % |
- Physical Copper Trust | |
| — | | |
| 1 | | |
| (21 | ) | |
| 110 | | |
| 90 | | |
| 0.32 | % |
| |
| 7,916 | | |
| 633 | | |
| (1,687 | ) | |
| 110 | | |
| 6,972 | | |
| 0.37 | % |
Total exchange listed products | |
| 23,203 | | |
| 1,144 | | |
| 1,885 | | |
| 110 | | |
| 26,342 | | |
| 0.39 | % |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Managed equities (3)(4) | |
| 2,874 | | |
| (222 | ) | |
| 348 | | |
| (127 | ) | |
| 2,873 | | |
| 0.90 | % |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Private strategies (4) | |
| 2,661 | | |
| (207 | ) | |
| (134 | ) | |
| — | | |
| 2,320 | | |
| 0.83 | % |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Total AUM (5) | |
| 28,738 | | |
| 715 | | |
| 2,099 | | |
| (17 | ) | |
| 31,535 | | |
| 0.47 | % |
(1) | See
"Net inflows" and "Other net inflows" in the key performance indicators and non-IFRS and other financial measures
section of the MD&A. |
(2) | Net
management fee rate represents the weighted average fees for all funds in the category, net of fund expenses. |
(3) | Managed
equities is made up of primarily precious metal strategies (53%), high net worth managed accounts (38%) and U.S. value strategies (9%). |
(4) | Prior
period figures have been reclassified to conform with current presentation. |
(5) | No
performance fees are earned on exchange listed products. Certain managed equities products earn either performance fees based on returns
above relevant benchmarks or earn carried interest calculated as a predetermined net profit over a preferred return. Private strategies
LPs primarily earn carried interest calculated as a predetermined net profit over a preferred return. |
Schedule
2 - Summary financial information
(In thousands $) | |
Q4 2024 | | |
Q3 2024 | | |
Q2 2024 | | |
Q1 2024 | | |
Q4 2023 | | |
Q3 2023 | | |
Q2 2023 | | |
Q1 2023 | |
Summary income statement | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Management fees (1) | |
| 41,161 | | |
| 38,693 | | |
| 38,065 | | |
| 36,372 | | |
| 34,244 | | |
| 32,867 | | |
| 32,940 | | |
| 31,170 | |
Fund expenses (2), (3) | |
| (2,708 | ) | |
| (2,385 | ) | |
| (2,657 | ) | |
| (2,234 | ) | |
| (2,200 | ) | |
| (1,740 | ) | |
| (1,871 | ) | |
| (1,795 | ) |
Direct payouts | |
| (1,561 | ) | |
| (1,483 | ) | |
| (1,408 | ) | |
| (1,461 | ) | |
| (1,283 | ) | |
| (1,472 | ) | |
| (1,342 | ) | |
| (1,187 | ) |
Carried interest and performance fees | |
| 2,511 | | |
| 4,110 | | |
| 698 | | |
| — | | |
| 503 | | |
| — | | |
| 388 | | |
| — | |
Carried interest and performance fee payouts - internal | |
| (830 | ) | |
| — | | |
| (251 | ) | |
| — | | |
| (222 | ) | |
| — | | |
| (236 | ) | |
| — | |
Carried interest
and performance fee payouts - external (3) | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Net fees | |
| 38,573 | | |
| 38,935 | | |
| 34,447 | | |
| 32,677 | | |
| 31,042 | | |
| 29,655 | | |
| 29,879 | | |
| 28,188 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Commissions | |
| 819 | | |
| 498 | | |
| 3,332 | | |
| 1,047 | | |
| 1,331 | | |
| 539 | | |
| 1,647 | | |
| 4,784 | |
Commission expense - internal | |
| (146 | ) | |
| (147 | ) | |
| (380 | ) | |
| (217 | ) | |
| (161 | ) | |
| (88 | ) | |
| (494 | ) | |
| (1,727 | ) |
Commission expense
- external (3) | |
| (290 | ) | |
| (103 | ) | |
| (1,443 | ) | |
| (312 | ) | |
| (441 | ) | |
| (92 | ) | |
| (27 | ) | |
| (642 | ) |
Net commissions | |
| 383 | | |
| 248 | | |
| 1,509 | | |
| 518 | | |
| 729 | | |
| 359 | | |
| 1,126 | | |
| 2,415 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Finance income (2) | |
| 1,441 | | |
| 1,574 | | |
| 4,084 | | |
| 1,810 | | |
| 1,391 | | |
| 1,795 | | |
| 1,650 | | |
| 1,655 | |
Gain (loss) on investments | |
| (3,889 | ) | |
| 937 | | |
| 1,133 | | |
| 1,809 | | |
| 2,808 | | |
| (1,441 | ) | |
| (1,950 | ) | |
| 1,958 | |
Co-investment income (2) | |
| 296 | | |
| 418 | | |
| 416 | | |
| 274 | | |
| 170 | | |
| 462 | | |
| 1,327 | | |
| 93 | |
Total net revenues (2) | |
| 36,804 | | |
| 42,112 | | |
| 41,589 | | |
| 37,088 | | |
| 36,140 | | |
| 30,830 | | |
| 32,032 | | |
| 34,309 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Compensation (2) | |
| 19,672 | | |
| 18,547 | | |
| 19,225 | | |
| 17,955 | | |
| 17,096 | | |
| 16,939 | | |
| 21,468 | | |
| 19,556 | |
Direct payouts | |
| (1,561 | ) | |
| (1,483 | ) | |
| (1,408 | ) | |
| (1,461 | ) | |
| (1,283 | ) | |
| (1,472 | ) | |
| (1,342 | ) | |
| (1,187 | ) |
Carried interest and performance fee payouts - internal | |
| (830 | ) | |
| — | | |
| (251 | ) | |
| — | | |
| (222 | ) | |
| — | | |
| (236 | ) | |
| — | |
Commission expense - internal | |
| (146 | ) | |
| (147 | ) | |
| (380 | ) | |
| (217 | ) | |
| (161 | ) | |
| (88 | ) | |
| (494 | ) | |
| (1,727 | ) |
Severance, new hire accruals and other | |
| (166 | ) | |
| (58 | ) | |
| — | | |
| — | | |
| (179 | ) | |
| (122 | ) | |
| (4,067 | ) | |
| (1,257 | ) |
Net compensation | |
| 16,969 | | |
| 16,859 | | |
| 17,186 | | |
| 16,277 | | |
| 15,251 | | |
| 15,257 | | |
| 15,329 | | |
| 15,385 | |
Net compensation ratio | |
| 44 | % | |
| 46 | % | |
| 44 | % | |
| 47 | % | |
| 47 | % | |
| 50 | % | |
| 48 | % | |
| 52 | % |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Severance, new hire accruals and other | |
| 166 | | |
| 58 | | |
| — | | |
| — | | |
| 179 | | |
| 122 | | |
| 4,067 | | |
| 1,257 | |
Selling, general and administrative ("SG&A") (2) | |
| 4,949 | | |
| 4,612 | | |
| 5,040 | | |
| 4,173 | | |
| 3,963 | | |
| 3,817 | | |
| 4,752 | | |
| 4,026 | |
SG&A recoveries from funds (1) | |
| (280 | ) | |
| (275 | ) | |
| (260 | ) | |
| (231 | ) | |
| (241 | ) | |
| (249 | ) | |
| (282 | ) | |
| (264 | ) |
Interest expense | |
| 613 | | |
| 933 | | |
| 715 | | |
| 830 | | |
| 844 | | |
| 882 | | |
| 1,087 | | |
| 1,247 | |
Depreciation and amortization | |
| 600 | | |
| 502 | | |
| 568 | | |
| 551 | | |
| 658 | | |
| 731 | | |
| 748 | | |
| 706 | |
Foreign exchange (gain) loss (2) | |
| (2,706 | ) | |
| 1,028 | | |
| 122 | | |
| 168 | | |
| 1,295 | | |
| 37 | | |
| 1,440 | | |
| 440 | |
Other (income) and expenses (2) | |
| — | | |
| — | | |
| (580 | ) | |
| — | | |
| 3,368 | | |
| 4,809 | | |
| (18,890 | ) | |
| 1,249 | |
Total expenses | |
| 20,311 | | |
| 23,717 | | |
| 22,791 | | |
| 21,768 | | |
| 25,317 | | |
| 25,406 | | |
| 8,251 | | |
| 24,046 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net income | |
| 11,680 | | |
| 12,697 | | |
| 13,360 | | |
| 11,557 | | |
| 9,664 | | |
| 6,773 | | |
| 17,724 | | |
| 7,638 | |
Net income per share | |
| 0.46 | | |
| 0.50 | | |
| 0.53 | | |
| 0.45 | | |
| 0.38 | | |
| 0.27 | | |
| 0.70 | | |
| 0.30 | |
Adjusted base EBITDA | |
| 22,362 | | |
| 20,675 | | |
| 22,375 | | |
| 19,751 | | |
| 18,759 | | |
| 17,854 | | |
| 17,953 | | |
| 17,321 | |
Adjusted base EBITDA per share | |
| 0.88 | | |
| 0.81 | | |
| 0.88 | | |
| 0.78 | | |
| 0.75 | | |
| 0.71 | | |
| 0.71 | | |
| 0.68 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Summary balance sheet | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Total assets | |
| 388,798 | | |
| 412,477 | | |
| 406,265 | | |
| 389,784 | | |
| 378,835 | | |
| 375,948 | | |
| 381,519 | | |
| 386,765 | |
Total liabilities | |
| 65,150 | | |
| 82,198 | | |
| 90,442 | | |
| 82,365 | | |
| 73,130 | | |
| 79,705 | | |
| 83,711 | | |
| 108,106 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Total AUM | |
| 31,535,062 | | |
| 33,439,221 | | |
| 31,053,136 | | |
| 29,369,191 | | |
| 28,737,742 | | |
| 25,398,159 | | |
| 25,141,561 | | |
| 25,377,189 | |
Average AUM | |
| 33,401,157 | | |
| 31,788,412 | | |
| 31,378,343 | | |
| 29,035,667 | | |
| 27,014,109 | | |
| 25,518,250 | | |
| 25,679,214 | | |
| 23,892,335 | |
| (1) | Previously, management
fees within the above summary financial information table included SG&A recoveries from funds consistent with IFRS 15. For management
reporting purposes, these recoveries are now shown next to their associated expense as management believes this will enable readers to
transparently identify the net economics of these recoveries. However, consistent with IFRS 15, SG&A recoveries from funds are still
shown within the "Management fees" line on the consolidated statement of operations. Prior year figures have been reclassified
to conform with current presentation. |
| (2) | Current and prior period
figures on the consolidated statements of operations include the following adjustments: (1) trading costs incurred in managed accounts
are now included within "Fund expenses" (previously included within "SG&A"); (2) interest income earned
on cash deposits are now included within "Finance income" (previously included within "Other income"); (3) co-investment
income and income attributable to non-controlling interest are now included as part of "Co-investment income" (previously included
within "Other income"); (4) expenses attributable to non-controlling interest is now included within "Co-investment
income" (previously included within "Other expenses"); (5) the mark-to-market expense of DSU issuances are now included
within "Compensation" (previously included within "Other expenses"); (6) foreign exchange (gain) loss is now
shown separately (previously included within "Other expenses"); and (7) shares received on a previously unrecorded contingent
asset in Q2 2023 are now included within "Other (income) and expenses" (previously included within "Other income").
Management believes the above changes enable readers to better identify the nature of these revenues and expenses. Prior year figures
have been reclassified to conform with current presentation. |
| (3) | These amounts are included in the "Fund expenses"
line on the consolidated statements of operations. |
Schedule
3 - EBITDA reconciliation
| |
3 months ended | | |
12 months ended | |
(In thousands $) | |
Dec. 31, 2024 | | |
Dec. 31, 2023 | | |
Dec. 31, 2024 | | |
Dec. 31, 2023 | |
Net income for the period | |
| 11,680 | | |
| 9,664 | | |
| 49,294 | | |
| 41,799 | |
Net income margin (1) | |
| 27 | % | |
| 24 | % | |
| 28 | % | |
| 28 | % |
Adjustments: | |
| | | |
| | | |
| | | |
| | |
Interest expense | |
| 613 | | |
| 844 | | |
| 3,091 | | |
| 4,060 | |
Provision for income taxes | |
| 4,813 | | |
| 1,159 | | |
| 19,712 | | |
| 8,492 | |
Depreciation and amortization | |
| 600 | | |
| 658 | | |
| 2,221 | | |
| 2,843 | |
EBITDA | |
| 17,706 | | |
| 12,325 | | |
| 74,318 | | |
| 57,194 | |
Adjustments: | |
| | | |
| | | |
| | | |
| | |
(Gain) loss on investments (2) | |
| 3,889 | | |
| (2,808 | ) | |
| 10 | | |
| (1,375 | ) |
Stock-based compensation (3) | |
| 4,988 | | |
| 4,681 | | |
| 18,817 | | |
| 17,128 | |
Foreign exchange (gain) loss (4) | |
| (2,706 | ) | |
| 1,295 | | |
| (1,388 | ) | |
| 3,212 | |
Severance, new hire accruals and other (4) | |
| 166 | | |
| 179 | | |
| 224 | | |
| 5,625 | |
Revaluation of contingent consideration (4) | |
| — | | |
| 2,254 | | |
| (580 | ) | |
| — | |
Costs relating to exit of non-core business (4) | |
| — | | |
| 155 | | |
| — | | |
| 5,142 | |
Non-recurring regulatory, professional fees and other (4) | |
| — | | |
| 959 | | |
| — | | |
| 3,982 | |
Shares received on recognition of contingent asset (4) | |
| — | | |
| — | | |
| — | | |
| (18,588 | ) |
Carried interest and performance fees | |
| (2,511 | ) | |
| (503 | ) | |
| (7,319 | ) | |
| (891 | ) |
Carried interest and performance fee payouts - internal | |
| 830 | | |
| 222 | | |
| 1,081 | | |
| 458 | |
Carried interest and performance fee payouts - external | |
| — | | |
| — | | |
| — | | |
| — | |
Adjusted base EBITDA | |
| 22,362 | | |
| 18,759 | | |
| 85,163 | | |
| 71,887 | |
Adjusted base EBITDA margin (5) | |
| 59 | % | |
| 56 | % | |
| 58 | % | |
| 57 | % |
| (1) | Calculated as IFRS net
income divided by IFRS total revenue. |
| (2) | This adjustment removes
the income effects of certain gains or losses on short-term investments, co-investments, and digital gold strategies to ensure the reporting
objectives of our EBITDA metric as described below are met. |
| (3) | In prior years, the mark-to-market
expense of DSU issuances were included with "other (income) and expenses". In the current period, these costs are included
as part of "stock based compensation". Prior year figures have been reclassified to conform with current presentation. |
| (4) | Foreign exchange (gain)
and loss, severance, new hire accruals and other; revaluation of contingent consideration; costs relating to exit of non-core business;
non-recurring regulatory, professional fees and other; and shares received on recognition of contingent asset were previously included
with "other (income) and expenses" and are now shown separately in the reconciliation of adjusted base EBITDA above. Prior
year figures have been reclassified to conform with current presentation. |
| (5) | Prior year figures have
been restated to remove the adjustment of depreciation and amortization. |
Conference
Call and Webcast
A webcast will be held today, February 26,
2025 at 10:00 am ET to discuss the Company's financial results.
To listen to the webcast, please register at: https://edge.media-server.com/mmc/p/syh6xw97
Please note, analysts who cover the Company should register
at: https://register.vevent.com/register/BIe9622ad4a1434ee3beff3bfb7224f1ef
This press release includes financial terms (including
AUM, net commissions, net fees, expenses, adjusted base EBITDA, adjusted base EBITDA margin and net compensation) 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. Non-IFRS financial measures do not have a standardized
meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers. Our key performance
indicators and non-IFRS and other financial measures are discussed below. For quantitative reconciliations of non-IFRS financial measures
to their most directly comparable IFRS financial measures please see schedule 2 and schedule 3 of the "Supplemental financial information"
section of this press release.
Net fees
Management fees, net of fund expenses and direct
payouts, and carried interest and performance fees, net of carried interest and performance fee payouts (internal and external), are
key revenue indicators as they represent the net revenue contribution after directly associated costs that we generate from our AUM.
Net commissions
Commissions, net of commission expenses (internal
and external), arise primarily from purchases and sales of critical materials in our exchange listed products segment and transaction-based
service offerings by our broker dealers.
Net compensation & net compensation
ratio
Net compensation excludes commission expenses
paid to employees, other direct payouts to employees, carried interest and performance fee payouts to employees, which are all presented
net of their related revenues in this MD&A, and severance, new hire accruals and other which are non-recurring. Net compensation
ratio is calculated as net compensation divided by net revenues.
EBITDA, adjusted base EBITDA and adjusted
base EBITDA margin
EBITDA in its most basic form is defined as earnings
before interest expense, income taxes, depreciation and amortization. EBITDA (or adjustments thereto) is a measure commonly used in the
investment industry by management, investors and investment analysts in understanding and comparing results by factoring out the impact
of different financing methods, capital structures, amortization techniques and income tax rates between companies in the same industry.
While other companies, investors or investment analysts may not utilize the same method of calculating EBITDA (or adjustments thereto),
the Company believes its adjusted base EBITDA metric results in a better comparison of the Company's underlying operations against its
peers and a better indicator of recurring results from operations as compared to other non-IFRS financial measures. Adjusted base EBITDA
margins are a key indicator of a company’s profitability on a per dollar of revenue basis, and as such, is commonly used in the
financial services sector by analysts, investors and management.
Forward Looking Statements
Certain
statements in this press release contain forward-looking information and forward-looking statements (collectively referred to herein
as the "Forward-Looking Statements") within the meaning of applicable Canadian and U.S. 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) our ability to capitalize on our constructive outlook in precious metals and critical materials; and
(ii) the declaration, payment and designation of dividends and confidence that our business will support the dividend level without
impacting our ability to fund future growth initiatives.
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; (iv) the impact of
public health outbreaks; and (v) those assumptions disclosed under the heading "Critical Accounting Estimates, Judgments and
Changes in Accounting Policies" in the Company’s MD&A for the period ended December 31, 2024. 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 favorable 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 private strategies business;
(xxvii) those risks described under the heading "Risk Factors" in the Company’s annual information form dated February 25,
2025; and (xxviii) those risks described under the headings "Managing Financial Risks" and "Managing Non-Financial
Risks" in the Company’s MD&A for the period ended December 31, 2024. 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 securities
laws.
About Sprott
Sprott
is a global asset manager focused on precious metals and critical materials investments. We are specialists. We believe our in-depth
knowledge, experience and relationships separate us from the generalists. Our investment strategies include Exchange Listed Products,
Managed Equities and Private Strategies. Sprott has offices in Toronto, New York, Connecticut and California and the company’s
common shares are listed on the New York Stock Exchange and the Toronto Stock Exchange under the symbol (SII). For more information,
please visit www.sprott.com.
Investor contact information:
Glen Williams
Managing Partner
Investor and Institutional Client Relations
(416) 943-4394
gwilliams@sprott.com
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