TORONTO, Nov. 12, 2015 (GLOBE NEWSWIRE) -- Sprott Inc. (TSX:SII) ("Sprott" or the "Company") today announced its financial results for the three-months ended September 30, 2015.
Q3 2015 Financial Overview
- Assets Under Management ("AUM") were $7.4 billion as at September 30, 2015, similar to $7.4 billion as at September 30, 2014 and a decrease of $0.4 billion (4.7%) from June 30, 2015.
- Assets Under Administration ("AUA") were $2.0 billion as at September 30, 2015, compared to $2.2 billion as at September 30, 2014 and $2.1 billion as at June 30, 2015.
- Total revenues were $22.5 million, reflecting a decrease of $5.6 million (20.1%) from the three months ended September 30, 2014.
- Total expenses were $65.2 million, reflecting an increase of $43.7 million from the three months ended September 30, 2014.
- During the quarter, goodwill resulting from the acquisition of Global Companies was assessed as being impaired and a charge against earnings in the amount of $28.5 million was taken. Additional non-cash charges taken in the quarter included: (i) a $0.4 million charge on fixed-term limited partnership contracts in Global Companies; (ii) a $1.7 million charge on carried interests in Global Companies; and (iii) a $9.3 million charge on the TEIC management contract in the Consulting segment.
- Net loss was $49.2 million ($(0.20) per share), reflecting a decrease of $53.7 million from the three-months ended September 30, 2014.
- Adjusted base EBITDA was $1.8 million ($0.01 per share), reflecting a decrease of $6.4 million (77.7%) from the three-months ended September 30, 2014. The decline was largely due to lower management fees, lower interest income and a $3.9 million write-down of a resource loan during the quarter.
- Invested capital stood at $312.7 million, reflecting a $30.6 million (8.9%) decrease from December 31, 2014.
Significant events for the three-months ended September 30, 2015 and year-to-date:
- Hired Dennis Mitchell as Senior Portfolio Manager at Sprott Asset Management and announced intention to launch four new funds to be managed by Mr. Mitchell
- Continued to advance exchange offers for Central GoldTrust and Silver Bullion Trust
"The continued sharp decline in resource markets negatively impacted our results during the period," said Peter Grosskopf, CEO of Sprott. "Despite the weakness, we continue to invest in our business in order to improve our funds, retain talent and better align and expand our client base globally. We expect that our efforts to build the leading manager in the sector will be duly rewarded once a recovery takes hold."
"Our diversified alternative platform has exceeded our expectations for growth and, during the quarter, we announced that Dennis Mitchell has joined Sprott Asset Management," added Mr. Grosskopf. "Dennis is a key addition to our team and we are confident that he will add to our momentum by attracting new clients to our platform."
Assets Under Management and Assets Under Administration
|Breakdown of AUM movements on a three months ended basis by investment product type:|
|$ (in millions)|| AUM |
June 30, 2015
| Net Sales / |
| Net Market |
| Acquisitions / |
| AUM |
|Alternative Investment Strategies||929||(71)||(23)||—||835|
|Exchange Traded Funds||216||(4)||(33)||—||179|
|Fixed Term Limited Partnerships||348||—||(9)||—||339|
- Assets Under Management ("AUM") were $7.4 billion as at September 30, 2015, similar to $7.4 billion as at September 30, 2014 and a decrease of $0.4 billion (4.7%) from June 30, 2015. Average AUM on a three and nine months ended basis was $7.6 billion and $7.7 billion, respectively, which was down slightly on a three months ended basis but up slightly on a nine months ended basis, as compared with the prior periods.
- AUA was $2.0 billion, reflecting a decrease of $0.2 billion (9.8%) from September 30, 2014, a decrease of $0.1 billion (6.2%) from June 30, 2015 and a nominal increase from December 31, 2014.
Net Income and Adjusted base EBITDA
- Net loss was $49.2 million ($(0.20) per share) on a three months ended basis and $35.5 million ($(0.14) per share) on a nine months ended basis, reflecting a decrease of $53.7 million and $55.3 million, respectively, from the prior periods.
- Basic and diluted earnings per share were negative $0.20 and negative $0.14 on a three and nine months ended basis compared with $0.02 and $0.08 for the prior periods.
- Adjusted base EBITDA was $1.8 million on a three months ended basis and $14.9 million on a nine months ended basis, reflecting a decrease of $6.4 million (77.7%) and $9.6 million (39.2%), respectively, from the prior periods. The declines were largely due to lower management fees and a $3.9 million write-down of a resource loan during the quarter.
On November 11, 2015, a dividend of $0.03 per common share was declared for the quarter ended September 30, 2015.
Conference Call and Webcast
A conference call and webcast will be held today, November 12, 2015 at 10:00am ET to discuss the Company's financial results. To participate in the call, please dial (877) 930-8292 ten minutes prior to the scheduled start of the call and provide conference ID75810520. A taped replay of the conference call will be available until Thursday, November 20, 2015 by calling (855) 859-2056 or (404) 537-3406, reference number 75810520.
*Non-IFRS Financial Measures
This press release includes financial terms (including AUM, AUA, 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.
Full details of each of the exchange offers for Central GoldTrust and Silver Bullion Trust (the "Sprott Offers") are set out in a takeover bid circular and accompanying offer documents (collectively and as amended and varied, the "Offer Documents"), which have been filed with the Canadian securities regulatory authorities. In connection with the Sprott Offers, Sprott Physical Gold Trust and Sprott Physical Silver Trust (the "Sprott Physical Trusts") have filed with the U.S. Securities and Exchange Commission (the "SEC") a registration statement on Form F-10 (each a "Registration Statement"), which contains a prospectus relating to the applicable Sprott Offer. Sprott Asset Management LP and Sprott Physical Gold Trust also have filed a tender offer statement on Schedule TO with respect to the Sprott Offer for Central GoldTrust. CENTRAL GOLDTRUST AND SILVER BULLION TRUST UNITHOLDERS AND OTHER INTERESTED PARTIES ARE URGED TO READ THESE DOCUMENTS, ALL DOCUMENTS INCORPORATED BY REFERENCE, ALL OTHER APPLICABLE DOCUMENTS AND ANY AMENDMENTS OR SUPPLEMENTS TO ANY SUCH DOCUMENTS WHEN THEY BECOME AVAILABLE, BECAUSE EACH WILL CONTAIN IMPORTANT INFORMATION ABOUT SPROTT ASSET MANAGEMENT LP, THE SPROTT PHYSICAL TRUSTS, CENTRAL GOLDTRUST, SILVER BULLION TRUST AND THE SPROTT OFFERS. Materials filed with the Canadian securities regulatory authorities are available electronically without charge at www.sedar.com. Materials filed with the U.S. Securities and Exchange Commission ("SEC") are available electronically without charge at the SEC's website at www.sec.gov.
This news release does not constitute an offer to buy or the solicitation of an offer to sell any of the securities of Central GoldTrust, Silver Bullion Trust, Sprott Physical Gold Trust or Sprott Physical Silver Trust. The securities registered pursuant to a Registration Statement are not offered for sale in any jurisdiction in which such offer or sale is not permitted.
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) expectations with respect to the launching of new funds; (ii) continued investment in the Company's business in order to improve its funds, retain talent and better align and market its product offerings; (iii) the expectation that the Company's efforts to build the leading manager in the sector will be duly rewarded once a recovery takes hold; (iv) expectations with respect to the benefits resulting from Dennis Mitchell joining Sprott Asset Management; and (v) 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) future exchange rates will remain consistent with the current environment; (ii) the impact of increasing competition in each business in which the Company operates will not be material; (iii) quality management will be available; and (iv) the effects of regulation and tax laws of governmental agencies will be consistent with the current environment. 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) changes in the investment management industry; (iii) risks related to regulatory compliance; (iv) failure to deal appropriately with conflicts of interest; (v) failure to continue to retain and attract quality staff; (vi) competitive pressures; (vii) corporate growth may be difficult to sustain and may place significant demands on existing administrative, operational and financial resources; (viii) foreign exchange risk relating to the relative value of the U.S. dollar; (ix) historical financial information is not necessarily indicative of future performance; (x) those risks described under the heading "Risk Factors" in the Company's annual information form dated March 4, 2015; and (xi) those risks described under the headings "Managing Risk - Financial" and "Managing Risk - Other" in the Company's MD&A for the nine months ended September 30, 2015. 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 Sprott Inc.
Sprott Inc. is a leading independent asset manager dedicated to achieving superior returns for its clients over the long term. The Company currently operates primarily through six business units: Sprott Asset Management LP, Sprott Private Wealth LP, Sprott Consulting LP, Sprott Resource Lending Corp., Sprott Toscana and Sprott U.S. Holdings Inc. Sprott Asset Management is the investment manager of the Sprott family of mutual funds and hedge funds and discretionary managed accounts; Sprott Private Wealth provides wealth management services to high net worth individuals; and Sprott Consulting and Sprott Toscana provide management, administrative and consulting services to other companies. Sprott Resource Lending provides lending services to mining and energy sectors. Sprott U.S. Holdings Inc. includes Sprott Global Resource Investments Ltd, Sprott Asset Management USA Inc., and Resource Capital Investments Corporation. Sprott Inc. is headquartered in Toronto, Canada, and is listed on the Toronto Stock Exchange under the symbol "SII". For more information on Sprott Inc., please visit www.sprottinc.com.
Investor contact information:
Director of Communications
Source: Sprott Inc.