AGF Management Limited Reports Strong Second Quarter 2017 Financial Results

  • 30% growth in mutual fund gross sales compared to prior year quarter
  • 50% of ranked AUM performed above median for the one-year period ended May 31, 2017, and 53% for the three-year period
  • Achieved final close of InstarAGF Essential Infrastructure Fund (EIF) with $740 million in commitments
  • Reported Diluted EPS of $0.16 compared to $0.12 in Q2 2016

TORONTO, June 28, 2017 (GLOBE NEWSWIRE) — AGF Management Limited (AGF or the Company) today announced financial results for the second quarter ended May 31, 2017.

Total assets under management (AUM) increased 8.0% to $36.4 billion compared to the same period in 2016, and up 3.7% compared to $35.1 billion as at February 28, 2017. AUM increased across all lines of business, including retail, private client, institutional and subadvisory, and the Company’s alternative asset management platform.

During the three months ended May 31, 2017, retail fund net redemptions improved 62.1% to $107 million compared to net redemptions of $282 million for the three months ended May 31, 2016, reflecting the Company’s continued focus on investment performance and customer service excellence.

On April 24, 2017, AGF further cemented its growing presence in the U.S. exchange-traded fund (ETF) marketplace with the official launch of its AGFiQ Asset Management (AGFiQ) quantitative solutions platform. AGFiQ has brought together an intellectually diverse, multi-discipline team that combines the complementary strength of investment professionals across AGF and its affiliates from Highstreet Asset Management Inc. (Highstreet) and FFCM, LLC (FFCM) to deliver innovative product ideas to manage volatility around specific client needs and outcomes.

“Our strong second quarter results reflect the strategy and vision we set in place,” said Blake Goldring, Chairman and Chief Executive Officer, AGF Management Limited. “The diversification of our business both globally and into new growth businesses focused on alternative and factor-based investing, is yet another example of how we are repositioning the firm to meet the evolving needs of our clients.”

Income from continuing operations for the three months ended May 31, 2017 increased 5.4% to $117.1 million compared to $111.1 million for the three months ended May 31, 2016. EBITDA from continuing operations increased 11.5% to $29.2 million for the three months ended May 31, 2017, compared to $26.2 million for the same period in 2016.

“We have moved to a place of consistent investment performance through our focused efforts on bringing discipline to our investment processes to deliver the repeatable results our clients expect of us,” said Kevin McCreadie, President and Chief Investment Officer, AGF Investments Inc. “As a result, we are seeing our efforts reflected in the strengthening inflows experienced in our core retail business.”

On May 31, 2017, through InstarAGF, the Company’s alternative asset management platform, AGF achieved final close of EIF fund, reaching a fund size of $740 million.

Diluted earnings per share (EPS) from continuing operations for the three months ended May 31, 2017 was $0.16, compared to $0.12 for the comparative period.

For the three months ended May 31, 2017, AGF declared an eight cent per share dividend on Class A Voting common shares and Class B Non-Voting shares, payable July 18, 2017 to shareholders on record as at July 10, 2017.

(from continuing operations) Three months ended Six months ended
  May 31,   February 28,   May 31,     May 31,   May 31,
(in millions of Canadian dollars, except per share data)   2017   2017 2016     2017   2016
Income 117.1 107.2 111.1 224.3 214.4
Net Income attributable to equity owners of the
Company 13.2 9.2 9.6 22.4 19.8
EBITDA 1 29.2 25.7 26.2 54.8 53.5
Adjusted EBITDA 1 29.2 25.7 27.7 54.8 55.0
Diluted earnings per share attributable to
equity owners of the Company 0.16 0.11 0.12 0.28 0.25
Adjusted diluted earnings per share attributable to
equity owners of the Company 1 0.16 0.11 0.13 0.28 0.26
Free Cash Flow 1 10.4 10.4 16.4 20.9 27.4
Dividends per share 0.08 0.08 0.08 0.16 0.16
Long-term debt 168.4 198.3 228.9 168.4 228.9
1  EBITDA (earnings before interest, taxes, depreciation and amortization), adjusted EBITDA, 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.
Three months ended
  May 31,   February 28,   November 30,     August 31,   May 31,
(in millions of Canadian dollars)   2017   2017   2016 1   2016   2016
Retail fund Assets Under Management (AUM)
(including retail pooled funds) 18,884 18,299 17,774 17,811 17,539
Institutional, sub-advisory and ETF accounts AUM 11,336 10,960 10,810 11,033 11,087
Private client AUM 5,323 5,143 4,908 4,784 4,586
Alternative asset management platform AUM 2 902 712 685 619 535
Total AUM, including alternative asset
management platform 36,445 35,114 34,177 34,247 33,747
Net retail redemptions 107 119 214 303 282
Average daily retail fund AUM 18,647 17,925 17,756 17,682 17,376
1 Net retail redemptions includes a $149.4 million transfer of an existing client from institutional to retail.
2 Represents fee-earning committed and/or invested capital from AGF and external investors held through joint ventures. AGF’s portion of this commitment is $150.0 million, of which $76.0 million has been funded as at May 31, 2017, which includes $10.1 million return of capital related to the monetization of its seed assets.

For further information and detailed financial statements for the second quarter ended May 31, 2017, 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.

Conference Call

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 http://edge.media-server.com/m/p/etao7r83. Alternatively, the call can be accessed toll-free in North America by dialing 1-800-708-4540 (Passcode #: 45088906).

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 a diversified global asset management firm with retail, institutional, alternative and high-net-worth businesses. As an independent firm, AGF strives to help investors succeed by delivering excellence in investment management and providing an exceptional client experience. AGF’s suite of diverse 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 over $36 billion in total assets under management, AGF serves more than one million investors. AGF trades on the Toronto Stock Exchange under the symbol AGF.B.

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, 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 2016 Annual MD&A.

AGF Management Limited shareholders, analysts and media, please contact:
Adrian Basaraba
Senior Vice-President and Chief Financial Officer
416-865-4203, Adrian.Basaraba@agf.com 
Paul Francis
Director, Finance
416-815-6239, Paul.Francis@agf.com