Guardian Capital Group Limited (TSX: GCG; GCG.A) Announces 2021 Third Quarter Operating Results

Toronto, Ontario, CANADA


TORONTO, Nov. 10, 2021 (GLOBE NEWSWIRE) -- All per share figures disclosed below are stated on a diluted basis.

     
For the periods ended September 30,Three months Nine months 
($ in thousands, except per share amounts)2021
202020212020
     
Net revenue$ 72,384  $52,042$ 207,038 $152,067 
Operating earnings  20,771   12,108  59,474  36,348 
Net gains (losses)  (8,146) 35,739  90,292  (82,296)
Net earnings (loss) attributable to shareholders  7,054   42,201  121,817  (43,681)
     
     
Attributable to shareholders:    
EBITDA(1)$ 24,703  $16,238$ 70,622 $47,910 
Adjusted cash flow from operations(1)  20,795   10,507  58,488  39,230 
     
     
Attributable to shareholders, per share:    
Net earnings (loss)$ 0.27  $1.56$ 4.53 $(1.72)
EBITDA(1)  0.93   0.60  2.63  1.78 
Adjusted cash flow from operations(1)  0.79   0.39  2.18  1.46 
     
     


    
As at 2021 2020 
($ in millions, except per share amounts)September 30December 31September 30
    
Assets under management$ 53,113 $45,984$32,734
Assets under administration  30,015  22,289 20,755
Total client assets  83,128  68,273 53,489
Shareholders' equity  781  700 632
Securities  689  633 552
    
    
Per share:   
Shareholders' equity(1)$ 29.40 $25.69$23.25
Securities(1)  25.91  23.23 20.30
    
    

The Company is reporting another historic high of $83.1 billion in total client assets as at September 30, 2021, which include assets under management (“AUM”) and assets under administration (“AUA”). This is a 22% increase from $68.3 billion as at December 31, 2020, and a 55% increase from $53.5 billion as at September 30, 2020. The acquisition of a Canadian wealth management business on March 1, 2021, which was subsequently renamed Guardian Partners Inc., added $5.4 billion in total client assets in the first quarter of 2021.

AUM grew to $53.1 billion as at September 30, 2021, a 16% increase from $46.0 billion as at December 31, 2020, and a 62% increase from $32.7 billion as at September 30, 2020. The growth in the AUM was driven by the positive global financial market performance over those periods, the strong inflow of assets, and the acquisition of Agincourt on October 1, 2020. GuardCap Asset Management Limited, our UK-based subsidiary’s AUM has grown to $16.2 billion as at September 30, 2021, representing a $5.5 billion growth since the beginning of the current year. The Company’s AUA grew to $30.0 billion as at September 30, 2021, a 35% increase from $22.3 billion as at December 31, 2020 and a 45% increase from $20.8 billion as at September 30, 2020.

The Company is reporting Operating earnings of $20.8 million for the quarter ended September 30, 2021, 72% or $8.7 million higher than the $12.1 million reported in the third quarter of 2020. This significant growth was achieved through improved results delivered by both, the Investment Management and the Wealth Management Segments of the Company.

Net revenue for the current quarter grew to another all-time high of $72.4 million, 39% or $20.3 million higher than the $52.0 million reported in the same quarter in the prior year. The increase reflects largely our successful organic growth in revenues, and, to a lesser extent, the addition of revenues from the acquired businesses.

Expenses in the current quarter were $51.6 million, an $11.7 million increase from $39.9 million in the same quarter in the prior year. The higher expenses reflect the growth in our businesses, the strategic investments made in the Canadian Retail Asset Management initiative and the addition of $5.2 million in expenses from the acquired businesses.

Net losses in the current quarter were $8.1 million, compared to Net gains of $35.7 million in the same quarter in the prior year. The largest portion of the Net losses in the current quarter were due to the decreases in fair values of a portion of our securities holdings exposed to the Emerging Market equities, which experienced negative returns, and the decrease in the fair value of the BMO shares.  

The Company's Net earnings attributable to shareholders in the current quarter were $7.1 million, compared to $42.2 million in the same quarter in 2020. The Net losses, as described above, compared to the large Net gains in the prior year, had the most significant impact on Net earnings. This was partially offset by the growth in Operating earnings over the same period.

EBITDA attributable to shareholders(1) for the current quarter was $24.7 million, compared to $16.2 million in the same period in the prior year. Adjusted cash flow from operations attributable to shareholders(1) for the current quarter was $20.8 million, compared to $10.5 million in the same quarter in the prior year.

The Company’s Shareholders’ equity as at September 30, 2021 increased to $781 million, or $29.40 per share(1), from $700 million, or $25.69 per share(1) as at December 31, 2020, and $632 million, or $23.25 per share(1) as at September 30, 2020. Since December 31, 2020, the Company returned to shareholders $13.8 million in dividends and $24.6 million in share buybacks. The fair value of the Company’s Securities as at September 30, 2021 increased to $689 million, or $25.91 per share(1), from $633 million, or $23.23 per share(1) as at December 31, 2020 and $552 million, or $20.30 per share(1) as at September 30, 2020.

The Board of Directors has declared a quarterly eligible dividend of $0.18 per share, payable on January 18, 2022, to shareholders of record on January 11, 2022.

The Company's financial results for the past eight quarters are summarized in the following table.  

         
 Sep 30,
2021
Jun 30,
2021
Mar 31,
2021
Dec 31,
2020
Sep 30,
2020
Jun 30,
2020
Mar 31,
2020
Dec 31,
2019
         
         
As at ($ in millions)        
Assets under management$ 53,113  $51,960$47,945$45,984$32,734$31,196$27,527 $31,147
Assets under administration  30,015   29,583 28,376 22,289 20,755 20,010 18,152  20,248
Total client assets  83,128   81,543 76,321 68,273 53,489 51,206 45,679  51,395
         
         
For the three months ended ($ in thousands)        
Net revenue$ 72,384  $69,960$64,694$63,724$52,042$50,124$49,901 $49,865
Operating earnings  20,771   21,199 17,504 18,493 12,108 13,427 10,813  13,030
Net gains (losses)  (8,146) 56,467 41,971 80,983 35,739 43,254 (161,289) 24,140
Net earnings (losses)  8,597   66,831 50,861 87,083 42,652 51,244 (134,911) 31,808
Net earnings (loss) attributable to shareholders  7,054   65,138 49,625 86,039 42,201 50,486 (136,368) 30,787
         
         
(in $)        
Net earnings (loss) attributable to shareholders:       
Per Class A and Common share        
Basic$ 0.28  $2.59$1.95$3.38$1.66$1.99$(5.35)$1.20
Diluted  0.27   2.42 1.83 3.17 1.56 1.87 (5.35) 1.13
Dividends paid on Class A and Common shares$ 0.18  $0.18$0.16$0.16$0.16$0.16$0.15 $0.15
         
         
As at        
Shareholders' equity ($ in thousands)$781,334  $780,323$737,363$699,610$631,863$596,265$562,821 $682,777
         
Per Class A and Common share (in $)        
Basic$ 31.56  $31.15$29.02$27.43$24.80$23.50$22.18 $26.73
Diluted  29.40   29.09 27.14 25.69 23.25 22.07 20.94  25.01
         
Total Class A and Common shares outstanding (shares in thousands)  26,968   27,263 27,691 27,740 27,758 27,758 27,758  27,839
         

Guardian Capital Group Limited is a diversified financial services company founded in 1962. The Company is headquartered in Canada and also has offices in the United Kingdom, the United States and the Caribbean. It provides investment and wealth management services to clients and services to financial advisors in its national mutual fund dealer, securities dealer, and life insurance managing general agency. Its Common and Class A shares are listed on The Toronto Stock Exchange.

For further information, contact: 
  
Donald YiGeorge Mavroudis
Chief Financial OfficerPresident and Chief Executive Officer
(416) 350-3136(416) 364-8341

(1)The Company's management uses EBITDA attributable to shareholders (formerly EBITDA), including the per share amount, Adjusted cash flow from operations attributable to shareholders (formerly Adjusted cash flow from operations), including the per share amount, Shareholders' equity per share and Securities per share to evaluate and assess the performance of its business. These measures do not have standardized measures under International Financial Reporting Standards ("IFRS"), and are therefore unlikely to be comparable to similar measures presented by other companies. However, management believes that most shareholders, creditors, other stakeholders and investment analysts prefer to include the use of these measures in analyzing the Company's results. The Company defines EBITDA attributable to shareholders as net earnings before interest, income taxes, amortization, stock-based compensation, net gains or losses, less amounts attributable to non-controlling interests. The Company defines Adjusted cash flow from operations attributable to shareholders (formerly Adjusted cash flow from operations) as net cash from operating activities, net of changes in non-cash working capital items and non-controlling interests. The most comparable IFRS measures are Net earnings, which were $8.6 million in 2021 (2020 - $42.7 million), and Net cash from operating activities, which was $38.1 million in 2021 (2020 - $22.4 million). The per share amounts for EBITDA attributable to shareholders, Adjusted cash flow from operations attributable to shareholders, Shareholders' equity and Securities are calculated by dividing the amounts by diluted shares, which Is calculated in a manner similar to net earnings attributable to shareholders per share. More detailed descriptions of these non-IFRS measures are provided in the Company's Management's Discussion and Analysis, including a reconciliation of these measures to their most comparable IFRS measures.