AGF Management Limited Reports Second Quarter 2022 Financial Results

Toronto, Ontario, CANADA


TORONTO, June 22, 2022 (GLOBE NEWSWIRE) --

  • Reported diluted earnings per share of $0.14
  • Mutual fund net sales of $132 million for the quarter
  • Announced quarterly dividend of $0.10 per share

AGF Management Limited (AGF or the Company) (TSX: AGF.B) today announced financial results for the second quarter ended May 31, 2022.

AGF reported total assets under management and fee-earning assets1 of $40.3 billion compared to $42.0 billion as at February 28, 2022 and $40.8 billion as at May 31, 2021.

“This quarter marked AGF’s 65th anniversary, a testament to our disciplined investment approach, our unwavering commitment to our clients and our history of innovation,” said Kevin McCreadie, Chief Executive Officer and Chief Investment Officer, AGF. “We are pleased to report our seventh consecutive quarter of positive net mutual fund sales and continued strong investment performance, outperforming our one-year and three-year targets in an environment marked by significant market volatility, demonstrating our ability to navigate regulatory change and further diversify our investments.”

AGF’s mutual fund gross sales were $818 million for the quarter compared to $1,060 million in the comparative period, while net sales were $132 million compared to $408 million in the comparative period. AGF’s sales have continued to outpace the industry. During the quarter the industry2 reported net redemptions, while AGF retail mutual funds3 remained in net sales.

“This quarter we struck new relationships with key platforms and further diversified our distribution strategy to meet the unique needs of our clients in different markets,” said Judy Goldring, President and Head of Global Distribution, AGF. “And we continue to see the results of this approach reporting another quarter of net positive mutual fund sales.”

Key Business Highlights:

  • On April 18 AGF marked its 65th anniversary. The firm was founded in 1957 when C. Warren Goldring and Allan Manford had the innovative idea to pool the funds of Canadian investors to allow greater access to the U.S. equity market. Their fund – named the American Growth Fund – became the very first U.S. equity fund for Canadian investors, and its initials, AGF, were adopted as the firm’s name.
  • In honour of our 65th anniversary and to mark Earth Week, AGF announced a partnership with Trees for Life to plant trees at the Claireville Conservation Area in Brampton, ON. There will be an opportunity for employees to participate in the planting onsite, building on AGF’s commitment to supporting environmental initiatives.  
  • Toronto-based employees moved into AGF’s new head office at CIBC SQUARE. AGF is one of the first tenants in this iconic next-generation building, which has achieved WELL Health-Safety Rating and WiredScore Platinum accreditation, and is expected to attain LEED® Platinum Core & Shell certification and WELL Platinum Certification, making it the first triple-platinum building in Toronto.
  • At the same time, employees across the organization officially transitioned to a hybrid work environment that supports work-life balance while encouraging greater connection, communication, and heightened collaboration.
  • AGF recently finalized an agreement with SMArtX Advisory Solutions LLC and had its separately managed account (SMA) models approved to be added to their platform as the firm continues to provide U.S. clients access to in-demand SMA strategies as part of an ongoing effort to expand both its offering and client base in the U.S.
  • At the annual Wealth Professional Awards, AGF was named a finalist in the following categories: Employer of Choice, Alternative Investment Solutions Provider of the Year and Mutual Fund Provider of the Year.
  • The firm remains active under its Normal Course Issuer Bid (NCIB). During the quarter, AGF repurchased 692,634 AGF.B shares for cancellation.  
  • On June 21, 2022, AGF’s Board of Directors approved a quarterly dividend of $0.10 for shareholders of record on July 8, 2022.

 

Financial Highlights:

  • Management, advisory, administration fees and deferred sales charges were $113.1 million for the three months ended May 31, 2022, compared to $108.6 million in 2021. The increase in revenue is attributable to a 5.3% increase in average mutual fund assets under management.
  • Selling, general and administrative costs were $47.3 million for the three months ended May 31, 2022, compared to $47.1 million in 2021. Excluding severance of $0.2 million incurred in the quarter, SG&A of $47.1 million remained flat compared to the prior year period.
  • EBITDA before commissions for the three months ended May 31, 2022 was $35.4 million, compared to $28.2 million in the prior year comparative period.
  • Effective June 1, 2022, the ban on the payment of upfront sales commissions, including deferred sales charge options, took effect. During the three and six months ended May 31, 2022, AGF paid commissions of $17.8 million and $37.1 million, respectively. 
  • Net income for the three months ended May 31, 2022 was $10.1 million ($0.14 diluted EPS), compared to $5.0 million ($0.07 diluted EPS) in the prior year comparative period. Diluted EPS in the quarter of $0.14 reflects growth in top line revenue.
 
 Three months endedSix months ended
  May 31,  February 28,  May 31,  May 31,  May 31, 
(in millions of Canadian dollars, except per share data) 2022  2022  2021  2022  2021 
                
Income               
Management, advisory, administration fees               
and deferred sales charges$113.1 $114.1 $108.6 $227.2 $211.5 
Share of profit (loss) of joint ventures (0.2)  (0.6)  0.1  (0.8)  0.9 
Other income from fee-earning arrangements 0.7  0.8  0.4  1.5  0.4 
Fair value adjustments and other income 3.9  10.6  0.4  14.5  3.9 
Total Income$117.5 $124.9 $109.5 $242.4 $216.7 
                
Selling, general and administrative 47.3  49.3  47.1  96.6  95.1 
                
Deferred selling commissions 17.8  19.3  17.7  37.1  33.3 
                
EBITDA before commissions1 35.4  40.0  28.2  75.4  54.7 
                
EBITDA 17.6  20.7  10.5  38.3  21.4 
                
Net income 10.1  12.9  5.0  23.0  10.6 
                
Diluted earnings per share 0.14  0.18  0.07  0.32  0.15 
                
Free cash flow1 12.3  13.3  10.4  25.6  20.9 
Dividends per share 0.10  0.09  0.08  0.19  0.16 
                


 
(end of period)Three months ended
  May 31,  February 28,  November 30,  August 31,  May 31, 
(in millions of Canadian dollars) 2022  2022  2021  2021  2021 
                
Mutual fund assets under management (AUM)2$22,849 $23,625 $24,006 $23,792 $22,290 
Institutional, sub-advisory and ETF accounts AUM 8,372  9,059  9,371  10,302  9,713 
Private client AUM 6,946  7,102  7,077  7,073  6,689 
Private alternatives AUM 58  69  73  99  134 
Total AUM$38,225 $39,855 $40,527 $41,266 $38,826 
Private alternatives fee-earning assets3 2,052  2,100  2,108  2,094  1,983 
Total AUM and fee-earning assets3$40,277 $41,955 $42,635 $43,360 $40,809 
                
Net mutual fund sales2 132  330  352  288  408 
Average daily mutual fund AUM2 23,183  24,075  23,896  23,104  22,011 
                


1EBITDA before commissions (earnings before interest, taxes, depreciation, amortization and deferred selling commissions), adjusted EBITDA before commissions, adjusted net income, 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.
2Mutual fund AUM includes retail AUM, pooled fund AUM and institutional client AUM invested in customized series offered within mutual funds.
3Fee-earning assets represents assets in which AGF has carried interest ownership and earns recurring fees but does not have ownership interest in the managers.

For further information and detailed financial statements for the second quarter ended May 31, 2022, 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 https://edge.media-server.com/mmc/p/k7tb88zf. Alternatively, the call can be accessed toll-free in Canada by dialing 1 (866) 455-3403 (PIN: 27114683#), or in the United States by dialing 1 (866) 374-5140 (PIN: 27114683#).

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 an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of 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 $40 billion in total assets under management and fee-earning assets, AGF serves more than 800,000 investors. AGF trades on the Toronto Stock Exchange under the symbol AGF.B.

AGF Management Limited shareholders, analysts and media, please contact:

Adrian Basaraba
Senior Vice-President and Chief Financial Officer
416-865-4203, InvestorRelations@agf.com

Courtney Learmont
Vice-President, Finance
647-253-6804, InvestorRelations@agf.com

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, the possible effects of war or terrorist activities, outbreaks of disease or illness that affect local, national or international economies (such as COVID-19), natural disasters and disruptions to public infrastructure, such as transportation, communications, power or water supply or other 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 2021 Annual MD&A.

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1Fee-earning assets represents assets in which AGF has carried interest ownership and earns recurring fees but does not have ownership interest in the managers.
2Long-term funds.
3Retail mutual fund net sales are calculated as reported mutual fund net sales less non-recurring institutional net sales in excess of $5 million invested in our mutual funds.