CI Financial reports first quarter 2019 results
- Earnings per share of $0.58, up 2% from the prior quarter
- Free cash flow of $144 million
- Continued investment in CI’s business while reducing SG&A expenses
- Assante and Stonegate post strong results
TORONTO (May 9, 2019) - CI Financial Corp. (“CI”) (TSX: CIX) today released unaudited financial results for the quarter ended March 31, 2019.
“We have maintained consistent results in the face of extraordinary market volatility over the past seven months,” said Peter W. Anderson, CI Chief Executive Officer. “We continue to manage the business with financial prudence, achieving a year-over-year reduction in quarterly expenses, while making investments into the business that will help to position the firm for future success in a rapidly changing environment.
“During the first quarter, we made important progress on two of CI’s most important initiatives: Our digital strategy and the modernization of our product lineup.
“Our digital strategy has been accelerated by the acquisition of WealthBar Financial Services, which closed in January, and its technology is already being used elsewhere within the organization. Broadly speaking, the goal of our digital strategy is to achieve efficiencies and enhance services across all of our operations and business lines, improving the experience for our clients.
“In addition, our initiative to modernize our product lineup is well underway. This includes new and relevant products to meet investors’ changing needs – such as the CI Mosaic ETF Portfolios launched in January – along with a sustained effort to simplify our lineup by reviewing all aspects of our business, including funds, product platforms and investment management. We continue to make it easier for investors and advisors to do business with CI.”
CI reported earnings per share of $0.58 for the first quarter of 2019, up 2% from $0.57 for the fourth quarter of 2018, and down 2% from $0.59 for the first quarter of 2018.
CI generated $143.5 million in free cash flow during the quarter ended March 31, 2019, compared to $156.5 million in the quarter ended December 31, 2018 and $166.9 million in the same quarter last year.
Average assets under management were $128.9 billion for the quarter ended March 31, 2019, largely unchanged from the quarter ended December 31, 2018 and down 9% from the quarter ended March 31, 2018. At March 31, 2019, CI’s ending assets under management and assets under advisement were up 6% and 9% respectively, when compared with December 31, 2018. CI’s assets under advisement include the assets of Assante Wealth Management (Canada) Limited and Stonegate Private Counsel, and now include the assets of WealthBar Financial Services Inc., which was acquired in January 2019.
CI’s Canadian business, excluding products closed to new investors, had $3.3 billion in gross sales and $1.9 billion in net redemptions for the quarter ended March 31, 2019. CI’s international business had $253 million in gross sales and $117 million in net redemptions in the first quarter. CI’s closed business, comprised primarily of segregated fund contracts that are no longer available for sale, had $294 million in net redemptions for the quarter. In total, CI had $2.3 billion in net redemptions for the quarter.
During the quarter, CI continued to make strategic investments into its business while maintaining strong controls on expenses. Selling, general and administrative (“SG&A”) expenses were $126.1 million in the first quarter of 2019.
Share repurchases and dividends
In the first quarter of 2019, CI repurchased $60.8 million of shares and paid $43.9 million in dividends. To April 30, 2019, CI had repurchased 22.8 million shares under its current normal course issuer bid and is on track to meet its intention of buying the limit of 25.4 million shares. In August 2018, the Board of Directors declared a quarterly dividend of $0.18 per share to be paid for the remainder of 2018 and for all of 2019. The annual dividend rate of $0.72 per share represented a yield of 3.7% on CI’s closing share price of $19.25 on May 8, 2019. As of April 30, 2019, CI had 240,294,142 shares outstanding.
- Assante and Stonegate continue to deliver outstanding performance, with first quarter net sales up 4% over the same quarter a year ago, significantly ahead of the industry. Their presence in high net worth and ultra-high net worth markets continues to grow with an increasing number of clients with over $1 million invested.
- First Asset Investment Management Inc. reached a milestone of $5 billion in assets under management in exchange-traded funds during the first quarter. The inflow was led by actively managed ETFs such as CI First Asset Enhanced Government Bond ETF (TSX: FGO) and CI First Asset Global Financial Sector ETF (TSX: FSF).
- Following quarter-end, First Asset and CI Investments announced that First Asset ETFs will be rebranded as CI First Asset ETFs, effective April 29, 2019. The new branding reflects growing synergies between the two companies in product development, sales and marketing.
- Financial industry veteran William (Bill) Butt joined the CI Board of Directors. Mr. Butt, former Global Head of Investment and Corporate Banking at BMO Financial Group, is a recognized and accomplished leader in business, finance and investment strategy, and has extensive experience as a corporate director.
Analysts’ conference call
CI will hold a conference call with analysts today at 8:30 a.m. Eastern Time, led by Chief Executive Officer Peter Anderson and Chief Financial Officer Douglas Jamieson. The call and a slide presentation will be accessible through a webcast by visiting www.cifinancial.com. Alternatively, investors may listen to the discussion by dialing 1-800-952-5114 or (416) 406-0743 (Passcode: 6669156#). A replay of the call will be available until 11:59pm at 1-800-408-3053 or (905) 694-9451 (Passcode: 9229505#). The webcast will be archived in the Financial Information section of www.cifinancial.com.
|As at and for the quarters ended||Change (%)|
|[millions of dollars, except share amounts]||Mar. 31, 2019||Dec. 31, 2018||Mar. 31, 2018||QoQ||YoY|
|Assets under management||131,309||124,360||139,223||6||(6)|
|Assets under advisement||45,644||41,813||42,658||9||7|
|Average assets under management||128,887||129,316||141,870||(0)||(9)|
|Selling, general & administrative||126.1||123.5||132.9||2||(5)|
|Basic earnings per share||0.58||0.57||0.59||2||(2)|
|Diluted earnings per share||0.58||0.57||0.59||2||(2)|
|Free cash flow1||143.5||156.5||166.9||(8)||(14)|
|Return on equity2||37.7%||37.1%||39.3%|
|Dividends paid per share||0.1800||0.1800||0.3525||-||(49)|
|Average shares outstanding||241,946,976||246,810,100||269,648,509||(2)||(10)|
|Share price – High||19.44||20.68||30.23||(6)||(36)|
|Share price – Low||16.92||16.47||27.02||3||(37)|
|Share price – Close||18.24||17.28||27.60||6||(34)|
|Change in share price||5.6%||(15.7%)||(7.3%)|
|Total shareholder return||6.6%||(14.9%)||(6.1%)|
|Long term debt (including current portion)||1,528.5||1,503.7||1,366.3||2||12|
|Net debt to adjusted EBITDA1||1.50||1.51||1.13||(1)||33|
1Adjusted net income, free cash flow, net debt, and EBITDA are not standardized earnings measures prescribed by IFRS. Descriptions of these measures, as well as others, and reconciliations to the nearest IFRS measures, where necessary, are included in Management’s Discussion and Analysis available at www.cifinancial.com.
2Trailing 12 months, calculated using adjusted net income.
For detailed financial statements for the quarter ended March 31, 2019, including Management’s Discussion and Analysis, which contains discussions of non-IFRS measures, please refer to CI’s website at www.cifinancial.com under Financial Information, or contact email@example.com.
About CI Financial
CI Financial Corp. (TSX: CIX) is an independent Canadian company offering global asset management and wealth management advisory services. Its primary operating businesses are CI Investments Inc., Assante Wealth Management (Canada) Ltd., CI Private Counsel LP, GSFM Pty Ltd. of Australia, First Asset Investment Management Inc., WealthBar Financial Services Inc., and BBS Securities Inc. Further information is available at www.cifinancial.com.
This press release contains forward-looking statements concerning anticipated future events, results, circumstances, performance or expectations with respect to CI Financial Corp. (“CI”) and its products and services, including its business operations, strategy and financial performance and condition. Forward-looking statements are typically identified by words such as “believe”, “expect”, “foresee”, “forecast”, “anticipate”, “intend”, “estimate”, “goal”, “plan” and “project” and similar references to future periods, or conditional verbs such as “will”, “may”, “should”, “could” or “would”. These statements are not historical facts but instead represent management beliefs regarding future events, many of which by their nature are inherently uncertain and beyond management’s control. Although management believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, such statements involve risks and uncertainties. The material factors and assumptions applied in reaching the conclusions contained in these forward-looking statements include that the investment fund industry will remain stable and that interest rates will remain relatively stable. Factors that could cause actual results to differ materially from expectations include, among other things, general economic and market conditions, including interest and foreign exchange rates, global financial markets, changes in government regulations or in tax laws, industry competition, technological developments and other factors described or discussed in CI’s disclosure materials filed with applicable securities regulatory authorities from time to time. The foregoing list is not exhaustive and the reader is cautioned to consider these and other factors carefully and not to place undue reliance on forward-looking statements. Other than as specifically required by applicable law, CI undertakes no obligation to update or alter any forward-looking statement after the date on which it is made, whether to reflect new information, future events or otherwise.
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