Sprott Inc. Press Releases
Sprott Announces 2017 Third Quarter Results
TORONTO, ON--(Marketwired - November 09, 2017) - Sprott Inc. (TSX: SII) ("Sprott" or the "Company") today announced its financial results for the three months ended September 30, 2017.
Financial Overview for the three-months ended September 30, 2017:
- Assets Under Management ("AUM") were $7.2 billion as at September 30, 2017, compared to $9.3 billion as at June 30, 2017.
- Total net revenues were $54.5 million, reflecting an increase of $18.6 million (52%) from the three months ended September 30, 2016.
- Total expenses (excluding commission expense, trailer fees and sub-advisor fees) were $21.3 million, reflecting a decrease of $0.2 million (1%) from the three months ended September 30, 2016.
- Net income was $29.8 million ($0.13 per share), reflecting an increase of $17.3 million from the three months ended September 30, 2016.
- Adjusted base EBITDA was $8.0 million ($0.03 per share), reflecting a decrease of $0.4 million from the three months ended September 30, 2016.
- Investable capital stood at $307 million as at September 30, 2017, compared to $309 million as at December 31, 2016.
Significant events for the three-months ended September 30, 2017 and year-to-date:
- Finalized sale of Canadian retail asset management contracts.
- Entered agreement to acquire management of Central Fund of Canada Limited that is expected to close in Q1 2018.
- Announced joint venture with Ceres Partners LLC.
"In October, we announced an important strategic acquisition through our agreement to acquire management of Central Fund of Canada Ltd. ("CFCL"). The transaction is expected to double our managed physical bullion holdings to nearly $9 billion, while increasing our total assets under management to approximately $11.5 billion," said Peter Grosskopf, CEO of Sprott. "We expect this acquisition to increase the revenue, earnings and profit margins of our exchange-listed product business and we look forward to expanding our US client base with the addition of approximately 90,000 CFCL shareholders."
"All of our business units are currently growing and raising new pools of capital for resource investments," added Mr. Grosskopf. "We are committed to launching new institutional strategies in order to build on the strong working relationships we established with US institutions and endowments through the successful raise of the US$640 million Sprott Private Resource Lending LP. Since finishing fundraising, we have enjoyed a strong pipeline of opportunities and announced a number of completed transactions. To date, US$150 million of the total capital committed to the LP has been deployed."
Assets Under Management
|$ (in millions)||AUM June 30, 2017||Net Sales / (Redemptions)||Net Market Value Change||Transfers / Acquisitions / (Divestitures)||AUM
September 30, 2017
|Alternative Asset Management: (1)|
|Alternative Investment Funds||1,065||1||4||(849)||221|
|Private Resource Investments:|
|Private Resource Lending Funds||74||114||-||-||188|
|Fixed-term limited partnerships||325||-||(1)||-||324|
|Total Enterprise AUM||9,306||84||(119)||(2,079)||7,192|
On November 8, 2017, a dividend of $0.03 per common share was declared for the quarter ended September 30, 2017.
Normal Course Issuer Bid
Sprott is pleased to announce that the Toronto Stock Exchange ("TSX") has approved the notice of its intention to make a normal course issuer bid ("NCIB").
Pursuant to the terms of the NCIB, Sprott may purchase its own common shares (the "Shares") for cancellation through the facilities of the TSX at the prevailing market price of the Shares. It is expected that the maximum number of Shares which may be purchased by Sprott during the NCIB will not exceed 12,188,761, being approximately 5% of 243,775,228 (representing the number of issued and outstanding Shares as of October 31, 2017). The average daily trading volume (the "ADTV") of the Shares on the TSX for the six-month period ended October 31, 2017 was 178,660. Under the rules of the TSX, Sprott is entitled to repurchase during the same trading day on the TSX up to 25% of the ADTV of the Shares, being 44,665 Shares, except where such purchases are made in accordance with the "block purchase" exemption under applicable TSX policy. Sprott will effect purchases at varying times commencing on November 15, 2017 and ending on November 14, 2018.
To facilitate repurchases of the Shares under the NCIB, Sprott has entered into an automatic repurchase plan with TD Securities Inc. (the "Broker"). The automatic repurchase plan allows for purchases by the Company of the Shares when the Company would ordinarily be prevented from making purchases due to regulatory restriction or self-imposed blackout periods. Purchases will be made by the Broker based upon the parameters prescribed by the TSX and the terms of the parties' written agreement.
In addition to providing shareholders liquidity, Sprott believes that the Shares have been trading in a price range which does not adequately reflect the value of such shares in relation to the Company's business and its future prospects. As a result, Sprott believes that its outstanding Shares may represent an attractive investment.
Conference Call and Webcast
A conference call and webcast will be held today, November 9, 2017 at 8:30am ET to discuss the Company's financial results. To participate in the call, please dial (855) 458-4215 ten minutes prior to the scheduled start of the call and provide conference ID 9474679. A taped replay of the conference call will be available until Thursday, November 16, 2017 by calling (855) 859-2056, reference number 9474679. The conference call will be webcast live at www.sprott.com and https://edge.media-server.com/m6/p/twir7abv.
*Non-IFRS Financial Measures
This press release includes financial terms (including AUM, EBITDA, adjusted base 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.
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 regarding Sprott's agreement to acquire management of CFCL; (ii) growing the Company's business units and raising new pools of capital for resource investments; (iii) launching new institutional strategies in order to build on the strong working relationships we established with US institutions and endowments through the successful raise of the US$640 million Sprott Private Resource Lending LP; (iv) the declaration, payment and designation of dividends; and (v) future purchases by Sprott of the Shares pursuant to the NCIB . 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) the impact of increasing competition in each business in which the Company operates will not be material; (ii) quality management will be available; (iii) the effects of regulation and tax laws of governmental agencies will be consistent with the current environment; and (iv) those assumptions disclosed under the heading "Significant Accounting Judgments and Estimates" in the Company's MD&A for the period ended September 30, 2017. 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) poor investment performance; (iii)performance fee fluctuations; (iv) changes in the investment management industry; (v) risks related to regulatory compliance; (vi) failure to deal appropriately with conflicts of interest; (vii) failure to continue to retain and attract quality staff; (viii) competitive pressures; (ix) corporate growth may be difficult to sustain and may place significant demands on existing administrative, operational and financial resources; (x) failure to execute the Company's succession plan; (xi) foreign exchange risk relating to the relative value of the U.S. dollar; (xii) litigation risk; (xiii) employee errors or misconduct could result in regulatory sanctions or reputational harm; (xiv) failure to implement effective information security policies, procedures and capabilities; (xv) failure to develop effective business resiliency plans; (xvi) failure to obtain or maintain sufficient insurance coverage on favourable economic terms; (xvii) historical financial information is not necessarily indicative of future performance; (xviii) the market price of common shares of the Company may fluctuate widely and rapidly; (xix) risks relating to the Company's proprietary investments; (xx) risks relating to the Company's lending business; (xxi) those risks described under the heading "Risk Factors" in the Company's annual information form dated March 1, 2017; and (xxii) those risks described under the headings "Managing Risk - Financial" and "Managing Risk - Other" in the Company's MD&A for the period ended September 30, 2017. 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.
Sprott is an alternative asset manager and a global leader in precious metal and real asset investments. Through its subsidiaries in Canada, the US and Asia, the Corporation is dedicated to providing investors with best-in-class investment strategies that include Exchange-Listed Products, Alternative Asset Management and Private Resource Investments. The Corporation also operates Merchant Banking and Brokerage businesses in both Canada and the US. Sprott is based in Toronto with offices in New York, Carlsbad and Vancouver and its common shares are listed on the Toronto Stock Exchange under the symbol (TSX: SII). For more information, please visit www.sprott.com.
Managing Director, Investor Relations