Sprott Inc. Press Releases
Sprott Inc. Announces 2017 First Quarter Results
TORONTO, May 10, 2017 (GLOBE NEWSWIRE) -- Sprott Inc. (TSX: SII) (“Sprott” or the “Company”) today announced its financial results for the three months ended March 31, 2017.
Q1 2017 Financial Overview:
- Assets Under Management (“AUM”) were $9.7 billion as at March 31, 2017, compared to $9.2 billion as at December 31, 2016.
- Total net revenues were $30.2 million, reflecting an increase of $2.5 million (9%) from the three months ended March 31, 2016.
- Total expenses (excluding trailer fees and sub-advisor fees) were $20.1 million, reflecting a decrease of $5.7 million (22%) from the three months ended March 31, 2016.
- Net income was $8.8 million ($0.04 per share), reflecting an increase of $7.5 million from the three months ended March 31, 2016.
- Adjusted base EBITDA was $15.9 million ($0.06 per share), reflecting an increase of $10.7 million from the three months ended March 31, 2016.
- Investable capital stood at $309.3 million as at March 31, 2017, compared to $309.0 million as at December 31, 2016.
Significant events for the three-months ended March 31, 2017 and YTD:
- Announced agreement to sell Canadian diversified assets for $46 million
- Sprott Private Resource Lending LP completed second close, raising US$560 million
- Re-capitalized Sprott Resource Corp. through business combination with Adriana Resources Inc. to create Sprott Resource Holdings Inc., a new vehicle with $90 million in resource investments and more than $75 million in cash to invest
- Launched Sprott Capital Partners
- Subject to obtaining all required approvals, including that of the Toronto Stock Exchange, Sprott intends to make a normal course issuer bid to purchase up to 5% of the issued and outstanding common shares of the Company
"In April, coming off a strong year for both the diversified and resource-focused sides of our business, we announced an agreement to sell our Canadian diversified assets to a management-led group," said Peter Grosskopf, CEO of Sprott. "We believe this move positions us well to focus on our core competencies as a manager of precious metal, resource and real asset investments."
"We are pleased with our recent success raising capital in our resource-oriented strategies. In April, we completed the second close of our Private Resource Lending LP, raising US$560 million and we look forward to building on this success through additional assignments with institutional accounts," added Mr. Grosskopf. "Our merchant banking business is also growing and we expect it to be a meaningful contributor to our financial results in 2017."
Assets Under Management
|$ (in millions)||AUM
Dec. 31, 2016
|Net Sales /
Mar. 31, 2017
|Alternative Asset Management: (1)|
|Alternative Investment Funds||1,085||44||23||(131)||1,021|
|Private Resource Investments:|
|Private Resource Lending Funds||49||—||4||—||53|
|Fixed-term limited partnerships||343||—||3||—||346|
|Total Enterprise AUM||9,248||(55)||467||32||9,692|
(1) On April 10, the Company announced the agreement to sell its Canadian diversified funds business to a management group for $46 million. As part of the transaction, the Company will sell approximately $3 billion of its Alternative Asset Management AUM, of which $865 million will continue to be sub-advised by SAM.
On May 9, 2017, a dividend of $0.03 per common share was declared for the quarter ended March 31, 2017.
Conference Call and Webcast
A conference call and webcast will be held today, May 10, 2017 at 10:00am 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 20010419. A taped replay of the conference call will be available until Wednesday, May 17, 2017 by calling (855) 859-2056, reference number 20010419. The conference call will be webcast live at www.sprottinc.com and http://edge.media-server.com/m/p/hh35w9dt
*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) Sprott’s intention to make a normal course issuer bid; (ii) Sprott’s agreement to sell its Canadian diversified fund business to a management group and the expected benefits therefrom; (iii) continued growth of Sprott’s key franchises, while also seeding and launching new products in capacity-constrained areas of the asset management industry; (iv) new institutional product launches; (v) expectations regarding the contributions of Sprott’s merchant banking business; and (vi) the declaration, payment and designation of dividends.
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 March 31, 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 March 31, 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 Inc. is a global alternative asset manager with three primary lines of business: Exchange-Listed Products, Alternative Asset Management and Private Resource Investments. The Exchange-Listed Products business platform houses the Company's closed-end physical trusts and exchange traded funds, both of which are actively traded on public securities exchanges. Sprott Asset Management LP ("SAM") is both the principal subsidiary and reportable segment through which these products are managed and distributed. The Diversified Alternative Asset Management business platform houses the Company's full suite of public mutual funds, alternative investment strategies and managed accounts and is also managed by SAM. The Private Resources business platform houses the Company's private resource-focused asset management activities. Primary activities include the management of: (1) U.S.-based fixed-term limited partnership vehicles, discretionary managed accounts and private placement activities; (2) direct and indirect resource lending activities via the Company’s balance sheet and through limited partnership structures; and (3) private equity style and direct asset investments through managed companies. Specific reportable segments and principal subsidiaries in this line of business are; Global - which is made up of Resource Capital Investment Corporation, Sprott Asset Management USA Inc. and Sprott Global Resource Investments Ltd.; Lending - which is primarily Sprott Resource Lending Corp.; and Consulting - which includes Sprott Consulting LP, Sprott Toscana and Sprott Korea Corporation. Sprott Inc. is headquartered in Toronto, Canada, and is listed on the Toronto Stock Exchange under the symbol “SII”. For more information, please visit www.sprottinc.com.
Managing Director, Investor Relations
Telephone Direct: 416.943.4394