AGF Management Limited Reports First Quarter 2023 Financial Results
TORONTO, March 22, 2023 (GLOBE NEWSWIRE) —
- Reported quarterly diluted earnings per share of $0.26
- Positive mutual fund net sales of $221 million for the quarter
- Increased quarterly dividend to $0.11 per share
AGF Management Limited (AGF or the Company) (TSX: AGF.B) today announced financial results for the first quarter ended February 28, 2023.
AGF reported total assets under management and fee-earning assets1 of $41.9 billion compared to $41.8 billion as at November 30, 2022 and $42.0 billion as at February 28, 2022. Year-over-year, the slight AUM decline was driven by market volatility, offset by positive net sales.
“During a time of market uncertainty, we remain focused on providing our clients with consistency when it comes to our performance, our investment approach and our client interactions,” said Kevin McCreadie, Chief Executive Officer and Chief Investment Officer, AGF. “We are well-positioned with a robust platform of global strategies across multiple vehicles and asset classes designed to meet the ever-evolving needs of our clients.”
AGF’s mutual fund gross sales were $982 million for the quarter compared to $989 million in the comparative period. Mutual fund net sales were $221 million compared to $330 million in the comparative period, marking the 10th consecutive quarter of positive net sales. AGF’s sales have continued to outpace the industry. During the quarter, the industry2 reported net redemptions, while AGF mutual funds remained in net sales.
“Given AGF’s solid performance this quarter, we continued to experience strong flows and positive net sales, while leveraging our partnerships,” said Judy Goldring, President and Head of Global Distribution, AGF. “We are seeing success with our sales strategy as we focus on the IIROC channel in Canada and gain momentum through our turnkey asset management programs in the U.S.”
“We take a thoughtful approach to expense management,” added McCreadie. “However, our strong investment performance and continued execution against our sales strategy will have an initial short-term impact on our profitability driven by an increase in success-based expenses.”
|1||Fee-earning assets represents assets in which AGF has carried interest ownership and earns recurring fees but does not have ownership interest in the managers.|
|2||Total long-term mutual funds in the Canadian mutual funds industry per Investment Funds Institute of Canada (IFIC).|
Key Business Highlights:
- AGF announced a 10% increase to its first quarter dividend to $0.11 per share payable on April 21, 2023 to shareholders on record as at April 11, 2023.
- As at February 28, 2023, AGF’s investment performance outperformed its one- and three-year targets (50% and 40% respectively, with 1st percentile being best possible performance) with an average one-year percentile of 36%, up from 56% in 2022, and an average three-year percentile of 33%, up from 46% in 2022.
- The firm’s investment performance spans across a broad range of categories and styles, where 70% and 75% of its strategies outperformed their peers on a 1- and 3-year basis, respectively, based on gross returns (before fees) within the same category.
- Over 60% of AGF’s Series F funds available in Canada managed by AGF Investments Inc. have a 4 or 5-star Overall Morningstar Rating across all asset classes as of February 28, 2023.*
- AGF Investments Inc. was recognized with FundGrade A+® Awards for AGF American Growth Class, AGF Fixed Income Plus Fund, AGF Global Convertible Bond Fund and AGF Global Select Fund.**
- In January, the firm announced new ETF and mutual fund names unified under the AGF brand in order to better reflect the continued integration of AGF’s quantitative and fundamental investing teams.
- W. Robert (Bob) Farquharson has retired from the AGF Board of Directors and has been named Vice-Chairman Emeritus in recognition of his long and successful career at AGF. He first joined AGF in 1963 as an analyst and over a period of 60 years, managed a number of AGF funds and served the company in senior executive and director roles.
- Total net revenue, was $80.1 million for the three months ended February 28, 2023, compared to $81.7 million for the three months ended November 30, 2022, and $89.3 million for the comparative prior year period. The decline was influenced by lower income on Private Capital long-term investments, which can be variable quarter to quarter and impacted by the timing of monetizations and cash distributions.
- Selling, general and administrative costs were $53.0 million for the three months ended February 28, 2023, compared to $49.3 million in 2022. The increase in SG&A was influenced by the continued improvement in investment performance and a 39% increase in the AGF.B share price.
- EBITDA before commissions for the three months ended February 28, 2023 was $27.1 million, compared to $40.0 million in the prior year comparative period.
- Net income for the three months ended February 28, 2023 was $17.6 million ($0.26 diluted EPS), compared to $12.9 million ($0.18 diluted EPS) in the prior year comparative period.
|Three months ended|
|February 28,||November 30,||February 28,|
|(in millions of Canadian dollars, except per share data)||2023||2022||2022|
|Management, advisory and administration fees||$||106.8||$||103.0||$||112.6|
|Trailing commissions and investment advisory fees||(33.8)||(32.5)||(35.6)|
|Net management, advisory and administration fees1||$||73.0||$||70.5||$||77.0|
|Deferred sales charges||1.8||1.8||1.5|
|Share of profit (loss) of joint ventures||0.3||0.5||(0.6)|
|Other income from fee-earning arrangements||0.7||0.8||0.8|
|Fair value adjustments and other income||4.3||8.1||10.6|
|Total net revenue1||80.1||81.7||89.3|
|Selling, general and administrative||53.0||51.5||49.3|
|Deferred selling commissions||–||–||19.3|
|EBITDA before commissions1||27.1||30.2||40.0|
|Diluted earnings per share||0.26||0.32||0.18|
|Free cash flow1||19.3||24.1||13.3|
|Dividends per share||0.10||0.10||0.09|
|(end of period)||Three months ended|
|February 28,||November 30,||February 28,|
|(in millions of Canadian dollars)||2023||2022||2022|
|Mutual fund Assets Under Management (AUM)2||$||24,029||$||23,898||$||23,625|
|Institutional, sub-advisory and ETF accounts AUM||8,511||8,514||8,751|
|Private Wealth AUM||7,252||7,275||7,410|
|Private Capital AUM||54||55||69|
|Private Capital fee-earning assets3||2,082||2,077||2,100|
|Total AUM and fee-earning assets3||41,928||41,819||41,955|
|Mutual fund net sales2||221||251||330|
|Average daily mutual fund AUM2||23,782||22,504||24,075|
|1||Net management, advisory and administration fees, total net revenue, EBITDA before commissions, EBITDA, 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.|
|2||Mutual fund AUM includes retail AUM, pooled fund AUM and institutional client AUM invested in customized series offered within mutual funds.|
|3||Fee-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 first quarter ended February 28, 2023, 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.
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.
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 delivering excellence in investing in the public and private markets through its three distinct business lines: AGF Investments, AGF Private Capital and AGF Private Wealth.
AGF brings a disciplined approach focused on providing an exceptional client experience and incorporating sound responsible and sustainable practices. The firm’s investment solutions, driven by its fundamental, quantitative and private investing capabilities, extends globally to a wide range of clients, from financial advisors and their clients to high-net worth and institutional investors including pension plans, corporate plans, sovereign wealth funds, endowments and foundations.
Headquartered in Toronto, Canada, AGF has investment operations and client servicing teams on the ground in North America and Europe. With nearly $42 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:
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 2022 Annual MD&A.
Morningstar Ratings reflect performance as of February 28, 2023 and are subject to change monthly. The Overall Morningstar Rating measures risk-adjusted returns and is derived from a weighted average of the performance figures associated with its 3-, 5- and 10-year (if applicable) ratings. For more information see www.morningstar.ca.
© 2023 Morningstar Inc., All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.
Learn More: https://www.agf.com/en/top-
**About the Fundata FundGrade A+ Rating
FundGrade A+® is used with permission from Fundata Canada Inc., all rights reserved. The annual FundGrade A+® Awards are presented by Fundata Canada Inc. to recognize the “best of the best” among Canadian investment funds. The FundGrade A+® calculation is supplemental to the monthly FundGrade ratings and is calculated at the end of each calendar year. The FundGrade rating system evaluates funds based on their risk-adjusted performance, measured by Sharpe Ratio, Sortino Ratio, and Information Ratio. The score for each ratio is calculated individually, covering all time periods from 2 to 10 years. The scores are then weighted equally in calculating a monthly FundGrade. The top 10% of funds earn an A Grade; the next 20% of funds earn a B Grade; the next 40% of funds earn a C Grade; the next 20% of funds receive a D Grade; and the lowest 10% of funds receive an E Grade. To be eligible, a fund must have received a FundGrade rating every month in the previous year. The FundGrade A+® uses a GPA-style calculation, where each monthly FundGrade from “A” to “E” receives a score from 4 to 0, respectively. A fund’s average score for the year determines its GPA. Any fund with a GPA of 3.5 or greater is awarded a FundGrade A+® Award. For more information, see https://www.
AGF American Growth Class won in the U.S. Equity CIFSC Category, out of 836 funds. The FundGrade A+ start date was 1/31/2013 and the FundGrade A+ end date was 12/31/2022.
AGF Fixed Income Plus Fund won in the Canadian Fixed Income CIFSC Category, out of 311 funds. The FundGrade A+ start date was 1/31/2013 and the FundGrade A+ end date was 12/31/2022.
AGF Global Convertible Fund won in the High Yield Fixed Income CIFSC Category, out of 191 funds. The FundGrade A+ start date was 1/31/2016 and the FundGrade A+ end date was 12/31/2022.
AGF Global Select Fund won in the Global Equity CIFSC Category, out of 1146 funds. The FundGrade A+ start date was 1/31/2013 and the FundGrade A+ end date was 12/31/2022.
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