IGM Financial Inc.

IGM Financial Inc.

May 02, 2008 10:45 ET

IGM Financial Inc. Reports First Quarter Earnings

Readers are referred to the disclaimer regarding Forward-Looking Information at the end of this Release.

WINNIPEG, MANITOBA--(Marketwire - May 2, 2008) - IGM Financial Inc. (IGM or the Company) (TSX:IGM) today announced earnings results for the first quarter of 2008.

Net income for the three months ended March 31, 2008 was $211.2 million compared to $210.5 million in 2007. Earnings per share were 79 cents unchanged from the prior year.

Gross revenues for the three months ended March 31, 2008 were $714.7 million, compared to $720.8 million in the prior year. Operating expenses were $424.4 million for the quarter, compared to $410.5 million in 2007.

Total assets under management at March 31, 2008 were $119.0 billion. This compared with total assets under management of $123.4 billion at March 31, 2007, a decrease of 3.6%.

Shareholders' equity at March 31, 2008 was $4.2 billion, unchanged from December 31, 2007. Return on average common equity for the three months ended March 31, 2008 was 20.2% compared with 21.6% for the same period in 2007.


The number of Investors Group Consultants was 4,342 at March 31, 2008 up from 4,331 at December 31, 2007 and up 9% from 3,985 at March 31, 2007.

"We are pleased to see our 15th consecutive quarter of growth in our Consultant network, up more than 35% since June 30, 2004," said Murray J. Taylor, President and Chief Executive Officer of Investors Group Inc. "We continue to experience a low 12 month redemption rate of 7.4% for long-term mutual funds."

Mutual fund sales for the first quarter were $2.0 billion compared to $2.3 billion in the prior year and mutual fund net sales for the first quarter were $510 million compared to $1.0 billion a year ago.

Investors Group's twelve month trailing redemption rate (excluding money market funds) was 7.4% at March 31, 2008, compared to 7.3% at December 31, 2007 and down from 7.7% at March 31, 2007.

Investors Group's mutual fund assets under management at March 31, 2008 were $58.6 billion compared to $60.2 billion at March 31, 2007, a decrease of 2.7%.


Total sales for first quarter of 2008 were $3.1 billion compared to $3.7 billion in the prior year. Total net redemptions for the first quarter were $102 million compared to net sales of $605 million in the prior year.

"During the first quarter of 2008, global stock market volatility affected asset growth and slowed long term fund sales relative to the prior year, but we are pleased with the strong relative out-performance of many of our mutual funds with 60% of our funds delivering first or second quartile performance over the last twelve months," said Charles R. Sims, President and Chief Executive Officer of Mackenzie Financial Corporation. "We continue to feel our investment portfolios are positioned to take advantage of the current market uncertainty," he added.

Mackenzie's total assets under management at March 31, 2008 totalled $60.9 billion. This compares with assets under management of $63.7 billion at March 31, 2007, a decrease of 4.4%. Mutual fund assets under management at March 31, 2008 were $44.6 billion, a decrease of 6.8% from one year ago.


The Board of Directors declared a quarterly dividend of $0.359375 per share on the Company's 5.75% Non-Cumulative First Preferred Shares, Series "A" payable on June 30, 2008 to shareholders of record on May 30, 2008 and has declared a dividend of 48.75 cents per share on the Company's common shares payable on July 25, 2008 to shareholders of record on June 23, 2008.


This Release may contain 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", "anticipates", "plans", "believes", "estimates", "intends", "targets", "projects", "forecasts" or negative versions thereof and other 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 revenues, earnings or growth rates), ongoing business strategies or prospects, and possible future Company action, is also a forward-looking statement. 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 the Company, 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 the Company due to, but not limited to, important factors such as general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, management of market liquidity and funding risks, changes in accounting policies and methods used to report financial condition, including uncertainties associated with critical accounting assumptions and estimates, the effect of applying future accounting changes, business competition, technological change, changes in government regulations and legislation, changes in tax laws, unexpected judicial or regulatory proceedings, catastrophic events, the Company's ability to complete strategic transactions and integrate acquisitions and the Company's success in anticipating and managing the foregoing risks. The reader is cautioned that the foregoing list of important factors is not exhaustive. The reader is also cautioned to consider these and other factors carefully and not place undue reliance on forward-looking statements. Other than as specifically required by applicable law, the Company has no specific intention to update any forward-looking statements whether as a result of new information, future events or otherwise.

A review of activities and performance for IGM Financial Inc., together with financial details and a management discussion, will be published in the Company's 2008 First Quarter Report to Shareholders which should be mailed to shareholders on or about May 14, 2008.

IGM Financial Inc. is one of Canada's premier personal financial services companies, and the country's largest manager and distributor of mutual funds and other managed asset products, with over $122 billion in total assets under management. Its activities are carried out principally through Investors Group, Mackenzie Financial and Investment Planning Counsel. IGM Financial Inc. is a member of the Power Financial Corporation group of companies.

Media Note: A live webcast of IGM's Analyst conference call for the First Quarter 2008 will be held Friday, May 2, 2008, at 3:30 P.M. (ET) at www.igmfinancial.com. Media and interested parties may alternatively choose to listen to the live analyst teleconference call by dialing 1-888-280-8349 or (416) 695-9719.

Consolidated Statements of Income

(unaudited) Three months ended March 31
(in thousands of dollars, except shares 2008 2007
and per share amounts)

Fee and net investment income
Management $ 490,649 $ 511,836
Administration 87,502 83,757
Distribution 75,687 62,169
Net investment income and other 60,844 63,029

Total fee and net investment income 714,682 720,791

Operating expenses
Commission expense 234,994 231,404
Non-commission expense 167,411 157,199
Interest expense 21,990 21,851

Total operating expenses 424,395 410,454

Income before income taxes and
non-controlling interest 290,287 310,337
Income taxes 78,555 99,147

Income before non-controlling interest 211,732 211,190
Non-controlling interest 529 641

Net income $ 211,203 $ 210,549

Average number of common shares
(in thousands)
- Basic 264,116 264,944
- Diluted 266,154 267,671

Earnings per share (in dollars)
- Basic $ 0.80 $ 0.79
- Diluted $ 0.79 $ 0.79

Financial Highlights

As at and for the three months
ended March 31 (unaudited) 2008 2007 Change

Net income ($ millions) $ 211.2 $ 210.5 0.3 %

Diluted earnings per share 0.79 0.79 -

Return on equity 20.2% 21.6%

Dividends per share 0.4875 0.4275 14.0

Total Assets under management (1)
($ millions) $ 118,957 $ 123,414 (3.6) %
Investors Group
Mutual funds 58,582 60,179 (2.7)
Mutual funds 44,555 47,823
Sub-advisory, institutional
and other accounts 16,325 15,828
Total 60,880 63,651 (4.4)
Counsel Group of Funds
Mutual funds 2,180 2,296 (5.1)


For the three months Investors Group of
ended March 31, 2008 Group Mackenzie Funds Total(2)

Mutual Funds and
Institutional Sales
($ millions)

Gross sales $ 1,953 $ 3,136 $ 84 $ 5,101
Net sales 510 (102) 3 397


(1) Total assets under management excludes $2.7 billion of assets
sub-advised by Mackenzie on behalf of Investors Group ($2.7 billion at
March 31, 2007) and is adjusted for $28 million in inter-segment assets
($35 million at March 31, 2007).

(2) Total Gross Sales and Net Sales exclude $72 million and $14 million
respectively in accounts sub-advised by Mackenzie on behalf of
Investors Group.

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