SCEPTRE INVESTMENT COUNSEL LIMITED
TSX : SZ

SCEPTRE INVESTMENT COUNSEL LIMITED

March 25, 2010 15:43 ET

Sceptre Investment Counsel Limited Reports Q1 2010 Results

TORONTO, ONTARIO--(Marketwire - March 25, 2010) - Sceptre Investment Counsel Limited (TSX:SZ), a leading independent Canadian money management firm, today reported its financial results for the three months ended February 28, 2010.

In the first quarter of 2010, the Company earned $1,159,000 or 8 cents per share fully diluted (8 cents per share basic). Earnings for the first quarter of 2009 were $914,000 or 7 cents per share fully diluted (7 cents per share basic).

Q1 Revenue

The appreciation in the level of equity markets compared to a year ago increased the level of assets under management, and positively impacted the Company's first quarter 2010 revenues relative to the first quarter in 2009.

Total revenue for the first quarter of 2010 was $7.46 million versus $6.50 million in the first quarter of 2009, representing an increase of $0.96 million or 14.8%. This resulted from of a $0.92 million increase in investment management revenue and an increase in investment income of $0.04 million.

Total investment management revenue for the quarter was $7.28 million, versus $6.36 million for the first quarter last year. Institutional revenue increased by 12.6% to $4.75 million from $4.22 million in the first quarter of 2009 as assets at the Billing Point (December 31st (1)) increased from $5.93 billion last year to $6.24 billion this year due to the recovery in equity markets. Mutual fund revenue was $1.51 million this quarter versus $1.14 million in the same quarter last year as average assets increased by 36.0% from $375 million last year to $510 million this year, due to market appreciation. Private Client revenue was $1.02 million for the quarter versus $1.00 million in the same quarter last year as average assets increased from $529 million last year to $549 million this year. Investment income increased by $44 thousand compared to the same quarter last year, due to the realized gains on sale of corporate investments, partially offset by lower distribution income.

Q1 Expenses

Revenue related expenses (sub-advisory fees, trailer fees and referral fees) increased by $0.18 million this quarter from a year ago, from $1.00 million to $1.18 million, in line with the growth in assets subject to those charges. Other operating expenses increased by $0.46 million versus a year-ago, to $4.57 million from $4.11 million primarily due to higher profitability related remuneration and higher compensation due to employee promotions.

The Company, having considered its financial requirements, has declared a quarterly dividend of 6 cents per share on outstanding common shares, payable on April 30, 2010 to shareholders of record April 6, 2010. The previous quarterly dividend was 6 cents per share.

Fiscal Period Asset Continuity

Q1 2010
(in $ thousands)                  
  Opening AUM Net Cash Flows   Market Appreciation Closing AUM
    $   $     $   $
Pension and other Institutional $ 6,099,550 $ 30,000   $ 38,149 $ 6,167,699
Private Client   601,012   (19,140 )   691   582,563
Retail Mutual Funds   492,394   (7,935 )   24,573   509,032
Total $ 7,192,956 $ 2,925   $ 63,413 $ 7,259,294

(1) Sceptre recognizes revenue from most institutional clients based on asset levels at the end of each calendar quarter ("the billing points"). Therefore, Q1 institutional revenue is based on institutional assets at December 31st. This applies only to institutional revenues as mutual fund and private client revenues are charged based on average daily market values during each fiscal quarter.

About Sceptre Investment Counsel

Sceptre Investment Counsel Limited is a leading Canadian independent investment management firm with assets under supervision of approximately $7.3 billion. The Company's Pension and Institutional Fund group manages investment portfolios for a wide range of clients, including corporations, governments, hospitals, charitable foundations, endowments, universities and unions. Through its Wealth Management group, Sceptre provides discretionary funds and segregated account management for high net-worth individuals, and offers a family of eight mutual funds. Sceptre employs 60 people in its offices in Toronto, Waterloo, Montreal and Vancouver. Sceptre's common shares trade on the Toronto Stock Exchange, under the symbol SZ.

INTERIM CONSOLIDATED BALANCE SHEETS            
In thousands of dollars            
(Unaudited)            
    As at  
    February 28     November 30  
    2010     2009  
   
Assets            
             
Current Assets            
  Cash $ 268   $ 44  
  Available-for-sale financial assets   12,837     13,920  
  Accounts receivable   2,440     1,842  
  Income taxes recoverable   2,024     2,102  
  Pre-funded compensation   738     738  
  Current portion of loans to related parties   10     11  
    18,317     18,657  
             
Furniture, equipment and leaseholds   728     767  
Loans to related parties   5     10  
Pre-funded compensation   515     676  
Value of customer relationships and other            
  intangibles net of accumulated amortization   3,386     3,491  
Goodwill   3,575     3,575  
  $ 26,526   $ 27,176  
Liabilities            
             
Current Liabilities            
  Accounts payable            
    and accrued liabilities $ 2,632   $ 2,703  
  Current portion of future income taxes   41     10  
  Bonuses due to employees   623     1,557  
    3,296     4,270  
             
Future income taxes   116     168  
    3,412     4,438  
   
Shareholders' Equity            
Capital stock   16,228     16,228  
Contributed surplus   2,207     2,110  
Retained earnings   5,165     4,848  
Accumulated other comprehensive loss   (486 )   (448 )
    23,114     22,738  
  $ 26,526   $ 27,176  
 
INTERIM CONSOLIDATED STATEMENTS OF EARNINGS
In thousands of dollars except per share amounts
(Unaudited)
    For the three months ended  
    February 28 2010       February 28 2009  
               
Revenue              
Investment management fees $ 7,277   $ 6,359  
Investment income   180       136  
    7,457       6,495  
Expenses              
Operating expenses   4,414       3,954  
Trailer and referral fees   339       215  
Sub-advisory fees   837       781  
Amortization of furniture, equipment and leaseholds   46       50  
Amortization of intangible assets   105       105  
    5,741       5,105  
Earnings before income taxes   1,716       1,390  
Provision for income taxes   574       486  
Provision for future income taxes   (16 )     (10 )
    557       476  
Net earnings for the period $ 1,159     $ 914  
   
Earnings per share              
Basic $ 0.08   $ 0.07  
Diluted $ 0.08   $ 0.07  

Contact Information

  • Sceptre Investment Counsel Limited
    David R. Morris
    Chief Operating Officer and Chief Financial Officer
    (416) 360-4805