SCEPTRE INVESTMENT COUNSEL LIMITED
TSX : SZ

SCEPTRE INVESTMENT COUNSEL LIMITED

January 15, 2008 16:08 ET

Sceptre Investment Counsel Reports Q4 & Fiscal 2007 Results

Earnings Increase 38% Year Over Year

TORONTO, ONTARIO--(Marketwire - Jan. 15, 2008) - Sceptre Investment Counsel Limited (TSX:SZ), a leading independent Canadian money management firm, today reported its financial results for the three- and 12-month periods ended November 30, 2007.

Fourth quarter earnings were $2,529,000 or 18 cents per share fully diluted (18 cents per share basic), compared with $1,383,000 or 10 cents per share fully diluted (10 cents per share basic) for the same period last year. Earnings for the 12 months ended November 30, 2007 were $7,354,000 or 52 cents per share fully diluted (53 cents per share basic), compared with a restated (Note 1 to attached financial statement) $5,339,000 or 38 cents per share fully diluted (38 cents per share basic) in 2006. Earnings in the quarter benefited from a gain of $830,000 from the sale of a management contract, the gain of which was partially tax sheltered.

Revenue for the fourth quarter was $10,485,000, compared with $7,195,000 for the fourth quarter last year. Revenue for the 12 months ended November 30, 2007 was $38,413,000, compared with a restated $27,488,000 for fiscal 2006.

For the fiscal year pension and institutional revenues increased by 24%. Mutual funds and private client revenues grew by 67%, a large part due to the Legg Mason Private Client acquisition. Investment income rose by 12%.

Total expenses for fiscal 2007 increased by 40% over the prior year mainly due to the acquisition of Legg Mason Canada's Private Client group. Other non-acquisition related expense increases included sub-advisory fees paid to AllianceBernstein (+35%), travel and promotion (+126%) and donations (+28%). These increases were directly related to the growth in assets under management, client servicing and new client opportunities.

"Overall, the year was quite gratifying as our financial performance continued to improve and our investment performance remained strong. As well, we successfully integrated the Legg Mason Private Client group into the Sceptre organization" said Richard Knowles, President and Chief Executive Officer.

He added, "In 2007, strong domestic equity markets provided the majority of the investment returns for our clients. Bond returns were reasonable while International and U.S. equity returns were adversely affected by the significant appreciation of the Canadian dollar against most foreign currencies.

We anticipate a more active year for new business opportunities based on our strong long term investment track records and a number of new product initiatives. Market conditions, however, will remain unsettled as a result of on-going global credit concerns."

The Company, having considered its financial requirements, new business opportunities and market outlook, has declared a quarterly dividend of 12 cents per share on outstanding common shares, payable on January 31, 2008 to shareholders of record January 24, 2008. The previous quarterly dividend was 12 cents per share. Total dividends declared for the fiscal year rose by 35% as compared to the prior fiscal year.

About Sceptre Investment Counsel

Sceptre Investment Counsel Limited is a leading Canadian independent investment management firm with assets under supervision of approximately $9.0 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 approximately 65 people in its offices in Toronto, Waterloo, Montreal and Vancouver. Sceptre's common shares trade on the Toronto Stock Exchange, under the symbol SZ.



CONSOLIDATED STATEMENTS OF EARNINGS
In thousands of dollars except
per share amounts
(Unaudited)

For the three months ended
November 30 November 30
2007 2006
--------------------------------------------------------------------------

Revenue

Investment management fees $ 9,424 $ 6,841
Gain on sale of management contract 830 -
Investment income 231 354
------------ ------------
10,485 7,195
------------ ------------

Expenses

Operating expenses 6,781 4,998
Amortization of furniture, equipment
and leaseholds 76 108
Amortization of intangible assets 105 -
------------ ------------
6,962 5,106
------------ ------------

Earnings before income taxes 3,523 2,089
------------ ------------
Provision for income taxes 1,074 839
Provision for future income taxes (80) (133)
------------ ------------
994 706
------------ ------------
Net earnings for the period $ 2,529 $ 1,383
------------ ------------
------------ ------------
Earnings per share
Basic $ 0.18 $ 0.10
Diluted $ 0.18 $ 0.10


For the years ended
November 30 November 30
2007 2006
--------------------------------------------------------------------------
(Restated - see note 1. below)

Revenue

Investment management fees $ 36,658 $ 25,919
Gain on sale of management contract 830 -
Investment income 925 1,569
------------ ------------
38,413 27,488
------------ ------------

Expenses

Operating expenses 26,624 19,218
Amortization of furniture, equipment
and leaseholds 294 302
Amortization of intangible assets 385 -
------------ ------------
27,303 19,520
------------ ------------

Earnings before income taxes 11,110 7,968
------------ ------------
Provision for income taxes 4,180 3,148
Provision for future income taxes (424) (518)
------------ ------------
3,756 2,630
------------ ------------
Net earnings for the period $ 7,354 $ 5,338
------------ ------------
------------ ------------

Earnings per share
Basic $ 0.53 $ 0.38
Diluted $ 0.52 $ 0.38


Note 1. Commencing with the fourth quarter of 2007, the Company amended
the revenue recognition policy for mutual fund revenue to remove a
one-month lag. Comparative financial statements have been restated to
reflect this change. The effect on net earnings after tax is an increase
of $110,000 in 2007 (including a decrease of $12,000 in the fourth
quarter) and an increase of $137,000 in 2006 (no effect in the fourth
quarter). Retained earnings as at December 1, 2005 has been increased by
$339,000 to reflect the net impact of this change on prior reporting
periods.



SCEPTRE INVESTMENT COUNSEL LIMITED

CONSOLIDATED BALANCE SHEETS
In thousands of dollars
(Unaudited)

As at
November 30 November 30
2007 2006
--------------------------------------------------------------------------
(Restated see
note 1.)
Current Assets

Cash and cash equivalents $ 35 $ 49
Investments available for sale 20,697 24,009
Accounts receivable 2,496 1,510
Current portion of deferred compensation 1,337 1,289
Current portion of loan to related party 38 38
---------------------------------
24,603 26,895

Deferred compensation - 1,299
Furniture, equipment and leaseholds 1,063 1,231
Loan to related party 19 56
Value of customer relationships
and other intangibles net of
accumulated amortization (note 3) 4,331 -
Goodwill (note 3) 3,575 63
---------------------------------
$ 33,591 $ 29,544
---------------------------------
---------------------------------
Liabilities

Current Liabilities

Accounts payable
and accrued liabilities $ 4,754 $ 2,381
Bonuses due to employees 2,500 1,460
Income taxes payable 1,346 2,697
Current portion of Future income taxes 450 469
---------------------------------
9,050 7,007

Future income taxes 165 454
---------------------------------
9,215 7,461
---------------------------------

Shareholders' Equity

Capital stock 15,913 16,259
Contributed surplus 1,518 1,290
Retained earnings 6,437 4,534
Accumulated other comprehensive
income (note 2) 508 -
---------------------------------
24,376 22,083
---------------------------------
$ 33,591 $ 29,544
---------------------------------
---------------------------------

Contact Information

  • Sceptre Investment Counsel Limited
    Richard L. Knowles
    President and Chief Executive Officer
    (416) 866-2380