Guardian Capital Group Limited
TSX : GCG
TSX : GCG.A

Guardian Capital Group Limited

February 22, 2017 16:31 ET

Guardian Capital Group Limited (TSX: GCG; GCG.A) Announces 2016 Operating Results

TORONTO, ONTARIO--(Marketwired - Feb. 22, 2017) - Guardian Capital Group Limited (TSX:GCG)(TSX:GCG.A) -

All per share figures disclosed below are stated on a diluted basis.

For the years ended December 31
($ in thousands, except per share amounts)

2016

2015
Net revenue $ 142,686 $ 132,911
Operating earnings 44,667 42,998
Net gains 38,617 11,040
Net earnings available to shareholders 69,475 44,105
EBITDA (1) $ 49,549 $ 47,826
Adjusted cash flow from operations (1) 38,659 38,347
Per Share:
Net earnings available to shareholders $ 2.32 $ 1.44
EBITDA (1) 1.66 1.56
Adjusted cash flow from operations (1) 1.30 1.25
As at December 31
($ in millions, except per share amounts) 2016 2015
Assets under management $ 27,280 $ 24,278
Assets under administration 16,489 14,943
Shareholders' equity 580 504
Value of corporate holdings of securities 620 540
Per Share:
Shareholders' equity $ 19.62 $ 16.55
Value of corporate holdings of securities 20.97 17.72

The Company completed another successful year in 2016, reaching historic highs again in many of its key financial measures. Based on the strong 2016 fiscal performance, the Board of Directors are pleased to announce a quarterly eligible dividend of $0.10 per share, an increase of 17.6%, payable on April 18, 2017, to shareholders of record on April 11, 2017.

Assets under management ("AUM") were $27.3 billion as at December 31, 2016, an increase of 12% from $24.3 billion as at December 31, 2015. The increase in AUM was due largely to the positive returns in the Canadian equity market, to which the Company's institutional AUM is over 50% exposed. The positive market performance was partially offset by net redemptions in Canadian equities from retail intermediary mandates and by institutional investors rebalancing their portfolios, after strong returns, especially in the fourth quarter of 2016. This trend is expected to continue into early 2017. Assets under administration were $16.5 billion as at December 31, 2016, an increase of 10% from $14.9 billion as at December 31, 2015.

The Company's operating earnings for the year were $44.7 million, a 4% growth from $43.0 million in 2015. The growth in operating earnings was aided by the significant growth in Q4 operating earnings, especially from the MGA business that delivered record sales in premiums on life insurance policies sold, as clients accelerated their decisions to buy policies before changes to income tax legislation came into effect in the new year. The sales in life insurance policies are expected to revert to more normal levels in early 2017. The growth in 2016 operating earnings was achieved while continuing to make strategic investments in the business. Included in 2016 operating earnings were $4.8 million operating losses associated with developing less mature businesses to support our future growth, including our new initiative to expand marketing and distribution capabilities in the US market. In 2015, these investments amounted to $3.5 million in operating losses.

Net earnings available to shareholders for the year were $69.5 million ($2.32 per share), a 58% growth compared to $44.1 million ($1.44 per share), for 2015. The increase in net earnings available to shareholders was due to the combination of growth in operating earnings and the significant increase in net gains in 2016, that included gains on the sale of just over 0.5 million in Bank of Montreal shares.

EBITDA(1) for the year was $49.5 million, or $1.66 per share, compared to $47.8 million, or $1.56 per share for 2015. Adjusted cash flow from operations(1) for the year was $38.7 million, or $1.30 per share, compared to $38.3 million, or $1.25 per share for 2015. The increases in each of these measures reflect the growth in operating earnings for the year. These two non-IFRS financial measures used by the Company are defined in its quarterly and annual Management's Discussion and Analysis.

The Company's shareholders' equity as at December 31, 2016 was $580 million, or $19.62 per share, compared to $504 million, or $16.55 per share, at December 31, 2015. The fair value of the Company's holdings of securities as at December 31, 2016 was $620 million, or $20.97 per share, compared to $540 million, or $17.72 per share, as at December 31, 2015.

The following table summarizes Guardian's financial results for the past eight quarters.

Three months ended
($ in thousand, except per share amounts)
Dec 31,
2016
Sep 30,
2016
Jun 30,
2016
Mar 31,
2016
Dec 31,
2015
Sep 30,
2015
Jun 30,
2015
Mar 31,
2015
Net revenue $ 38,240 $ 35,185 $ 34,191 $ 35,070 $ 34,353 $ 33,188 $ 33,066 $ 32,304
Operating earnings 12,371 10,646 10,300 11,350 10,256 10,876 11,390 10,476
Net gains (losses) 10,754 10,057 1,028 16,778 9,658 (2,407 ) 602 3,187
Net earnings 19,859 17,475 9,169 24,072 17,362 6,278 9,786 11,551
Net earnings available to shareholders 19,417 17,353 8,887 23,818 17,138 6,053 9,604 11,310
Shareholders' equity 580,177 545,339 513,939 497,656 504,255 470,533 473,944 477,901
Net earnings available to shareholders per Class A and Common share
Basic $ 0.69 $ 0.61 $ 0.31 $ 0.83 $ 0.59 $ 0.21 $ 0.33 $ 0.38
Diluted 0.65 0.58 0.30 0.79 0.56 0.20 0.31 0.37
Shareholders' equity per Class A and Common share
Basic $ 20.75 $ 19.11 $ 18.08 $ 17.51 $ 17.37 $ 15.96 $ 16.08 $ 16.15
Diluted 19.62 18.07 17.10 16.63 16.55 15.23 15.32 15.42
Dividends paid $ 0.085 $ 0.085 $ 0.085 $ 0.075 $ 0.075 $ 0.075 $ 0.075 $ 0.065

Guardian Capital Group Limited is a diversified financial services company founded in 1962. Guardian provides institutional and high net worth investment management services to clients; financial services to international investors; and services to financial advisors in its national mutual fund dealer, securities dealer, and insurance distribution network. Its Common and Class A shares are listed on The Toronto Stock Exchange.

(1) The Company's management uses EBITDA and Adjusted cash flow from operations to evaluate and assess the performance of its business. These two measures do not have standardized meaning under International Financial Reporting Standards ("IFRS"), and are therefore unlikely to be comparable to similar measures presented by other companies. However, management believes that most shareholders, creditors, other stakeholders and investment analysts prefer to include the use of these measures in analyzing the Company's results. The Company defines EBITDA as net earnings before interest, income taxes, amortization, stock-based compensation, net gains or losses and net gains or losses on securities held for sale, less amounts attributable to non-controlling interest. The Company defines Adjusted cash flow from operations as Net cash from operating activities, net of changes in non-cash working capital items and net of non-controlling interests. The most comparable IFRS measures are Net earnings, which was $70,575 for the year ended December 31, 2016 (2015 - $44,977), and Net cash from operating activities, which was $42,515 for the year ended December 31, 2016 (2015 - $33,777). More detailed descriptions of these two non-IFRS measures are provided in the Company's annual Management's Discussions and Analysis, including a reconciliation of these measures to their most comparable IFRS measures.

Contact Information

  • Guardian Capital Group Limited
    Donald Yi
    Chief Financial Officer
    (416) 350-3136

    Guardian Capital Group Limited
    George Mavroudis
    President and Chief Executive Officer
    (416) 364-8341