TORONTO, ONTARIO--(Marketwire - Nov. 10, 2011) -
Readers are referred to the disclaimer regarding Forward-Looking Statements and Non-IFRS Financial Measures at the end of this Release.
IGM Financial Inc. (IGM or the Company) (TSX:IGM) today announced earnings results for the third quarter of 2011.
Operating earnings available to common shareholders for the three months ended September 30, 2011 were $213.0 million or 82 cents per share compared to operating earnings available to common shareholders of $181.11 million or 691 cents per share in 2010. This represents an increase of 18.8% on a per share basis.
Operating earnings available to common shareholders for the nine months ended September 30, 2011 were $637.0 million or $2.46 per share compared to operating earnings available to common shareholders of $548.71 million or $2.081 per share in 2010. This represents an increase of 18.3% on a per share basis.
On September 2, 2011, Mackenzie announced that it had entered into an agreement to sell M.R.S. Trust Company and M.R.S. Inc. (MRS). Other items for the three and nine months ended September 30, 2011 consisted of the net earnings for MRS which have been classified as discontinued operations. Net earnings for MRS, excluding a one-time tax adjustment, totalled $2.3 million and $4.3 million for the three and nine months ended September 30, 2011. During the third quarter of 2011, a reduction in income taxes of $28.7 million was recorded to reflect a change in estimate related to tax filing positions. As a result, net earnings from discontinued operations were $31.0 million and $33.0 million for the three and nine months ended September 30, 2011.
Net earnings available to common shareholders, including other items, for the three months ended September 30, 2011 were $244.0 million or 94 cents per share compared to net earnings available to common shareholders of $173.4 million or 66 cents per share in 2010. Net earnings available to common shareholders, including other items, for the nine months ended September 30, 2011 were $670.0 million or $2.58 per share compared to net earnings available to common shareholders of $540.8 million or $2.05 per share in 2010.
Revenues for the three months ended September 30, 2011 were $674.2 million compared to $632.5 million a year ago. Revenues for the nine months ended September 30, 2011 were $2.08 billion compared to $1.91 billion a year ago. Expenses were $398.2 million for the third quarter of 2011 compared to $385.6 million a year ago and $1.24 billion for the nine month period compared to $1.17 billion in 2010.
Total assets under management at September 30, 2011 were $116.7 billion. This compared with total assets under management of $122.7 billion at September 30, 2010, a decrease of 4.8%.
Shareholders' equity at September 30, 2011 was $4.4 billion compared to $4.3 billion at September 30, 2010. Return on average common equity based on operating earnings for the nine months ended September 30, 2011 was 20.2% compared to 17.7% for the comparative period in 2010.
Investors Group Operations
At September 30, 2011 there were 2,674 Consultants with 4 years or more of Investors Group experience, up from 2,659 at June 30, 2011. The number of Investors Group Consultants was 4,595 at September 30, 2011, up from 4,592 at June 30, 2011.
"Our total number of Consultants has grown slightly during the quarter through strong retention of experienced Consultants and effective recruitment and training of new Consultants," said Murray J. Taylor, President and Chief Executive Officer of Investors Group Inc. "Sales increased over 2010 by 9% for mutual funds, 13% for insurance and 17% for mortgage originations as our Consultants served the diverse financial planning needs of our clients."
Mutual fund sales for the third quarter were $1.29 billion compared to $1.17 billion in the prior year, and mutual fund net redemptions for the third quarter were $162 million compared to net redemptions of $166 million a year ago.
Mutual fund sales for the nine months ended September 30, 2011 were $4.74 billion compared to $4.36 billion in the prior year and mutual fund net sales were $197 million compared to $291 million a year ago.
The twelve month trailing redemption rate (excluding money market funds) was 8.7% at September 30, 2011, compared to 8.5% at June 30, 2011.
Mutual fund assets under management at September 30, 2011 were $56.5 billion compared to $58.8 billion at September 30, 2010, a decrease of 4.0%.
Mackenzie Operations
Total sales for the third quarter of 2011 were $2.05 billion compared to $2.46 billion in the prior year. Total net redemptions for the third quarter were $1.20 billion compared to total net redemptions of $771 million a year ago.
Total sales for the nine months ended September 30, 2011 were $8.22 billion compared to $9.03 billion in the prior year. Total net redemptions were $1.25 billion compared to total net redemptions of $1.19 billion a year ago.
"Investment performance of our mutual fund family remained strong, with 55% of our fund assets ranked in the first or second quartile of their respective asset categories over the last year," said Charles R. Sims, F.C.A., President and Chief Executive Officer of Mackenzie Financial Corporation.
Mackenzie's total assets under management at September 30, 2011 were $60.9 billion compared with total assets under management of $64.5 billion at September 30, 2010, a decrease of 5.6%. Mutual fund assets under management at September 30, 2011 were $38.5 billion compared to $41.1 billion a year ago, a decrease of 6.3%.
Dividends
The Board of Directors has declared a dividend of 53.75 cents per share on the Company's common shares and has declared a dividend of $0.36875 per share on the Company's 5.90% Non-Cumulative First Preferred Shares, Series "B". The common share dividend and the preferred share dividend are payable on January 31, 2012 to shareholders of record on December 30, 2011.
Forward-Looking Statements
Certain statements in this Release, other than statements of historical fact, are forward-looking statements based on certain assumptions and reflect IGM Financial's current expectations. Forward-looking statements are provided for the purposes of assisting the reader in understanding the Company's financial position and results of operations as at and for the periods ended on certain dates and to present information about management's current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. These statements may include, without limitation, statements regarding the operations, business, financial condition, expected financial results, performance, prospects, opportunities, priorities, targets, goals, ongoing objectives, strategies and outlook of the Company, as well as the outlook for North American and international economies, for the current fiscal year and subsequent periods. 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", "seeks", "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".
This information is based upon certain material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking statements, including the perception of historical trends, current conditions and expected future developments, as well as other factors that are believed to be appropriate in the circumstances.
By its nature, this information is subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved.
A variety of material factors, many of which are beyond the Company's and its subsidiaries' control, affect the operations, performance and results of the Company, and its subsidiaries, and their businesses, and could cause actual results to differ materially from current expectations of estimated or anticipated events or results. These factors include, but are not limited to: the impact or unanticipated impact of 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, operational and reputational risks, 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, integrate acquisitions and implement other growth strategies, and the Company's success in anticipating and managing the foregoing factors.
The reader is cautioned that the foregoing list of factors is not exhaustive of the factors that may affect any of the Company's forward-looking statements. The reader is also cautioned to consider these and other factors, uncertainties and potential events carefully and not place undue reliance on forward-looking statements.
Other than as specifically required by law, the Company undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date on which such statements are made, or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results, or otherwise.
Additional information about the risks and uncertainties of the Company's business is provided in its disclosure materials filed with the securities regulatory authorities in Canada, available at www.sedar.com.
Non-IFRS Financial Measures
This release contains non-IFRS financial measures. Net earnings available to common shareholders, which is a financial measure in accordance with International Financial Reporting Standards (IFRS), may be subdivided into two components consisting of:
- Operating earnings available to common shareholders; and
- Other items, which include the after-tax impact of any item that management considers to be of a non-recurring nature or that could make the period-over-period comparison of results from operations less meaningful.
Terms by which non-IFRS financial measures are identified include but are not limited to "operating earnings available to common shareholders", "operating earnings per share", "operating return on average common equity" and other similar expressions. Non-IFRS financial measures are used to provide management and investors with additional measures of performance. However, non-IFRS financial measures do not have standard meanings prescribed by IFRS and are not directly comparable to similar measures used by other companies. Please refer to the attached Financial Highlights for the appropriate reconciliations of these non-IFRS financial measures to measures prescribed by IFRS.
The unaudited interim Consolidated Financial Statements and Management's Discussion and Analysis (MD&A) of operating results are available on IGM Financial Inc.'s website at www.igmfinancial.com.
IGM Financial Inc. is one of Canada's premier personal financial services companies, and one of the country's largest managers and distributors of mutual funds and other managed asset products, with over $121 billion in total assets under management as of October 31, 2011. Its activities are carried out principally through Investors Group, Mackenzie Financial Corporation 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 Third Quarter 2011 will be held Thursday November 10, 2011 at 4:30 P.M. (ET) at www.igmfinancial.com. Media and interested parties may alternatively choose to listen to the live analyst teleconference call by dialing 1-866-226-1792 or 416-340-2216.
| 1 Other items for the three and nine months ended September 30, 2010 consisted of: | |
| • | Net earnings for MRS of $0.5 million and $0.3 million, respectively, which were classified as discontinued operations. |
| • | An after-tax charge of $8.2 million representing the Company's proportionate share of Great-West Lifeco Inc.'s incremental litigation provision. |
| IGM FINANCIAL INC. | |||||||||||
| Consolidated Statements of Earnings | |||||||||||
| (unaudited) | Three months ended | Nine months ended | |||||||||
| (in thousands of Canadian dollars, | September 30 | September 30 | |||||||||
| except shares and per share amounts) | 2011 | 2010 | 2011 | 2010 | |||||||
| Revenues | |||||||||||
| Management fees | $ | 464,649 | $ | 452,561 | $ | 1,448,551 | $ | 1,357,805 | |||
| Administration fees | 85,116 | 82,579 | 260,540 | 249,268 | |||||||
| Distribution fees | 80,759 | 68,775 | 253,676 | 212,856 | |||||||
| Net investment income and other | 43,667 | 28,618 | 121,079 | 93,898 | |||||||
| 674,191 | 632,533 | 2,083,846 | 1,913,827 | ||||||||
| Expenses | |||||||||||
| Commission | 218,939 | 207,458 | 681,863 | 633,522 | |||||||
| Non-commission | 156,032 | 150,245 | 482,129 | 451,600 | |||||||
| Interest | 23,198 | 27,870 | 79,608 | 82,743 | |||||||
| 398,169 | 385,573 | 1,243,600 | 1,167,865 | ||||||||
| Earnings before income taxes and discontinued operations | 276,022 | 246,960 | 840,246 | 745,962 | |||||||
| Income taxes | 60,775 | 71,833 | 196,595 | 197,560 | |||||||
| Net earnings from continuing operations | 215,247 | 175,127 | 643,651 | 548,402 | |||||||
| Net earnings from discontinued operations | 30,995 | 472 | 33,018 | 288 | |||||||
| Net earnings | 246,242 | 175,599 | 676,669 | 548,690 | |||||||
| Perpetual preferred share dividends | 2,213 | 2,212 | 6,638 | 7,892 | |||||||
| Net earnings available to common shareholders | $ | 244,029 | $ | 173,387 | $ | 670,031 | $ | 540,798 | |||
| Average number of common shares (in thousands) | |||||||||||
| Basic | 257,807 | 261,714 | 258,461 | 262,226 | |||||||
| Diluted | 258,730 | 262,770 | 259,464 | 263,385 | |||||||
| Earnings per share (in dollars) | |||||||||||
| Net earnings from continuing operations | |||||||||||
| Basic | $ | 0.83 | $ | 0.66 | $ | 2.46 | $ | 2.06 | |||
| Diluted | $ | 0.82 | $ | 0.66 | $ | 2.46 | $ | 2.05 | |||
| Net earnings available to common shareholders | |||||||||||
| Basic | $ | 0.95 | $ | 0.66 | $ | 2.59 | $ | 2.06 | |||
| Diluted | $ | 0.94 | $ | 0.66 | $ | 2.58 | $ | 2.05 | |||
| IGM FINANCIAL INC. | ||||||||||||||||||
| Financial Highlights | ||||||||||||||||||
| (unaudited) | Three months ended September 30 |
Nine months ended September 30 |
||||||||||||||||
| 2011 | 2010 | % Change | 2011 | 2010 | % Change | |||||||||||||
| Earnings available to common shareholders ($ millions) | ||||||||||||||||||
| Operating Earnings(1) | $ | 213.0 | $ | 181.1 | 17.6 | % | $ | 637.0 | $ | 548.7 | 16.1 | % | ||||||
| Net Earnings | 244.0 | 173.4 | 40.7 | 670.0 | 540.8 | 23.9 | ||||||||||||
| Diluted earnings per share | ||||||||||||||||||
| Operating Earnings(1) | 0.82 | 0.69 | 18.8 | 2.46 | 2.08 | 18.3 | ||||||||||||
| Net Earnings | 0.94 | 0.66 | 42.4 | 2.58 | 2.05 | 25.9 | ||||||||||||
| Return on equity | ||||||||||||||||||
| Operating Earnings(1) | 20.2 | % | 17.7 | % | ||||||||||||||
| Net Earnings | 21.3 | % | 17.3 | % | ||||||||||||||
| Dividends per share | 0.5375 | 0.5125 | 4.9 | 1.5625 | 1.5375 | 1.6 | ||||||||||||
| Total assets under management(2)($ millions) | $ | 116,743 | $ | 122,667 | (4.8 | )% | ||||||||||||
| Investors Group | ||||||||||||||||||
| Mutual funds | 56,502 | 58,838 | (4.0 | ) | ||||||||||||||
| Mackenzie | ||||||||||||||||||
| Mutual funds | 38,527 | 41,112 | ||||||||||||||||
| Sub-advisory, institutional and other accounts | 22,389 | 23,421 | ||||||||||||||||
| Total | 60,916 | 64,533 | (5.6 | ) | ||||||||||||||
| Counsel | ||||||||||||||||||
| Mutual funds | 2,674 | 2,377 | 12.5 | |||||||||||||||
| Mutual Funds and Institutional Sales ($ millions) | Investors Group | Mackenzie | Counsel | Total(3) | |||||
| For the three months ended September 30, 2011 | |||||||||
| Gross sales | $ 1,285 | $ 2,045 | $ 113 | $ 3,430 | |||||
| Net sales (redemptions) | (162 | ) | (1,201 | ) | 44 | (1,284 | ) | ||
| For the nine months ended September 30, 2011 | |||||||||
| Gross sales | $ 4,736 | $ 8,215 | $ 415 | $ 12,967 | |||||
| Net sales (redemptions) | 197 | (1,253 | ) | 169 | (1,151 | ) | |||
| (1) | Non-GAAP Financial Measures: |
| 2011 operating earnings excluded net earnings from discontinued operations. | |
| 2010 operating earnings excluded net earnings from discontinued operations and an after-tax charge of $8.2 million recorded in the third quarter representing the Company's proportionate share of Great-West Lifeco Inc.'s (Lifeco) incremental litigation provision. | |
| (2) | Total assets under management excluded $3.3 billion of assets sub-advised by Mackenzie on behalf of Investors Group and Investment Planning Counsel ($3.1 billion at September 30, 2010). |
| (3) | Total Gross Sales and Net Sales for the three months ended September 30, 2011 excluded $13 million and ($35) million respectively in accounts sub-advised by Mackenzie on behalf of Investors Group and Investment Planning Counsel. |
| Total Gross Sales and Net Sales for the nine months ended September 30, 2011 excluded $399 million and $264 million respectively in accounts sub-advised by Mackenzie on behalf of Investors Group and Investment Planning Counsel. |
Contact Information:
Ron Arnst
Media Relations
(204) 956-3364
ron.arnst@igmfinancial.com