IGM Financial Inc.
TSX : IGM

IGM Financial Inc.

November 03, 2005 14:13 ET

IGM Financial Inc. Reports Third Quarter Earnings

TORONTO, ONTARIO--(CCNMatthews - Nov. 3, 2005) -

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

IGM Financial Inc. (IGM) (TSX:IGM) today announced earnings results for the third quarter of 2005.

Net income for the three months ended September 30, 2005 was $176.6 million, compared to $153.8 million in 2004, an increase of 14.8%. Earnings per share were 66 cents compared to 58 cents, an increase of 13.8%.

For the nine months ended September 30, 2005 net income was $505.2 million compared to $454.3 million in 2004, an increase of 11.2%. Earnings per share were $1.90 compared to $1.71 in 2004, an increase of 11.1%.

Gross revenues for the three months ended September 30, 2005 were $587.0 million, compared to $527.1 million in the prior year. Gross revenues for the nine months ended September 30, 2005 were $1.74 billion, compared to $1.57 billion last year. Operating expenses were $341.8 million for the quarter and $1.02 billion for the nine months, compared with $305.7 million and $914.5 million, respectively, in 2004.

Mutual fund assets under management at September 30, 2005 totalled $91.0 billion, compared to $78.6 billion at September 30, 2004, an increase of 15.8%. Total assets under management at September 30, 2005 totalled $96.6 billion, compared to $81.4 billion at September 30, 2004, an increase of 18.7%.

Shareholders' equity at September 30, 2005 was $3.37 billion, compared to $3.15 billion at December 31, 2004. Return on average common equity for the nine months was 19.9% compared with 19.7% for the same period in 2004.

Investors Group Operations

Mutual fund sales for the third quarter were $1.21 billion compared to $1.00 billion in the prior year. For the quarter, mutual fund net sales were $56 million compared to net redemptions of $52 million in 2004 and net sales of long-term mutual funds (excluding money market funds) were $10 million compared to net redemptions of $96 million in 2004.

Year-to-date mutual fund sales were $4.1 billion compared to $3.6 billion in the prior year and mutual fund net sales were $524 million compared to $264 million a year ago. Net sales of long-term funds were $361 million compared to $146 million in the prior year.

"Our Consultant network has grown in each of the last five quarters," said Murray J. Taylor, President and Chief Executive Officer of Investors Group Inc. "A 99% increase in year to date mutual fund net sales over 2004 combined with strong investment performance has resulted in record levels of assets under management."

Investors Group's twelve month trailing redemption rate (excluding money market funds) was 9.1% at the end of the quarter, down from 9.2% at the same time last year. The corresponding rate at September 30, 2005 for all other members of the Investment Funds Institute of Canada (IFIC) was 16.8%.

Investors Group's mutual fund assets under management at September 30, 2005 were $49.0 billion, an increase of 16.0%, compared to $42.3 billion at September 30, 2004.

The number of Investors Group Consultants was 3,560 at September 30, 2005. Investors Group has experienced five consecutive quarters of growth resulting in an increase of 11.0% in the Consultant Network since June 30, 2004.

Mackenzie Operations

Mackenzie Financial recorded mutual fund sales of $1.7 billion for the third quarter compared to $1.4 billion for the same quarter last year. Mutual fund net sales were $110 million for the third quarter in both 2005 and 2004. Net sales of long-term funds (excluding money market and managed yield funds) were $85 million for the quarter, compared with $133 million in 2004.

Year-to-date mutual fund sales were $5.9 billion compared to $5.1 billion in the prior year. Mutual fund net sales were $663 million compared to $672 million in the prior year. Net sales of long-term funds (excluding money market and managed yield funds) were $684 million for the period compared to $730 million in 2004.

"Mackenzie's assets under management hit a record high during the quarter, driven by investment returns and continued sales momentum," said Charles R. Sims, President and Chief Executive Officer of Mackenzie Financial Corporation. "Mackenzie continues to focus on providing advisors and investors with high quality investment solutions, as Canadians increasingly demonstrate a desire to utilize financial advice in their long term investing plans," said Sims.

Mackenzie Financial's twelve month trailing redemption rate for long-term funds was 15.1% at the end of September 2005, compared to 13.7% at the end of September 2004. The corresponding rate at September 30, 2005 for all other members of IFIC was 16.1%.

Mackenzie Financial's mutual fund assets under management at September 30, 2005 were $40.2 billion, an increase of 15.0%, compared to $35.0 billion one year ago. Total assets under management at September 30, 2005 totalled $47.9 billion compared to $39.3 billion at September 30, 2004, an increase of 21.9%.

Dividends

The Board of Directors has declared a quarterly dividend of $0.359375 per share on the Company's 5.75% Non-Cumulative First Preferred Shares, Series "A" payable on December 31, 2005 to shareholders of record on November 30, 2005 and has declared a dividend of 34.5 cents per share on the Company's common shares payable on January 27, 2006 to shareholders of record on December 30, 2005.

Forward-Looking Information

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", "intends", "plans", "believes", "estimates" or negative versions thereof and similar expressions. 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, business competition, technological change, changes in government regulations, changes in tax laws, unexpected judicial or regulatory proceedings, catastrophic events, and the Company's ability to complete strategic transactions and integrate acquisitions. We caution 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.

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. 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 Company group of companies.

Media Note: A live webcast of IGM's Analyst conference call for the Third Quarter 2005 will be held today, Thursday, November 3, 2005, at 3:00 P.M. (ET) at www.igmfinancial.com. Media and interested parties may alternatively choose to listen to today's live analyst teleconference call by dialing 1-888-789-0089 or (416) 695-5261.



IGM FINANCIAL INC.
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Consolidated Statements of Income

(unaudited)
(in thousands of dollars, Three months ended Nine months ended
except shares and per share September 30 September 30
amounts) 2005 2004 2005 2004
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Fee and net investment income
Management $420,516 $371,686 $1,217,628 $1,108,467
Administration 74,481 74,228 229,362 228,024
Distribution 53,406 44,448 156,498 118,275
Net investment income and
other 38,594 36,756 135,767 116,238
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Total fee and net investment
income 586,997 527,118 1,739,255 1,571,004
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Operating expenses
Commission expense 183,491 155,305 536,972 452,929
Non-commission expense 135,611 126,553 414,124 390,046
Interest expense 22,746 23,889 67,676 71,493
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Total operating expenses 341,848 305,747 1,018,772 914,468
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Income before income taxes
and non-controlling interest 245,149 221,371 720,483 656,536
Income taxes 68,365 66,969 214,033 201,499
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Income before non-controlling
interest 176,784 154,402 506,450 455,037
Non-controlling interest 229 571 1,269 731
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Net income $176,555 $153,831 $505,181 $454,306
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Average number of common shares
(in thousands)
- Basic 264,581 264,634 264,595 264,379
- Diluted 266,813 266,186 266,586 265,954

Earnings per share (in dollars)
- Basic $0.67 $0.58 $1.91 $1.72
- Diluted $0.66 $0.58 $1.90 $1.71
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IGM FINANCIAL INC.
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Financial Highlights
Three months ended Nine months ended
September 30 September 30
2005 2004 Change 2005 2004 Change
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Net income ($millions) $176.6 $153.8 14.8% $505.2 $454.3 11.2%
Diluted earnings per share 0.66 0.58 13.8 1.90 1.71 11.1
Return on equity 19.9% 19.7%
Dividends per share 0.345 0.300 15.0 0.990 0.850 16.5
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($ millions)

Mutual funds
Investors Group
Sales $1,205 $995 21.2% $4,111 $3,620 13.6%
Net sales (redemptions) 56 (52) N/M 524 264 98.7
Assets under management 49,045 42,296 16.0
Mackenzie
Sales 1,721 1,438 19.7 5,892 5,092 15.7
Net sales 110 110 0.7 663 672 (1.3)
Assets under management 40,215 34,979 15.0
Investment Planning Counsel
Sales 91 87 4.6 317 158(1) N/A
Net sales 48 60 (20.0) 186 109(1) N/A
Assets under management 1,772 1,359 30.4

Combined mutual fund assets
under management (2) 90,996 78,605 15.8

Insurance in force
(face amount) 36,368 35,217 3.3

Securities operations
assets under administration 7,476 6,618 13.0

Mortgages serviced 5,909 6,102 (3.2)
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Employees 3,222 3,171 1.6%
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(1) From date of acquisition.
(2) Adjusted for $36 million in inter-segment assets.
(2004 - $29 million).


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