March 28, 2007 13:58 ET

Sceptre Investment Counsel Reports Q1 Results

TORONTO, ONTARIO--(CCNMatthews - March 28, 2007) - Sceptre Investment Counsel Limited,(TSX:SZ) a leading independent Canadian money management firm, today reported its financial results for its first quarter ending February 28, 2007.

First quarter earnings were $1,134,000 or 8 cents per share fully diluted (8 cents per share basic) compared with $1,042,000 or 7 cents per share diluted (7 cents per share basic) for the same period last year.

During the quarter, overall operating results were negatively affected by charges relating to the Legg Mason Private Client acquisition of approximately $245,000 and amortization of the intangible assets portion of the purchase price of $70,000. In addition, the first quarter of our fiscal year includes the full annual cost of exchange listing fees and regulatory registration fees, of approximately $100,000 and the majority of our annual payroll taxes expense (approximately $100,000).

Net contribution from the Legg Mason Private Client business for the two months ending February 28, 2007, including some one-time operating charges, was flat prior to asset retention expenses and amortization of intangibles.

As the fiscal year progresses there will be further non-recurring expenses emanating from the Legg Mason acquisition and an ongoing accounting charge relating to the amortization of the non-tangible asset portion of the acquisition price.

Revenue for the first quarter was $8,403,000 compared with $6,189,000 for the first quarter last year. Included in this number is $759,000 which represents two months of revenues from the Legg Mason Private Client Group. Revenue includes $169,000 of investment income this quarter versus $283,000 for the same period last year. The decline in investment income is due to the initial payment for the Legg Mason acquisition at the end of December, which reduced short-term note interest, and a reduction of realized capital gains in the corporate investment portfolio. The first quarter revenues from the Company's Pension and Institutional Fund business are calculated based on market values as of December 31, 2006.

Normal asset related expense increases were experienced in the quarter due to higher assets under management across all client groups. Mutual Fund trailers and sub-advisory fees paid to AllianceBernstein and the Legg Mason affiliates were the major areas of increase.

"We are pleased to have completed the Legg Mason Private Client acquisition at the end of December. Preliminary indications are quite positive and we look forward to further growth in this business over the next year" stated Richard Knowles, President and Chief Executive Officer.

He added, "Although more volatile, equity market returns have been in line with our longer term view while fixed income returns have been stable. Sceptre's investment performance has continued strong against its competitors across key asset classes. Mutual fund assets are growing nicely and we are competing on new institutional business on a regular basis."

The Company, having considered its financial requirements and new business opportunities, has declared a quarterly dividend of 9 cents per share on outstanding common shares, payable on April 30, 2007 to shareholders of record April 9, 2007. The previous quarterly dividend was 9 cents per share.

About Sceptre Investment Counsel

Sceptre Investment Counsel Limited is a leading Canadian independent investment management firm with assets under supervision of approximately $8.8 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 seven mutual funds and two closed end funds. Sceptre employs approximately 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.

Contact Information

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