June 24, 2005 14:46 ET

Sceptre Investment Counsel Reports Q2 Results

TORONTO, ONTARIO--(CCNMatthews - June 24, 2005) - Sceptre Investment Counsel Limited (TSX:SZ), one of Canada's leading independent money management firms, today reported its financial results for its second quarter ended May 31, 2005.

Revenue for the second quarter was $5,242,000 compared with $6,375,000 for the second quarter last year. Second quarter earnings were $670,000 or 5 cents per share diluted (5 cents per share basic) compared with $1,067,000 or 7 cents per share diluted (7 cents per share basic) for the same period last year. Year to date revenue and earnings were $11,070,000 and $1,744,000 respectively compared to $12,962,000 and $2,113,000 respectively for the same period in the prior year.

Revenue for the quarter was lower than the second quarter of 2004 as a result of the loss of assets under supervision ("Assets") reported during the previous three quarters. The majority of the lost Assets were from the strategic alliance with Putnam Investments LLC. That alliance was ultimately terminated on December 31, 2004. The revenue drop was partly mitigated by the increase in the billing base from investment performance return. Mutual fund revenue increased during the quarter as a result of strong cash inflows and investment management fees received from structured products. Sceptre's investment performance and market returns continued very strong to the end of May. As well, our new global investment manager, Alliance Bernstein, added significantly to our clients' results. However, we are finding a delay in decision making on the part of pension investment committees as they deal with the added complexity of the removal of the foreign content restrictions, with the result that we have not yet added the expected new mandates in the institutional segment of our business.

While remuneration costs declined by 14.6% for the quarter and 10.5% for the six months, overall expenses for the quarter declined by 9.3%. The major contributor to the increase in non-remuneration expenses was the commencement of fees payable to the new sub-advisor for a portion of our global assets. These fees, which are higher than those of our previous sub-advisor, directly reduced our earnings as the corresponding increase in investment management fees charged to our institutional clients does not take effect until the third quarter. Other areas of increased expenses were related to the growth in mutual fund assets and a higher level of institutional marketing activity. The combined effect of the revenue and expense changes in the quarter resulted in a fall in net earnings of 37.2% from the same period last year.

Our financial position remains strong with $19 million in cash and liquid investments.

The Company, having considered its financial requirements, has declared a quarterly dividend of 6 cents per share on outstanding Common Shares, payable on July 29, 2005 to shareholders of record July 6, 2005. The previous quarterly dividend was 6 cents.

About Sceptre Investment Counsel

Sceptre Investment Counsel Limited is a leading Canadian independent investment management firm with assets under supervision of $6.4 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 50 people in its office in Toronto. 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