News Column

CI Financial reports second quarter results: Earnings increase 23%

August 7, 2014

TSX Symbol: CIX

TORONTO, Aug. 7, 2014 /CNW/ - CI Financial Corp. ("CI") today released unaudited financial results for the quarter ended June 30, 2014.

ASSETS & SALES (in $millions)

Quarter ended

June 30, 2014

Quarter ended

June 30, 2013

% change

Assets Under Management

99,882

81,650

22

Average Assets Under Management

97,895

81,691

20

Gross Sales

3,504

3,377

4

Net Sales

996

978

2









EARNINGS1 (in $)







Net Income (in millions)

127.8

104.0

23

Earnings Per Share

0.45

0.37

22

EBITDA Per Share 2

0.78

0.67

16

Pre-Tax Operating Earnings Per Share2

0.74

0.62

19









OTHER METRICS







Dividends Recorded Per Share (in $)

0.295

0.265

11

Net Debt (in $millions)

252.6

447.9

(44)

SG&A Expenses3

35 bps

38 bps

(8)

Return on Equity

25.8%

23.0%

n/a




1

Net of non-controlling interest.

2

Pre-Tax Operating Earnings and EBITDA (earnings before interest, taxes, depreciation and amortization) are not standardized earnings measures prescribed by IFRS; however, management believes that most of its shareholders, creditors, other stakeholders and investment analysts prefer to include the use of these performance measures in analyzing CI's results. CI defines pre-tax operating earnings as income before income taxes less redemption fee revenue, non-recurring items, performance fees and investment gains, plus amortization of deferred sales commissions (DSC) and fund contracts. CI's method of calculating these measures may not be comparable to similar measures presented by other companies.



As a percentage of average assets under management.



Average assets under management reached a record $97.9 billion for the second quarter, an increase of 20% from the same quarter in the previous year. At June 30, 2014, CI reached the highest level of assets under management for a quarter-end at $99.9 billion, up 22% from $81.7 billion at June 30, 2013. The S&P/TSX Composite Index increased 29% and the FTSE TMX Universe Bond Index increased 5% over the same period.

CI achieved the highest level of second quarter gross sales in its history and the highest level of net sales in over a decade. Gross sales of funds were $3.5 billion compared to $3.4 billion for the quarter ended June 30, 2013, while net sales increased to $996 million.

Earnings per share of $0.45 represented increases of 22% from $0.37 in the second quarter of 2013 and 5% from $0.43 per share in the first quarter of 2014. CI reported EBITDA per share of $0.78, a 16% increase from the second quarter of 2013 and a 4% increase from the prior quarter. Pre-tax operating earnings per share were up 19% from the second quarter of 2013 and up 6% from the prior quarter.

CI continued to maintain its discretionary spending below the rate of growth in assets under management. Selling, general and administrative (SG&A) expenses as a percentage of average assets under management fell to 35 basis points in the second quarter of 2014, down from 38 basis points in the second quarter of last year.

CI generated $137.9 million in free cash flow during quarter ended June 30, 2014 compared to $114.2 million in the second quarter of 2013. CI's cash flow facilitated the reduction in net debt of $81.7 million, the repurchase of $5.4 million in CI shares and the payment of $82.6 million in dividends. Since the end of the second quarter, CI has repurchased an additional $24.0 million in CI shares under its normal course issuer bid. As at July 31, 2014, CI had 283,741,338 shares outstanding.

"CI's second quarter was significant in so many ways: CI celebrated its 20-year anniversary as a publicly traded company and reached a milestone $100 billion in assets under management, and net sales of our investment products were at the highest level in over a decade," said Stephen A. MacPhail, CI President and Chief Executive Officer. "We continue to invest extensively in training, advisor support and investment management expertise, utilizing the advantages of a $100 billion asset base, while at the same time ensuring we do so in a prudent and cost-efficient manner."

The Board of Directors declared a monthly cash dividend of $0.10 per share payable on each of September 15, October 15 and November 14, 2014 to shareholders of record on August 31, September 30 and October 31, 2014, respectively. The monthly dividend represents a yield of 3.4% on CI's closing share price of $34.83 on August 6, 2014.

For detailed financial statements for the quarter ended June 30, 2014, including Management's Discussion and Analysis, please refer to CI's website at www.cifinancial.com under Reports, or contact investorrelations@ci.com.

Analysts' Conference Call

CI will hold a conference call with analysts today at 4 p.m. Eastern time. Speaking on the call will be Mr. MacPhail and Douglas Jamieson, Executive Vice-President and Chief Financial Officer. The conference call and a slide presentation will be accessible through a webcast at www.ci.com/q2. Alternatively, investors may listen to the discussion by dialling 1-866-696-5910 or (416) 340-2217 (passcode: 4713081).

The call will be available for playback later in the day until August 21, 2014 at (905) 694-9451 or 1-800-408-3053 (passcode: 4784058). The webcast will be archived at www.ci.com/q2.

CI Financial Corp. (TSX: CIX) is an independent, Canadian-owned wealth management company. CI offers a broad range of investment products and services, including an industry-leading selection of investment funds, and is on the Web at www.cifinancial.com.

This press release contains forward-looking statements with respect to CI and its products and services, including its business operations and strategy and financial performance and condition. Although management believes that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, including interest rates, business competition, changes in government regulations or in tax laws, and other factors discussed in materials filed with applicable securities regulatory authorities from time to time.

SOURCE CI Investments Inc.


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