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Guardian Capital Group Limited (TSX: GCG; GCG.A) Announces 2016 Operating Results

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Guardian Capital Group Limited (TSX:<a class="ticker" href="/stock/GCG#TSX" rel="nofollow" rel="nofollow">GCG</a>, GCG.A)) Announces 2016 Operating Results

Guardian Capital Group Limited (TSX:GCG, GCG.A)) Announces 2016 Operating Results

TORONTO, ONTARIO--(Marketwired - Feb 22, 2017) - Guardian Capital Group Limited (TSX:GCG)(TSX:GCG) -

All per share figures disclosed below are stated on a diluted basis.

For the years ended December 31

($ in thousands, except per share amounts)


2016


2015
Net revenue $ 142,686 $ 132,911
Operating earnings 44,667 42,998
Net gains 38,617 11,040
Net earnings available to shareholders 69,475 44,105
EBITDA (1) $ 49,549 $ 47,826
Adjusted cash flow from operations (1) 38,659 38,347
Per Share:
Net earnings available to shareholders $ 2.32 $ 1.44
EBITDA (1) 1.66 1.56
Adjusted cash flow from operations (1) 1.30 1.25
As at December 31
($ in millions, except per share amounts) 2016 2015
Assets under management $ 27,280 $ 24,278
Assets under administration 16,489 14,943
Shareholders' equity 580 504
Value of corporate holdings of securities 620 540
Per Share:
Shareholders' equity $ 19.62 $ 16.55
Value of corporate holdings of securities 20.97 17.72

The Company completed another successful year in 2016, reaching historic highs again in many of its key financial measures. Based on the strong 2016 fiscal performance, the Board of Directors are pleased to announce a quarterly eligible dividend of $0.10 per share, an increase of 17.6%, payable on April 18, 2017, to shareholders of record on April 11, 2017.

Assets under management ("AUM") were $27.3 billion as at December 31, 2016, an increase of 12% from $24.3 billion as at December 31, 2015. The increase in AUM was due largely to the positive returns in the Canadian equity market, to which the Company's institutional AUM is over 50% exposed. The positive market performance was partially offset by net redemptions in Canadian equities from retail intermediary mandates and by institutional investors rebalancing their portfolios, after strong returns, especially in the fourth quarter of 2016. This trend is expected to continue into early 2017. Assets under administration were $16.5 billion as at December 31, 2016, an increase of 10% from $14.9 billion as at December 31, 2015.

The Company's operating earnings for the year were $44.7 million, a 4% growth from $43.0 million in 2015. The growth in operating earnings was aided by the significant growth in Q4 operating earnings, especially from the MGA business that delivered record sales in premiums on life insurance policies sold, as clients accelerated their decisions to buy policies before changes to income tax legislation came into effect in the new year. The sales in life insurance policies are expected to revert to more normal levels in early 2017. The growth in 2016 operating earnings was achieved while continuing to make strategic investments in the business. Included in 2016 operating earnings were $4.8 million operating losses associated with developing less mature businesses to support our future growth, including our new initiative to expand marketing and distribution capabilities in the US market. In 2015, these investments amounted to $3.5 million in operating losses.

Net earnings available to shareholders for the year were $69.5 million ($2.32 per share), a 58% growth compared to $44.1 million ($1.44 per share), for 2015. The increase in net earnings available to shareholders was due to the combination of growth in operating earnings and the significant increase in net gains in 2016, that included gains on the sale of just over 0.5 million in Bank of Montreal shares.

EBITDA(1) for the year was $49.5 million, or $1.66 per share, compared to $47.8 million, or $1.56 per share for 2015. Adjusted cash flow from operations(1) for the year was $38.7 million, or $1.30 per share, compared to $38.3 million, or $1.25 per share for 2015. The increases in each of these measures reflect the growth in operating earnings for the year. These two non-IFRS financial measures used by the Company are defined in its quarterly and annual Management's Discussion and Analysis.

The Company's shareholders' equity as at December 31, 2016 was $580 million, or $19.62 per share, compared to $504 million, or $16.55 per share, at December 31, 2015. The fair value of the Company's holdings of securities as at December 31, 2016 was $620 million, or $20.97 per share, compared to $540 million, or $17.72 per share, as at December 31, 2015.

The following table summarizes Guardian's financial results for the past eight quarters.

Three months ended

($ in thousand, except per share amounts)
Dec 31,

2016
Sep 30,

2016
Jun 30,

2016
Mar 31,

2016
Dec 31,

2015
Sep 30,

2015
Jun 30,

2015
Mar 31,

2015
Net revenue $ 38,240 $ 35,185 $ 34,191 $ 35,070 $ 34,353 $ 33,188 $ 33,066 $ 32,304
Operating earnings 12,371 10,646
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