Sprott Inc. Announces 2012 First Quarter Results
May 09 2012 - 7:00AM
PR Newswire (Canada)
TORONTO, May 9, 2012 /CNW/ -Sprott Inc. ("Sprott" or the "Company")
today announced its financial results for the three months ended
March 31, 2012. Q1 2012 Highlights -- Assets Under Management
("AUM") were $9.7 billion as at March 31, 2012, compared to $9.7
billion as at March 31, 2011 and $9.1 billion as at December 31,
2011 -- Assets Under Administration ("AUA") were $4.6 billion as at
March 31, 2012, compared to $5.9 billion as of March 31, 2011 --
Management Fees were $33.0 million, a decrease of 7.2% compared
with the three months ended March 31, 2011 -- Base EBITDA was $16.1
million ($0.10 per share), compared with $16.9 million ($0.10 per
share) in 2011, a decrease of 4.7% -- EBITDA was $20.4 million
($0.12 per share), compared with $17.4 million ($0.11 per share) in
2011, an increase of 17.2% -- Net income was $16.9 million ($0.10
per share), an increase of 60.4% from $10.6 million ($0.07 per
share) in the first quarter of 2011 -- Named John Wilson, Senior
Portfolio Manager of Sprott Asset Management and appointed lead
manager of Sprott Opportunities Funds -- Added Neil Adshead as
Investment Strategist at Resource Capital Investment Corp. --
Sprott Physical Gold Trust completed follow-on offering of Trust
Units for gross proceeds of US$349 million -- Sprott Physical
Silver Trust completed follow-on offering of Trust Units for gross
proceeds of US$349 million -- Launched Sprott Silver Equities Class
-- Announced Letter of Intent to acquire Toscana Capital Corp. and
Toscana Energy Corp. Subsequent events: -- Launched Sprott Enhanced
Equity Class and Sprott Enhanced Balanced Fund -- Nominated Paul
Stephens as Director "The ongoing climate of economic uncertainty
impacted our results during the first quarter as the markets
struggled to price in the potential for further central bank
intervention," said Peter Grosskopf, CEO of Sprott Inc. "In our
view, the strength of the recovery in the U.S. has been overblown
and the European debt crisis is far from resolved. As such, we
believe the outlook for precious metals and their related equities
remains compelling." "We continue to add new products and managers
to help us diversify and grow our business," continued Mr.
Grosskopf. "The pending acquisition of the Toscana Companies
will enhance our position in the energy sector and we continue to
look for new opportunities to grow through further acquisitions of
complementary products and managers." For the three months ended
March 31, ($ in millions) 2012 2011 AUM, beginning of period 9,137
8,545 Net sales 540 260 Business acquisition — 695 Market value
appreciation of portfolios 6 178 AUM, end of period 9,683 9,678
Assets Under Management At March 31, 2012, AUM was $9.7
billion, virtually unchanged from $9.7 billion at March 31,
2011. Net sales for the three months ended March 31, 2012 were
$0.5 billion. During the quarter, the launches of the Sprott 2012
Flow-Through Limited Partnership and the Sprott Silver Equities
Class, combined with the follow-on offerings of the Sprott Physical
Gold Trust and Sprott Physical Silver Trust added approximately
$0.7 billion to AUM. This was offset by approximately $171 million
in net redemptions experienced by the mutual funds, hedge funds,
managed accounts and offshore funds. Average AUM for the three
months ended March 31, 2012 was $10.1 billion compared with
$8.8 billion for the three months ended March 31, 2011, an
increase of 15.1%. Income Statement Total revenue for the three
months ended March 31, 2012 increased by 12.3% to $44.4
million, from $39.5 million in 2011. Management fees decreased by
7.2% during the quarter to $33.0 million, from $35.5 million for
the three months ended March 31, 2011, even though average AUM
increased over the prior year period. Management fee margins fell
during the first quarter of 2012 to 1.4% from 1.5% during the
comparable period in 2011. The decrease is mainly due to the
significant growth in bullion funds and fixed income funds, which
have lower management fees than the majority of the other Sprott
Funds. Gains from proprietary investments, which include
investments in funds that Sprott manages, an investment in Sprott
Resource Lending Corp., certain other resource-related stocks and
warrants, and bullion, totaled $4.2 million for the three months
ended March 31, 2012, compared with a gain of $0.4 million in
the three months ended March 31, 2011. Commission revenue for
the three months ended March 31, 2012, was $5.7 million
compared to $3.0 million during the three months ended
March 31, 2011. In the three months ended March 31, 2012,
commission revenue was generated by Global Resource Investments
Ltd. and Sprott Private Wealth. Other income increased by
$1.0 million in the three months ended March 31, 2012 to $1.4
million from $0.4 million in the first quarter of 2011. Total
expenses for the three months ended March 31, 2012 were $23.2
million, a decrease of $1.4 million or 5.6%, from $24.6 million
during the same period last year. Base EBITDA, which excludes the
impact of income taxes and certain non-cash expenses and gains or
losses on proprietary investments, decreased by 4.7% to $16.1
million ($0.10 per share) for the three months ended March 31,
2012, compared with $16.9 million ($0.10 per share) in the first
quarter of 2011. Net income for the three months ended
March 31, 2012 increased by 60.4% to $16.9 million ($0.10 per
share) from $10.6 million ($0.07 per share) in the first quarter
2011. Dividends On March 20, 2012, a dividend of $0.03 per common
share was declared for the quarter ended December 31, 2011. This
dividend was paid on April 20, 2012 to shareholders of record at
the close of business on April 5, 2012. In May 2012, a dividend of
$0.03 per common share was declared for the quarter ended March 31,
2012. Conference Call and Webcast A conference call and webcast
will be held today, Wednesday, May 9, 2012, at 10:00am ET to
discuss the Company's financial results. To access the call, please
dial 647-427-7450 or 1-888-231-8191 ten minutes prior to the
scheduled start of the call. A taped replay of the conference call
will be available until Thursday, May 17, 2012 by calling
416-849-0833 or 1-855-859-2056, reference number 76237551. The
conference call will also be webcast live at www.sprottinc.com and
www.newswire.ca. An archived replay of the webcast will be
available for 365 days. *Non-IFRS Financial Measures This press
release includes financial terms (including AUM, EBITDA, Base
EBITDA, Cash Flow from Operations and net sales) that the Company
utilizes to assess the financial performance of its business that
are not measures recognized under International Financial Reporting
Standards ("IFRS"). These non-IFRS measures should not be
considered alternatives to performance measures determined in
accordance with IFRS and may not be comparable to similar measures
presented by other issuers. For additional information regarding
the Company's use of non-IFRS measures, including the calculation
of these measures, please refer to the "Non-IFRS Financial
Measures" section of the Company's Management's Discussion and
Analysis and its financial statements available on the Company's
website at www.sprottinc.com and on SEDAR at www.sedar.com.
Forward-Looking Statements This release contains "forward-looking
statements" which reflect the current expectations of the Company.
These statements reflect management's current beliefs with respect
to future events and are based on information currently available
to management. Forward-looking statements involve significant known
and unknown risks, uncertainties and assumptions. Many factors
could cause actual results, performance or achievements to be
materially different from any future results, performance or
achievements that may be expressed or implied by such
forward-looking statements including, without limitation, those
listed under the heading "Risk Factors" in the Company's annual
information form dated March 27, 2012. Should one or more of these
risks or uncertainties materialize, or should assumptions
underlying the forward-looking statements prove incorrect, actual
results, performance or achievements could vary materially from
those expressed or implied by the forward-looking statements
contained in this release. Although the forward-looking statements
contained in this release are based upon what the Company believes
to be reasonable assumptions, the Company cannot assure investors
that actual results, performance or achievements will be consistent
with these forward-looking statements. These forward-looking
statements are made as of the date of this release and the Company
does not assume any obligation to update or revise them to reflect
new events or circumstances. About Sprott Inc. Sprott Inc. is a
leading independent asset manager dedicated to achieving superior
returns for its clients over the long term. The Company currently
operates through four business units: Sprott Asset Management LP,
Sprott Private Wealth LP, Sprott Consulting LP, and Sprott U.S.
Holdings Inc. Sprott Asset Management is the investment
manager of the Sprott family of mutual funds and hedge funds and
discretionary managed accounts; Sprott Private Wealth provides
wealth management services to high net worth individuals; and
Sprott Consulting provides management, administrative and
consulting services to other companies, including Sprott Resource
Corp. , Sprott Resource Lending Corp. and Sprott Power Corp. .
Sprott U.S. Holdings Inc. includes Global Resource Investments Ltd,
Sprott Asset Management USA Inc., and Resource Capital Investments
Corporation. Sprott Inc. is headquartered in Toronto, Canada, and
is listed on the Toronto Stock Exchange under the symbol "SII". For
more information on Sprott Inc., please visit www.sprottinc.com.
Sprott Inc. CONTACT: Investor contact information: (416)
203-2310 or 1 (877) 403-2310or ir@sprott.com
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