Stock Name: GMP
Amount: CAD 0.10
Announcement Date: 14/03/2012
Record Date: 20/03/2012
Dividend Detail:
For further information about GMP Capital Inc., our results for fiscal
2011 and the meaning of certain references, this earnings release
should be read in conjunction with our 2011 Annual Financial Statements
and Management's Discussion and Analysis for the year ended December
31, 2011 and our 2011 Annual Information Form, which can be accessed on
our website at gmpcapital.com and on sedar.com. Unless otherwise indicated, all dollar amounts are expressed in
Canadian dollars and have been taken from our 2011 Annual Financial
Statements prepared in accordance with International Financial
Reporting Standards ("IFRS").
TORONTO, March 14, 2012 /CNW/ - GMP Capital Inc. ("GMP") (TSX: GMP)
today reported revenue of $72.7 million in fourth quarter 2011,
representing a 53% decrease compared with the same period a year ago
primarily due to weaker performance in our Capital Markets segment amid
ongoing challenging market conditions.�� �� Net income was $2.4 million
($0.02 per basic share) in fourth quarter 2011 compared with net income
of $46.0 million ($0.55 per basic share) in fourth quarter 2010,
generating an annualized return on common shareholders' equity ("ROE")1 of 2.3% in fourth quarter 2011.
GMP's results for fourth quarter 2011 were affected by the following
items of note aggregating to a negative impact of $0.03 per basic
share:
$1.7 million ($1.0 million after-tax) share-based compensation expense
recorded in connection with the common shares of GMP ("Common Shares")
issued to certain key employees in connection with the acquisition of
Miller Tabak Roberts Securities, LLC ("MTR"); and
$1.3 million ($1.0 million after-tax) non-cash impairment charge
relating to the intangible assets of EdgeStone Capital Partners, L.P.
("EdgeStone").
"Our financial results in fourth quarter 2011 were adversely affected by
the continued challenging market conditions which dominated much of the
year," said Harris Fricker, Chief Executive Officer, GMP.�� "Trading and
underwriting activity in Capital Markets remained relatively muted this
quarter although M&A advisory revenues were 59% higher than fourth
quarter 2010. Results in Alternative Investments were impacted by lower
performance fees and unrealized losses on our fund investments while
our Wealth Management returns reflect lower results at Richardson GMP
which was also impacted by the weaker capital markets activity.��
Although our financial performance was negatively affected by market
conditions this quarter, we continued to focus on our clients and the
prudent management of all aspects of our business.�� One of GMP's
greatest competitive advantages remains our proven ability to adapt and
succeed in changing markets, and it is that ability that leaves me
optimistic about our prospects for growth as we enter 2012."
Revenue was $301.8 million for 2011, representing a year-over-year
decrease of 33%.�� Net income was $29.1 million ($0.31 per basic share)
compared with net income of $31.2 million ($0.30 per basic share) in
2010, generating a ROE1 of 7.3% for the year compared with 7.2% in 2010. Adjusted net income1 in fiscal 2011 was $35.0 million, adjusted earnings per basic share1 was $0.40, and adjusted ROE1 was 9.3%. Adjusted net income1 for fiscal 2010 was $107.7 million, adjusted earnings per basic share1 was $1.39, and adjusted ROE1 was 27.4%.
FINANCIAL HIGHLIGHTS
Fourth Quarter 2011 versus Fourth Quarter 2010
Revenue of $72.7 million compared with $153.4 million
Net income of $2.4 million compared with $46.0 million
Adjusted net income1 of $4.3 million compared with $46.5 million
Earnings per basic share of $0.02 compared with $0.55
Adjusted earnings per basic share1 of $0.05 compared with $0.55
Annualized ROE1 of 2.3% compared with 49.2%. Adjusted annualized ROE1 of 5.3% compared with 49.7%
2011 versus 2010
Revenue of $301.8 million compared with $453.7 million
Net income of $29.1 million compared with $31.2 million
Adjusted net income1 of $35.0 million compared with $107.7 million
Earnings per basic share of $0.31 compared with $0.30
Adjusted earnings per basic share1 of $0.40 compared with $1.39
ROE1 of 7.3% compared with 7.2%. Adjusted ROE1 of 9.3% compared with 27.4%
Commenting further, Mr. Fricker said, "Our financial results do not
reflect the many operational and strategic accomplishments achieved in
2011 and it's here that I am most pleased with GMP's resilience.�� In
2011, we accelerated the build out of our fixed income capabilities
through the acquisition of Miller Tabak Roberts Securities, LLC and we
continued our international expansion with further enhancements to our
European capabilities and the launch of new operations in Australia.��
We strengthened our balance sheet and capital position through the
issuance of preferred shares, the redemption of all outstanding
long-term debt and the return of significant capital back to our
shareholders under our normal course issuer bid.�� We believe that,
collectively, these initiatives have made us stronger and better
positioned to withstand prolonged economic headwinds, and have added
notably to GMP's global reach and product expertise to better serve a
growing global client base.�� The success of our client-centric business
model is made possible by the dedication of our professionals and I
thank them for remaining focused on the needs of our clients during
these challenging times."
ANNUAL BUSINESS HIGHLIGHTS
CAPITAL MARKETS
Advanced its international expansion strategy through the addition of
several senior members to its team of professionals in London, England
in the areas of sales and trading, research and investment banking;
Leveraged its core capabilities and leadership in the mid-market
resource sector through the launch of operations in Australia;
Accelerated the build-out of its fixed income capabilities through the
acquisition of MTR (subsequently renamed GMP Securities, LLC), which
tangibly adds fixed income expertise to GMP's overall client
proposition;
GMP Securities L.P. ("GMP Securities") ranked sixth in the dollar value
of common equity underwriting transactions completed in Canada for
which we were lead or co-lead;2
GMP Securities ranked sixth in Canada for equity block trading volumes
on the Toronto Stock Exchange ("TSX") and TSX Venture Exchange
("TSXV"), achieving a 6.8% market share;3 and
GMP Securities participated in 196 underwriting transactions completed
in Canada helping raise approximately $15.4 billion on behalf of
clients, leading or co-leading 83 of these transactions4.
WEALTH MANAGEMENT
The Wealth Management segment is comprised of GMP's non-controlling
ownership interest in Richardson GMP Limited ("Richardson GMP").�� 2011
business highlights for Richardson GMP include:
finished 2011 with assets under administration ("AUA")1 of $13.3 billion and 109 investment advisory teams;
recorded its first annual profit despite challenging market conditions
in 2011;
ranked first overall in the annual Investment Executive Brokerage Report
Card for the last two consecutive years; and
expanded its team of multi-disciplinary professionals located across
Canada, enhancing the ability to provide clients with integrated tax
and estate planning strategies.
ALTERNATIVE INVESTMENTS
During 2011, GMP Investment Management L.P. ("GMP Investment
Management"):
increased assets under management ("AUM")1 by $145.4 million or 33%, ending the year with AUM1 of $589.0 million;
launched the GMPIM Equity Opportunities Fund and the GMPIM Equity
Opportunities Class F Fund (collectively, the "GMPIM Equity Funds"),
quantitatively driven long/short investment funds focused on investing
in North American equities;
was appointed portfolio advisor to Diversified Alpha Fund II, a
closed-end exchange traded fund; and
generated a return of 9.8%4 in 2011 for the Canadian ABCP Fund LP, net of fees, making it one of
the top performing credit funds in 2011, outperforming the Merrill
Lynch High Yield Index which generated a return of 4.5%5 before fees in 2011.
DIVIDENDS
On March 13, 2012, the board of directors of GMP (the "Board of
Directors") declared a quarterly cash dividend of $0.10 per Common
Share, and a quarterly cash dividend of $0.3438 per Cumulative 5-Year
Rate Reset Preferred Share, Series B, each payable on March 31, 20126, to the respective shareholders of record on March 22, 2012.
NORMAL COURSE ISSUER BID RENEWED
During fiscal 2011, we purchased for cancellation 5,475,584 Common
Shares at a weighted average price of $13.15 per share for an aggregate
cost of $72.0 million under our normal course issuer bid.�� On March 13,
2012, the Board of Directors approved the renewal of GMP's normal
course issuer bid, which has been accepted by the TSX ("2012 NCIB").��
As at February 29, 2012, GMP had 70,019,445 Common Shares outstanding.��
Under the 2012 NCIB, GMP may purchase for cancellation up to 4,862,583
Common Shares, representing 10% of the public float of 48,625,826
Common Shares on February 29, 2012, from time to time over the 12-month
period commencing on March 16, 2012 and ending on the earlier of the
date on which purchases under the 2012 NCIB have been completed and
March 15, 2013.
Daily repurchases will be limited to 54,388 Common Shares, subject to
certain prescribed exemptions, including block purchase exceptions.��
The daily repurchase limit represents 25% of the average daily trading
volume of 217,554 Common Shares for the six-month period��ended February
29, 2012 (excluding purchases we made under our normal course issuer
bid).�� All purchases will be made in accordance with TSX requirements
and the price which GMP will pay for any Common Shares acquired will be
the prevailing market price of Common Shares at the time of
acquisition.�� The actual number of Common Shares that may be purchased
and the timing of any such purchases will be determined at GMP's
discretion, subject to the limitations referred to above. All purchases
will be effected by GMP Securities through the facilities of the TSX
and will be funded from GMP's working capital. GMP believes that the
purchase of outstanding Common Shares may at certain times enhance
value to shareholders and in these circumstances, represents an
appropriate use of funds.
QUARTERLY FINANCIAL HIGHLIGHTS
Fourth quarter 2011 revenue decreased $80.8 million or 53% to $72.7
million compared with fourth quarter 2010 primarily due to weaker
revenue performance in the Capital Markets segment.
Capital Markets' fourth quarter 2011 revenue decreased $64.5 million or
49% to $67.1 million amid unfavourable market conditions in fourth
quarter 2011, which resulted in lower investment banking revenue, lower
returns generated in client facilitation and principal activities and a
decrease in commission revenue.�� In Alternative Investments, revenue
decreased $16.7 million or 93% in fourth quarter 2011 primarily due to
lower performance fees recorded in connection with funds managed by GMP
Investment Management compared with fourth quarter 2010. Revenues were
also impacted by negative mark to market valuation adjustments recorded
on GMP's investments in funds managed by GMP Investment Management and
EdgeStone during fourth quarter 2011. Wealth Management reported a loss
before income taxes of $0.7 million in fourth quarter 2011 compared
with income before income taxes of $0.9 million in fourth quarter 2010
as weak capital market activity adversely impacted Richardson GMP's
commission revenue due to lower client trading volumes.
Expenses for GMP decreased $25.8 million or 28% in fourth quarter 2011
compared with fourth quarter 2010 driven by a decrease in employee
compensation and benefits expense largely due to lower variable
compensation recorded in the Capital Markets segment commensurate with
weaker revenue generation. Non-compensation related expenses decreased
$7.7 million or 31% in fourth quarter 2011 compared with fourth quarter
2010. Lower selling, general and administrative expenses in the Capital
Markets segment represented the majority of the overall decrease, with
the Corporate segment also experiencing a decline.
GMP recorded net income of $2.4 million ($0.02 per basic share) in
fourth quarter 2011 compared with net income of $46.0 million ($0.55
per basic share) in fourth quarter 2010. For fourth quarter 2011, GMP
reported a ROE1 of 2.3% compared with a ROE1 of 49.2% in fourth quarter 2010. Fourth quarter 2011 adjusted net
income1 was $4.3 million, adjusted earnings per basic share1 was $0.05, and adjusted ROE1 was 5.3%. Fourth quarter 2010 adjusted net income1 was $46.5 million, adjusted earnings per basic share1 was $0.55 and adjusted ROE1 was 49.7%.
QUARTERLY FINANCIAL PERFORMANCE - BY BUSINESS SEGMENT
For further details relating to segmented information see Note 28 to the
2011 Annual Financial Statements.
CAPITAL MARKETS
($000, except as otherwise noted) | �� | % increase/ (decrease) | |
Fourth Quarter 2011 | Fourth Quarter 2010 | ||
Revenue�� | 67,098 | 131,600 | (49) |
������Investment banking | 43,862 | 69,384 | (37) |
������Commissions | 15,604 | 32,108 | (51) |
������Client facilitation and principal activities | 5,041 | 26,521 | (81) |
������Interest | 1,897 | 3,415 | (44) |
������Other | 695 | 172 | 100+ |
Expenses �� | 55,689 | 76,742 | (27) |
������Employee compensation and benefits | 42,921 | 58,819 | (27) |
������Selling, general and administrative | 11,452 | 15,611 | (27) |
������Interest | 724 | 1,770 | (59) |
������Amortization | 592 | 542 | 9 |
Income before income taxes - reported | 11,409 | 54,858 | (79) |
Income before income taxes - adjusted 1 | 13,158 | 54,858 | (76) |
Total headcount (#)�� | 357 | 241 | 48 |
1 | Considered to be a non-GAAP financial measure. This measure does not have any standardized meaning prescribed by generally accepted accounting principles ("GAAP") under IFRS and is therefore unlikely to be comparable to similar measures presented by other issuers.�� This data should be read in conjunction with the "Non-GAAP Measures" section at the end of this press release. |
Capital Markets' fourth quarter 2011 revenue decreased $64.5 million or
49% to $67.1 million compared with fourth quarter 2010.
Investment banking revenue declined $25.5 million or 37% to $43.9
million compared with fourth quarter 2010 due to lower underwriting
revenue which declined $32.5 million or 57% to $24.8 million in fourth
quarter 2011.�� The decline in underwriting revenue reflects the
continued challenging market conditions in fourth quarter 2011, which
were in sharp contrast to robust activity in the comparable quarter of
the prior year. During fourth quarter 2011, GMP Securities led or
co-led 18 underwriting transactions completed in Canada having an
aggregate dollar value of approximately $0.9 billion. Despite the
unfavourable market conditions, M&A advisory revenue rose $7.0 million
in fourth quarter 2011 compared with fourth quarter 2010.
Capital Markets generated net gains of $5.0 million in client
facilitation and principal activities in fourth quarter 2011 compared
with net gains of $26.5 million in fourth quarter 2010.�� This decrease
reflects significantly lower gains recorded on our principal
inventories and higher facilitation losses resulting from volatile
equity markets.
Commission revenue decreased $16.5 million or 51% to $15.6 million in
fourth quarter 2011 compared with fourth quarter 2010 largely due to a
63% decrease in the volume of trades executed by GMP Securities on the
TSX and TSXV over the same period. According to CanadaEquity.com, GMP Securities ranked ninth in equity block trading volume on the TSX
and TSXV during fourth quarter 2011, achieving a market share of 4.4%
compared with a market share of 9.2% and a ranking of third in fourth
quarter 2010.
Expenses decreased $21.1 million or 27% to $55.7 million in fourth
quarter 2011 compared with fourth quarter 2010 driven by a decrease in
employee compensation and benefits expense primarily due to lower
variable compensation recorded in the period.�� Fixed salaries and
benefits reflected a $2.4 million (pre-tax) charge recorded in
connection with a consulting arrangement entered into with a former
executive as well as the inclusion of fixed salaries and benefits for
the newly acquired MTR.�� Shared-based compensation also increased in
fourth quarter 2011 due to a $1.7 million expense recorded in
connection with Common Shares issued to certain key employees of MTR.��
Selling, general and administrative expenses decreased largely due to
lower investment banking deal related expenses, lower levels of
charitable giving and lower transactional costs associated with our
trading activities.
Capital Markets recorded income before income taxes of $11.4 million for
fourth quarter 2011 compared with $54.9 million in fourth quarter 2010.
Adjusted income before income taxes1 was $13.2 million in fourth quarter 2011.
WEALTH MANAGEMENT
($000) | �� | % increase/ (decrease) | |
Fourth Quarter 2011 | Fourth Quarter 2010 | ||
�� | �� | �� | �� |
Share of (loss) income of associate | (689) | 852 | n.m. |
(Loss) income before income taxes | (689) | 852 | n.m. |
n.m. = not meaningful
Wealth Management reported a loss before income taxes of $0.7 million in
fourth quarter 2011 compared with income before income taxes of $0.9
million in fourth quarter 2010. The loss before income taxes in fourth
quarter 2011 interrupted several consecutive quarters of profitability
at Richardson GMP as weak capital market activity adversely impacted
commission revenue due to lower client trading volumes.
ALTERNATIVE INVESTMENTS
($000, except as otherwise noted) | �� | % increase/ (decrease) | |
Fourth Quarter 2011 * | Fourth Quarter 2010 | ||
Revenue | 1,319 | 18,021 | (93) |
������Investment management and fee income | 3,058 | 5,556 | (45) |
������Principal activities | (2,137) | 1,230 | n.m. |
������Interest | 2 | 2 | - |
������Other | 396 | 11,233 | (96) |
Expenses | 5,261 | 5,893 | (11) |
������Employee compensation and benefits | 3,452 | 4,007 | (14) |
������Selling, general and administrative | 1,740 | 1,751 | (1) |
������Interest | 7 | 7 | - |
������Amortization | 62 | 128 | (52) |
(Loss) income before income taxes | (3,942) | 12,128 | n.m. |
Total headcount (#) | 22 | 37 | (41) |
n.m. = not meaningful | |
*�� | Up until November 30, 2011, this segment also included the financial results of EdgeStone. On December 12, 2011, GMP entered into arrangements with certain former senior officers of EdgeStone, (the "Principals"), pursuant to which the Principals have assumed responsibility for all aspects of the management and operations of the EdgeStone business. |
Alternative Investments' revenue decreased $16.7 million or 93% in
fourth quarter 2011.�� Fourth quarter 2010 was bolstered by $9.6 million
in performance fees recorded by GMP Investment Management and its
affiliates in connection with performance of the funds managed by GMP
Investment Management compared with $0.3 million in performance fees
recognized in fourth quarter 2011. Other revenue in fourth quarter 2010
also reflected carried interest revenue of $2.3 million following the
disposition of a portfolio company by the EdgeStone Venture Fund
compared with no such carried interest recorded in fourth quarter 2011.
Principal activities in fourth quarter 2011 include an unrealized loss
of $1.5 million on our investment in the EdgeStone Capital Energy
Fund-I, L.P. following the completion of a valuation assessment by
EdgeStone, while fourth quarter 2010 included $1.5 million in
unrealized gains on GMP's investment in the GMP Diversified Alpha
Fund.�� Also contributing to the decrease was lower investment
management and fee income relating to EdgeStone.
Expenses decreased $0.6 million or 11% to $5.3 million in fourth quarter
2011 compared with fourth quarter 2010 due primarily to lower employee
compensation and benefits expense relating to EdgeStone, partly offset
by higher salaries and benefits expense in GMP Investment Management
due to the addition of professionals to its team.�� Non-compensation
related expenses were largely unchanged.
Alternative Investments reported a loss before income taxes of $3.9
million in fourth quarter 2011 compared with income before income taxes
of $12.1 million in fourth quarter 2010.
CORPORATE
($000) | �� | % increase/ (decrease) | ||
Fourth Quarter 2011 | Fourth Quarter 2010 | |||
Revenue�� | 4,237 | 3,828 | 11 | |
Expenses | 5,924 | 10,036 | (41) | |
�� Employee compensation and benefits | 3,142 | 4,819 | (35) | |
�� Selling, general and administrative | 2,405 | 2,561 | (6) | |
�� Interest | 44 | 1,168 | (96) | |
�� Amortization | 333 | 1,488 | (78) | |
Impairment charges | 1,317 | 481 | 100+ | |
(Loss) before income taxes - reported�� | (3,004) | (6,689) | 55 | |
(Loss) before income taxes - adjusted1 | (1,687) | (6,208) | 73 | |
1�� | Considered to be a non-GAAP financial measure. This measure does not have any standardized meaning prescribed by generally accepted accounting principles ("GAAP") under IFRS and is therefore unlikely to be comparable to similar measures presented by other issuers.�� This data should be read in conjunction with the "Non-GAAP Measures" section at the end of this press release. |
Revenue in fourth quarter 2011 includes $4.1 million in revenue received
in support of carrying broker and other administrative support services
provided to Richardson GMP.�� This compares with $3.6 million in such
revenue earned in fourth quarter 2010.
Total expenses decreased in fourth quarter 2011 compared with fourth
quarter 2010 largely due to lower employee compensation and benefits
expenses and lower amortization expense recorded in connection with the
EdgeStone intangible assets following impairment charges recorded on
these assets.�� Interest expense also decreased in fourth quarter 2011
compared with fourth quarter 2010 as a result of the redemption of all
issued and outstanding senior unsecured notes issued by Griffiths
McBurney L.P. (the "Notes"), an indirect, wholly-owned subsidiary of
GMP, in the first quarter of 2011.
�� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | ||
�� | FINANCIAL HIGHLIGHTS | �� | �� | �� | �� | �� | �� | �� | �� | �� | ||
�� | UNAUDITED | �� | Q4/11 | �� | Q4/10 | �� | �� | 2011 | �� | 2010 | ||
(thousands of Canadian dollars, except for per share amounts | �� | �� | �� | �� | �� | �� | �� | �� | �� | |||
and outstanding share information) | �� | �� | �� | �� | �� | �� | �� | �� | �� | |||
Selected Financial Highlights - Reported | �� | �� | �� | �� | �� | �� | �� | �� | �� | |||
�� | Revenue | �� | �� | 72,654 | �� | 153,448 | �� | �� | 301,843 | �� | 453,670 | |
�� | Expenses | �� | �� | 66,875 | �� | 92,670 | �� | �� | 261,193 | �� | 299,762 | |
�� | Income before income taxes | �� | 3,773 | �� | 61,149 | �� | �� | 40,415 | �� | 70,166 | ||
�� | Net income | �� | �� | 2,390 | �� | 45,992 | �� | �� | 29,119 | �� | 31,200 | |
�� | Net income attributable to: | �� | �� | �� | �� | �� | �� | �� | �� | �� | ||
�� | GMP Capital Inc. shareholders | �� | 3,016 | �� | 38,417 | �� | �� | 25,929 | �� | 20,814 | ||
�� | Non-controlling interests �� | �� | (626) | �� | 7,575 | �� | �� | 3,190 | �� | 10,386 | ||
�� | Total assets | �� | �� | �� | �� | �� | �� | �� | 1,267,753 | 1,439,126 | ||
�� | Total liabilities | �� | �� | �� | �� | �� | �� | �� | 897,543 | 1,107,495 | ||
�� | Long-term debt | �� | �� | �� | �� | �� | �� | �� | - | �� | 59,885 | |
�� | Shareholders' equity | �� | �� | �� | �� | �� | �� | �� | 363,975 | �� | 327,930 | |
�� | Total equity | �� | �� | �� | �� | �� | �� | �� | 370,210 | �� | 331,631 | |
�� | Total headcount (#) | �� | �� | �� | �� | �� | �� | �� | 469 | �� | 362 | |
Financial Measures - Reported �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | |||
�� | Basic earnings per share | �� | $ | 0.02 | $ | 0.55 | �� | $ | 0.31 | $ | 0.30 | |
�� | Diluted earnings per share | �� | $ | 0.02 | $ | 0.50 | �� | $ | 0.28 | $ | 0.27 | |
�� | Return on common equity 1 | �� | �� | 2.3% | �� | 49.2% | �� | �� | 7.3% | �� | 7.2% | |
�� | Common share dividends declared | �� | 7,012 | �� | 4,387 | �� | �� | 26,825 | �� | 16,077 | ||
�� | Preferred share dividends declared - Series B | �� | 1,581 | �� | �� | �� | �� | 5,384 | �� | �� | ||
�� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | ||
Adjusted Results 1 | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | ||
�� | Income before income taxes | �� | 6,839 | �� | 61,630 | �� | �� | 49,025 | �� | 151,111 | ||
�� | Net income | �� | �� | 4,340 | �� | 46,473 | �� | �� | 35,021 | �� | 107,746 | |
�� | Net income attributable to GMP Capital Inc. shareholders | �� | 3,385 | �� | 38,898 | �� | �� | 26,447 | �� | 97,360 | ||
�� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | ||
Adjusted Measures 1 | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | ||
�� | Basic earnings per share | �� | $ | 0.05 | $ | 0.55 | �� | $ | 0.40 | $ | 1.39 | |
�� | Diluted earnings per share | �� | $ | 0.05 | $ | 0.51 | �� | $ | 0.36 | $ | 1.28 | |
�� | Return on common equity | �� | �� | 5.3% | �� | 49.7% | �� | �� | 9.3% | �� | 27.4% | |
�� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | ||
Client Assets (end of period) | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | ||
�� | Assets under management 1 - GMP Investment Management | �� | �� | �� | �� | �� | �� | 589,000 | �� | 443,600 | ||
�� | Assets under management 1 - EdgeStone | �� | �� | �� | �� | �� | �� | �� | �� | 966,700 | ||
�� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | ||
Shareholders' Capital Outstanding (000) | �� | �� | �� | �� | �� | �� | �� | �� | �� | |||
�� | Cumulative 5-Year Rate Reset Preferred Shares, Series B (period end) �� | �� | �� | �� | 4,600 | �� | �� | |||||
�� | Common shares 2 - (period end) | �� | �� | �� | �� | �� | �� | 70,020 | �� | 73,050 | ||
�� | Weighted-average number of common shares - basic | �� | �� | �� | �� | �� | �� | 66,922 | �� | 70,295 | ||
�� | Weighted-average number of common shares - diluted | �� | �� | �� | �� | �� | �� | 73,588 | �� | 76,007 | ||
�� | �� | �� | �� | �� | �� | �� | �� | �� | �� | �� | ||
1 Considered to be a non-GAAP financial measure. This measure does not have any standardized meaning prescribed by GAAP under IFRS and is therefore unlikely to be comparable to similar measures presented by other issuers. This data should be read in conjunction with the "Non-GAAP Measures" section at the end of this press release | ||||||||||||
2 Net of 0.020 million treasury shares as at December 31, 2011 purchased under our normal course issuer bid.�� | ||||||||||||
CONFERENCE CALL
GMP executives will host a conference call and live audio webcast today
at 10:00 a.m. (ET) to discuss GMP's fourth quarter and fiscal 2011
results.�� Interested parties are invited to access the call by dialing
416-644-3414 or 1-800-814-4859 (toll free) or via live audio webcast at
http://www.gmpcapital.com/investor. A recording of the conference call will be available until Wednesday,
March 21, 2012, by dialing 416-640-1917 or 1-877-289-8525 (toll free)
and entering access code 4507690#. The webcast will be archived at http://www.gmpcapital.com/investor.
NON-GAAP MEASURES
Consistent with GMP's management framework, management uses certain
Non-GAAP financial measures to assess GMP's financial performance,
which are not generally accepted accounting principle measures ("GAAP")
under IFRS. These measures do not have any standardized meaning
prescribed by GAAP and are therefore unlikely to be comparable to
similar measures presented by other issuers. Non-GAAP measures should
not be considered as alternatives to net income or comparable metrics
determined in accordance with IFRS as indicators of GMP's performance,
liquidity, cash flows and profitability.
Return on Common Equity
GMP also evaluates the performance of its consolidated operations using
ROE. Our ROE calculation is based on net income available to common
shareholders divided by total average common shareholder equity for the
period, which are measures derived from information contained in our
2011 Annual Financial Statements, which were prepared in accordance
with IFRS.
Assets under Administration/Management
AUA is a measure of the market value of client assets administered by
Richardson GMP and in respect of which Richardson GMP earns commissions
or fees.�� AUA is used by management in assessing the performance of the
Wealth Management segment because such commissions or fees earned by
Richardson GMP impact the performance of GMP's Wealth Management
segment through GMP's proportionate share of Richardson GMP's net
income.��AUM is a measure of the net asset value of funds managed by GMP
Investment Management (the "GMP IM Funds") and in respect of which GMP
Investment Management earns management fees and may also earn
performance fees.��Up until November 30, 2011, AUM also included the
amount of committed and/or invested capital in the funds managed by
EdgeStone in respect of which EdgeStone earned management fee income or
received general partner distributions. The amount of management fees
earned by GMP is directly related to the level of AUM in the
Alternative Investments segment. The amount of performance fees earned
is related to both the investment performance and the level of AUM of
the GMP IM Funds. AUM is used by management in assessing the
performance of GMP's Alternative Investments segment because it is a
key driver of revenues for the segment. AUA and AUM are not included in
GMP's Consolidated Balance Sheets.
Adjusted Measures
Management believes that presenting certain results and measures on an
adjusted basis which excludes the impacts of specified items may be
more reflective of ongoing operating results and provides readers with
an enhanced understanding of how management views GMP's core
performance. Management assesses performance on both a reported and an
adjusted basis and considers both bases to be useful in assessing
underlying, ongoing business performance. Presenting results on both
bases also permits readers to assess the impact of the specified items
on the results for the periods presented. We exclude the following to
arrive at our adjusted measures:
(i) from fiscal 2011 financial results, the impact of the one-time
redemption costs (the "Redemption Costs") recorded in connection with
the redemption of all of the outstanding Notes that was completed
during fiscal 2011;�� the share-based compensation expense recorded in
connection with the common shares of GMP issued to certain key
employees of MTR in connection with the acquisition of MTR in fiscal
2011; the impact of goodwill and intangible asset impairment charges
recorded during fiscal 2011; and
(ii) from fiscal 2010 financial results, the impact of goodwill and
intangible asset impairment charges recorded during fiscal 2010.
Management has excluded the Redemption Costs in presenting fiscal 2011
adjusted measures on the basis that such costs are not expected to
re-occur and therefore unlikely to be reflective of GMP's core
performance. The share-based compensation expense arising from the
deferred share-based awards issued in connection with the acquisition
of MTR has also been excluded from fiscal 2011 adjusted results as
management regards these shares as part of the purchase price
consideration, notwithstanding the accounting treatment which treats
these shares as share-based compensation due to the obligations imposed
on the key employees to forfeit their unvested shares in the event they
cease to be an employee of the GMP Group. Impairment charges have been
excluded from fiscal 2011 and fiscal 2010 adjusted measures due to
their potential impact on trend analysis.
The following table provides a reconciliation of GMP's reported results
to its adjusted measures:
GAAP and Related Non-GAAP Results and Measures �� �� �� �� �� �� �� �� | ||||||||||
(thousands of Canadian dollars, except as noted) | �� | 2011 | �� | 2010 | �� | Q4 2011 | Q4 2010 | |||
Reported Results | �� | �� | �� | �� | �� | �� | �� | �� | ||
Income before income taxes | �� | 40,415 | �� | 70,166 | �� | 3,773 | �� | 61,149 | ||
Income tax expense | �� | 11,296 | �� | 38,966 | �� | 1,383 | �� | 15,157 | ||
Net income | �� | 29,119 | �� | 31,200 | �� | 2,390 | �� | 45,992 | ||
Net income attributable to common shareholders | �� | 20,545 | �� | 20,814 | �� | 1,435 | �� | 38,417 | ||
| �� | �� | �� | �� | �� | �� | �� | �� | �� | ||
Reported Measures | �� | �� | �� | �� | �� | �� | �� | �� | ||
Net income per common share | �� | �� | �� | �� | �� | �� | �� | �� | ||
�� | Basic | $ | 0.31 | $ | 0.30 | $ | 0.02 | $ | 0.55 | |
�� | Diluted | $ | 0.28 | $ | 0.27 | $ | 0.02 | $ | 0.50 | |
Average common equity | �� | 280,875 | �� | 288,628 | �� | 254,412 | 312,615 | |||
Return on common equity 1 | �� | 7.3% | �� | 7.2% | �� | 2.3% | �� | 49.2% | ||
Pre-tax Impact of Adjusting Items | �� | �� | �� | �� | �� | �� | �� | �� | ||
Corporate Segment | �� | �� | �� | �� | �� | �� | �� | �� | ||
�� | Charges to Interest expense - Redemption of senior unsecured notes | �� | 5,466 | �� | ��� | �� | ��� | �� | ��� | |
�� | Impairment charges - Goodwill and intangible assets | �� | 1,317 | �� | 80,945 | �� | 1,317 | �� | 481 | |
Capital Markets Segment | �� | �� | �� | �� | �� | �� | �� | �� | ||
�� | Charges to Employee compensation and benefits - Deferred share-based awards | �� | 1,827 | �� | ��� | �� | 1,749 | �� | ��� | |
Impact of Adjusting Items on income before income taxes | �� | 8,610 | �� | 80,945 | �� | 3,066 | �� | 481 | ||
After-Tax Impact of Adjusting Items | �� | �� | �� | �� | �� | �� | �� | �� | ||
�� | Redemption costs associated with senior unsecured notes | �� | 3,908 | �� | ��� | �� | ��� | �� | ��� | |
�� | Goodwill and intangible asset impairment charges | �� | 974 | �� | 76,546 | �� | 974 | �� | 481 | |
�� | Cost of deferred share-based awards | �� | 1,020 | �� | ��� | �� | 976 | �� | ��� | |
Impact of adjusting items on: | �� | �� | �� | �� | �� | �� | �� | �� | ||
�� | Net income | �� | 5,902 | �� | 76,546 | �� | 1,950 | �� | 481 | |
�� | Net income attributable to common shareholders | �� | 5,902 | �� | 76,546 | �� | 1,950 | �� | 481 | |
�� | Net income per common share: | �� | �� | �� | �� | �� | �� | �� | �� | |
�� | Basic | $ | 0.09 | $ | 1.09 | $ | 0.03 | �� | ��� | |
�� | Diluted | $ | 0.08 | $ | 1.01 | $ | 0.03 | $ | 0.01 | |
�� | �� | �� | �� | �� | �� | �� | �� | �� | ||
Adjusted Results 1 | �� | �� | �� | �� | �� | �� | �� | �� | ||
Income before income taxes | �� | 49,025 | �� | 151,111 | �� | 6,839 | �� | 61,630 | ||
Income tax expense | �� | 14,004 | �� | 43,365 | �� | 2,499 | �� | 15,157 | ||
Net income | �� | 35,021 | �� | 107,746 | �� | 4,340 | �� | 46,473 | ||
Net income attributable to common shareholders | �� | 26,447 | �� | 97,360 | �� | 3,385 | �� | 38,898 | ||
Adjusted Measures 1 | �� | �� | �� | �� | �� | �� | �� | �� | ||
Net income per common share | �� | �� | �� | �� | �� | �� | �� | �� | ||
�� | Basic | $ | 0.40 | $ | 1.39 | $ | 0.05 | $ | 0.55 | |
�� | Diluted | $ | 0.36 | $ | 1.28 | $ | 0.05 | $ | 0.51 | |
Average common equity | �� | 284,549 | �� | 355,245 | �� | 255,387 | 312,855 | |||
Return on common equity | �� | 9.3% | �� | 27.4% | �� | 5.3% | �� | 49.7% | ||
�� | �� | �� | �� | �� | �� | �� | �� | �� | ||
1 Adjusted results and measures are considered to be non-GAAP financial measures. These measures do not have any standardized meaning prescribed by GAAP under IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers. The table above outlines such measures with their closest GAAP counterparts.�� | ||||||||||
��
FORWARD-LOOKING INFORMATION
This press release contains "forward-looking information" as defined
under applicable Canadian securities laws.���� This information includes,
but is not limited to, statements concerning our 2012 objectives, our
strategies to achieve those objectives, as well as statements made with
respect to management's beliefs, estimates, projections and intentions,
and similar statements concerning anticipated future events, results,
circumstances, performance or expectations that are not historical
facts. Forward-looking information generally can be identified by the
use of forward-looking terminology such as "outlook", "objective",
"may", "will", "expect", "intend", "estimate", "anticipate", "believe",
"should", "plans" or "continue", or similar expressions suggesting
future outcomes or events. Such forward-looking information reflects
management's current beliefs and is based on information currently
available to management.
Forward-looking information is not a guarantee of future performance and
is subject to numerous risks and uncertainties, including those
described in this press release. GMP's primary business activities are
both competitive and subject to various risks. These risks include
market, credit, liquidity, operational and legal and regulatory risks
and other risk factors including, without limitation, variations in the
market value of securities, the volatility and liquidity of equity and
fixed income trading markets, the volume of new financings and mergers
and acquisitions ("M&A"), dependence on key personnel and
sustainability of fees. Other factors, such as general economic
conditions, including interest rate and exchange rate fluctuations, may
also have an effect on GMP's results of operations. Many of these risks
and uncertainties can affect GMP's actual results and could cause our
actual results to differ materially from those expressed or implied in
any forward-looking information disclosed by management or on its
behalf.�� For a description of additional risks that could cause our
actual results to materially differ from our current expectations, see
"Risk Management" in GMP's 2011 Annual MD&A and "Risk Factors" in GMP's
annual information form, dated March 13, 2012. Material assumptions or
factors underlying the forward-looking information contained in this
press release are set out in the "Business Environment - 2011
Highlights - Market Outlook" section of the 2011 Annual MD&A and
include, without limitation: recurring concerns over European sovereign
debt, global production supply chain disruptions, the ongoing budget
debate in the United States, expectations for a continued low interest
rate environment and moderate economic growth in Canada. Although
forward-looking information contained in this press release is based
upon what management believes are reasonable assumptions, there can be
no assurance that actual results will be consistent with this
forward-looking information. Certain statements included in this press
release may be considered a "financial outlook" for purposes of
applicable Canadian securities laws, and as such the financial outlook
may not be appropriate for purposes other than this press release. The
forward-looking information contained in this press release is made as
of the date of this press release, and should not be relied upon as
representing GMP's views as of any date subsequent to the date of this
press release. Except as required by applicable law, management and the
Board of Directors undertake no obligation to publicly update or revise
any forward-looking information, whether as a result of new
information, future events or otherwise.��
ABOUT GMP CAPITAL INC.
GMP Capital Inc. ("GMP") is a leading independent diversified financial
services firm headquartered in Toronto, Canada, providing a wide range
of financial products and services to a client base that includes
corporate clients, institutional investors and high-net-worth
individuals in three integrated reporting segments. The Capital Markets
segment provides investment banking, including advisory and
underwriting services, institutional sales and trading and research
through offices located in Toronto, Montreal, Calgary, New York, Miami,
Dallas, London, Perth and Sydney.�� The Capital Markets segment conducts
its business through the following operating entities: GMP Securities
L.P., GMP Securities, LLC, Griffiths McBurney Corp., GMP Securities
Europe LLP and GMP Securities Australia Pty Limited. Wealth Management
consists of GMP's non-controlling ownership interest in Richardson GMP
Limited, a full-service independent firm focused on providing exclusive
and comprehensive wealth management and investment services delivered
by an experienced team of investment professionals. The Alternative
Investments segment consists of the investment management and
alternative investment products provided by GMP Investment Management
L.P. GMP is listed on the Toronto Stock Exchange under the symbol
"GMP". For further information, please visit our corporate website at gmpcapital.com.
________________________________
1 Considered to be a non-GAAP financial measure. This measure does not
have any standardized meaning prescribed by generally accepted
accounting principles ("GAAP") under IFRS and is therefore unlikely to
be comparable to similar measures presented by other issuers.�� This
data should be read in conjunction with the "Non-GAAP Measures" section
at the end of this press release.
2 Source: FPinfomart as at February 6, 2012.
3 Source: CanadaEquity.com as at February 6, 2012.
4 Source: GMP Capital Inc. internal reports.
5 Source: Bloomberg.
6 In the event that the payment date is not a business day, such dividend
shall be paid on the next succeeding day that is a business day.
.
��
��
��
For further information:
GMP Capital Inc.
Rocco Colella, Director, Investor Relations
145 King Street West, Suite 300, Toronto, Ontario M5H 1J8
Tel: (416) 941-0894; Fax: (416) 943-6175
rcolella@gmpcapital.com or��investorrelations@gmpcapital.com
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