Third quarter dividend of $0.085 per common share
TORONTO, Feb. 4, 2025 /CNW/ – Canaccord Genuity Group Inc. (Canaccord Genuity Group, the Company) (TSX:CF) today announced its financial results for the third fiscal quarter and nine months ended December 31, 2024.
“During our third fiscal quarter, our wealth management division set new records for revenue and client assets and we also benefitted from improved corporate financing activity in most of our geographies,” said Dan Daviau, Chairman & CEO of Canaccord Genuity Group Inc. “Despite solid revenue growth, our profitability for the three-month period was affected by certain elevated non-compensation expenses which are not expected to continue at the same levels. Our outlook for the balance of the fiscal year is cautiously optimistic as we expect to see stronger financial performance driven by the strengthening backdrop for capital markets activities and a continuance of growing contributions from wealth management.”
Third fiscal quarter and nine-month fiscal year-to-date highlights:
(All dollar amounts are stated in thousands of Canadian dollars unless otherwise indicated)
Third quarter revenue of $451.0 million increased by 15.9% over the same period in the prior year
Global wealth management revenue for the third fiscal quarter increased by 19.7% year-over-year to $233.4 million
Global capital markets revenue for the third fiscal quarter increased by 11.0% year-over-year to $210.7 million
Nine-month fiscal year-to-date revenue of $1.3 billion, an increase of 22.3% compared to the first nine months of fiscal 2024
Third quarter net income before taxes excluding significant items(1) of $39.8 million, a decrease of 11.0% compared to Q3/24 (on an IFRS basis Q3/25 net loss before taxes was $5.2 million compared to net income before taxes of $37.1 million for Q3/24)
Nine-month fiscal year-to-date net income before taxes excluding significant items(1) of $116.9 million, an increase of 24.2% compared to the first nine months of fiscal 2024 (on an IFRS basis year-to-date net income before taxes of $35.2 million compared to net income before taxes of $42.7 million in the first nine months of fiscal 2024)
Diluted earnings per common share excluding significant items(1) for the third fiscal quarter of $0.17 per common share (diluted loss per common share of $0.26 on an IFRS basis)
Diluted earnings per common share excluding significant items (1) for the first nine months of fiscal 2025 of $0.49 per common share (diluted loss per common share of $0.29 on an IFRS basis)
Excluding significant items(1), CG’s global wealth management businesses contributed net income before taxes of $36.3 million in the third quarter of fiscal 2025
Excluding significant items(1) CG’s global capital markets business contributed third quarter net income before taxes of $14.8 million
Total client assets(1) in our global wealth management business were a record $115.0 billion at December 31, 2024, a year-over-year increase of 15.9% and reflecting year-over-year increases of 16.5% in Canada, 13.7% in the UK & Crown Dependencies and 32.7% in Australia
Third quarter common share dividend of $0.085 per share
___________________________
(1) See Non-IFRS Measures on page 6
Three months ended
December 31
Year-over-year
change
Three months
ended
September 30
Quarter-over-
quarter change
Q3/25
Q3/24
Q2/25
Third fiscal quarter highlights- adjusted1
Revenue excluding significant items1
$451,335
$389,503
15.9 %
$427,619
5.6 %
Expenses excluding significant items1
$411,561
$344,803
19.4 %
$385,333
6.8 %
Diluted earnings per common share excluding significant items1,
$0.17
$0.20
(15.0) %
$0.20
(15.0) %
Net Income excluding significant items1,2
$29,255
$33,304
(12.2) %
$31,804
(8.0) %
Net income attributable to common shareholders excluding significant items1,3
$17,120
$20,767
(17.6) %
$20,185
(15.2) %
Third fiscal quarter highlights-IFRS
Revenue
$451,034
$389,143
15.9 %
$428,636
5.2 %
Expenses
$456,226
$352,045
29.6 %
$411,747
10.8 %
Diluted (loss) earnings per common share
$(0.26)
$0.14
(285.7) %
$(0.05)
n.m.
Net (loss) income 2
$(11,603)
$28,005
(141.4) %
$9,166
(226.6) %
Net (loss) income attributable to common shareholders3
$(25,391)
$14,346
(277.0) %
$(4,759)
n.m.
1. Figures excluding significant items are non-IFRS measures. See Non-IFRS Measures on page 6
2. Before non-controlling interests and preferred share dividends paid on the Series A and Series C Preferred Shares
3. Net income (loss) attributable to common shareholders is calculated as the net income adjusted for non-controlling interests and preferred share dividends
Core business performance highlights:
Canaccord Genuity Wealth Management
The Company’s combined global wealth management operations earned revenue of $233.4 million for the third fiscal quarter, a year-over-year increase of 19.7%. On a year-to-date basis, revenue amounted to $665.9 million, an increase of 16.1% compared to the first nine months of the prior fiscal year. Net income before taxes excluding significant items(1) for this segment decreased by 4.2% and increased by 1.1% year-over-year for the three and nine- month periods ended December 31, 2024, respectively.
Wealth management operations in the UK & Crown Dependencies generated third quarter revenue of $115.8 million, an increase of 13.8% compared to the same period last year, primarily driven by higher commissions and fees revenue. Fee-related revenue for Q3/25 increased by 11% from the same period in the prior year and accounted for 82.8% of the wealth management revenue in the UK & Crown Dependencies during the third quarter of fiscal 2025. Excluding significant items(1), pre-tax net income for this business was $25.4 million in Q3/25 and $73.4 million fiscal year-to-date, substantially unchanged from Q3/24 and a slight decrease of 2.0% for the nine-month period.
Canaccord Genuity Wealth Management (North America) generated $96.4 million in third quarter revenue, a year-over-year increase of 25.1% compared to Q3/24, primarily driven by increases in commissions and fees, investment banking and interest revenue. Fee-related revenue improved by 21.7% year-over-year and accounted for 49.5% of the wealth management revenue in Canada during the third quarter of fiscal 2025. Excluding significant items(1) net income before taxes for this business was $9.0 million in Q3/25 and $30.3 million for the first nine months of fiscal 2025, which represents a year-over-year decrease of 16.6% and an increase of 4.5% respectively.
Wealth management operations in Australia generated $21.2 million in third quarter revenue, an increase of 31.3% compared to the third quarter of last year. Fee-related revenue increased by 44% year-over-year and accounted for 43.4% of the wealth management revenue in our Australia wealth management operations during the three months ended December 31, 2024. Excluding significant items(1) net income before taxes for this business was $1.8 million in Q3/25 and $4.0 million fiscal 2025 year-to-date, representing increases of 20.1% and 55.0% respectively.
Total client assets(1) in the Company’s global wealth management businesses at the end of the third fiscal quarter amounted to $115.0 billion, an increase of $15.8 billion or 15.9% from Q3/24.
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(1) See Non-IFRS Measures on page 6
Client assets(1) in the UK & Crown Dependencies were $64.5 billion (£35.9 billion) as at December 31, 2024, an increase of 13.7% (increase of 6.6% in local currency) from $56.8 billion (£33.7 billion) at December 31, 2023 due to net flows, market growth and foreign exchange movement. On a sequential basis, client assets increased by 2.5% from $63.0 billion (£34.8 billion) at the end of the previous quarter.
Client assets(1) in North America were $42.3 billion as at December 31, 2024, an increase of 16.5% from $36.3 billion at December 31, 2023 due to net inflows and market growth, and an increase of 5.9% compared to the previous quarter.
Client assets(1) in Australia were $8.1 billion (AUD 9.1 billion) at December 31, 2024, an increase of 8.0% from $7.5 billion (AUD 8.0 billion) at the end of the previous quarter and an increase of 32.7% from $6.1 billion (AUD 6.8 billion) at December 31, 2023 mainly due to net new assets. In addition, client assets(1) totalling $13.3 billion (AUD 15.0 billion) are also held on record in less active and transactional accounts through our Australian platform.
Canaccord Genuity Capital Markets
Globally, Canaccord Genuity Capital Markets earned revenue of $210.7 million for the third fiscal quarter. The year-over-year increase of 11.0% primarily reflects increased revenues from investment banking activities, with the most notable increase from our US business.
For the nine months ended December 31, 2024, revenue increased by 28.7% to $618.4 million as revenue improved across all our core operations.
Canaccord Genuity Capital Markets participated in 291 investment banking transactions globally, including led and co-led deals, raising total proceeds of $29.8 billion fiscal year-to-date.
Investment banking for the three-month period was $58.2 million, an increase of 13.0% sequentially and a year-over-year increase of 45.9% as corporate finance activities improved in our Canadian, US and Australian operations. Our US operation was the largest contributor to the principal trading revenue, which increased by 17.9% year-over-year and 27.6% sequentially. Advisory fees revenue decreased by $4.6 million or 6.2% year-over-year, as declines in our US and UK & Europe operations offset a revenue growth of 114.8% in our Canadian operations. On a fiscal year-to-date basis, investment banking, advisory fees and principal trading revenue increased by 74.5%, 33.7% and 19.7% respectively compared to the same period in the prior year.
Excluding significant items(1), our global capital markets division recorded net income before taxes of $14.8 million for the quarter, a decrease of 11.3% compared to the third quarter of fiscal 2024, as the increase in revenue was offset by higher interest expense and professional fees. Net income excluding significant items(1) for the nine-month period ended December 31, 2024 was $42.8 million compared to net income of $2.7 million for the same period in the prior year.
Summary of Corporate Developments
On October 1, 2024 the Company, through its wealth management business in CGWM UK completed its purchase of Cantab Asset Management Ltd., a chartered, independent financial planning business headquartered in Cambridge, UK.
On November 7, 2024, the Company, through its U.S. Capital Markets business, Canaccord Genuity LLC, entered into a business collaboration agreement (the “Agreement”) with Carbon Reduction Capital LLC (CRC-IB), a leading provider of investment banking and advisory services across the energy transition sector. CRC-IB provides M&A, project finance and capital raising services with dedicated experience in the wind, solar, storage, and carbon capture segments. The Agreement aims to mutually strengthen and expand core M&A, capital markets, and strategic advisory services for the rapidly advancing global energy transition while enhancing Canaccord Genuity’s midmarket advisory capabilities, which have materially grown since 2019. In connection with the Agreement, the Company also made a loan to CRC HoldingCo, LLC and entered into …
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