IGM Financial Inc. reports third quarter earnings
Winnipeg – October 30, 2008: IGM Financial Inc. (IGM or the Company) (TSX:IGM) today announced earnings results for the third quarter of 2008.
Net income for the three months ended September 30, 2008 was $198.7 million compared to net income of $218.4 million in 2007. Earnings per share were 75 cents for the period compared to 82 cents in 2007.
Adjusted net income for the nine months ended September 30, 2008 was $626.0 million compared to net income of $644.8 million in 2007. Adjusted earnings per share were $2.36 in 2008 compared to earnings per share of $2.41 in 2007. Adjusted net income and earnings per share for the nine months ended September 30, 2008 excluded $25.0 million recorded in the second quarter which represented the Company’s proportionate share of Great-West Lifeco Inc.’s after-tax gain on the sale of its healthcare business, Great-West Healthcare. Net income without adjustment for the nine months ended September 30, 2008 was $651.0 million and earnings per share on this basis were $2.45.
Gross revenues for the three months ended September 30, 2008 were $685.0 million, compared to $730.8 million in the prior year. Gross revenues for the nine months ended September 30, 2008 were $2.12 billion, compared to $2.17 billion in 2007. Operating expenses were $407.6 million for the quarter and $1.25 billion for the nine months, compared to $415.2 million and $1.24 billion in 2007.
Total assets under management at September 30, 2008 were $118.5 billion. This compared with total assets under management of $124.2 billion at September 30, 2007, a decrease of 4.6%.
Shareholders' equity at September 30, 2008 was $4.3 billion, compared to $4.2 billion at December 31, 2007. Adjusted return on average common equity for the nine months ended September 30, 2008 was 19.7% compared with return on average common equity of 21.5% for the same period in 2007.
Investors Group Operations
The number of Investors Group Consultants was 4,411 at September 30, 2008, a record high for the company, up from 4,360 at June 30, 2008 and 4,331 at December 31, 2007.
“Our Consultant network continues to expand with our 17th consecutive quarter of growth,” said Murray J. Taylor, President and Chief Executive Officer of Investors Group Inc. “Even though we have seen a period of significant market volatility we are pleased to have positive net sales of $61 million during the 3rd quarter as we continue to experience a low 12 month redemption rate of 7.7% for long-term mutual funds.”
Mutual fund sales for the third quarter were $1.3 billion compared to $1.6 billion in the prior year and mutual fund net sales for the third quarter were $61 million compared to net sales of $370 million a year ago. Year-to-date mutual fund sales for 2008 were $4.7 billion compared to $5.6 billion in the prior year and mutual fund net sales were $565 million compared to $1.8 billion a year ago.
Investors Group's twelve month trailing redemption rate (excluding money market funds) was 7.7% at September 30, 2008, compared to the average redemption rate of approximately 17.2% for all other members of the Investment Funds Institute of Canada.
Investors Group's mutual fund assets under management at September 30, 2008 were $54.3 billion compared to $61.2 billion at September 30, 2007, a decrease of 11.3%.
Total sales for the third quarter of 2008 were $2.7 billion compared to $2.8 billion in the prior year. Total net redemptions for the third quarter were $1.2 billion compared to net redemptions of $473 million in the prior year. Total year-to-date sales for 2008 were $9.2 billion compared to $9.7 billion in the prior year. Total net redemptions were $1.1 billion compared to net sales of $841 million in the prior year.
“We were pleased to acquire Saxon Financial Inc. on September 25, adding $12.1 billion to our assets under management. This acquisition enables us to enhance our product offering to advisors and clients. Saxon has a proven capability in value-oriented equity and fixed income investing across the retail, institutional and high net worth client segments,” said Charles R. Sims, President and Chief Executive Officer of Mackenzie Financial Corporation.
Mackenzie’s total assets under management at September 30, 2008 totalled $64.8 billion. This compares with assets under management of $63.5 billion at September 30, 2007, an increase of 2.0%. Mutual fund assets under management at September 30, 2008 were $41.8 billion, a decrease of 11.9% from one year ago.
The Board of Directors declared a quarterly dividend of $0.359375 per share on the Company’s 5.75% Non-Cumulative First Preferred Shares, Series “A” payable on December 31, 2008 to shareholders of record on November 28, 2008 and has declared a dividend of 51.25 cents per share on the Company’s common shares payable on January 30, 2009 to shareholders of record on December 29, 2008.
Forward-Looking Information and Non-GAAP Financial Measures
This Release may contain forward-looking statements about the Company, including its business operations, strategy and expected financial performance and condition. Forward-looking statements include statements that are predictive in nature, depend upon or refer to future events or conditions, or include words such as “expects”, “anticipates”, “plans”, “believes”, “estimates”, “intends”, “targets”, “projects”, “forecasts” or negative versions thereof and other similar expressions, or future or conditional verbs such as “may”, “will”, “should”, “would” and “could”. In addition, any statement that may be made concerning future financial performance (including revenues, earnings or growth rates), ongoing business strategies or prospects, and possible future Company action, is also a forward-looking statement. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about the Company, economic factors and the financial services industry generally. They are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied by forward-looking statements made by the Company due to, but not limited to, important factors such as general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, management of market liquidity and funding risks, changes in accounting policies and methods used to report financial condition, including uncertainties associated with critical accounting assumptions and estimates, the effect of applying future accounting changes, business competition, technological change, changes in government regulations and legislation, changes in tax laws, unexpected judicial or regulatory proceedings, catastrophic events, the Company's ability to complete strategic transactions and integrate acquisitions and the Company’s success in anticipating and managing the foregoing risks. The reader is cautioned that the foregoing list of important factors is not exhaustive. The reader is also cautioned to consider these and other factors carefully and not place undue reliance on forward-looking statements. Other than as specifically required by applicable law, the Company has no specific intention to update any forward-looking statements whether as a result of new information, future events or otherwise.
This release contains non-GAAP financial measures. Terms by which non-GAAP financial measures are identified include but are not limited to “adjusted net income”, “adjusted earnings per share”, “adjusted return on average common equity”, “net income without adjustment” and other similar expressions. Non-GAAP financial measures are used to provide management and investors with additional measures of performance. However, non-GAAP financial measures do not have standard meanings prescribed by GAAP and are not directly comparable to similar measures used by other companies. Please refer to the attached Financial Highlights for the appropriate reconciliations of these non-GAAP financial measures to measures prescribed by GAAP.
A review of activities and performance for IGM Financial Inc., together with financial details and a management discussion, will be published in the Company’s 2008 Second Quarter Report to Shareholders which should be mailed to shareholders on or aboutAugust 12, 2008.
Consolidated Statements of Income
Consolidated Statements of Income [ PDF: 22 K / 1 page ]
Financial Highlights [ PDF: 12 K / 1 page ]
IGM Financial Inc. is one of Canada's premier personal financial services companies, and the country’s largest manager and distributor of mutual funds and other managed asset products, with over $119 billion in total assets under management. Its activities are carried out principally through Investors Group, Mackenzie Financial and Investment Planning Counsel. IGM Financial Inc. is a member of the Power Financial Corporation group of companies.
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Media Note: A live webcast of IGM’s Analyst conference call for the Third Quarter 2008 will be held Friday, October 31, 2008, at 9:30 A.M. (ET) at www.igmfinancial.com. Media and interested parties may alternatively choose to listen to the live analyst teleconference call by dialing 1-888-280-8349 or (416) 695-9719.