IGM Financial Inc. reports third quarter earnings
Winnipeg – October 29, 2009: IGM Financial Inc. (IGM or the Company) (TSX:IGM) today announced earnings results for the third quarter of 2009.
Net income for the three months ended September 30, 2009 was $167.4 million compared to $198.7 million a year ago and $144.5 million in the prior quarter. Earnings per share were 63 cents compared to 75 cents a year ago and 55 cents in the prior quarter.
Net income for the nine months ended September 30, 2009 was $445.4 million compared to adjusted net income of $626.0 million for the comparative period in 2008. Earnings per share were $1.69 in 2009 compared to adjusted earnings per share of $2.36 in 2008.
Gross revenues for the three months ended September 30, 2009 were $622.6 million compared to $684.7 million a year ago and $587.8 million in the prior quarter. Operating expenses were $383.1 million for the third quarter of 2009, compared to $407.6 million a year ago and $384.1 million in the prior quarter.
Gross revenues for the nine months ended September 30, 2009 were $1.77 billion compared to $2.12 billion a year ago. Operating expenses were $1.14 billion for the nine months ended September 30, 2009 compared to $1.25 billion a year ago.
Total assets under management at September 30, 2009 were $117.9 billion. This compared with total assets under management of $118.5 billion at September 30, 2008 and $109.6 billion at June 30, 2009.
Shareholders' equity at September 30, 2009 was $4.3 billion, unchanged from September 30, 2008 and June 30, 2009. Return on average common equity for the nine months ended September 30, 2009 was 14.2% and for the comparative period in 2008 adjusted return on equity was 19.7%.
Investors Group Operations
The number of Investors Group Consultants was 4,616 at September 30, 2009 up from 4,479 at December 31, 2008 and up from 4,411 at September 30, 2008.
“Our Consultant network continued to expand for the 21st consecutive quarter, the longest continuous period of growth in the history of Investors Group,” said Murray J. Taylor, President and Chief Executive Officer of Investors Group Inc. “Strong client relationships built on our approach to long-term financial planning have contributed to a record low 12 month redemption rate of 7.3% for our long-term mutual funds.”
Mutual fund sales for the third quarter were $1.1 billion compared to $1.3 billion in the prior year and mutual fund net sales for the third quarter were $36 million compared to net sales of $61 million a year ago and net redemptions of $95 million in the prior quarter.
Mutual fund sales for the nine months ended September 30, 2009 were $3.7 billion compared to $4.7 billion in the prior year and mutual fund net sales were $250 million compared to $565 million a year ago.
Investors Group's twelve month trailing redemption rate (excluding money market funds) was 7.3% at September 30, 2009, compared to 7.7% at September 30, 2008 and 7.5% at June 30, 2009.
Investors Group's mutual fund assets under management at September 30, 2009 were $56.6 billion compared to $54.3 billion at September 30, 2008 and $52.5 billion at June 30, 2009.
Total sales for the third quarter of 2009 were $2.4 billion compared to $2.7 billion in the prior year. Total net redemptions for the third quarter were $62 million compared to total net redemptions of $1.2 billion in the prior year and total net redemptions of $535 million in the prior quarter.
Total sales for the nine months ended September 30, 2009 were $8.7 billion compared to $9.2 billion in the prior year. Total net redemptions were $896 million compared to total net redemptions of $1.1 billion in the prior year.
“During the quarter we announced the alignment of our institutional sales and service units into Mackenzie Global Advisors, continuing our work to expand the distribution channels available for our investment advisory services,” said Charles R. Sims, President and Chief Executive Officer of Mackenzie Financial Corporation. “During the quarter, we continued to focus on streamlining our operations. Year over year operating expenses for the quarter declined by $18 million or 12%.”
Mackenzie’s total assets under management at September 30, 2009 totalled $62.0 billion. This compares with total assets under management of $64.8 billion at September 30, 2008 and $57.8 billion at June 30, 2009. Mutual fund assets under management at September 30, 2009 were $39.9 billion compared to $41.8 billion a year ago and $37.2 billion at June 30, 2009.
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, 2009 to shareholders of record on November 27, 2009 and has declared a dividend of 51.25 cents per share on the Company’s common shares payable on January 29, 2010 to shareholders of record on December 28, 2009.
Forward-Looking Statements and Non-GAAP Financial Measures
Certain statements in this Release, other than statements of historical fact, are forward-looking statements based on certain assumptions and reflect IGM Financial’s current expectations. Forward-looking statements are provided for the purposes of assisting the reader in understanding the Company’s financial position and results of operations as at and for the periods ended on certain dates and to present information about management’s current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. These statements may include, without limitation, statements regarding the operations, business, financial condition, expected financial results, performance, prospects, opportunities, priorities, targets, goals, ongoing objectives, strategies and outlook of the Company, as well as the outlook for North American and international economies, for the current fiscal year and subsequent periods. 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”, ”seeks”, “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”.
This information is based upon certain material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking statements, including the perception of historical trends, current conditions and expected future developments, as well as other factors that are believed to be appropriate in the circumstances.
By its nature, this information is subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved.
A variety of material factors, many of which are beyond the Company’s, and its subsidiaries’ control, affect the operations, performance and results of the Company, and its subsidiaries, and their businesses, and could cause actual results to differ materially from current expectations of estimated or anticipated events or results. These factors include, but are not limited to: the impact or unanticipated impact of 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 (including adoption of International Financial Reporting Standards), operational and reputational risks, 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, integrate acquisitions and implement other growth strategies, and the Company’s success in anticipating and managing the foregoing factors.
The reader is cautioned that the foregoing list of factors is not exhaustive of the factors that may affect any of the Company’s forward-looking statements. The reader is also cautioned to consider these and other factors, uncertainties and potential events carefully and not place undue reliance on forward-looking statements.
Other than as specifically required by law, the Company undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date on which such statements are made, or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results, or otherwise.
Additional information about the risks and uncertainties of the Company’s business is provided in its disclosure materials filed with the securities regulatory authorities in Canada, available at www.sedar.com.
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 2009 Third Quarter Report to Shareholders which should be mailed to shareholders on or about November 12, 2009.
IGM Financial Inc. is one of Canada's premier personal financial services companies, and one of the country’s largest managers and distributors of mutual funds and other managed asset products, with $118 billion in total assets under management as of September 30, 2009. Its activities are carried out principally through Investors Group, Mackenzie Financial Corporation and Investment Planning Counsel. IGM Financial Inc. is a member of the Power Financial Corporation group of companies.
Consolidated Statements of Income
- Consolidated Statements of Income [ PDF: 11 K / 1 page ]
- Financial Highlights [ PDF: 12 K / 1 page ]
For more information contact:
Media Note: A live webcast of IGM’s Analyst conference call for the Third Quarter 2009 will be held Friday October 30, 2009, 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 1-866-223-7781 or (416) 340-8018
 Adjusted net income for the nine month period ended September 30, 2008 excluded a $25.0 million gain 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 was $651.0 million for the nine month period and earnings per share on this basis were $2.45.