IGM Financial Inc. reports third quarter earnings
Toronto – November 11, 2010: IGM Financial Inc. (IGM or the Company) (TSX:IGM) today announced earnings results for the third quarter of 2010.
Operating earnings available to common shareholders for the three months ended September 30, 2010 were $177.9 million or 68 cents per share compared to net earnings available to common shareholders of $167.4 million or 63 cents per share in 2009. This represents an increase of 7.9% on a per share basis.
Operating earnings available to common shareholders for the nine months ended September 30, 2010 were $535.7 million or $2.03 per share compared to net earnings available to common shareholders of $445.4 million or $1.69 per share in 2009. This represents an increase of 20.1% on a per share basis.
Other items for the three and nine months ended September 30, 2010 consisted of an after-tax charge of $8.2 million representing the Company’s proportionate share of Great-West Lifeco Inc.’s incremental litigation provision established in the third quarter.
Net earnings available to common shareholders, including other items, for the three months ended September 30, 2010 were $169.7 million or 65 cents per share. Net earnings available to common shareholders, including other items, for the nine months ended September 30, 2010 were $527.5 million or $2.00 per share.
Revenues for the three months ended September 30, 2010 were $637.3 million compared to $626.5 million a year ago. Revenues for the nine months ended September 30, 2010 were $1.93 billion compared to $1.78 billion a year ago. Expenses were $394.8 million for the third quarter of 2010, compared to $387.0 million a year ago and $1.20 billion for the nine month period compared to $1.15 billion in 2009.
Total assets under management at September 30, 2010 were $122.7 billion. This compared with total assets under management of $117.9 billion at September 30, 2009, an increase of 4.0%.
Shareholders' equity at September 30, 2010 was $4.5 billion, compared to $4.3 billion at September 30, 2009. Return on average common equity based on operating earnings for the nine months ended September 30, 2010 was 16.6% compared to 14.2% for the comparative period in 2009.
Investors Group Operations
The number of Investors Group Consultants was 4,683 at September 30, 2010 up from 4,633 at December 31, 2009.
Mutual fund sales for the third quarter were $1.2 billion compared to $1.1 billion in the prior year and mutual fund net redemptions for the third quarter were $166 million compared to net sales of $36 million a year ago.
Mutual fund sales for the nine months ended September 30, 2010 were $4.4 billion compared to $3.7 billion in the prior year and mutual fund net sales were $291 million compared to $250 million a year ago.
The twelve month trailing redemption rate (excluding money market funds) was 8.1% at September 30, 2010, compared to 7.3% at September 30, 2009.
“Our Consultant network expanded for the 25th consecutive quarter to 4,683 at September 30, 2010,” said Murray J. Taylor, President and Chief Executive Officer of Investors Group Inc. “We continue to expand our regional offices in 2010, with announcements for additional offices in Vancouver, Lethbridge, Saskatoon, Thunder Bay, Toronto and Belleville, leading to 101 regional offices across Canada.”
Mutual fund assets under management at September 30, 2010 were $58.8 billion compared to $56.6 billion at September 30, 2009, an increase of 4.0%.
Total sales for the third quarter of 2010 were $2.5 billion compared to $2.4 billion in the prior year. Total net redemptions for the third quarter were $771 million compared to total net redemptions of $62 million a year ago.
Total sales for the nine months ended September 30, 2010 were $9.0 billion compared to $8.7 billion in the prior year. Total net redemptions were $1.2 billion compared to total net redemptions of $896 million a year ago.
“Investment performance of our mutual fund family remained strong, with 63% of our fund assets ranked in the first or second quartile of their respective asset categories over the last three years,” said Charles R. Sims, President and Chief Executive Officer of Mackenzie Financial Corporation.
Mackenzie’s total assets under management at September 30, 2010 were $64.5 billion compared with total assets under management of $62.0 billion at September 30, 2009, an increase of 4.0%. Mutual fund assets under management at September 30, 2010 were $41.1 billion compared to $39.9 billion a year ago, an increase of 3.2%.
The Board of Directors has declared a dividend of 51.25 cents per share on the Company’s common shares and has declared a dividend of $0.36875 per share on the Company’s 5.90% Non-Cumulative First Preferred Shares, Series “B”. The common share dividend is payable on January 28, 2011 to shareholders of record on December 31, 2010 and the preferred share dividend is payable on January 31, 2011 to shareholders of record on December 31, 2010.
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.
Non-GAAP Financial Measures
This release contains non-GAAP financial measures. Net earnings available to common shareholders, which is a financial measure in accordance with Canadian GAAP, may be subdivided into two components consisting of:
- Operating earnings available to common shareholders; and
- Other items, which include the after-tax impact of any item that management considers to be of a non-recurring nature or that could make the period-over-period comparison of results from operations less meaningful.
Terms by which non-GAAP financial measures are identified include but are not limited to “operating earnings available to common shareholders”, “operating earnings per share”, “operating return on average common equity” 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 2010 Third Quarter Report to Shareholders which should be mailed to shareholders on or about November 22, 2010.
Financial Statements and Notes
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 over $124 billion in total assets under management as of October 31, 2010. 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.
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Media Note: A live webcast of IGM’s Analyst conference call for the Third Quarter 2010 will be held Thursday November 11, 2010, at 1:00 P.M. (ET) at www.igmfinancial.com. Media and interested parties may alternatively choose to listen to the live analyst teleconference call by dialing 1-866-226-1792 or 416-340-2216.