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Winnipeg -- February 15, 2007: IGM Financial Inc. (IGM or the Company) (TSX:IGM) today announced earnings results for the fourth quarter and for the year ended December 31, 2006.
Net income for the three months ended December 31, 2006 was $199.6 million compared to $177.2 million in 2005, an increase of 12.6%. Earnings per share were 75 cents compared to 66 cents in 2005, an increase of 13.6%.
Net income for the year ended December 31, 2006, excluding a non-cash income tax benefit described below, was $763.0 million compared to net income of $682.4 million in 2005, an increase of 11.8%. Earnings per share on the same basis were $2.85 compared to earnings per share of $2.56 in 2005, an increase of 11.3%. A non-cash income tax benefit of $13.7 million resulting from decreases in the federal corporate income tax rates was reported in the second quarter of 2006. Net income for the year ended December 31, 2006, including the non-cash income tax benefit, totalled $776.7 million and earnings per share on the same basis were $2.90.
Gross revenues for the three months ended December 31, 2006 were $678.6 million, compared to $608.3 million in the prior year. Gross revenues for the year ended December 31, 2006 were $2.60 billion, compared to $2.35 billion in the prior year. Operating expenses were $389.2 million for the quarter and $1.49 billion for the twelve months, compared to $353.5 million and $1.37 billion, respectively, in 2005.
Total assets under management at December 31, 2006 totalled $119.4 billion. This compares with total assets under management of $100.2 billion at December 31, 2005, an increase of 19.1%.
Shareholders' equity at December 31, 2006 was $3.82 billion, compared to $3.45 billion at December 31, 2005. Return on average common equity for the twelve months ended December 31, 2006, excluding a non-cash income tax benefit, was 20.3% compared with return on average common equity of 20.0% for the same period in 2005.
INVESTORS GROUP OPERATIONS
Investors Group's mutual fund assets under management at December 31, 2006 were $58.2 billion compared to $50.7 billion at December 31, 2005, an increase of 14.8%.
The number of Investors Group Consultants was 3,917 at December 31, 2006 up from 3,668 at December 31, 2005. Investors Group has experienced ten consecutive quarters of growth resulting in an increase of more than 22% in the Consultant network since June 30, 2004.
“Our Consultant network continues to grow setting a new record high in 2006,” 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 resulted in increased sales and record low redemption rates.”
Mutual fund sales for the fourth quarter were $1.5 billion compared to $1.4 billion in the prior year and mutual fund net sales for the fourth quarter were $335 million compared to $254 million a year ago.
Mutual fund sales for 2006 were $6.2 billion compared to $5.5 billion in the prior year. Investors Group's twelve month trailing redemption rate (excluding money market funds) was 7.9% at December 31, 2006, down from 8.7% at the same time last year. Mutual fund net sales were $1.3 billion compared to $778 million a year ago.
MACKENZIE OPERATIONS
Mackenzie’s total assets under management at December 31, 2006 totalled $61.5 billion. This compares with assets under management of $49.9 billion at December 31, 2005, an increase of 23.4%. Mutual fund assets under management at December 31, 2006 were $46.6 billion, an increase of 12.0%, compared to $41.6 billion one year ago.
“We continue to diversify our distribution channels and were rewarded in 2006 with 23.4% growth in assets under management through solid investment returns, continued net sales and the strategic acquisition of the Cundill group,” said Charles R. Sims, President and Chief Executive Officer of Mackenzie Financial Corporation.
Total sales for the fourth quarter of 2006 were $3.1 billion compared to $2.8 billion in the prior year. Total net sales for the fourth quarter were $596 million compared to net sales of $916 million in the prior year. Total sales for 2006 were $11.7 billion compared to $11.1 billion in the prior year. Total net sales were $2.2 billion compared to $3.5 billion in the prior year.
DIVIDENDS
The Board of Directors has declared a quarterly dividend of $0.359375 per share on the Company’s 5.75% Non-Cumulative First Preferred Shares, Series “A” payable on March 31, 2007 to shareholders of record on March 6, 2007 and has declared an increase of 3.00 cents per share in the quarterly dividend from 39.75 cents to 42.75 cents per share on the Company’s common shares payable on April 27, 2007 to shareholders of record on March 26, 2007.
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 may also contain non-GAAP financial measures. Terms by which non-GAAP financial measures are identified include but are not limited to “net income excluding a non-cash income tax benefit”, “earnings per share excluding a non-cash income tax benefit” 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 2006 Annual Report to Shareholders which should be mailed to shareholders on or about March 23, 2007.
FINANCIAL STATEMENTS AND NOTES
Financial Statements and Notes [ PDF: 18 K / 2 pages ]
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 $121 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.
For more information contact:
Ron Arnst
Media Relations
(204) 956-3364
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Media Note: A live webcast of IGM’s Analyst conference call for the Fourth Quarter 2006 will be held Friday, February 16, 2007, 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 1-888-789-0089 or (416) 695-5261.
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