- \n
- Earnings per share of $0.62 for the quarter<\/b><\/li>\n
- Comparable selling, general and administrative expenses (SG&A) down $19.4 million and total SG&A down $15.8 million from Q3-2019<\/b><\/li>\n
- Repurchased 4.3 million shares for $77.7 million and paid $38.6 million in dividends ($0.18 per share) <\/b><\/li>\n
- At quarter-end, wealth management assets reach new record of $66.1 billion with the acquisitions of Balasa Dinverno Foltz and Congress Wealth Management<\/b><\/li>\n
- After quarter-end, following the acquisition of Canadian advisory firm Aligned Capital and other announced transactions, wealth management assets will grow to a record $83 billion and total assets to a record $209 billion<\/b><\/li>\n
- CI common shares to trade on NYSE under \u201cCIXX\u201d starting November 17, 2020<\/b><\/li>\n
- Corporate rebrand creating consistency across CI\u2019s businesses<\/b><\/li>\n<\/ul>\n
TORONTO–(BUSINESS WIRE<\/a>)–CI Financial Corp.<\/a> (\u201cCI\u201d) (TSX: CIX) today released unaudited financial results for the quarter ended September 30, 2020.\n<\/p>\n
\n\u201cOur financial results were strong for the quarter with earnings per share of $0.62 and free cash flow of $144 million \u2013 an increase of 12% from last quarter,\u201d said Kurt MacAlpine, CI Chief Executive Officer. \u201cThese results are due in part to our continued cost discipline. We have successfully cut SG&A expenses by $16 million year over year even as we have made several acquisitions this year. Excluding the impact of acquisitions, we reduced expenses by $19 million over the third quarter of last year.\u201d\n<\/p>\n
\n\u201cWe also made incredible progress this quarter executing against our three strategic priorities of modernizing asset management, expanding wealth management, and globalizing the firm,\u201d Mr. MacAlpine said.\n<\/p>\n
\n\u201cDuring the third quarter, we closed on the acquisition of two U.S. wealth management firms and have subsequently reached agreements to purchase another four high-quality firms in strategic locations across the United States. These transactions will boost our U.S. wealth assets to about $22 billion, giving us a significant presence in the United States in less than a year.\n<\/p>\n
\n\u201cWith the acquisition in October of Aligned Capital Partners of Burlington, Ontario, we have achieved exceptional scale in our wealth management business, with assets of $61 billion in Canada and total North American wealth assets of about $83 billion,\u201d Mr. MacAlpine said.\n<\/p>\n
\n\u201cConsistent with our globalization strategy, we are listing our common shares on the New York Stock Exchange starting next week, which should broaden CI\u2019s investor base and increase its corporate profile.\n<\/p>\n
\n\u201cWe have also started rolling out the new corporate branding for CI and our subsidiaries, including the introduction of CI Global Asset Management, CI Assante Wealth Management, CI Direct Investing and CI Investment Services, as well as launching a new CI Financial website,\u201d Mr. MacAlpine said. \u201cThe modernized brands provide consistency across the CI Financial group and reduce the complexity of our service and product offerings \u2013 making it easier for advisors and investors to do business with CI.\u201d\n<\/p>\n
Financial Results <\/b><\/p>\n
\nCI reported earnings per share of $0.62 for the third quarter of 2020, compared to $0.56 in the previous quarter and $0.60 in the third quarter of 2019.\n<\/p>\n
\nSG&A expenses for the third quarter were $108.8 million, down slightly from $109.0 million in the second quarter and down $15.8 million or 13% from $124.6 million in the third quarter of 2019. Excluding the additional expenses of firms acquired by CI this year, SG&A expenses were $105.2 million for the quarter, representing a decline of $19.4 million or 16% from the third quarter a year ago. For the first nine months of 2020, SG&A expenses excluding acquisitions were down by $49.1 million or 13% compared to the same period of 2019.\n<\/p>\n
\nCI generated $143.9 million in free cash flow1<\/sup> during the third quarter, an increase of 12% from $128.3 million in the second quarter and a decline of 1% from 144.7 million in the same quarter a year ago.\n<\/p>\n
\nAt September 30, 2020, total ending assets under management were $128.3 billion, an increase of 2% from June 30, 2020 and a decline of 1% from September 30, 2019. Core assets under management, which consists of assets managed by CI\u2019s Canadian and Australian subsidiaries, were $123.6 billion at September 30, 2020, an increase of 2% from three months earlier and a decline of 5% year over year. During the third quarter, U.S. assets under management grew by 10% to $4.7 billion.\n<\/p>\n
\nTotal average assets under management were $129.0 billion for the third quarter, up 7% from $120.1 billion for the second quarter and down slightly from $129.4 billion in the third quarter of 2019. Core average assets under management were $124.6 billion in the third quarter, compared to $118.4 billion for the previous quarter and $129.4 billion for the year-ago quarter.\n<\/p>\n
Total wealth management assets as at September 30, 2020 were $66.1 billion, which represents a quarter-end record for CI and an increase of $12.3 billion or 23% over June 30, 2020 and an increase of $18.0 billion or 37% year over year.<\/span><\/p>\n
Canadian wealth management assets, at $51.2 billion, increased 4% during the quarter and 6% from one year ago. This includes the assets of Assante Wealth Management (Canada) Limited, CI Private Counsel LP, CI Direct Investing (WealthBar Financial Services Inc.) and Virtual Brokers.<\/span><\/p>\n
\nU.S. wealth management assets were $14.9 billion at September 30, 2020, up $10.0 billion over the quarter. During the quarter, CI acquired Balasa Dinverno Foltz LLC and an interest in Congress Wealth Management, LLC. U.S. wealth management also includes assets of The Cabana Group, LLC, One Capital Management, LLC and Surevest, LLC.\n<\/p>\n
\nCI reported $2.0 billion in overall net redemptions for the third quarter of 2020. CI\u2019s Canadian retail business, excluding products closed to new investors, had $1.4 billion in net redemptions, relatively unchanged versus the third quarter of 2019. CI\u2019s Canadian institutional business had net redemptions of $1.1 billion, an increase of $0.7 billion from the same quarter a year ago. Consistent with CI\u2019s previous quarter, nearly all the institutional redemptions came from bank and insurance-owned asset managers with in-house internal investment teams. GSFM had $0.4 billion of net sales for the third quarter of 2020, and CI\u2019s U.S. RIA business had $0.3 billion in net sales. CI\u2019s closed business, comprised primarily of segregated fund contracts that are no longer available for sale, had $0.2 billion in net redemptions for the quarter.\n<\/p>\n
Capital Allocation<\/b><\/p>\n
\nIn the third quarter of 2020, CI repurchased 4.3 million shares at a cost of $77.7 million and paid $38.6 million in dividends ($0.18 per share). For the month of October 2020, CI repurchased a further 0.9 million shares, ending the month with 210,548,302 shares outstanding.\n<\/p>\n
\nThe Board of Directors declared a quarterly dividend of $0.18 per share, payable on April 15, 2021, to shareholders of record on March 31, 2021. The annual dividend rate of $0.72 per share represented a yield of 4.4% on CI\u2019s closing share price of $16.32 on November 11, 2020.\n<\/p>\n
New York Stock Exchange listing \u2013 \u201cCIXX\u201d<\/b><\/p>\n
\nCI also announced today that its common shares have been approved for listing on the New York Stock Exchange (the \u201cNYSE\u201d). CI expects its common shares will commence trading on the NYSE as of market open on November 17, 2020 under the ticker symbol \u201cCIXX.\u201d This move is expected to broaden CI\u2019s investor base, increase its corporate profile in the U.S. and allow CI to offer U.S. dollar-denominated shares as consideration when making acquisitions in the U.S.\n<\/p>\n
\nIn addition to listing and trading on the NYSE in U.S. dollars, CI\u2019s common shares continue to be listed and trade on the Toronto Stock Exchange in Canadian dollars under the symbol \u201cCIX.\u201d Shareholders who purchased their CI common shares on the TSX and, in connection with the NYSE listing, wish to trade in U.S. dollars are advised to contact their broker for more information.\n<\/p>\n
\nShareholders who purchased their CI common shares \u201cover-the-counter\u201d or OTC, including shareholders whose shares are denoted in their institution\/broker account with the symbol \u201cCIFAF\u201d, are advised to monitor their account to ensure their holdings are updated to reflect the NYSE listing and trading symbol, as the Company expects OTC quotations for CI common shares to cease in connection with the NYSE listing. Shareholders are advised to contact their broker for more information if they have questions in this regard.\n<\/p>\n
Business highlights <\/b><\/p>\n
- \n
- \nCI made significant progress in expanding its U.S. wealth management business. During the quarter:<\/p>\n
- \n
- \nCI acquired 100% ownership of Balasa Dinverno Foltz of Itasca, Illinois, a leading Chicago-area RIA with approximately $6.2 billion in assets.\n<\/li>\n
- \nCI announced in September an agreement to purchase 100% of Bowling Portfolio Management LLC of Cincinnati, Ohio, an RIA with $590 million in assets.\n<\/li>\n
- \nOCM Capital Partners LLC, which is majority owned by CI and is the parent company of One Capital Management, LLC of Westlake Village, California, announced an agreement to purchase Thousand Oaks Financial Holding, LLC, an RIA based in Thousand Oaks, California operating under the name Professional Planning. The acquisition closed in October and Thousand Oaks is being integrated into One Capital.\n<\/li>\n
- \nCI completed in July the acquisition of a strategic interest in Congress Wealth Management, LLC of Boston, a firm with approximately $3.6 billion in assets.\n<\/li>\n<\/ul>\n<\/li>\n
- \nCI acquired a majority interest in Aligned Capital Partners Inc. of Burlington, Ontario, a full-service investment dealer with approximately $11 billion in assets and more than 200 financial advisors across Canada. The acquisition was announced in August and closed on October 19, 2020.\n<\/li>\n
- \nCI initiated its plan to rebrand the company and its subsidiaries. The changes will streamline CI\u2019s lineup of brands, unify its operations under the CI name, and give the company a modern image reflecting its position as an integrated global asset and wealth management company. During the quarter, WealthBar Financial Services rebranded as CI Direct Investing. Following quarter-end, Assante was rebranded to CI Assante Wealth Management, CI Investments Inc. rebranded as CI Global Asset Management, BBS Securities Inc. was renamed CI Investment Services Inc., and CI Financial launched a new website to reflect the updated branding.\n<\/li>\n
- \nThe Cabana Group subsidiary, Cabana Asset Management, launched a US$1 billion lineup of exchange-traded funds using Cabana\u2019s innovative and proven target drawdown investment strategy. The Target Drawdown ETFs were listed on the New York Stock Exchange in September and build on the proven track record of Cabana\u2019s Target Drawdown Professional Series of separately managed accounts, which have been available in the U.S. since 2012.\n<\/li>\n<\/ul>\n
\nFollowing quarter-end:\n<\/p>\n
- \n
- \nCI announced three RIA transactions, agreeing to acquire:<\/p>\n
- \n
- \n100% of The Roosevelt Investment Group, Inc., a New York-based wealth manager with approximately $3.6 billion in assets.\n<\/li>\n
- \nFull ownership of Doyle Wealth Management, Inc. of St. Petersburg, Florida, which has approximately $1.5 billion in assets.\n<\/li>\n
- \nA majority interest in Stavis & Cohen Financial LLC of Houston, a firm with approximately $759 million in assets.\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n
Analysts\u2019 conference call (updated)<\/b><\/p>\n
\nCI will hold a conference call with analysts today at 10:00 a.m. Eastern Time, led by Chief Executive Officer Kurt MacAlpine and Chief Financial Officer Douglas Jamieson. The call and a slide presentation will be accessible through a webcast<\/a>, which can also be reached through the Events section of the Investor Relations<\/a> page on www.cifinancial.com<\/a>. Alternatively, investors may listen to the discussion by dialing 1-800-367-2403 or 647-490-5367 (Passcode: 7837577). A replay<\/a> of the call will be available for one year following the presentation (Passcode: 7837577). The webcast will be archived in the Financials<\/a> section of www.cifinancial.com<\/a>.\n<\/p>\n
Financial highlights <\/b><\/p>\n
- \nCI announced three RIA transactions, agreeing to acquire:<\/p>\n
- Comparable selling, general and administrative expenses (SG&A) down $19.4 million and total SG&A down $15.8 million from Q3-2019<\/b><\/li>\n
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