Press Release

Sprott Inc. Announces 2015 Second Quarter Results

TORONTO, Aug. 12, 2015 (GLOBE NEWSWIRE) -- Sprott Inc. (TSX:SII) ("Sprott" or the "Company") today announced its financial results for the three-months ended June 30, 2015.

Q2 2015 Financial Overview

  • Assets Under Management ("AUM") were $7.8 billion as at June 30, 2015, similar to $7.8 billion as at June 30, 2014 and March 31, 2015
  • Assets Under Administration ("AUA") were $2.1 billion as at June 30, 2015, compared to $2.6 billion as at June 30, 2014 and $2.2 billion as at March 31, 2015
  • Management fees were $19.5 million, reflecting a decrease of $0.6 million (3.1%) from the three-months ended June 30, 2014
  • Commission revenues were $1.5 million, reflecting a decrease of $1.0 million (40.9%) from the three-months ended June 30, 2014
  • Adjusted base EBITDA was $5.9 million ($0.02 per share), reflecting a decrease of $0.9 million (13.8%) from the three-months ended June 30, 2014
  • Net income was $6.7 million ($0.03 per share), reflecting an increase of $1.7 million (34.2%), from the three-months ended June 30, 2014
  • Investable capital stood at $331.1 million, reflecting a $12.1 million (3.6%) decrease from December 31, 2014

Significant events for the three-months ended June 30, 2015 and year-to-date:

  • Sprott Asset Management launched exchange offers for all of the outstanding units of Central GoldTrust and Silver Bullion Trust for consideration consisting of units of Sprott Physical Gold Trust and Sprott Physical Silver Trust, respectively, and submitted a requisition in connection with a meeting of Central Fund of Canada Limited shareholders
  • Expanded Enhanced products line with the addition of the Sprott Enhanced U.S. Equity Class
  • Introduced Sprott Global REIT & Property Equity Fund, sub-advised by Capital Innovations LLC

"The investment management changes we have made over the past two years are beginning to show results and we are generally pleased with our funds' investment performance in the first half of 2015," said Peter Grosskopf, CEO of Sprott. "We have introduced a number of new products and generated more than $90 million in net sales across the platform, year-to-date. The continued weakness in natural resources during the second quarter of 2015 had a negative impact on our resource-oriented strategies."

"In light of the depressed conditions in the precious metals area, the development of our diversified business has become more important for Sprott," continued Mr. Grosskopf. "The majority of our actively-managed funds have delivered solid results on a year-to-date basis and we recently expanded our Enhanced product offerings, managed by John Wilson, with the launch of the Sprott Enhanced U.S. Equity Class. This core product line now represents more than $1 billion of our total AUM and is well positioned to deliver further growth." 

Breakdown of AUM movements on a three months ended basis by investment product type:
$ (in millions) AUM 
March 31, 2015
Net Sales /
(Redemptions)
Net Market
Value Change
Acquisitions /
(Divestitures)
AUM
June 30, 2015
           
Bullion Funds 3,429 (39) (150) 3,240
Mutual Funds 2,096 27 17 2,140
Alternative Investment Strategies 832 77 1 19 929
Exchange Traded Funds 230 (1) (13) 216
Managed Companies 775 (19) 756
Managed Accounts 106 18 (5) 53 172
Fixed Term Limited Partnerships 349 (1) 348
Total 7,817 82 (170) 72 7,801

Assets Under Management

  • AUM was $7.8 billion, reflecting a nominal decrease from June 30, 2014 and March 31, 2015 and an increase of $0.8 billion (11.0%) from December 31, 2014. Average AUM for the three and six months ended was $7.8 billion and $7.7 billion, respectively, which was up slightly from average AUM for the three and six months ended June 30, 2014.
  • AUA was $2.1 billion, reflecting a decrease of $0.5 billion (19.5%) from June 30, 2014, a decrease of $0.1 billion (3.6%) from March 31, 2015 and an increase of $0.1 billion (7.3%) from December 31, 2014.
  • Total revenues were $28.6 million on a three months ended basis and $61.9 million on a six months ended basis, reflecting a decrease of $1.7 million (5.7%) and $1.3 million (2.1%), respectively, from the prior periods.
  • Total expenses were $20.3 million on a three months ended basis and $44.8 million on a six months ended basis, reflecting a decrease of $2.4 million (10.6%) and an increase of $0.9 million (2.1%), respectively, from the prior periods.
  • Net income was $6.7 million ($0.03 per share) on a three months ended basis and $13.7 million ($0.06 per share) on a six months ended basis, reflecting an increase of $1.7 million (34.2%) and a decrease of $1.6 million (10.4%), respectively, from the prior periods.
  • Adjusted base EBITDA was $5.9 million on a three months ended basis and $19.0 million on a six months ended basis, reflecting a decrease of $0.9 million (13.8%) and an increase of $3.2 million (20.0%), respectively, from the prior periods.
  • Basic and diluted earnings per share for the quarter were $0.03, versus $0.02 for the prior period

Dividends

On August 11, 2015, a dividend of $0.03 per common share was declared for the quarter ended June 30, 2015.

Conference Call and Webcast

A conference call and webcast will be held today, August 12, 2015 at 10:00am ET to discuss the Company's financial results. To participate in the call, please dial (877) 930-8292 ten minutes prior to the scheduled start of the call and provide conference ID 5068810. A taped replay of the conference call will be available until Tuesday, August 19, 2015 by calling (855) 859-2056 or (404) 537-3406, reference number 5068810. The conference call will be webcast live at www.sprottinc.com and http://edge.media-server.com/m/p/q8rs8pqz

*Non-IFRS Financial Measures

This press release includes financial terms (including AUM, AUA, EBITDA and net sales) that the Company utilizes to assess the financial performance of its business that are not measures recognized under International Financial Reporting Standards ("IFRS"). These non-IFRS measures should not be considered alternatives to performance measures determined in accordance with IFRS and may not be comparable to similar measures presented by other issuers. For additional information regarding the Company's use of non-IFRS measures, including the calculation of these measures, please refer to the "Non-IFRS Financial Measures" section of the Company's Management's Discussion and Analysis and its financial statements available on the Company's website at www.sprottinc.com and on SEDAR at www.sedar.com.

Important Notice

This news release does not constitute an offer to buy or the solicitation of an offer to sell any of the securities of Central GoldTrust, Silver Bullion Trust, Sprott Physical Gold Trust or Sprott Physical Silver Trust. The securities registered pursuant to a Registration Statement are not offered for sale in any jurisdiction in which such offer or sale is not permitted.

Forward-Looking Statements

Certain statements in this press release contain forward-looking information (collectively referred to herein as the "Forward-Looking Statements") within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify Forward-Looking Statements. In particular, but without limiting the forgoing, this press release contains Forward-Looking Statements pertaining to: (i) continued development of meaningful scale in the Company's diversified business and the expected benefits therefrom; (ii) generation of results from investment management changes; (iii) the positioning of the Company's product line for future growth; (iv) intentions related to the exchange offers for GTU and SBT and the expected benefits provided to holders of these products; and (v) the declaration, payment and designation of dividends.

Although the Company believes that the Forward-Looking Statements are reasonable, they are not guarantees of future results, performance or achievements. A number of factors or assumptions have been used to develop the Forward-Looking Statements, including: (i) future exchange rates will remain consistent with the current environment; (ii) the impact of increasing competition in each business in which the Company operates will not be material; (iii) quality management will be available; and (iv) the effects of regulation and tax laws of governmental agencies will be consistent with the current environment.   In addition, the material factors or assumptions that Sprott and the Sprott Physical Trusts identified and applied in drawing conclusions or making forecasts or projections set out in the forward-looking information include, but are not limited to, the execution of business and growth strategies, including the success of investments and initiatives; no significant and continuing adverse changes in general economic conditions or conditions in the financial markets; the acquisition of all of the issued and outstanding units of, or substantially all of the assets and liabilities of, GTU and SBT; that all required regulatory approvals for the Exchange Offers will be obtained and all other conditions to completion of the Exchange Offers will be satisfied or waived. Actual results, performance or achievements could vary materially from those expressed or implied by the Forward-Looking Statements should assumptions underlying the Forward-Looking Statements prove incorrect or should one or more risks or other factors materialize, including: (i) difficult market conditions; (ii) changes in the investment management industry; (iii) risks related to regulatory compliance; (iv) failure to deal appropriately with conflicts of interest; (v) failure to continue to retain and attract quality staff; (vi) competitive pressures; (vii) corporate growth may be difficult to sustain and may place significant demands on existing administrative, operational and financial resources; (viii) foreign exchange risk relating to the relative value of the U.S. dollar; (ix) historical financial information is not necessarily indicative of future performance; (x) those risks described under the heading "Risk Factors" in the Company's annual information form dated March 4, 2015; and (xi) those risks described under the headings "Managing Risk - Financial" and "Managing Risk - Other" in the Company's MD&A for the six months ended June 30, 2015. In addition, the payment of dividends is not guaranteed and the amount and timing of any dividends payable by the Company will be at the discretion of the Board of Directors of the Company and will be established on the basis of the Company's earnings, the satisfaction of solvency tests imposed by applicable corporate law for the declaration and payment of dividends, and other relevant factors. The Forward-Looking Statements speak only as of the date hereof, unless otherwise specifically noted, and the Company does not assume any obligation to publicly update any Forward-Looking Statements, whether as a result of new information, future events or otherwise, except as may be expressly required by applicable Canadian securities laws.

About Sprott Inc.

Sprott Inc. is a leading independent asset manager dedicated to achieving superior returns for its clients over the long term. The Company currently operates primarily through six business units: Sprott Asset Management LP, Sprott Private Wealth LP, Sprott Consulting LP, Sprott Resource Lending Corp., Sprott Toscana and Sprott U.S. Holdings Inc. Sprott Asset Management is the investment manager of the Sprott family of mutual funds and hedge funds and discretionary managed accounts; Sprott Private Wealth provides wealth management services to high net worth individuals; and Sprott Consulting and Sprott Toscana provide management, administrative and consulting services to other companies. Sprott Resource Lending provides lending services to mining and energy sectors. Sprott U.S. Holdings Inc. includes Sprott Global Resource Investments Ltd, Sprott Asset Management USA Inc., and Resource Capital Investments Corporation. Sprott Inc. is headquartered in Toronto, Canada, and is listed on the Toronto Stock Exchange under the symbol "SII". For more information on Sprott Inc., please visit www.sprottinc.com.

Source: Sprott Inc.
 

CONTACT: Investor contact information:
         Glen Williams
         Director of Communications
         (416) 943-4394
         gwilliams@sprott.com
Sprott, Inc.