3 Min Read
* Results miss estimates by a penny
* Canadian dealer cut costs last year
* Sees stronger markets, more UK M&A
By Cameron French
TORONTO, Feb 6 (Reuters) - Canaccord Financial reported a stronger third-quarter profit on Thursday as record advisory fees drove a 56 percent jump in revenue, and the company's CEO pledged to continue to expand its presence in the United Kingdom.
The Toronto-based investment dealer and wealth management firm earned C$10.3 million ($10.33 million), or 8 Canadian cents a share, in its fiscal third quarter ended Dec 31. That compared with a year-before profit of C$2.5 million, or 1 Canadian cent a share.
Excluding significant items, such as C$11.9 million in restructuring costs, Canaccord said it earned 17 Canadian cents a share.
Analysts had expected profit of 18 Canadian cents a share, before exception items, according to Thomson Reuters I/B/E/S.
Quarterly revenue rose 55.5 percent to C$230.0 million, with about two-thirds of that generated at the company's Canaccord Genuity investment dealer, which led or co-led 33 transactions globally.
Canaccord pushed into the United Kingdom last year with the purchase of British broker and advisory group Collins Stewart Hawkpoint for $392 million and followed that up with the C$20.3 million purchase of the wealth management of British boutique firm Eden Financial.
The company earned half of its revenue in markets outside of Canada during the quarter and plans to continue to expand in the UK through acquisitions, Chief Executive Paul Reynolds said on a conference call.
"We should be able to continually finance one or two transactions a year to add on a billion to two billion pounds ($ 1.6-$3.1 billion)a year in assets through acquisitions," he said.
Like many independent dealers, Canaccord has been hit hard by weak commodity markets and the European debt crisis.
The company slashed its dividend last August and then shuttered half of its Canadian wealth management offices and cut 35 advisory teams in order to cut costs to a break even level.
Reynolds said the company is beginning to see signs of an uptick in markets activity.
"We're optimistic that equity markets and financing transactions will rebound in the coming months as markets are already experiencing positive flows of capital from fixed income to equities," he said.
Canaccord maintained its quarterly dividend at 5 Canadian cents a share.
The stock closed at C$7.58 on the Toronto Stock Exchange. The results were released after markets closed.