UPDATE 1-CI Financial profit up on strong sales, lifts dividend

Thu Nov 7, 2013 1:31pm EST
 
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(Adds analyst comment, share price, sales details)

TORONTO Nov 7 (Reuters) - Canadian asset manager CI Financial Corp reported a higher profit and an increase in its dividend on Thursday as assets under management and sales climbed and its big bet on equity market gains paid off.

For the third quarter, net income rose to C$107.8 million($103.18 million), or 38 Canadian cents a share, from C$91.3 million, or 32 Canadian cents a share, in the same period a year ago. CI increased its monthly dividend by 6 percent, or half a Canadian cent, to 9.5 Canadian cents a share.

Shares of CI Financial climbed 2.5 percent to C$35.10 after the results, which were largely in line with expectations for a profit of 39 Canadian cents a share.

Average assets under management reached a record high C$84.1 billion for the quarter ended Sept. 30, up 16 percent from the same quarter of the previous year and 3 percent from the prior quarter.

The Toronto-based asset manager, which is partly owned by Bank of Nova Scotia, said it had a record level of third-quarter gross sales and its highest level of third quarter net sales since 2000.

"CI continues to generate strong earnings momentum, leveraging its efficiencies and peer leading AUM growth, with an incremental improvement in its expenses as a percentage of average AUM," Barclays Capital analyst John Aiken wrote in a research note.

"We see little reason to believe that this will not be sustainable and continue to see additional upside in its valuation relative to its peers."

CI has raised its dividend three times in 2013. The 6 percent increase in its payout means it now has its dividend yield at more than 3 percent.   Continued...