February 5, 2014 / 10:05 PM / 5 years ago

Canaccord Genuity tops estimates with 78 pct profit jump

TORONTO (Reuters) - Canaccord Genuity (CF.TO), a Canadian investment dealer and wealth manager, reported a stronger than expected 78 percent rise in quarterly profit on Wednesday, helped by higher revenue at its European division and by lower expenses.

The Toronto-based company earned C$18.3 million ($16.48 million), or 14 Canadian cents a share, in its third quarter ended December 31. That compared with a year-before profit of C$10.3 million, or 8 Canadian cents a share.

Excluding certain amortization costs, the company said it earned 17 Canadian cents a share. Analysts had expected a profit of 13 Canadian cents a share, excluding items, according to Thomson Reuters I/B/E/S.

Revenue crept up to C$231 million from C$230 million as a 53 percent revenue increase from the company’s British and Europe division offset a 36 percent drop in business in Canada.

Overall expenses fell 5 percent to C$206.5 million.

Like other Canadian independent dealers, Canaccord has been hit hard over the past two years by a combination of tighter regulatory requirements, tougher competition from bank-owned dealers, and a slump in activity from resource companies, which has traditionally been the backbone of the Canadian market.

One known as Canaccord Financial, the firm formally changed its name last year following the acquisition of Genuity Capital in 2010.

Canaccord pushed into Britain in 2012 with the purchase of 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 arm of British boutique firm Eden Financial.

The company’s shares, which have fallen 18 percent over the past 12 months, rose 4 Canadian cents to C$6.87 on Wednesday on the Toronto Stock Exchange. The results were released after markets closed.

Reporting by Cameron French; Editing by Phil Berlowitz; and Peter Galloway

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