August 5, 2010 / 4:22 PM / in 7 years

UPDATE 1-Canaccord profit falls, revenue rises post Genuity

* Q1 net income C$4.9 million, or EPS of C$0.06

* Results include C$12.4 million of acquisition expenses

* Board approves quarterly dividend of C$0.05 per share (Recasts and adds details)

By Pav Jordan

TORONTO, Aug 5 (Reuters) - Still paying for the acquisition of a rival, Canaccord Financial Inc CF.TO reported a sharply lower quarterly profit on Thursday but it reaped the benefit of added muscle as banking advisory fees drove revenue upward.

Canaccord, which bought Genuity Capital Markets in April, said net income for the first quarter of its financial 2011 fell 35.2 percent to C$4.9 million ($4.8 million), with earnings per share of 6 Canadian cents against 16 Canadian cents in the year-before quarter.

The results included C$12.4 million of expense items connected to the acquisition of Genuity, a boutique Canadian investment bank specializing in mergers and acquisitions and advisory services.

Excluding acquisition-related expense items, the Vancouver-based company reported earnings of C$13.9 million, up about 52.5 percent from C$9.1 million in the year-before quarter.

Canaccord is best known for a strong presence in Canada’s mining sector, particularly among juniors and midcaps. The company, with 37 offices worldwide, has also developed a strong presence in China.

Genuity gave the company a well-connected M&A shop, with bankers with ties to some of the country’s top companies.

Advisory fees from work on key deals helped push revenue up 10.5 percent from the year-before quarter to C$151.9 million. Revenue was up 6.1 percent from Canaccord’s fourth quarter, before the Genuity acquisition closed.

“The expanded Canaccord-Genuity team delivered solid trading and capital markets performance during turbulent markets in the first quarter,” the company said in a statement. “Our Canadian, U.S. and U.K. teams led 29 transactions globally, raising total proceeds of C$1.2 billion.”

Including transactions it did not lead, the company was involved in a total of 97 transactions globally, raising total proceeds of C$2.9 billion during the quarter.

KEY DEALS

In Canada, Canaccord led or co-led deals such as the C$382.8 million initial public offering of Tahoe Resources Inc THO.TO on the Toronto Stock Exchange and two separate transactions for Artis Real Estate Investment Trust AX_u.TO on the TSX totaling C$166.9 million.

On the TSX Venture Exchange, it helped Eacom Timber Corp ETR.V to a C$145 million private placement.

Canaccord also said its share of block trading rose on Canadian exchanges.

Based on value, it said market share on the TSX nearly doubled from its fourth quarter, to 3.1 percent from 1.6 percent.

On the TSX Venture, based on value, Canaccord ranked first in Canada for block trading market share, at 10.1 percent. That is up from fourth place in the previous quarter, when it had a 7.6 percent share.

Canaccord said the board had approved a quarterly dividend of 5 Canadian cents a share payable on Sept. 10.

The company reported cash and cash equivalents balance of C$570.0 million and working capital of C$325.0 million.

Stock of Canaccord rose 0.87 percent to C$10.43 per share.

$1=$1.01 Canadian Reporting by Pav Jordan; editing by Peter Galloway

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