Sprott Announces Third Quarter 2024 Results
Sprott Inc. (NYSE/TSX: SII) reported strong Q3 2024 financial results with Assets Under Management (AUM) reaching $33.4 billion, up 8% from June 30, 2024, and 16% from December 31, 2023. The company achieved record-high AUM for the third consecutive quarter, driven by strong gold and silver prices and $589 million in net sales. Net income increased 87% to $12.7 million ($0.50 per share), while management fees rose 18% to $38.7 million. The Board declared a quarterly dividend of $0.30 per share, representing a 20% increase. The company expects to become debt-free by month-end and maintains a positive outlook based on its positioning in precious metals and critical materials.
Sprott Inc. (NYSE/TSX: SII) ha riportato risultati finanziari solidi per il terzo trimestre del 2024, con Attivi in Gestione (AUM) che hanno raggiunto 33,4 miliardi di dollari, in aumento dell'8% rispetto al 30 giugno 2024 e del 16% rispetto al 31 dicembre 2023. L'azienda ha raggiunto un AUM record per il terzo trimestre consecutivo, sostenuta dai forti prezzi dell'oro e dell'argento e da 589 milioni di dollari in vendite nette. L'utile netto è aumentato dell'87% a 12,7 milioni di dollari (0,50 dollari per azione), mentre le commissioni di gestione sono aumentate del 18% a 38,7 milioni di dollari. Il Consiglio ha proclamato un dividendo trimestrale di 0,30 dollari per azione, rappresentando un aumento del 20%. L'azienda prevede di diventare senza debiti entro la fine del mese e mantiene un outlook positivo grazie alla sua posizione nei metalli preziosi e nei materiali critici.
Sprott Inc. (NYSE/TSX: SII) reportó resultados financieros sólidos para el tercer trimestre de 2024, con Activos Bajo Gestión (AUM) alcanzando 33,4 mil millones de dólares, un 8% más que el 30 de junio de 2024 y un 16% más que el 31 de diciembre de 2023. La compañía logró un AUM récord durante el tercer trimestre consecutivo, impulsada por los fuertes precios del oro y la plata y 589 millones de dólares en ventas netas. El ingreso neto aumentó un 87% a 12,7 millones de dólares (0,50 dólares por acción), mientras que las tarifas de gestión subieron un 18% a 38,7 millones de dólares. La Junta declaró un dividendo trimestral de 0,30 dólares por acción, lo que representa un aumento del 20%. La empresa espera estar libre de deudas para fin de mes y mantiene una perspectiva positiva basada en su posicionamiento en metales preciosos y materiales críticos.
Sprott Inc. (NYSE/TSX: SII)는 2024년 3분기 강력한 재무 실적을 보고하며, 자산 관리(AUM)가 334억 달러에 달했고 이는 2024년 6월 30일 대비 8%, 2023년 12월 31일 대비 16% 증가한 수치입니다. 이 회사는 금 및 은 가격의 상승과 5억 8900만 달러의 순판매에 힘입어 3분기 연속으로 AUM 기록을 경신했습니다. 순이익은 87% 증가하여 1270만 달러 (주당 0.50달러)에 달했고, 관리 수수료는 18% 증가하여 3870만 달러에 이르렀습니다. 이사회는 주당 0.30달러의 분기 배당금을 발표했으며, 이는 20%의 증가를 의미합니다. 회사는 이달 말까지 부채가 없을 것으로 예상하며, 귀금속과 필수 자재에 대한 위치를 바탕으로 긍정적인 전망을 유지하고 있습니다.
Sprott Inc. (NYSE/TSX: SII) a annoncé de solides résultats financiers pour le troisième trimestre 2024, avec des Actifs Sous Gestion (AUM) atteignant 33,4 milliards de dollars, en hausse de 8 % par rapport au 30 juin 2024 et de 16 % par rapport au 31 décembre 2023. L'entreprise a réalisé un AUM record pour le troisième trimestre consécutif, soutenue par de solides prix de l'or et de l'argent et 589 millions de dollars de ventes nettes. Le revenu net a augmenté de 87 % pour atteindre 12,7 millions de dollars (0,50 dollar par action), tandis que les frais de gestion ont augmenté de 18 % pour atteindre 38,7 millions de dollars. Le Conseil a déclaré un dividende trimestriel de 0,30 dollar par action, représentant une augmentation de 20 %. L'entreprise s'attend à être sans dette d'ici la fin du mois et maintient un outlook positif basé sur sa position dans les métaux précieux et les matériaux critiques.
Sprott Inc. (NYSE/TSX: SII) hat starke finanzielle Ergebnisse für das dritte Quartal 2024 gemeldet, wobei das verwaltete Vermögen (AUM) 33,4 Milliarden Dollar erreichte, was einem Anstieg von 8 % gegenüber dem 30. Juni 2024 und 16 % gegenüber dem 31. Dezember 2023 entspricht. Das Unternehmen erzielte im dritten Quartal in Folge einen Rekord-AUM, der durch die hohen Gold- und Silberpreise sowie 589 Millionen Dollar an Nettoumsätzen unterstützt wurde. Der Nettogewinn stieg um 87 % auf 12,7 Millionen Dollar (0,50 Dollar pro Aktie), während die Verwaltungsgebühren um 18 % auf 38,7 Millionen Dollar zunahmen. Der Vorstand erklärte eine vierteljährliche Dividende von 0,30 Dollar pro Aktie, was einen Anstieg von 20 % darstellt. Das Unternehmen erwartet, bis Ende des Monats schuldenfrei zu sein, und hält eine positive Perspektive basierend auf seiner Positionierung im Bereich Edelmetalle und kritische Materialien aufrecht.
- AUM reached record $33.4 billion, up 8% QoQ and 16% YoY
- Net income increased 87% to $12.7 million ($0.50 per share)
- Management fees up 18% to $38.7 million
- Quarterly dividend increased 20% to $0.30 per share
- Company to become debt-free by end of month
- Commission revenues down 8% in Q3
- Net commissions decreased 31% to $0.2 million
- Finance income declined 12% to $1.6 million in Q3
Insights
The Q3 2024 results show strong financial performance with several positive indicators. AUM reached $33.4 billion, up
Key highlights include:
- Management fees up
18% to$38.7 million - Dividend increased
20% to$0.30 per share - Expected to be debt-free by month-end
- Net inflows of
$589 million during the quarter
The company's focus on precious metals and critical materials positions it well in the current market environment. Strong precious metals prices and continuous inflows to exchange-listed products are driving revenue growth, while improving operational efficiency is evident in the lower net compensation ratio of
The market positioning in precious metals has proven highly advantageous, with significant growth in physical trusts. The Physical Gold Trust saw particularly strong performance, reaching
The critical materials segment, while showing some market value decline, maintains strategic importance with uranium and copper trusts. The launch of Physical Copper Trust demonstrates continued product innovation. The
TORONTO, Nov. 06, 2024 (GLOBE NEWSWIRE) -- Sprott Inc. (NYSE/TSX: SII) (“Sprott” or the “Company”) today announced its financial results for the three and nine months ended September 30, 2024.
Management commentary
“Sprott’s Assets Under Management (“AUM”) was
"With Sprott's core positioning in precious metals and critical materials, we retain our constructive outlook and believe we are well positioned to navigate volatile market conditions and continue creating value for our clients and shareholders," continued Mr. George.
Key AUM highlights1
- AUM was
$33.4 billion as at September 30, 2024, up8% from$31.1 billion as at June 30, 2024 and up16% from$28.7 billion as at December 31, 2023. On a three and nine months ended basis, we primarily benefited from strong market value appreciation in our precious metals physical trusts. We also benefited from net inflows to our exchange listed products and the launch of our Physical Copper Trust in the second quarter.
Key revenue highlights
- Management fees were
$38.7 million in the quarter, up18% from$32.9 million for the quarter ended September 30, 2023 and$113.1 million on a year-to-date basis, up17% from$97 million for the nine months ended September 30, 2023. Carried interest and performance fees were$4.1 million in the quarter, up from $nil for the quarter ended September 30, 2023 and$4.8 million on a year-to-date basis, up from$0.4 million for the nine months ended September 30, 2023. Net fees were$38.9 million in the quarter, up31% from$29.7 million for the quarter ended September 30, 2023 and$106.1 million on a year-to-date basis, up21% from$87.7 million for the nine months ended September 30, 2023. Our revenue performance on both a three and nine months ended basis was primarily due to higher average AUM on strong market value appreciation in our precious metals physical trusts and continuous inflows to the majority of our exchange listed products. We also benefited from carried interest crystallization in a legacy fixed-term exploration LP in our managed equities segment. - Commission revenues were
$0.5 million in the quarter, down8% from the quarter ended September 30, 2023 and$4.9 million on a year-to-date basis, down30% from$7 million for the nine months ended September 30, 2023. Net commissions were$0.2 million in the quarter, down31% from$0.4 million for the quarter ended September 30, 2023 and$2.3 million on a year-to-date basis, down42% from$3.9 million for the nine months ended September 30, 2023. Commission revenue was lower in the quarter due to modest ATM activity in our critical materials physical trusts. On a year-to-date basis, the decline in commission revenue was due to the sale of our former Canadian broker-dealer in the second quarter of last year. - Finance income was
$1.6 million in the quarter, down12% from$1.8 million for the quarter ended September 30, 2023 and$7.5 million on a year-to-date basis, up46% from$5.1 million for the nine months ended September 30, 2023. The decrease in the quarter was due to lower income generation in co-investment positions we hold in our LPs managed in our private strategies segment. The increase on a year-to-date basis was due to higher income earned on streaming syndication activity in the second quarter.
Key expense highlights
- Net compensation expense was
$16.9 million in the quarter, up11% from$15.3 million for the quarter ended September 30, 2023 and$50.3 million on a year-to-date basis, up9% from$46 million for the nine months ended September 30, 2023. The increase in the quarter and on a year-to-date basis was primarily due to increased AIP accruals on higher net fee generation. Our net compensation ratio was46% in the quarter (September 30, 2023 -50% ) and45% on a year-to-date basis (September 30, 2023 -50% ). - SG&A expense was
$4.6 million in the quarter, up21% from$3.8 million for the quarter ended September 30, 2023 and$13.8 million on a year-to-date basis, up10% from$12.6 million for the nine months ended September 30, 2023. The increase in the quarter and on a year-to-date basis was due to higher technology and professional services costs.
Earnings summary
- Net income for the quarter was
$12.7 million ($0.50 per share), up87% from$6.8 million ($0.27 per share) for the quarter ended September 30, 2023 and was$37.6 million ($1.48 per share) on a year-to-date basis, up17% from$32.1 million ($1.27 per share) for the nine months ended September 30, 2023. Our earnings benefited from higher management fees on strong market valuations of our precious metals physical trusts and good inflows to our exchange listed products. We also benefited from carried interest crystallization in our managed equities funds and market value appreciation of our co-investments. - Adjusted base EBITDA was
$20.7 million ($0.81 per share) in the quarter, up16% from$17.9 million ($0.71 per share) for the quarter ended September 30, 2023 and$62.8 million ($2.47 per share) on a year-to-date basis, up18% from$53.1 million ($2.10 per share) for the nine months ended September 30, 2023. Adjusted base EBITDA on both a three and nine months ended basis benefited from higher management fees on strong market valuations of our precious metals physical trusts and good inflows to our exchange listed products.
1 See “non-IFRS financial measures” section in this press release and schedule 2 and 3 of "Supplemental financial information"
Subsequent events
- Subsequent to quarter-end, on November 1, 2024, AUM was
$34.2 billion , up2% from$33.4 billion at September 30, 2024. - On November 5, 2024, the Sprott Board of Directors announced a quarterly dividend of
$0.30 per share.
Supplemental financial information
Please refer to the September 30, 2024 quarterly financial statements of the Company and the related management discussion and analysis filed earlier this morning for further details into the Company's financial position as at September 30, 2024 and the Company's financial performance for the three and nine months ended September 30, 2024.
Schedule 1 - AUM continuity
| 3 months results | ||||||||||
| (In millions $) | AUM Jun. 30, 2024 | Net inflows (1) | Market value changes | Other net inflows (1) | AUM Sep. 30, 2024 | Net management fee rate (2) | ||||
| Exchange listed products | ||||||||||
| - Precious metals physical trusts and ETFs | ||||||||||
| - Physical Gold Trust | 7,283 | 361 | 973 | — | 8,617 | 0.35 | % | |||
| - Physical Silver Trust | 4,994 | 224 | 348 | — | 5,566 | 0.45 | % | |||
| - Physical Gold and Silver Trust | 4,710 | — | 515 | — | 5,225 | 0.40 | % | |||
| - Precious Metals ETFs | 355 | (11 | ) | 60 | — | 404 | 0.33 | % | ||
| - Physical Platinum & Palladium Trust | 143 | 7 | 1 | — | 151 | 0.50 | % | |||
| 17,485 | 581 | 1,897 | — | 19,963 | 0.39 | % | ||||
| - Critical materials physical trusts and ETFs | ||||||||||
| - Physical Uranium Trust | 5,615 | 23 | (230 | ) | — | 5,408 | 0.32 | % | ||
| - Critical Materials ETFs | 2,408 | 56 | (157 | ) | — | 2,307 | 0.55 | % | ||
| - Physical Copper Trust | 98 | 2 | 3 | — | 103 | 0.32 | % | |||
| 8,121 | 81 | (384 | ) | — | 7,818 | 0.38 | % | |||
| Total exchange listed products | 25,606 | 662 | 1,513 | — | 27,781 | 0.39 | % | |||
| Managed equities (3)(4) | 2,962 | (55 | ) | 369 | — | 3,276 | 0.90 | % | ||
| Private strategies (4) | 2,485 | (18 | ) | (85 | ) | — | 2,382 | 0.80 | % | |
| Total AUM (5) | 31,053 | 589 | 1,797 | — | 33,439 | 0.47 | % | |||
| 9 months results | ||||||||||
| (In millions $) | AUM Dec. 31, 2023 | Net inflows (1) | Market value changes | Other net inflows (1) | AUM Sep. 30, 2024 | Net management fee rate (2) | ||||
| Exchange listed products | ||||||||||
| - Precious metals physical trusts and ETFs | ||||||||||
| - Physical Gold Trust | 6,532 | 316 | 1,769 | — | 8,617 | 0.35 | % | |||
| - Physical Silver Trust | 4,070 | 256 | 1,240 | — | 5,566 | 0.45 | % | |||
| - Physical Gold and Silver Trust | 4,230 | (161 | ) | 1,156 | — | 5,225 | 0.40 | % | ||
| - Precious Metals ETFs | 339 | (14 | ) | 79 | — | 404 | 0.33 | % | ||
| - Physical Platinum & Palladium Trust | 116 | 42 | (7 | ) | — | 151 | 0.50 | % | ||
| 15,287 | 439 | 4,237 | — | 19,963 | 0.39 | % | ||||
| - Critical materials physical trusts and ETFs | ||||||||||
| - Physical Uranium Trust | 5,773 | 266 | (631 | ) | — | 5,408 | 0.32 | % | ||
| - Critical materials ETFs | 2,143 | 294 | (130 | ) | — | 2,307 | 0.55 | % | ||
| - Physical Copper Trust | — | 2 | (9 | ) | 110 | 103 | 0.32 | % | ||
| 7,916 | 562 | (770 | ) | 110 | 7,818 | 0.38 | % | |||
| Total exchange listed products | 23,203 | 1,001 | 3,467 | 110 | 27,781 | 0.39 | % | |||
| Managed equities (3)(4) | 2,874 | (167 | ) | 569 | — | 3,276 | 0.90 | % | ||
| Private strategies (4) | 2,661 | (172 | ) | (107 | ) | — | 2,382 | 0.80 | % | |
| Total AUM (5) | 28,738 | 662 | 3,929 | 110 | 33,439 | 0.47 | % | |||
| (1) See "Net inflows" and "Other net inflows" in the key performance indicators and non-IFRS and other financial measures section of the MD&A. | ||||||||||
| (2) Management fee rate represents the weighted average fees for all funds in the category, net of fund expenses. | ||||||||||
| (3) Managed equities is made up of primarily precious metal strategies ( | ||||||||||
| (4) Prior period figures have been reclassified to conform with current presentation. | ||||||||||
| (5) No performance fees are earned on exchange listed products. Performance fees are earned on certain of our managed equities products and are based on returns above relevant benchmarks. Private strategies LPs primarily earn carried interest calculated as a predetermined net profit over a preferred return. | ||||||||||
Schedule 2 - Summary financial information
| (In thousands $) | Q3 2024 | Q2 2024 | Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 | Q1 2023 | Q4 2022 | ||||||||
| Summary income statement | ||||||||||||||||
| Management fees (1) | 38,693 | 38,065 | 36,372 | 34,244 | 32,867 | 32,940 | 31,170 | 28,152 | ||||||||
| Fund expenses (2), (3) | (2,385 | ) | (2,657 | ) | (2,234 | ) | (2,200 | ) | (1,740 | ) | (1,871 | ) | (1,795 | ) | (1,470 | ) |
| Direct payouts | (1,483 | ) | (1,408 | ) | (1,461 | ) | (1,283 | ) | (1,472 | ) | (1,342 | ) | (1,187 | ) | (1,114 | ) |
| Carried interest and performance fees | 4,110 | 698 | — | 503 | — | 388 | — | 1,219 | ||||||||
| Carried interest and performance fee payouts - internal | — | (251 | ) | — | (222 | ) | — | (236 | ) | — | (567 | ) | ||||
| Carried interest and performance fee payouts - external (3) | — | — | — | — | — | — | — | (121 | ) | |||||||
| Net fees | 38,935 | 34,447 | 32,677 | 31,042 | 29,655 | 29,879 | 28,188 | 26,099 | ||||||||
| Commissions | 498 | 3,332 | 1,047 | 1,331 | 539 | 1,647 | 4,784 | 5,027 | ||||||||
| Commission expense - internal | (147 | ) | (380 | ) | (217 | ) | (161 | ) | (88 | ) | (494 | ) | (1,727 | ) | (1,579 | ) |
| Commission expense - external (3) | (103 | ) | (1,443 | ) | (312 | ) | (441 | ) | (92 | ) | (27 | ) | (642 | ) | (585 | ) |
| Net commissions | 248 | 1,509 | 518 | 729 | 359 | 1,126 | 2,415 | 2,863 | ||||||||
| Finance income (2) | 1,574 | 4,084 | 1,810 | 1,391 | 1,795 | 1,650 | 1,655 | 1,738 | ||||||||
| Gain (loss) on investments | 937 | 1,133 | 1,809 | 2,808 | (1,441 | ) | (1,950 | ) | 1,958 | (930 | ) | |||||
| Co-investment income (2) | 418 | 416 | 274 | 170 | 462 | 1,327 | 93 | 370 | ||||||||
| Total net revenues (2) | 42,112 | 41,589 | 37,088 | 36,140 | 30,830 | 32,032 | 34,309 | 30,140 | ||||||||
| Compensation (2) | 18,547 | 19,225 | 17,955 | 17,096 | 16,939 | 21,468 | 19,556 | 17,148 | ||||||||
| Direct payouts | (1,483 | ) | (1,408 | ) | (1,461 | ) | (1,283 | ) | (1,472 | ) | (1,342 | ) | (1,187 | ) | (1,114 | ) |
| Carried interest and performance fee payouts - internal | — | (251 | ) | — | (222 | ) | — | (236 | ) | — | (567 | ) | ||||
| Commission expense - internal | (147 | ) | (380 | ) | (217 | ) | (161 | ) | (88 | ) | (494 | ) | (1,727 | ) | (1,579 | ) |
| Severance, new hire accruals and other | (58 | ) | — | — | (179 | ) | (122 | ) | (4,067 | ) | (1,257 | ) | (1,240 | ) | ||
| Net compensation | 16,859 | 17,186 | 16,277 | 15,251 | 15,257 | 15,329 | 15,385 | 12,648 | ||||||||
| Net compensation ratio | 46 | % | 44 | % | 47 | % | 47 | % | 50 | % | 48 | % | 52 | % | 44 | % |
| Severance, new hire accruals and other | 58 | — | — | 179 | 122 | 4,067 | 1,257 | 1,240 | ||||||||
| Selling, general and administrative ("SG&A") (2) | 4,612 | 5,040 | 4,173 | 3,963 | 3,817 | 4,752 | 4,026 | 3,814 | ||||||||
| SG&A recoveries from funds (1) | (275 | ) | (260 | ) | (231 | ) | (241 | ) | (249 | ) | (282 | ) | (264 | ) | (253 | ) |
| Interest expense | 933 | 715 | 830 | 844 | 882 | 1,087 | 1,247 | 1,076 | ||||||||
| Depreciation and amortization | 502 | 568 | 551 | 658 | 731 | 748 | 706 | 710 | ||||||||
| Foreign exchange (gain) loss (2) | 1,028 | 122 | 168 | 1,295 | 37 | 1,440 | 440 | (484 | ) | |||||||
| Other (income) and expenses (2) | — | (580 | ) | — | 3,368 | 4,809 | (18,890 | ) | 1,249 | 1,686 | ||||||
| Total expenses | 23,717 | 22,791 | 21,768 | 25,317 | 25,406 | 8,251 | 24,046 | 20,437 | ||||||||
| Net income | 12,697 | 13,360 | 11,557 | 9,664 | 6,773 | 17,724 | 7,638 | 7,331 | ||||||||
| Net income per share | 0.50 | 0.53 | 0.45 | 0.38 | 0.27 | 0.70 | 0.30 | 0.29 | ||||||||
| Adjusted base EBITDA | 20,675 | 22,375 | 19,751 | 18,759 | 17,854 | 17,953 | 17,321 | 18,083 | ||||||||
| Adjusted base EBITDA per share | 0.81 | 0.88 | 0.78 | 0.75 | 0.71 | 0.71 | 0.68 | 0.72 | ||||||||
| Summary balance sheet | ||||||||||||||||
| Total assets | 412,477 | 406,265 | 389,784 | 378,835 | 375,948 | 381,519 | 386,765 | 383,748 | ||||||||
| Total liabilities | 82,198 | 90,442 | 82,365 | 73,130 | 79,705 | 83,711 | 108,106 | 106,477 | ||||||||
| Total AUM | 33,439,221 | 31,053,136 | 29,369,191 | 28,737,742 | 25,398,159 | 25,141,561 | 25,377,189 | 23,432,661 | ||||||||
| Average AUM | 31,788,412 | 31,378,343 | 29,035,667 | 27,014,109 | 25,518,250 | 25,679,214 | 23,892,335 | 22,323,075 | ||||||||
(1) Previously, management fees within the above summary financial information table included SG&A recoveries from funds consistent with IFRS 15. For management reporting purposes, these recoveries are now shown next to their associated expense as management believes this will enable readers to transparently identify the net economics of these recoveries. However, SG&A recoveries from funds are still shown within the "Management fees" line on the consolidated statement of operations. Prior year figures have been reclassified to conform with current presentation.
(2) Current and prior period figures on the consolidated statements of operations include the following adjustments: (1) trading costs incurred in managed accounts are now included within "Fund expenses" (previously included within "SG&A"); (2) interest income earned on cash deposits are now included within "Finance income" (previously included within "Other income"); (3) co-investment income and income attributable to non-controlling interest are now included as part of "Co-investment income" (previously included within "Other income"); (4) expenses attributable to non-controlling interest is now included within "Co-investment income" (previously included within "Other expenses"); (5) the mark-to-market expense of DSU issuances are now included within "Compensation" (previously included within "Other expenses"); (6) foreign exchange (gain) loss is now shown separately (previously included within "Other expenses"); and (7) shares received on a previously unrecorded contingent asset in Q2 2023 are now included within "Other (income) and expenses" (previously included within "Other income"). Prior year figures have been reclassified to conform with current presentation.
(3) These amounts are included in the "Fund expenses" line on the consolidated statements of operations.
Schedule 3 - EBITDA reconciliation
| 3 months ended | 9 months ended | |||||||
| (in thousands $) | Sep. 30, 2024 | Sep. 30, 2023 | Sep. 30, 2024 | Sep. 30, 2023 | ||||
| Net income for the period | 12,697 | 6,773 | 37,614 | 32,135 | ||||
| Net income margin (1) | 27 | % | 20 | % | 28 | % | 29 | % |
| Adjustments: | ||||||||
| Interest expense | 933 | 882 | 2,478 | 3,216 | ||||
| Provision for income taxes | 5,698 | (1,349 | ) | 14,899 | 7,333 | |||
| Depreciation and amortization | 502 | 731 | 1,621 | 2,185 | ||||
| EBITDA | 19,830 | 7,037 | 56,612 | 44,869 | ||||
| Adjustments: | ||||||||
| (Gain) loss on investments (2) | (937 | ) | 1,441 | (3,879 | ) | 1,433 | ||
| Stock-based compensation (3) | 4,806 | 4,408 | 13,829 | 12,447 | ||||
| Foreign exchange (gain) loss (4) | 1,028 | 37 | 1,318 | 1,917 | ||||
| Severance, new hire accruals and other (4) | 58 | 122 | 58 | 5,446 | ||||
| Revaluation of contingent consideration (4) | — | — | (580 | ) | (2,254 | ) | ||
| Costs relating to exit of non-core business (4) | — | 3,615 | — | 4,987 | ||||
| Non-recurring regulatory, professional fees and other (4) | — | 1,194 | — | 3,023 | ||||
| Shares received on recognition of contingent asset (4) | — | — | — | (18,588 | ) | |||
| Carried interest and performance fees | (4,110 | ) | — | (4,808 | ) | (388 | ) | |
| Carried interest and performance fee payouts - internal | — | — | 251 | 236 | ||||
| Carried interest and performance fee payouts - external | — | — | — | — | ||||
| Adjusted base EBITDA | 20,675 | 17,854 | 62,801 | 53,128 | ||||
| Adjusted base EBITDA margin (5) | 58 | % | 56 | % | 58 | % | 57 | % |
(1) Calculated as IFRS net income divided by IFRS total revenue.
(2) This adjustment removes the income effects of certain gains or losses on short-term investments, co-investments, and digital gold strategies to ensure the reporting objectives of our EBITDA metric as described below are met.
(3) In prior years, the mark-to-market expense of DSU issuances were included with "other (income) and expenses". In the current period, these costs are included as part of "stock based compensation". Prior year figures have been reclassified to conform with current presentation.
(4) Foreign exchange (gain) and loss, severance, new hire accruals and other; revaluation of contingent consideration; costs relating to exit of non-core business; non-recurring regulatory, professional fees and other; and shares received on recognition of contingent asset were previously included with "other (income) and expenses" and are now shown separately in the reconciliation of adjusted base EBITDA above. Prior year figures have been reclassified to conform with current presentation.
(5) Prior year figures have been restated to remove the adjustment of depreciation and amortization.
Conference Call and Webcast
A webcast will be held today, November 6, 2024 at 10:00 am ET to discuss the Company's financial results.
To listen to the webcast, please register at: https://edge.media-server.com/mmc/p/7nbc4pms
Please note, analysts who cover the Company should register at: https://register.vevent.com/register/BIecf4c3c925374bf19a6ce5051f64dd6d
This press release includes financial terms (including AUM, net commissions, net fees, expenses, adjusted base EBITDA, adjusted base EBITDA margin and net compensation) 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. Non-IFRS financial measures do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers. Our key performance indicators and non-IFRS and other financial measures are discussed below. For quantitative reconciliations of non-IFRS financial measures to their most directly comparable IFRS financial measures please see schedule 2 and schedule 3 of the "Supplemental financial information" section of this press release.
Net fees
Management fees, net of fund expenses and direct payouts, and carried interest and performance fees, net of carried interest and performance fee payouts (internal and external), are key revenue indicators as they represent the net revenue contribution after directly associated costs that we generate from our AUM.
Net commissions
Commissions, net of commission expenses (internal and external), arise primarily from purchases and sales of critical materials in our exchange listed products segment and transaction-based service offerings by our broker dealers.
Net compensation & net compensation ratio
Net compensation excludes commission expenses paid to employees, other direct payouts to employees, carried interest and performance fee payouts to employees, which are all presented net of their related revenues in this MD&A, and severance, new hire accruals and other which are non-recurring. Net compensation ratio is calculated as net compensation divided by net revenues.
EBITDA, adjusted base EBITDA and adjusted base EBITDA margin
EBITDA in its most basic form is defined as earnings before interest expense, income taxes, depreciation and amortization. EBITDA (or adjustments thereto) is a measure commonly used in the investment industry by management, investors and investment analysts in understanding and comparing results by factoring out the impact of different financing methods, capital structures, amortization techniques and income tax rates between companies in the same industry. While other companies, investors or investment analysts may not utilize the same method of calculating EBITDA (or adjustments thereto), the Company believes its adjusted base EBITDA metric results in a better comparison of the Company's underlying operations against its peers and a better indicator of recurring results from operations as compared to other non-IFRS financial measures. Adjusted base EBITDA margins are a key indicator of a company’s profitability on a per dollar of revenue basis, and as such, is commonly used in the financial services sector by analysts, investors and management.
Forward Looking Statements
Certain statements in this press release contain forward-looking information and forward-looking statements (collectively referred to herein as the "Forward-Looking Statements") within the meaning of applicable Canadian and U.S. 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) our constructive outlook in precious metals and critical materials; (ii) our expectation to repay the balance of our line of credit by the end of this month, resulting in a debt-free balance sheet at that time; and (iii) the declaration, payment and designation of dividends and confidence that our business will support the dividend level without impacting our ability to fund future growth initiatives.
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) the impact of increasing competition in each business in which the Company operates will not be material; (ii) quality management will be available; (iii) the effects of regulation and tax laws of governmental agencies will be consistent with the current environment; (iv) the impact of public health outbreaks; and (v) those assumptions disclosed under the heading "Critical Accounting Estimates, Judgments and Changes in Accounting Policies" in the Company’s MD&A for the period ended September 30, 2024. 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) poor investment performance; (iii) failure to continue to retain and attract quality staff; (iv) employee errors or misconduct resulting in regulatory sanctions or reputational harm; (v) performance fee fluctuations; (vi) a business segment or another counterparty failing to pay its financial obligation; (vii) failure of the Company to meet its demand for cash or fund obligations as they come due; (viii) changes in the investment management industry; (ix) failure to implement effective information security policies, procedures and capabilities; (x) lack of investment opportunities; (xi) risks related to regulatory compliance; (xii) failure to manage risks appropriately; (xiii) failure to deal appropriately with conflicts of interest; (xiv) competitive pressures; (xv) corporate growth which may be difficult to sustain and may place significant demands on existing administrative, operational and financial resources; (xvi) failure to comply with privacy laws; (xvii) failure to successfully implement succession planning; (xviii) foreign exchange risk relating to the relative value of the U.S. dollar; (xix) litigation risk; (xx) failure to develop effective business resiliency plans; (xxi) failure to obtain or maintain sufficient insurance coverage on favorable economic terms; (xxii) historical financial information being not necessarily indicative of future performance; (xxiii) the market price of common shares of the Company may fluctuate widely and rapidly; (xxiv) risks relating to the Company’s investment products; (xxv) risks relating to the Company's proprietary investments; (xxvi) risks relating to the Company's private strategies business; (xxvii) those risks described under the heading "Risk Factors" in the Company’s annual information form dated February 20, 2024; and (xxviii) those risks described under the headings "Managing Financial Risks" and "Managing Non-Financial Risks" in the Company’s MD&A for the period ended September 30, 2024. 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 securities laws.
About Sprott
Sprott is a global asset manager focused on precious metals and critical materials investments. We are specialists. We believe our in-depth knowledge, experience and relationships separate us from the generalists. Our investment strategies include Exchange Listed Products, Managed Equities and Private Strategies. Sprott has offices in Toronto, New York, Connecticut and California and the company’s common shares are listed on the New York Stock Exchange and the Toronto Stock Exchange under the symbol (SII). For more information, please visit www.sprott.com.
Investor contact information:
Glen Williams
Managing Partner
Investor and Institutional Client Relations
(416) 943-4394
gwilliams@sprott.com
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