June 17, 2010 - Sceptre Reports Q2 Results
Sceptre Investment Counsel Limited Reports Q2 2010 Results
TORONTO, ONTARIO – June 17, 2010 - Sceptre Investment Counsel Limited (TSX:SZ), a leading independent Canadian money management firm, today reported its financial results for the three months ended May 31, 2010.
In the second quarter of 2010, the Company earned $351,000 or 2.5 cents per share fully diluted (2.5 cents per share basic), after expensing transaction costs incurred during the quarter related to the merger transaction announced on June 16, 2010. Without these transaction costs and other one time expenses, the company would have earned 8.8 cents per share. Earnings for the second quarter of 2009 were $519,000 or 3.7 cents per share fully diluted (3.7 cents per share basic).
Q2 Revenue
The appreciation in the level of equity markets compared to a year ago increased the level of assets under management, and positively impacted the Company’s second quarter 2010 revenues relative to the second quarter in 2009.
Total revenue for the second quarter of 2010 was $7.41 million versus $6.24 million in the second quarter of 2009, representing an increase of $1.16 million or 18.6%. This resulted from a $0.99 million increase in investment management revenue and an increase in investment income of $0.17 million.
Total investment management revenue for the quarter was $7.36 million, versus $6.37 million for the second quarter last year. Institutional revenue increased by 11.4% to $4.69 million from $4.21 million in the second quarter of 2009, as assets at the Billing Point (March 31st
(1)) increased from $5.89 billion to $6.28 billion due to the recovery in equity markets. Mutual fund revenue was $1.66 million this quarter versus $1.17 million in the same quarter last year as average assets increased by 36.1%, from $384 million to $522 million due primarily to market appreciation. Private Client revenue was $1.02 million for the quarter versus $0.99 million in the same quarter last year as average assets increased from $524 million to $536 million.
Q2 Expenses
Revenue related expenses (sub-advisory fees, trailer fees and referral fees) increased by $0.11 million this quarter from a year ago, from $1.02 million to $1.13 million, in line with the growth in assets subject to those charges. Other operating expenses increased by $0.94 million versus a year-ago, to $5.31 million from $4.37 million primarily due to transaction costs associated with the merger agreement, higher profitability related remuneration and employee promotions.
The Company, having considered its financial requirements, has declared a quarterly dividend of 6 cents per share on outstanding common shares, payable on July 30, 2010 to shareholders of record June 28, 2010. The previous quarterly dividend was 6 cents per share.
Fiscal Period Asset Continuity____________________________________________________
(1) Sceptre recognizes revenue from most institutional clients based on asset levels at the end of each calendar quarter (“the billing points”). Therefore, Q2 institutional revenue is based on institutional assets at March 31st. This applies only to institutional revenues as mutual fund and private client revenues are charged based on average daily market values during each fiscal quarter.
About Sceptre Investment Counsel
Sceptre Investment Counsel Limited is a leading Canadian independent investment management firm with assets under supervision of approximately $7.3 billion at May 31, 2010. The Company’s Pension and Institutional Fund group manages investment portfolios for a wide range of clients, including corporations, governments, hospitals, charitable foundations, endowments, universities and unions. Through its Wealth Management group, Sceptre provides discretionary funds and segregated account management for high net-worth individuals, and offers a family of eight mutual funds. Sceptre employs 58 people in its offices in Toronto, Waterloo, Montreal and Vancouver. Sceptre’s common shares trade on the Toronto Stock Exchange, under the symbol SZ.
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For further information, please contact:
David R. Morris
Chief Operating Officer and Chief Financial Officer
Sceptre Investment Counsel Limited
(416) 360-4805
