Financial Highlights
Selected financial information(1)(2)(3)
| For the years ended March 31 | |||||||||
| (C$ thousands, except per share and % amounts, and number of employees) | 2018 | 2017 | 2016 | 2018/2017 change | |||||
|---|---|---|---|---|---|---|---|---|---|
| Canaccord Genuity Group Inc. (CGGI) | |||||||||
| Revenue | |||||||||
| Commissions and fees | $ | 461,937 | $ | 396,741 | $ | 376,817 | $ | 65,196 | 16.4% |
| Investment banking | 282,195 | 196,129 | 132,029 | 86,066 | 43.9% | ||||
| Advisory fees | 122,372 | 130,749 | 160,180 | (8,377) | (6.4)% | ||||
| Principal trading | 113,921 | 119,040 | 85,559 | (5,119) | (4.3)% | ||||
| Interest | 27,875 | 16,847 | 16,830 | 11,028 | 65.5% | ||||
| Other | 14,577 | 20,040 | 16,390 | (5,463) | (27.3)% | ||||
| Total revenue | 1,022,877 | 879,546 | 787,805 | 143,331 | 16.3% | ||||
| Expenses | |||||||||
| Non-share based incentive compensation | 480,369 | 414,676 | 382,851 | 65,693 | 15.8% | ||||
| Share-based incentive compensation | 46,245 | 40,322 | 35,025 | 5,923 | 14.7% | ||||
| Salaries and benefits | 99,239 | 85,698 | 92,981 | 13,541 | 15.8% | ||||
| Other overhead expenses(4) | 298,250 | 284,966 | 302,530 | 13,284 | 4.7% | ||||
| Restructuring costs(5) | 7,643 | — | 17,352 | 7,643 | n.m. | ||||
| Acquisition-related costs | 6,732 | — | — | 6,732 | n.m. | ||||
| Acceleration of long-term incentive plan expense(6) | 48,355 | — | — | 48,355 | n.m. | ||||
| Share of loss of an associate(7) | 298 | — | — | 298 | n.m. | ||||
| Impairment of goodwill and other assets(8) | — | — | 321,037 | — | — | ||||
| Total expenses | 987,131 | 825,662 | 1,151,776 | 161,469 | 19.6% | ||||
| Income (loss) before income taxes | 35,746 | 53,884 | (363,971) | (18,138) | (33.7)% | ||||
| Net income (loss) | $ | 17,077 | $ | 43,186 | $ | (358,567) | $ | (26,109) | (60.5)% |
| Net income (loss) attributable to CGGI shareholders | $ | 13,024 | $ | 38,103 | $ | (358,471) | $ | (25,079) | (65.8)% |
| Non-controlling interests | $ | 4,053 | $ | 5,083 | $ | (96) | $ | (1,030) | (20.3)% |
| Earnings (loss) per common share (EPS) – basic | $ | 0.04 | $ | 0.29 | $ | (4.09) | $ | (0.25) | (86.2)% |
| Earnings (loss) per common share – diluted | $ | 0.03 | $ | 0.27 | $ | (4.09) | $ | (0.24) | (88.9)% |
| Return on common equity (ROE) | 0.9% | 5.0% | (50.4)% | (4.1) p.p. | |||||
| Dividends per common share | $ | 0.15 | $ | 0.10 | $ | 0.10 | $ | 0.05 | 50.0% |
| Dividends per Series A Preferred Share | $ | 0.9712 | $ | 1.173 | $ | 1.375 | $ | (0.20) | (17.2)% |
| Dividends per Series C Preferred Share | $ | 1.2482 | $ | 1.4375 | $ | 1.4375 | $ | (0.19) | (13.2)% |
| Book value per diluted common share(9) | $ | 5.71 | $ | 5.08 | $ | 4.99 | $ | 0.63 | 12.3% |
| Excluding significant items(10) | |||||||||
| Total revenue | $ | 1,022,877 | $ | 878,353 | $ | 787,805 | $ | 144,524 | 16.5% |
| Total expenses | $ | 912,270 | $ | 817,096 | $ | 793,862 | $ | 95,174 | 11.6% |
| Income (loss) before income taxes | $ | 110,607 | $ | 61,257 | $ | (6,057) | $ | 49,350 | 80.6% |
| Net income (loss) | $ | 81,657 | $ | 49,196 | $ | (5,995) | $ | 32,461 | 66.0% |
| Net income (loss) attributable to CGGI shareholders | $ | 77,604 | $ | 43,903 | $ | (6,620) | $ | 33,701 | 76.8% |
| Net income attributable to non-controlling interests | $ | 4,053 | $ | 5,293 | $ | 625 | $ | (1,240) | (23.4)% |
| Earnings (loss) per common share – diluted | $ | 0.59 | $ | 0.32 | $ | (0.21) | $ | 0.27 | 84.4% |
| Balance sheet data | |||||||||
| Total assets | $ | 4,020,736 | $ | 5,203,516 | $ | 3,424,546 | $ | (1,182,780) | (22.7)% |
| Total liabilities | 3,165,813 | 4,426,873 | 2,665,895 | (1,261,060) | (28.5)% | ||||
| Non-controlling interests | 13,571 | 11,858 | 8,722 | 1,713 | 14.4% | ||||
| Total shareholders’ equity | 841,352 | 764,785 | 749,929 | 76,567 | 10.0% | ||||
| Number of employees | 1,956 | 1,700 | 1,795 | 256 | 15.1% | ||||
(1) Data is in accordance with IFRS except for ROE, book value per diluted common share, figures excluding significant items and number of employees. See Non-IFRS Measures on page 14 of our MD&A.
(2) The operating results of the Australian operations have been fully consolidated, and a 42% non-controlling interest has been recognized for the year ended March 31, 2018 [year ended March 31, 2017 – 42% and March 31, 2016 – 40%].
(3) Data includes the results of Hargreave Hale since the closing date of September 18, 2017.
(4) Consists of trading costs, premises and equipment, communication and technology, interest, general and administrative, amortization of tangible and intangible assets, and development costs.
(5) Restructuring costs for the year ended March 31, 2018 related to termination benefits incurred as a result of the closing of certain trading operations in our UK & Europe capital markets operations, staff reductions in our Canadian and US capital markets operations, as well as real estate costs related to the acquisition of Hargreave Hale. Restructuring costs for the year ended March 31, 2016 were related to staff reductions in our US capital markets operations and the closure of our Barbados office in Other Foreign Locations, as well as charges related to changes in our Corporate and Other segment.
(6) Effective as of March 31, 2018, the Plan was changed to remove certain employment-related conditions for the vesting of RSU awards made as part of the normal course incentive compensation payment cycle. As a result of this change, the costs of RSUs granted as part of the normal course incentive compensation payment cycle will now be expensed in the period in which those awards are deemed to be earned, instead of recognizing the costs over the vesting period. This change led to the acceleration of the remaining expense for certain awards made under the LTIP which had not been fully amortized as of March 31, 2018. The total charge recorded during the year ended March 31, 2018 in respect of awards granted prior to fiscal 2018 was $48.4 million.
(7) Represents the Company’s equity portion of the net loss of its investment in Canaccord Genuity Acquisition Corp. for the year ended March 31, 2018.
(8) Impairment of goodwill and other assets for the year ended March 31, 2016 is in connection with our capital markets operations in the UK, US, Canada, Australia, and Other Foreign Locations – Singapore operations.
(9) Book value per diluted common share is calculated as total common shareholders’ equity adjusted for assumed proceeds from exercise of options and warrants and conversion of convertible debentures divided by the number of diluted common shares outstanding including estimated amounts in respect of share issuance commitments including options, warrants and convertible debentures, as applicable, and adjusted for shares purchased under the normal course issuer bid and not yet cancelled, and estimated forfeitures in respect of unvested share awards under share-based payment plans.
(10) Net income (loss) and earnings (loss) per common share excluding significant items reflect tax-effected adjustments related to such items. See the Selected Financial Information Excluding Significant Items table on page 23 of our MD&A.
p.p.: percentage points
n.m.: not meaningful