Financial Overview
Selected financial information(1)(2)(8)
| For the years ended March 31 | |||||||||
| (C$ thousands, except per share and % amounts, and number of employees) | 2019 | 2018 | 2017 | 2019/2018 change | |||||
|---|---|---|---|---|---|---|---|---|---|
| Canaccord Genuity Group Inc. (CGGI) | |||||||||
| Revenue | |||||||||
| Commissions and fees | $ | 556,475 | $ | 461,937 | $ | 396,741 | $ | 94,538 | 20.5% |
| Investment banking | 294,241 | 282,195 | 196,129 | 12,046 | 4.3% | ||||
| Advisory fees | 142,228 | 122,372 | 130,749 | 19,856 | 16.2% | ||||
| Principal trading | 125,830 | 113,921 | 119,040 | 11,909 | 10.5% | ||||
| Interest | 51,008 | 27,875 | 16,847 | 23,133 | 83.0% | ||||
| Other | 20,785 | 14,577 | 20,040 | 6,208 | 42.6% | ||||
| Total revenue | 1,190,567 | 1,022,877 | 879,546 | 167,690 | 16.4% | ||||
| Expenses | |||||||||
| Incentive compensation | 599,867 | 526,614 | 454,998 | 73,253 | 13.9% | ||||
| Salaries and benefits | 116,758 | 99,239 | 85,698 | 17,519 | 17.7% | ||||
| Other overhead expenses(3) | 356,240 | 298,250 | 284,966 | 57,990 | 19.4% | ||||
| Restructuring costs(4) | 13,070 | 7,643 | — | 5,427 | 71.0% | ||||
| Acquisition-related costs | 3,064 | 6,732 | — | (3,668) | (54.5)% | ||||
| Loss on extinguishment of convertible debentures | 8,608 | — | — | 8,608 | n.m. | ||||
| Acceleration of long-term incentive plan expense | — | 48,355 | — | (48,355) | (100.0)% | ||||
| Share of loss of an associate(5) | 304 | 298 | — | 6 | 2.0% | ||||
| Total expenses | 1,097,911 | 987,131 | 825,662 | 110,780 | 11.2% | ||||
| Income before income taxes | 92,656 | 35,746 | 53,884 | 56,910 | 159.2% | ||||
| Net income | $ | 71,582 | $ | 17,077 | $ | 43,186 | $ | 54,505 | n.m. |
| Net income attributable to CGGI shareholders | $ | 70,530 | $ | 13,024 | $ | 38,103 | $ | 57,506 | n.m. |
| Non-controlling interests | $ | 1,052 | $ | 4,053 | $ | 5,083 | $ | (3,001) | (74.0)% |
| Earnings per common share – basic | $ | 0.58 | $ | 0.04 | $ | 0.29 | $ | 0.54 | n.m. |
| Earnings per common share – diluted | $ | 0.48 | $ | 0.03 | $ | 0.27 | $ | 0.45 | n.m. |
| Dividends per common share | $ | 0.20 | $ | 0.15 | $ | 0.10 | $ | 0.05 | 33.3% |
| Dividends per Series A Preferred Share | $ | 0.9712 | $ | 0.9712 | $ | 1.173 | $ | 0.00 | 0.0% |
| Dividends per Series C Preferred Share | $ | 1.2482 | $ | 1.2482 | $ | 1.4375 | $ | 0.00 | 0.0% |
| Book value per diluted common share(6) | $ | 6.25 | $ | 5.71 | $ | 5.08 | $ | 0.54 | 9.5% |
| Excluding significant items(7) | |||||||||
| Total revenue | $ | 1,190,567 | $ | 1,022,877 | $ | 878,353 | $ | 167,690 | 16.4% |
| Total expenses | $ | 1,054,981 | $ | 912,270 | $ | 817,096 | $ | 142,711 | 15.6% |
| Income before income taxes | $ | 135,586 | $ | 110,607 | $ | 61,257 | $ | 24,979 | 22.6% |
| Net income | $ | 107,355 | $ | 81,657 | $ | 49,196 | $ | 25,698 | 31.5% |
| Net income attributable to CGGI shareholders | $ | 106,303 | $ | 77,604 | $ | 43,903 | $ | 28,699 | 37.0% |
| Net income attributable to non-controlling interests | $ | 1,052 | $ | 4,053 | $ | 5,293 | $ | (3,001) | (74.0)% |
| Earnings per common share – diluted | $ | 0.80 | $ | 0.59 | $ | 0.32 | $ | 0.21 | 35.6% |
| Balance sheet data | |||||||||
| Total assets | $ | 4,749,294 | $ | 4,020,736 | $ | 5,203,516 | $ | 728,558 | 18.1% |
| Total liabilities | 3,870,934 | 3,165,813 | 4,426,873 | 705,121 | 22.3% | ||||
| Non-controlling interests | 1,997 | 13,571 | 11,858 | (11,574) | (85.3)% | ||||
| Total shareholders’ equity | 876,363 | 841,352 | 764,785 | 35,011 | 4.2% | ||||
| Number of employees | 2,135 | 1,956 | 1,700 | 179 | 9.2% | ||||
(1) These figures exclude significant items. Figures excluding significant items are non-IFRS measures. 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 non-controlling interest of 15% has been recognized for the year ended March 31, 2019 [April 1, 2018 to August 9, 2018 – 42% and post-acquisition of an additional 30% interest in the Australian operations on August 10, 2018 – 15%; March 31, 2018 – 42%].
(3) Consists of trading costs, premises and equipment, communication and technology, interest, general and administrative, amortization of tangible and intangible assets, and development costs.
(4) Restructuring costs for the year ended March 31, 2019 related to termination benefits and certain real estate costs incurred as a result of the restructuring of our UK capital markets operations. Restructuring costs for the year ended March 31, 2018 related to termination benefits 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.
(5) Represents the Company’s equity portion of the net loss of its investment in Canaccord Genuity Growth Corp. and Canaccord Genuity Acquisition Corp. for the year ended March 31, 2019 and the Company’s equity portion of the net loss of its investment in Canaccord Genuity Acquisition Corp for the year ended March 31, 2018.
(6) Book value per diluted common share is calculated as total common shareholders’ equity adjusted for assumed proceeds from the exercise of options and warrants, issuance of common shares in connection with deferred consideration related to acquisitions, settlement of a promissory note in shares at the Company’s option, and the 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, other share-based payment plan, deferred consideration related to acquisitions, promissory notes and convertible debentures, and adjusted for shares purchased or committed to be 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.
(7) Net income and earnings 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 24 of our MD&A.
(8) Data includes the operating results of Hargreave Hale Limited since September 18, 2017, the operating results of Jitneytrade Inc. and Finlogik Inc. since June 6, 2018, the operating results of McCarthy Taylor Ltd. since January 29, 2019 and the operating results of Petsky Prunier LLC since February 13, 2019.
n.m.: not meaningful (percentages over 300% are indicated as n.m.)