Sprott Inc. (NYSE/TSX: SII) (“Sprott” or the “Company”) today
announced its financial results for the three and six months ended
June 30, 2024.
Management commentary “We are
pleased to report that during the second quarter of 2024, Sprott’s
Assets Under Management (“AUM”) reached $31.1 billion, up 6% from
March 31, 2024 and up 8% from December 31, 2023,” said Whitney
George, CEO of Sprott. "After more than four years of positive net
sales, we started 2024 with $284 million of net redemptions in the
first quarter. This quarter, we returned to positive net sales with
$357 million of net inflows and an additional $110 million from the
recent initial public offering ("IPO") of the Sprott Physical
Copper Trust ("COP"), bringing our net sales in the first half of
the year to $183 million, inclusive of the COP IPO."
“The IPO of COP was a strategic priority for
Sprott and the latest addition to our critical materials investment
strategies," continued Mr. George. "As the world’s first physical
copper fund, COP is designed to provide investors with an
alternative to investing in copper futures and a way for
institutions and individual clients to complement their equity
positions. Since the launch of the Sprott Physical Uranium Trust in
2021, we have established a global network of institutions, family
offices and individuals seeking exposure to critical materials
investment strategies. We look forward to engaging with this
audience as we seek to scale COP."
Key AUM highlights1
- AUM was $31.1
billion as at June 30, 2024, up 6% from $29.4 billion as at March
31, 2024 and up 8% from $28.7 billion as at December 31, 2023. On a
three and six months ended basis, we primarily benefited from
market value appreciation in our precious metals physical trusts.
We also benefited from net inflows to our exchange listed products
and the launch of COP in the quarter.
Key revenue highlights
- Management fees
were $38.1 million in the quarter, up 16% from $32.9 million for
the quarter ended June 30, 2023 and $74.4 million on a year-to-date
basis, up 16% from $64.1 million for the six months ended June 30,
2023. Carried interest and performance fees were $0.7 million in
the quarter and on a year-to-date basis, up 80% from $0.4 million
for the quarter and six months ended June 30, 2023. Net fees were
$34.4 million in the quarter, up 15% from $29.9 million for the
quarter ended June 30, 2023 and $67.1 million on a year-to-date
basis, up 16% from $58.1 million for the six months ended June 30,
2023. Our revenue performance on both a three and six months ended
basis was primarily due to higher average AUM on good market value
appreciation across most of our exchange listed products since last
year.
- Commission
revenues were $3.3 million in the quarter, up from $1.6 million for
the quarter ended June 30, 2023 and $4.4 million on a year-to-date
basis, down 32% from $6.4 million for the six months ended June 30,
2023. Net commissions were $1.5 million in the quarter, up 34% from
$1.1 million for the quarter ended June 30, 2023 and $2 million on
a year-to-date basis, down 43% from $3.5 million for the six months
ended June 30, 2023. Higher commissions in the quarter were due to
increased ATM activity in our physical uranium trust and the launch
of COP. On a year-to-date basis, lower commissions were due to the
sale of our former Canadian broker-dealer in the second quarter of
last year.
- Finance income
was $4.1 million in the quarter, up from $1.7 million for the
quarter ended June 30, 2023 and $5.9 million on a year-to-date
basis, up 78% from $3.3 million for the six months ended June 30,
2023. The increase in finance income was due to higher income
earned on streaming syndication activity.
Key expense highlights
- Net compensation
expense was $17.2 million in the quarter, up 12% from $15.3 million
for the quarter ended June 30, 2023 and $33.5 million on a
year-to-date basis, up 9% from $30.7 million for the six months
ended June 30, 2023. The increase in the quarter was primarily due
to increased AIP accruals on higher net fee generation.
- SG&A expense
was $5 million in the quarter, up 6% from $4.8 million for the
quarter ended June 30, 2023 and $9.2 million on a year-to-date
basis, up 5% from $8.8 million for the six months ended June 30,
2023. The increase was due to higher technology and professional
services costs.
Earnings summary
- Last year, our
net income benefited from the realization of an $18.6 million
non-recurring asset. Consequently, our net income this quarter of
$13.4 million ($0.53 per share) was down 25% from $17.7 million
($0.70 per share) for the three months ended last year. On a
year-to-date basis, net income was $24.9 million ($0.98 per share),
down 2% from $25.4 million ($1.00 per share) last year. Excluding
the impact of last year’s realization of a non-recurring asset, our
second quarter net income was up $14.2 million, and up $18.1
million for the six months ended June 30, 2024. Our earnings
benefited from higher management fees on improved market valuations
in our precious metals exchange listed products, higher commission
income on increased ATM activity in our critical materials exchange
listed products and higher finance income in our private strategies
segment due to higher streaming syndication fees. Our earnings also
benefited from market value appreciation of our
co-investments.
- Adjusted base
EBITDA was $22.4 million ($0.88 per share) in the quarter, up 25%
from $18 million ($0.71 per share) for the quarter ended June 30,
2023 and $42.1 million ($1.66 per share) on a year-to-date basis,
up 19% from $35.3 million ($1.40 per share) for the six months
ended June 30, 2023. Adjusted base EBITDA on both a three and six
months ended basis benefited from higher management fees on
improved market valuations in our precious metals exchange listed
products, higher commission income on increased ATM activity in our
critical materials exchange listed products and higher finance
income in our private strategies segment due to higher streaming
syndication fees mentioned above.
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 August 1, 2024, AUM was $31.5
billion, up 2% from $31.1 billion at June 30, 2024.
-
On August 6, 2024, the Sprott Board of Directors announced a
quarterly dividend of $0.25 per share.
Supplemental financial
information
Please refer to the June 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 June 30,
2024 and the Company's financial performance for the three and six
months ended June 30, 2024.
Schedule 1 - AUM continuity
3 months results |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In millions $) |
AUMMar. 31, 2024 |
Net inflows (1) |
Market value changes |
Othernet inflows (1) |
AUM Jun. 30, 2024 |
|
Net management fee rate (2) |
|
|
|
|
|
|
|
|
Exchange listed products |
|
|
|
|
|
|
|
-
Precious metals physical trusts and ETFs |
|
|
|
|
|
|
-
Physical Gold Trust |
6,895 |
99 |
|
289 |
|
— |
7,283 |
|
0.35 |
% |
-
Physical Silver Trust |
4,242 |
51 |
|
701 |
|
— |
4,994 |
|
0.45 |
% |
-
Physical Gold and Silver Trust |
4,401 |
(48 |
) |
357 |
|
— |
4,710 |
|
0.40 |
% |
-
Precious Metals ETFs |
337 |
6 |
|
12 |
|
— |
355 |
|
0.34 |
% |
-
Physical Platinum & Palladium Trust |
112 |
30 |
|
1 |
|
— |
143 |
|
0.50 |
% |
|
15,987 |
138 |
|
1,360 |
|
— |
17,485 |
|
0.39 |
% |
|
|
|
|
|
|
|
|
-
Critical materials physical trust and ETFs |
|
|
|
|
|
|
-
Physical Uranium Trust |
5,626 |
187 |
|
(198 |
) |
— |
5,615 |
|
0.32 |
% |
-
Critical Materials ETFs |
2,235 |
189 |
|
(16 |
) |
— |
2,408 |
|
0.58 |
% |
-
Physical Copper Trust |
— |
— |
|
(12 |
) |
110 |
98 |
|
0.32 |
% |
|
7,861 |
376 |
|
(226 |
) |
110 |
8,121 |
|
0.39 |
% |
|
|
|
|
|
|
|
|
Total exchange listed products |
23,848 |
514 |
|
1,134 |
|
110 |
25,606 |
|
0.39 |
% |
|
|
|
|
|
|
|
|
Managed equities (3) |
2,923 |
(36 |
) |
98 |
|
— |
2,985 |
|
0.92 |
% |
|
|
|
|
|
|
|
|
Private strategies |
2,598 |
(121 |
) |
(15 |
) |
— |
2,462 |
|
0.78 |
% |
|
|
|
|
|
|
|
|
Total AUM (4) |
29,369 |
357 |
|
1,217 |
|
110 |
31,053 |
|
0.47 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6 months results |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In millions $) |
AUMDec. 31, 2023 |
Net inflows (1) |
Market value changes |
Othernet inflows (1) |
AUM Jun. 30, 2024 |
|
Net management fee rate (2) |
|
|
|
|
|
|
|
|
Exchange listed products |
|
|
|
|
|
|
|
-
Precious metals physical trusts and ETFs |
|
|
|
|
|
|
-
Physical Gold Trust |
6,532 |
(45 |
) |
796 |
|
— |
7,283 |
|
0.35 |
% |
-
Physical Silver Trust |
4,070 |
32 |
|
892 |
|
— |
4,994 |
|
0.45 |
% |
-
Physical Gold and Silver Trust |
4,230 |
(161 |
) |
641 |
|
— |
4,710 |
|
0.40 |
% |
-
Precious Metals ETFs |
339 |
(3 |
) |
19 |
|
— |
355 |
|
0.34 |
% |
-
Physical Platinum & Palladium Trust |
116 |
35 |
|
(8 |
) |
— |
143 |
|
0.50 |
% |
|
15,287 |
(142 |
) |
2,340 |
|
— |
17,485 |
|
0.39 |
% |
|
|
|
|
|
|
|
|
-
Critical materials physical trust and ETFs |
|
|
|
|
|
|
-
Physical Uranium Trust |
5,773 |
243 |
|
(401 |
) |
— |
5,615 |
|
0.32 |
% |
-
Critical materials ETFs |
2,143 |
238 |
|
27 |
|
— |
2,408 |
|
0.58 |
% |
-
Physical Copper Trust |
— |
— |
|
(12 |
) |
110 |
98 |
|
0.32 |
% |
|
7,916 |
481 |
|
(386 |
) |
110 |
8,121 |
|
0.39 |
% |
|
|
|
|
|
|
|
|
Total exchange listed products |
23,203 |
339 |
|
1,954 |
|
110 |
25,606 |
|
0.39 |
% |
|
|
|
|
|
|
|
|
Managed equities (3) |
2,890 |
(106 |
) |
201 |
|
— |
2,985 |
|
0.92 |
% |
|
|
|
|
|
|
|
|
Private strategies |
2,645 |
(160 |
) |
(23 |
) |
— |
2,462 |
|
0.78 |
% |
|
|
|
|
|
|
|
|
Total AUM (4) |
28,738 |
73 |
|
2,132 |
|
110 |
31,053 |
|
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 (55%), high net worth managed accounts (36%) and U.S.
value strategies (9%). |
(4) 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 strategiesLPs earn carried interest calculated as a
predetermined net profit over a preferred return. |
Schedule 2 - Summary financial information
(In thousands $) |
Q2 2024 |
Q1 2024 |
Q42023 |
Q32023 |
Q22023 |
Q12023 |
Q42022 |
Q32022 |
Summary income statement |
|
|
|
|
|
|
|
|
Management fees (1) |
38,065 |
|
36,372 |
|
34,244 |
|
32,867 |
|
32,940 |
|
31,170 |
|
28,152 |
|
28,899 |
|
Fund expenses (2), (3) |
(2,657 |
) |
(2,234 |
) |
(2,200 |
) |
(1,740 |
) |
(1,871 |
) |
(1,795 |
) |
(1,470 |
) |
(1,466 |
) |
Direct payouts |
(1,408 |
) |
(1,461 |
) |
(1,283 |
) |
(1,472 |
) |
(1,342 |
) |
(1,187 |
) |
(1,114 |
) |
(1,121 |
) |
Carried interest and performance fees |
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 |
34,447 |
|
32,677 |
|
31,042 |
|
29,655 |
|
29,879 |
|
28,188 |
|
26,099 |
|
26,312 |
|
|
|
|
|
|
|
|
|
|
Commissions |
3,332 |
|
1,047 |
|
1,331 |
|
539 |
|
1,647 |
|
4,784 |
|
5,027 |
|
6,101 |
|
Commission expense - internal |
(380 |
) |
(217 |
) |
(161 |
) |
(88 |
) |
(494 |
) |
(1,727 |
) |
(1,579 |
) |
(2,385 |
) |
Commission expense - external (3) |
(1,443 |
) |
(312 |
) |
(441 |
) |
(92 |
) |
(27 |
) |
(642 |
) |
(585 |
) |
(476 |
) |
Net commissions |
1,509 |
|
518 |
|
729 |
|
359 |
|
1,126 |
|
2,415 |
|
2,863 |
|
3,240 |
|
|
|
|
|
|
|
|
|
|
Finance income (2) |
4,084 |
|
1,810 |
|
1,391 |
|
1,795 |
|
1,650 |
|
1,655 |
|
1,738 |
|
1,274 |
|
Gain (loss) on investments |
1,133 |
|
1,809 |
|
2,808 |
|
(1,441 |
) |
(1,950 |
) |
1,958 |
|
(930 |
) |
45 |
|
Co-investment income (2) |
416 |
|
274 |
|
170 |
|
462 |
|
1,327 |
|
93 |
|
370 |
|
249 |
|
Total net revenues (2) |
41,589 |
|
37,088 |
|
36,140 |
|
30,830 |
|
32,032 |
|
34,309 |
|
30,140 |
|
31,120 |
|
|
|
|
|
|
|
|
|
|
Compensation (2) |
19,225 |
|
17,955 |
|
17,096 |
|
16,939 |
|
21,468 |
|
19,556 |
|
17,148 |
|
19,044 |
|
Direct payouts |
(1,408 |
) |
(1,461 |
) |
(1,283 |
) |
(1,472 |
) |
(1,342 |
) |
(1,187 |
) |
(1,114 |
) |
(1,121 |
) |
Carried interest and performance fee payouts - internal |
(251 |
) |
— |
|
(222 |
) |
— |
|
(236 |
) |
— |
|
(567 |
) |
— |
|
Commission expense - internal |
(380 |
) |
(217 |
) |
(161 |
) |
(88 |
) |
(494 |
) |
(1,727 |
) |
(1,579 |
) |
(2,385 |
) |
Severance, new hire accruals and other |
— |
|
— |
|
(179 |
) |
(122 |
) |
(4,067 |
) |
(1,257 |
) |
(1,240 |
) |
(1,349 |
) |
Net compensation |
17,186 |
|
16,277 |
|
15,251 |
|
15,257 |
|
15,329 |
|
15,385 |
|
12,648 |
|
14,189 |
|
|
|
|
|
|
|
|
|
|
Severance, new hire accruals and other |
— |
|
— |
|
179 |
|
122 |
|
4,067 |
|
1,257 |
|
1,240 |
|
1,349 |
|
Selling, general and administrative ("SG&A") (2) |
5,040 |
|
4,173 |
|
3,963 |
|
3,817 |
|
4,752 |
|
4,026 |
|
3,814 |
|
4,051 |
|
SG&A recoveries from funds (1) |
(260 |
) |
(231 |
) |
(241 |
) |
(249 |
) |
(282 |
) |
(264 |
) |
(253 |
) |
(259 |
) |
Interest expense |
715 |
|
830 |
|
844 |
|
882 |
|
1,087 |
|
1,247 |
|
1,076 |
|
884 |
|
Depreciation and amortization |
568 |
|
551 |
|
658 |
|
731 |
|
748 |
|
706 |
|
710 |
|
710 |
|
Foreign exchange (gain) loss (2) |
122 |
|
168 |
|
1,295 |
|
37 |
|
1,440 |
|
440 |
|
(484 |
) |
3,020 |
|
Other (income) and expenses (2) |
(580 |
) |
— |
|
3,368 |
|
4,809 |
|
(18,890 |
) |
1,249 |
|
1,686 |
|
3,384 |
|
Total expenses |
22,791 |
|
21,768 |
|
25,317 |
|
25,406 |
|
8,251 |
|
24,046 |
|
20,437 |
|
27,328 |
|
|
|
|
|
|
|
|
|
|
Net income |
13,360 |
|
11,557 |
|
9,664 |
|
6,773 |
|
17,724 |
|
7,638 |
|
7,331 |
|
3,071 |
|
Net income per share |
0.53 |
|
0.45 |
|
0.38 |
|
0.27 |
|
0.70 |
|
0.30 |
|
0.29 |
|
0.12 |
|
Adjusted base EBITDA |
22,375 |
|
19,751 |
|
18,759 |
|
17,854 |
|
17,953 |
|
17,321 |
|
18,083 |
|
16,837 |
|
Adjusted base EBITDA per share |
0.88 |
|
0.78 |
|
0.75 |
|
0.71 |
|
0.71 |
|
0.68 |
|
0.72 |
|
0.67 |
|
|
|
|
|
|
|
|
|
|
Summary balance sheet |
|
|
|
|
|
|
|
|
Total assets |
406,265 |
|
389,784 |
|
378,835 |
|
375,948 |
|
381,519 |
|
386,765 |
|
383,748 |
|
375,386 |
|
Total liabilities |
90,442 |
|
82,365 |
|
73,130 |
|
79,705 |
|
83,711 |
|
108,106 |
|
106,477 |
|
103,972 |
|
|
|
|
|
|
|
|
|
|
Total AUM |
31,053,136 |
|
29,369,191 |
|
28,737,742 |
|
25,398,159 |
|
25,141,561 |
|
25,377,189 |
|
23,432,661 |
|
21,044,252 |
|
Average AUM |
31,378,343 |
|
29,035,667 |
|
27,014,109 |
|
25,518,250 |
|
25,679,214 |
|
23,892,335 |
|
22,323,075 |
|
21,420,015 |
|
(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 |
6 months ended |
|
|
|
|
|
(in thousands $) |
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
Net income for the period |
13,360 |
|
17,724 |
|
24,917 |
|
25,362 |
|
Adjustments: |
|
|
|
|
Interest expense |
715 |
|
1,087 |
|
1,545 |
|
2,334 |
|
Provision for income taxes |
5,438 |
|
6,057 |
|
9,201 |
|
8,682 |
|
Depreciation and amortization |
568 |
|
748 |
|
1,119 |
|
1,454 |
|
EBITDA |
20,081 |
|
25,616 |
|
36,782 |
|
37,832 |
|
Adjustments: |
|
|
|
|
(Gain) loss on investments (1) |
(1,133 |
) |
1,950 |
|
(2,942 |
) |
(8 |
) |
Stock-based compensation (2) |
4,332 |
|
3,922 |
|
9,023 |
|
8,039 |
|
Foreign exchange (gain) loss (3) |
122 |
|
1,440 |
|
290 |
|
1,880 |
|
Severance, new hire accruals and other (3) |
— |
|
4,067 |
|
— |
|
5,324 |
|
Revaluation of contingent consideration (3) |
(580 |
) |
(2,254 |
) |
(580 |
) |
(2,254 |
) |
Costs relating to exit of non-core business (3) |
— |
|
1,372 |
|
— |
|
1,372 |
|
Non-recurring regulatory, professional fees and other (3) |
— |
|
580 |
|
— |
|
1,829 |
|
Shares received on recognition of contingent asset (3) |
— |
|
(18,588 |
) |
— |
|
(18,588 |
) |
Carried interest and performance fees |
(698 |
) |
(388 |
) |
(698 |
) |
(388 |
) |
Carried interest and performance fee payouts - internal |
251 |
|
236 |
|
251 |
|
236 |
|
Carried interest and performance fee payouts - external |
— |
|
— |
|
— |
|
— |
|
Adjusted base EBITDA |
22,375 |
|
17,953 |
|
42,126 |
|
35,274 |
|
Adjusted base EBITDA margin (4) |
58 |
% |
57 |
% |
58 |
% |
57 |
% |
(1) 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.
(2) 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.
(3) 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.
(4) Prior year figures have been restated to
remove the adjustment of depreciation and amortization.
Conference Call and Webcast
A webcast will be held today, August 7, 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/o98gu3w8
Please note, analysts who cover the
Company should register
at: https://register.vevent.com/register/BIab693a7d3e344814b015460b3e74ffe0
Non-IFRS Financial Measures
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 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 the MD&A, and
severance, new hire accruals and other which are non-recurring.
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 ability to scale
COP; and (ii) 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 June 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 June 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 leader in precious metals and
critical materials investments. We are specialists. 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 WilliamsManaging PartnerInvestor and
Institutional Client Relations;Head of Corporate
Communications(416) 943-4394gwilliams@sprott.com
Sprott (NYSE:SII)
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