TORONTO - AGF Management Ltd. (TSX:AGF.B) has reported a 37.5 per cent drop in fourth-quarter profits amid an almost 10 per cent decline in revenue.
The Toronto-based wealth manager and mutual fund company said Wednesday that net income attributable to equity owners declined to $15.7 million, or 17 cents per diluted share, in the three months ended Nov. 30.
That was down from $25.1 million, or 26 cents per share, in the same 2011 period.
AGF, which sold its trust operations to Laurentian Bank's B2B Trust subsidiary earlier this year for $421.6 million, said revenue fell 9.6 per cent to $125 million from $138.2 million in the 2011 period.
For the full year, AGF reported net profits of $52.3 million, or 55 cents per diluted share, on revenue of $585.7 million. That was down 49.5 per cent from $103.6 million, or $1.09 per share, on $585.7 million or revenue in fiscal 2011.
Net income from continuing operations was also down sharply in both periods, falling to $13 million in Q4 from $18 million in the year-earlier period, and to $27.7 million from $76.6 million for the full year.
"We recognize that 2012 posed clear challenges for the investment management industry and AGF," chairman and CEO Blake Goldring said in remarks accompanying the results.
"We have significantly reinvested in our global investment management platform to enhance our overall investment performance while building out our Emerging Markets and Global capabilities and solidifying our key distribution relationships."
The disposition of AGF Trust marked the company's commitment to its core business of investment management, added Goldring, who noted that the company had continued its history of dividend growth and used capital from the sale to repurchase stock under its normal course issuer bid.
In total, AGF returned $188 million of free cash flow from operations to shareholders through a combination of cash dividends and share buybacks as it repurchased a total of almost 7.7 million shares for $88.7 million.
Total assets under management decreased 14.9 per cent to 39.2 billion as of Nov. 30 from $46 billion a year earlier as a result of net redemptions of institutional and sub-advisory accounts.
Meanwhile, the company said it believes 2013 will mark a better environment for equity investing both domestically and globally.
"Europe is slowly working through its financial issues and the United States has averted the fiscal cliff," it said in a release.
"Although debt and growth challenges still remain, the pace of global monetary easing has levelled off. We believe that equity returns will outpace fixed income returns as we enter into a phase of rising rates, which will benefit asset managers that specialize in equity investing."
The company's shares gained 30 cents or nearly three per cent to $10.50 on the Toronto Stock Exchange in mid-morning trading.
Note to readers: This is a corrected story: An earlier version said full-year revenue in both years was $585.7 million.
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