Sprott Inc. announces 2012 second quarter results

    




 TORONTO, Aug. 9, 2012 /CNW/ - Sprott Inc.  ("Sprott" or the  "Company") today announced its financial results for the three and six  months ended June 30, 2012. 

 Q2 2012 Overview 




        --  Assets Under Management ("AUM") were $8.5 billion as at
            June 30, 2012, compared to $9.3 billion as at June 30, 2011 and
            $9.7 billion as at March 31, 2012
        --  Assets Under Administration ("AUA") were $3.8 billion as at
            June 30, 2012, compared to $5.3 billion as of June 30, 2011
        --  Management Fees were $28.1 million, a decrease of 24.6%
            compared with the three months ended June 30, 2011
        --  Base EBITDA was $10.4 million ($0.06 per share) compared with
            $18.1 million ($0.11 per share) for the three months ended
            June 30, 2011, a decrease of 42.6%
        --  EBITDA was $6.4 million ($0.04 per share), compared with $14.6
            million ($0.09 per share) for the three months ended June 30,
            2011, a decrease of 56.0%
        --  Net income was $0.7 million ($0.00 per share) for the three
            months ended June 30, 2012, a decrease of 90.2% from $7.5
            million ($0.04 per share) in the comparable quarter of 2011
        --  Launched the Sprott Enhanced Equity Class and Sprott Enhanced
            Balanced Fund




 Subsequent events: 




        --  Finalized acquisition of Toscana Capital Corporation and
            Toscana Energy Corporation (collectively, the "Toscana
            Companies")
        --  Closed  acquisition of Flatiron Capital Management Partners
            ("Flatiron")
        --  Completed US $220 million follow-on offering of Sprott Physical
            Silver Trust Units
        --  Launched the Sprott Flatiron Yield Trust




  

 "We continue to build our business and recently completed the  acquisitions of Flatiron and the Toscana Companies," said Peter  Grosskopf, CEO of Sprott Inc. "Together, these transactions further  diversify our investment capabilities and product offerings  through  the addition of top convertible arbitrage and energy yield specialists,  allowing us to launch value-added yield products that are currently in  high demand." 

 "Our investment performance was disappointing through the first six  months of the year and this negatively impacted our financial results,"  continued Mr. Grosskopf. "While our macro-economic assessment has been  accurate, this has yet to manifest itself in improved performance for  most of our funds. It appears likely that central banks will again, and  possibly on a continuous basis, be mandated to intervene in the markets  in an effort to stimulate growth. We therefore remain committed to our  current positioning and believe that both our precious metals positions  and our lower-volatility strategies will outperform in the second half  of the year." 

  





                       For the three months ended For the six months ended

                                    June 30,                  June 30,

    ($ in millions)       2012            2011       2012          2011

                                                                          

    AUM, beginning of    9,683     9,678            9,137   8,545         
    period

    Net sales             (158       565              387     825         
    (redemptions)              )

    Business           —   —          —     695         
    acquisition

    Market value        (1,040      (951           (1,039    (773
    depreciation of
    portfolios                 )         )                )       )

    AUM, end of period   8,485     9,292            8,485   9,292         






  

 Assets Under Management 

 At June 30, 2012, AUM decreased by 8.7% to $8.5 billion, from $9.3  billion at June 30, 2011. Net redemptions for the three months ended  June 30, 2012 were $158 million, which together with $1.0 billion in  market value depreciation resulted in the $1.2 billion decrease in AUM  for the quarter. 

 Average AUM for the three months ended June 30, 2012 was $9.0 billion  compared with $9.9 billion for the three months ended June 30, 2011, a  decrease of 9.3%. 

 Income Statement 

 Total revenue for the three months ended June 30, 2012 decreased by  30.2% to $27.4 million, from $39.3 million in 2011.  For the six months  ended June 30, 2012, total revenue decreased by 8.9% to $71.8 million  from $78.8 million in the first six months of 2011. 

 Management fees decreased by 24.6% during the quarter to $28.1 million,  from $37.2 million for the three months ended June 30, 2011 as average  AUM decreased over the prior year period. For the first six months of  2012, management fees decreased by 16.1% to $61.1 million from $72.8  million in the first half of 2011.  The decrease in management fees is  attributable to both the lower average AUM for the three and six-month  periods ended June 30, 2012 as well as an increase in lower margin  offerings such as the physical bullion trusts and fixed-income  products. 

 Losses from proprietary investments, which include investments in funds  that Sprott manages, an investment in Sprott Resource Lending Corp.,  certain other resource-related stocks and warrants, and bullion,  totaled $4.0 million for the three months ended June 30, 2012,  essentially the same as the quarter ended June 30, 2011. For the six  months ended June 30, 2012, gains from proprietary investments totaled  $0.3 million, compared with losses of $3.6 million during the first six  months of 2011. 

 Commission revenue for the three months ended June 30, 2012, was $2.1  million compared to $4.9 million during the three months ended June 30,  2011. For the six months ended June 30, 2012, commission revenue  decreased by $0.1 million to $7.8 million from $7.9 million during the  prior year period. 

 Other income increased by $0.7 million in the three months ended  June 30, 2012 to $1.3 million from $0.6 million in the second quarter  of 2011. For the six months ended June 30, 2012, other income increased  by $1.6 million to $2.6 million from $1.0 million during the prior year  period. 

 Total expenses for the three months ended June 30, 2012 were $26.2  million, a decrease of $1.9 million or 6.6%, from $28.1 million during  the same period last year . Total expenses for the first six months of  2012 were $49.4 million, a decrease of 6.1% from $52.6 million in the  six months ended June 30, 2011. 

 Base EBITDA, which excludes the impact of income taxes and certain  non-cash expenses and gains or losses on proprietary investments,  decreased by 42.6% to $10.4 million ($0.06 per share) for the three  months ended June 30, 2012, compared with $18.1 million ($0.11 per  share) in the second quarter of 2011. For the six months ended June 30,  2012, Base EBITDA decreased by 24.3% to $26.5 million from $35.1  million in the first half of 2011. 

 Net income for the three months ended June 30, 2012 decreased by 90.2%  to $0.7 million ($0.00 per share) from $7.5 million ($0.04 per share)  in the second quarter of 2011. Net income for the first six months of  2011 was $17.7 million ($0.10 per share), a 2.2% decrease as compared  with the $18.1 million ($0.11 per share) earned during the first half  of 2011. 

 Dividends 

 On May 8,  2012, a dividend of $0.03 per common share was declared for  the quarter ended March 31, 2012. This dividend was paid on June 1,  2012 to shareholders of record at the close of business on May 18,  2012. 

 In August 2012, a dividend of $0.03 per common share was declared for  the quarter ended June 30, 2012. 

 Conference Call and Webcast 

 A conference call and webcast will be held today, Thursday, August 9,  2012, at 10:00am ET to discuss the Company's financial results. To  participate in the call, please dial 647-427-7450 or 1-888-231-8191 ten  minutes prior to the scheduled start of the call. A taped replay of the  conference call will be available until Thursday, August 16, 2012 by  calling 416-849-0833 or 1-855-859-2056, reference number 12659963. The  conference call will be webcast live at www.sprottinc.com and www.newswire.ca. 

 *Non-IFRS Financial Measures  

 This press release includes financial terms (including AUM, EBITDA, Base  EBITDA, Cash Flow from Operations and net sales) 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. For additional information regarding the Company's use of  non-IFRS measures, including the calculation of these measures, please  refer to the "Non-IFRS Financial Measures" section of the Company's  Management's Discussion and Analysis and its financial statements  available on the Company's website at www.sprottinc.com and on SEDAR at www.sedar.com. 

 Forward-Looking Statements  

 This release contains "forward-looking statements" which reflect the  current expectations of the Company. These statements reflect  management's current beliefs with respect to future events and are  based on information currently available to management. Forward-looking  statements involve significant known and unknown risks, uncertainties  and assumptions. Many factors could cause actual results, performance  or achievements to be materially different from any future results,  performance or achievements that may be expressed or implied by such  forward-looking statements including, without limitation, those listed  under the heading "Risk Factors" in the Company's annual information  form dated March 27, 2012. Should one or more of these risks or  uncertainties materialize, or should assumptions underlying the  forward-looking statements prove incorrect, actual results, performance  or achievements could vary materially from those expressed or implied  by the forward-looking statements contained in this release. Although  the forward-looking statements contained in this release are based upon  what the Company believes to be reasonable assumptions, the Company  cannot assure investors that actual results, performance or  achievements will be consistent with these forward-looking statements.  These forward-looking statements are made as of the date of this  release and the Company does not assume any obligation to update or  revise them to reflect new events or circumstances. 

 About Sprott Inc. 

 Sprott Inc. is a leading independent asset manager dedicated to  achieving superior returns for its clients over the long term. The  Company currently operates through four business units: Sprott Asset  Management LP, Sprott Private Wealth LP, Sprott Consulting LP, and  Sprott U.S. Holdings Inc.  Sprott Asset Management is the investment  manager of the Sprott family of mutual funds and hedge funds and  discretionary managed accounts; Sprott Private Wealth provides wealth  management services to high net worth individuals; and Sprott  Consulting provides management, administrative and consulting services  to other companies. Sprott U.S. Holdings Inc. includes Sprott Global  Resource Investments Ltd, Sprott Asset Management USA Inc., and  Resource Capital Investments Corporation. Sprott Inc. is headquartered  in Toronto, Canada, and is listed on the Toronto Stock Exchange under  the symbol "SII". For more information on Sprott Inc., please visit www.sprottinc.com. 

   

   

Sprott Inc.


CONTACT:  Investor contact information:Glen WilliamsDirector of CommunicationsSprott Inc.(416) [e-mail] 


    

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