TORONTO, Nov. 06, 2024 (GLOBE NEWSWIRE) -- Sprott Inc. (NYSE/TSX: SII) ("Sprott” or the "Company”) today announced its financial results for the three and nine months ended September 30, 2024.
Management commentary
"Sprott's Assets Under Management ("AUM”) was $33.4 billion as at September 30, 2024, up 8% from June 30, 2024 and up 16% from December 31, 2023," said Whitney George, CEO of Sprott. "This is our third consecutive quarter of record high AUM, driven by strong gold and silver prices, as well as $589 million in net sales during the period. Given the strength of these results and our confidence in Sprott's future, our Board has declared a third quarter dividend of $0.30 per share, an increase of 20%. Further, we now expect to repay the balance of our line of credit by the end of this month, resulting in a debt-free balance sheet."
"With Sprott's core positioning in precious metals and critical materials, we retain our constructive outlook and believe we are well positioned to navigate volatile market conditions and continue creating value for our clients and shareholders," continued Mr. George.
Key AUM highlights1
- AUM was $33.4 billion as at September 30, 2024, up 8% from $31.1 billion as at June 30, 2024 and up 16% from $28.7 billion as at December 31, 2023. On a three and nine months ended basis, we primarily benefited from strong market value appreciation in our precious metals physical trusts. We also benefited from net inflows to our exchange listed products and the launch of our Physical Copper Trust in the second quarter.
- Management fees were $38.7 million in the quarter, up 18% from $32.9 million for the quarter ended September 30, 2023 and $113.1 million on a year-to-date basis, up 17% from $97 million for the nine months ended September 30, 2023. Carried interest and performance fees were $4.1 million in the quarter, up from $nil for the quarter ended September 30, 2023 and $4.8 million on a year-to-date basis, up from $0.4 million for the nine months ended September 30, 2023. Net fees were $38.9 million in the quarter, up 31% from $29.7 million for the quarter ended September 30, 2023 and $106.1 million on a year-to-date basis, up 21% from $87.7 million for the nine months ended September 30, 2023. Our revenue performance on both a three and nine months ended basis was primarily due to higher average AUM on strong market value appreciation in our precious metals physical trusts and continuous inflows to the majority of our exchange listed products. We also benefited from carried interest crystallization in a legacy fixed-term exploration LP in our managed equities segment.
- Commission revenues were $0.5 million in the quarter, down 8% from the quarter ended September 30, 2023 and $4.9 million on a year-to-date basis, down 30% from $7 million for the nine months ended September 30, 2023. Net commissions were $0.2 million in the quarter, down 31% from $0.4 million for the quarter ended September 30, 2023 and $2.3 million on a year-to-date basis, down 42% from $3.9 million for the nine months ended September 30, 2023. Commission revenue was lower in the quarter due to modest ATM activity in our critical materials physical trusts. On a year-to-date basis, the decline in commission revenue was due to the sale of our former Canadian broker-dealer in the second quarter of last year.
- Finance income was $1.6 million in the quarter, down 12% from $1.8 million for the quarter ended September 30, 2023 and $7.5 million on a year-to-date basis, up 46% from $5.1 million for the nine months ended September 30, 2023. The decrease in the quarter was due to lower income generation in co-investment positions we hold in our LPs managed in our private strategies segment. The increase on a year-to-date basis was due to higher income earned on streaming syndication activity in the second quarter.
- Net compensation expense was $16.9 million in the quarter, up 11% from $15.3 million for the quarter ended September 30, 2023 and $50.3 million on a year-to-date basis, up 9% from $46 million for the nine months ended September 30, 2023. The increase in the quarter and on a year-to-date basis was primarily due to increased AIP accruals on higher net fee generation. Our net compensation ratio was 46% in the quarter (September 30, 2023 - 50%) and 45% on a year-to-date basis (September 30, 2023 - 50%).
- SG&A expense was $4.6 million in the quarter, up 21% from $3.8 million for the quarter ended September 30, 2023 and $13.8 million on a year-to-date basis, up 10% from $12.6 million for the nine months ended September 30, 2023. The increase in the quarter and on a year-to-date basis was due to higher technology and professional services costs.
- Net income for the quarter was $12.7 million ($0.50 per share), up 87% from $6.8 million ($0.27 per share) for the quarter ended September 30, 2023 and was $37.6 million ($1.48 per share) on a year-to-date basis, up 17% from $32.1 million ($1.27 per share) for the nine months ended September 30, 2023. Our earnings benefited from higher management fees on strong market valuations of our precious metals physical trusts and good inflows to our exchange listed products. We also benefited from carried interest crystallization in our managed equities funds and market value appreciation of our co-investments.
- Adjusted base EBITDA was $20.7 million ($0.81 per share) in the quarter, up 16% from $17.9 million ($0.71 per share) for the quarter ended September 30, 2023 and $62.8 million ($2.47 per share) on a year-to-date basis, up 18% from $53.1 million ($2.10 per share) for the nine months ended September 30, 2023. Adjusted base EBITDA on both a three and nine months ended basis benefited from higher management fees on strong market valuations of our precious metals physical trusts and good inflows to our exchange listed products.
Subsequent events
- Subsequent to quarter-end, on November 1, 2024, AUM was $34.2 billion, up 2% from $33.4 billion at September 30, 2024.
- On November 5, 2024, the Sprott Board of Directors announced a quarterly dividend of $0.30 per share.
Please refer to the September 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 September 30, 2024 and the Company's financial performance for the three and nine months ended September 30, 2024.
Schedule 1 - AUM continuity
| 3 months results | ||||||||||
| (In millions $) | AUM
Jun. 30, 2024 | Net
inflows (1) | Market value changes | Other
net inflows (1) | AUM Sep. 30, 2024 | Net management fee rate (2) | ||||
| Exchange listed products | ||||||||||
| - Precious metals physical trusts and ETFs | ||||||||||
| - Physical Gold Trust | 7,283 | 361 | 973 | - | 8,617 | 0.35 | % | |||
| - Physical Silver Trust | 4,994 | 224 | 348 | - | 5,566 | 0.45 | % | |||
| - Physical Gold and Silver Trust | 4,710 | - | 515 | - | 5,225 | 0.40 | % | |||
| - Precious Metals ETFs | 355 | (11 | ) | 60 | - | 404 | 0.33 | % | ||
| - Physical Platinum & Palladium Trust | 143 | 7 | 1 | - | 151 | 0.50 | % | |||
| 17,485 | 581 | 1,897 | - | 19,963 | 0.39 | % | ||||
| - Critical materials physical trusts and ETFs | ||||||||||
| - Physical Uranium Trust | 5,615 | 23 | (230 | ) | - | 5,408 | 0.32 | % | ||
| - Critical Materials ETFs | 2,408 | 56 | (157 | ) | - | 2,307 | 0.55 | % | ||
| - Physical Copper Trust | 98 | 2 | 3 | - | 103 | 0.32 | % | |||
| 8,121 | 81 | (384 | ) | - | 7,818 | 0.38 | % | |||
| Total exchange listed products | 25,606 | 662 | 1,513 | - | 27,781 | 0.39 | % | |||
| Managed equities (3)(4) | 2,962 | (55 | ) | 369 | - | 3,276 | 0.90 | % | ||
| Private strategies (4) | 2,485 | (18 | ) | (85 | ) | - | 2,382 | 0.80 | % | |
| Total AUM (5) | 31,053 | 589 | 1,797 | - | 33,439 | 0.47 | % | |||
| 9 months results | ||||||||||
| (In millions $) | AUM Dec. 31, 2023 | Net
inflows (1) | Market value changes | Other net inflows (1) | AUM Sep. 30, 2024 | Net management
fee rate (2) | ||||
| Exchange listed products | ||||||||||
| - Precious metals physical trusts and ETFs | ||||||||||
| - Physical Gold Trust | 6,532 | 316 | 1,769 | - | 8,617 | 0.35 | % | |||
| - Physical Silver Trust | 4,070 | 256 | 1,240 | - | 5,566 | 0.45 | % | |||
| - Physical Gold and Silver Trust | 4,230 | (161 | ) | 1,156 | - | 5,225 | 0.40 | % | ||
| - Precious Metals ETFs | 339 | (14 | ) | 79 | - | 404 | 0.33 | % | ||
| - Physical Platinum & Palladium Trust | 116 | 42 | (7 | ) | - | 151 | 0.50 | % | ||
| 15,287 | 439 | 4,237 | - | 19,963 | 0.39 | % | ||||
| - Critical materials physical trusts and ETFs | ||||||||||
| - Physical Uranium Trust | 5,773 | 266 | (631 | ) | - | 5,408 | 0.32 | % | ||
| - Critical materials ETFs | 2,143 | 294 | (130 | ) | - | 2,307 | 0.55 | % | ||
| - Physical Copper Trust | - | 2 | (9 | ) | 110 | 103 | 0.32 | % | ||
| 7,916 | 562 | (770 | ) | 110 | 7,818 | 0.38 | % | |||
| Total exchange listed products | 23,203 | 1,001 | 3,467 | 110 | 27,781 | 0.39 | % | |||
| Managed equities (3)(4) | 2,874 | (167 | ) | 569 | - | 3,276 | 0.90 | % | ||
| Private strategies (4) | 2,661 | (172 | ) | (107 | ) | - | 2,382 | 0.80 | % | |
| Total AUM (5) | 28,738 | 662 | 3,929 | 110 | 33,439 | 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 (57%), high net worth managed accounts (35%) and U.S. value strategies (8%). | ||||||||||
| (4) Prior period figures have been reclassified to conform with current presentation. | ||||||||||
| (5) 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 strategies LPs primarily earn carried interest calculated as a predetermined net profit over a preferred return. | ||||||||||
| (In thousands $) | Q3 2024 | Q2 2024 | Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 | Q1 2023 | Q4 2022 | ||||||||
| Summary income statement | ||||||||||||||||
| Management fees (1) | 38,693 | 38,065 | 36,372 | 34,244 | 32,867 | 32,940 | 31,170 | 28,152 | ||||||||
| Fund expenses (2), (3) | (2,385 | ) | (2,657 | ) | (2,234
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