(March 16 – 21:00 ET) – Winnipeg’s Assante Corp. is reporting lower results for the year ended December 31, 1999.
The firm reports fully-diluted earnings per share of 2¢, down from 16¢ in 1998. Net earnings for the year were just $1.3 million, down from $8.5 million in 1998. The firm attributes the falloff to a $23.9 million increase in goodwill amortization and increased investments in human resources and infrastructure. The company says it spent $1.3 million on the integration of its back office
processing systems and its distribution channels in the fourth quarter. It expects this process to be completed in early 2000 and to incur a restructuring charge.
Despite the poor bottom line performance the firm reports that annual after-tax cash flow is up 55.9% year over year to $48.5 million. Assets under administration grew 31% to $24.7 billion and assets under management are up 27% to $3.8 billion.
Revenue is up 116% year over year, thanks to sales of the firm’s proprietary products and revenue additions from the firms it acquired in 1999. However advisor compensation more than doubled in the year from $69.8 million to $176.4 million in 1999, from 47.5% of revenues to 55.6% in 1999. The firm attributes the change to Financial Concept Group, and its “significantly higher advisor compensation to revenue ratio”. Selling, general and administration costs also doubled.
The company has so far acquired 87,100 shares toward its 2,675,000 share buyback. It has also finalized the acquisitions of KRT Management Inc. and Kronish De Grosbois Inc.
– IE Staff