(August 18) – Dundee Wealth Management is reporting improved earnings for the first half of this year.
Dundee’s net earnings for the six months ended June 30, were $9.6 million, or 15¢ per share, compared with $5.2 million in 1999. Total revenue for the period was $152.3 million, up from $73.1 million.
Mutual fund management fee revenue was $56.9 million on average assets of $6.1 billion and average fees of approximately 1.85%, up from $5.3 billion and 1.74% respectively in the year earlier.
Mutual fund asset growth was flat. It sits at $6.1 billion as of June 30. Although market gain has added $329 million since the start of the year, it has been wiped out by net redemptions of $339 million. As a result total redemption fees received during the period were up to $10.1 million, compared with $7.1-million in 1999.
The big gain was in “financial services” revenue. During the first half it was up to $82.8 million, compared with $18.3 million in 1999. Brokerage operations generated commission and trailer revenues of $53.7 million. About 87% came from the retail side and another 13% on the institutional front. Principal trading added $17.6 million, corporate finance generated $5.3 million, and interest on margin accounts made $5.1 million.
Revenue is growing quickly, but so are Dundee’s expenses. Selling, general and administrative expenses were $95.8 million this year, up from $34.3 million in 1999. About $17.5 million is due to the investment management division, while $77.4 million came from brokerage operations, including $50.1 million in compensation paid to financial advisers. Trailer fees totaled $10.9 million.