By James Langton

(April 18 – 17:30 ET) – In its recently released annual report Sceptre Investment Counsel warns of another tough year for the firm. Although management believes it has turned things around.

The firm says that it expects its revenue in 2001, “will continue to reflect the lagged effect of lost business in 2000, particularly for the first half of the year”. It notes that revenue from new foreign specialty business will not be recognized in time to offset a full year of sub-advisory fees paid to Putnam for the managing its foreign pooled funds. Sceptre also expects assets under management to remain flat year over year.

At the same time, expenses will increase thanks to the sub-advisory fees payable to Putnam, and the cost of upgrading technology and services for wealth management clients. The upgrade will be extended to other client groups in the latter part of the year.

Last year, the firm focused on expanding its private-client business. “Fundamentally, we are approaching our relationship with private clients from a broader perspective. We now want to be in a position to be the primary financial advisor to a client, providing a full range of wealth management solutions. To get us to this point, we are investing heavily in new technologies and introducing new products.”

The firm will concentrate on delivering strong investment performance to clients in 2001. “With the changes we are making to our investment management processes, and with the shift in the market this past year, we are confident we can achieve this goal,” it says.

Sceptre also notes that one of its directors, former Manulife chairman William Blundell, has decided not to stand for re-election to the firm’s board as an independent director “because of other responsibilities, which may at some future date conflict with his role as a director of Sceptre”.

In his place the firm is recommending Dr. Peter Barnard as an independent director. Barnard foundeded his own management consulting firm and venture capital firm and served as chairman of Ontario Hydro Technologies from 1994-1997. In 1997, he founded Iter Canada, a not-for-profit corporation committed to locating the world’s premier fusion energy research and development centre in Canada.

The report also lists a trio of Sceptre vice presidents, Patricia Croft, Andrew MacDonald and Mario Richard, as proposed managing directors of the firm.

“While some challenges remain, we have demonstrated our dedication to meet them with creative solutions that expand our global reach while maintaining our strong local presence and the independence that has served our clients and shareholders so well in the past. We continue to improve the company at every level and have already begun to emerge from this difficult period a much stronger organization,” said chairman Doug Grant in the report.