Saxon Financial posts strong growth in second quarter results

     2005 brings record revenue, steady earnings growth
Investment manager's assets under management climb to $10 billion

TORONTO, Aug. 12 /CNW/ - Saxon Financial Inc. (TSX:SFI), the investment
management firm that operates Saxon Mutual Funds, today released its financial
results for the second quarter and six months ended June 30, 2005. The
company, which went public on July 7, posted record revenue and strong
earnings growth compared with the same period a year ago.
"In going public last month, we put Saxon on a track for growth, and our
second quarter shows that Saxon's growth is on track," said Allan Smith,
Saxon's President and CEO. "Whether you invest in our company or invest in our
funds, you get the same thing from Saxon: we're light on flash and fanfare -
but we're strong on long-term results."

Highlights: A growing business

The second quarter results include unique events related to Saxon's final
quarter as a private company. For example, as described in the prospectus
supporting the company's initial public offering, Saxon incented its employees
by issuing them shares in the company worth approximately $0.8 million, which
was fully charged against earnings in June 2005.

The table below highlights Saxon's earnings with and without the June
2005 special charge.

<<
-------------------------------------------------------------------------
Financial Highlights            Three months ended     Six months ended
(in $thousands, except                June 30,             June 30,
per share data)                    2005      2004       2005       2004
-------------------------------------------------------------------------
Revenue                          $9,108    $6,956    $17,704    $13,261
EBITDA(1)                        $4,013    $3,754     $8,437     $6,958
EBITDA (adjusted)                $4,768    $3,754     $9,192     $6,958
Net income                       $2,203    $2,308     $4,881     $4,530
Net income (adjusted)            $2,958    $2,308     $5,636     $4,530
Earnings per diluted share        $0.18     $0.18      $0.39      $0.36
Earnings per diluted
 share (adjusted)                 $0.24     $0.18      $0.45      $0.36
-------------------------------------------------------------------------

Highlights of the quarter included:

-  Saxon's quarterly revenue reached a record $9.1 million. Revenue grew
   31% over the second quarter of 2004, and earnings grew 28% before the
   unique provision of the shares to Saxon employees.

-  Total assets under management were $9.993 billion as at June 30, and
   exceeded the $10-billion milestone in early July. This represents
   growth of 11% since June 30, 2004, and a compound annual growth rate
   of almost 36% since 2000.

-  The company's core mutual fund business continued to perform very
   strongly, with Saxon Mutual Funds' assets under management growing by
   50% from $949 million a year ago to $1.46 billion at quarter-end.
   Investors continue to respond well to Saxon's no-load, low-fee,
   value-style funds and its track record of fair dealing, integrity and
   consistently superior long-term performance.

-  June and July became Saxon Mutual Funds' fifty-third and fifty-fourth
   consecutive month of positive net sales - a track record that is
   almost unique in the industry. Net sales of the funds in the quarter
   were $60 million.

-  Saxon also experienced excellent growth in its private client asset
   management business, with assets under management up 39% in the past
   year. The company's institutional asset management business posted
   growth of more than 6%.

-  Higher expenses in 2005 related to the successful implementation of
   key elements of the company's growth strategy, including the provision
   of shares to employees, increased portfolio management and marketing
   staffing, and higher administrative support costs to reflect the
   company's rapid growth.

"Saxon has posted very strong growth today, and our prospects for
tomorrow are equally bright," Smith said. "That's because Saxon now enjoys the
best of both worlds: the leadership and portfolio management team that have
made us successful for 20 years, and an enhanced ability to attract and retain
the investment industry's leaders of the future."
For detailed financial statements, including management's discussion and
analysis, please refer to Saxon's website at www.saxonfinancial.ca.

Conference call

Saxon will host a conference call to discuss these results on Friday
August 12, 2005, at 10:00 am EST. Please dial 416-340-8010, or toll-free    
866-540-8136 to participate. For further information, please refer to Saxon's
website.

About Saxon Financial (www.saxonfinancial.ca)

Saxon Financial Inc. is one of Canada's most respected value-style
investment management firms. The company has three principal lines of
business: Saxon Funds Management Limited, which manages a family of high-
performing, no-load, low-fee mutual funds; Howson Tattersall Investment
Counsel Limited, an institutional asset management business; and Howson
Tattersall Private Asset Management Inc., a private client asset management
business.

-------------------------

(1) "EBITDA" is defined as earnings before investment and other income,
    interest expense, income taxes, depreciation, amortization and
    non-controlling interest. EBITDA is not an earnings measure
    recognized by Canadian GAAP and does not have a standardized meaning
    prescribed by Canadian GAAP. Therefore, EBITDA may not be comparable
    to similar measures presented by other issuers.

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