Q3 Revenue up 13%, earnings up 17% over Q3 2006
TORONTO, Nov. 5 /CNW/ - Saxon Financial Inc. (TSX:SFI) today reported record financial results for the third quarter ended September 30, 2007. The Company continued its strong performance with 13% growth in revenue and 17% increase in earnings over Q3 2006. Saxon Financial's assets under management grew 9% to $13 billion in the 12-month period ended September 30, 2007.
"Saxon's ability to deliver strong financial performance stands out in a quarter of significant market volatility," said Allan Smith, President and CEO of Saxon Financial. "Saxon's retail and institutional fixed income investors were insulated from payment disruptions that rocked financial markets-a testament to Saxon's discipline in weighing risk against potential reward."
Highlights: Another quarter of double-digit growth
Financial Highlights
(unaudited - $ Three month period Nine month period
thousands, except ended September 30 ended September 30
per share data) ----------------------- -----------------------
2007 2006 Increase 2007 2006 Increase
------ ------ -------- ------ ------ ---------
$ $ $ $
Revenue(x) 13,867 12,311 13% 41,674 35,720 17%
EBITDA(xx) 7,107 6,188 15% 20,477 17,072 20%
Net Income 4,608 3,948 17% 13,298 10,816 23%
Earnings per share .34 .29 17% .98 .79 24%
(x) Revenue refers to management fee revenue and excludes investment
income.
(xx) The amount of earnings before interest, taxes, depreciation and
amortization ("EBITDA") is a non-GAAP measure used by management,
investors and analysts to evaluate and analyze the Company's
results. EBITDA does not have a standardized meaning and may not be
comparable to similar measures presented by other companies. EBITDA
is defined as earnings before investment income, interest expense,
income taxes, depreciation and amortization.
Highlights included:
- Saxon Financial's assets under management increased by $1.1 billion,
or 9%, year over year to $13.0 billion as of September 30, 2007.
- Saxon largely sustained AUM levels relative to the preceding quarter
due to prudent management of its fixed income assets, the largest
component of AUM. Saxon corporate holdings and mutual funds did not
have any exposure to the sub-prime market or non-bank issued asset-
backed commercial paper.
- Saxon's Q3 revenue was $13.9 million, a 13% increase over the third
quarter of 2006.
- Saxon's net income for the quarter was $4.6 million, up 17% over the
third quarter of 2006.
- Saxon expanded its successful principal-protected note offering with
notes linked to the performance of two Saxon flagship funds: Saxon
Stock Fund and Saxon Balanced Fund Both funds are ranked 1st quartile
for 10-, 15-, and 20-year performance among all Canadian equity
mutual funds and Canadian equity balanced mutual funds
respectively.(x)
- Saxon Financial's institutional investment management subsidiary,
Howson Tattersall Investment Counsel Limited, built on its recent
success with the addition of two new clients in the quarter. For the
year, the institutional business has added a total of five new
clients and eight new mandates.
- Saxon entered into a 5 year agreement with Citigroup as an outsource
provider for mutual funds operations to facilitate Saxon's expansion
into the advisor channel.
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 Monday November 5, at 11:00 am EST. Please dial 416-695-7806, or toll-free 1-888-789-9572. Passcode No.3238408.
About Saxon Financial Inc.
Saxon Financial Inc. is one of Canada's most respected value style investment management firms. The Company has three principal businesses: Saxon Funds Management Limited, which manages a family of high-performing 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.
(x)Source: Morningstar PALTrak as of September 30, 2007. The annualized compounded rates of return for A units of Saxon Balanced Fund as of September 30, 2007 for 1-, 3-, 5-, 10- and 15-year periods are 12.8%, 11.6%, 11.8%, 9.2% and 12.1% and for Saxon Stock Fund 19.0%, 16.0%, 15.6%, 11.5% and 15.0% and are not intended to be, nor should they be construed to be, an indication as to the future returns or volatility of the mutual fund. These figures are used to illustrate the effects of compound growth rates and assume that all distributions on Class A units of Saxon Balanced Fund were reinvested in additional units of the fund and do not include any applicable sales, redemption, distribution or optional charges that would have reduced returns. Returns are shown after the payment of expenses and fees of the fund. The performance figures reflect the payment of the management expense ratio of the fund for the indicated periods. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing.