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Canaccord Financial swings to Q4 loss, revenue declines sharply

Published: 14:10 23 May 2012 BST

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Canaccord Financial (TSE:CF) swung to a fourth quarter net loss Wednesday, citing hefty restructuring and acquisition-related expenses, as the investment dealer also reported a sharp decline in revenue.

The Vancouver-based company provides a range of investment products, brokerage and investment banking services to institutional and corporate clients.

Canaccord posted a net loss of $31.8 million, or 42 cents per share, on $177.7 million in sales for the three months that ended March 31.

That compared with a profit of $41.3 million, or 49 cents per share, on sales of $247.5 million, a year-prior.
Stripping out a $41.2 million in special charges, the company earned $2.1 million, or two cents a share, versus $42.3 million, or 50 cents a share, a year ago.

In the latest quarter, Canaccord reported $29 million in restructuring costs, $10.4 million related to its Collins Stewart Hawkpoint acquisition, and a $1.8 million expense due to amortization and intangible assets. This amounted to $33.9 million after tax.

Last year, Canaccord said it was buying British broker and advisory group Collins Stewart Hawkpoint for $397 million, expanding its footprint in Europe.

On average, analysts had expected a per-share profit of 13 cents, on sales of $158 million, according to Bloomberg.

The company’s capital markets unit, Canaccord Genuity, led or co-led 25 transactions globally, raising total proceeds of $919.1 million. It also took part in another 84 transactions globally, and raised total proceeds of $2 billion.

Canaccord Genuity generated advisory revenue of $24.6 million in the fourth quarter, a decline of 4.3 percent compared to the same period a year earlier.

Its wealth management business posted $54.5 million in revenue. Assets under administration slipped 13 percent to $14.8 billion from $17 billion.

The company’s book value slipped six percent to $8.26 per share from $8.79 per share. Cash and equivalents also fell to $814.2 million from $954.1 million in 2011.

The company’s board approved a quarterly dividend of 10 cents per share, which will be paid on June 15, 2012, to shareholders on record as of June 1.

Its stock closed Tuesday at $6.57 each on the Toronto Stock Exchange.

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