Canaccord’s Expansion Costs Offset Record Wealth-Segment Revenue
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Canaccord Genuity Group Inc.’s earnings missed analysts’ estimates in the fiscal first quarter as higher costs from hiring and technology investments overshadowed record revenue from its wealth-management segment.
Author of the article:
Bloomberg News
Stephanie Hughes
Published Aug 08, 2024 • Last updated 6 hours ago • 1 minute read
(Bloomberg) — Canaccord Genuity Group Inc.’s earnings missed analysts’ estimates in the fiscal first quarter as higher costs from hiring and technology investments overshadowed record revenue from its wealth-management segment.
The Canadian wealth manager reported earnings per share of C$0.13 on an adjusted basis in the three months through June 30, short of analysts’ projections for C$0.21. Companywide revenue of C$429 million ($312 million) was also below their expectations.
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Chief Executive Officer Dan Daviau said the firm’s recent investments in the wealth-management business with adviser hires, higher client interest expenses as well as price inflation in technology investments weighed on results.
“We had an impact this quarter for all the investments we’ve done in compliance technology, marketing growth, conferences and a lot of that won’t happen again,” Daviau said in an interview.
One of Canaccord’s main focuses will be to further build on the wealth-management segment organically through net new asset flows from clients and recruiting in the wealth space, Daviau said. He added that Canaccord spent roughly $600 million in purchasing wealth companies mainly in Australia and the UK — where it bought Cantab Asset Management in May.
“We’re certainly looking at acquisitions, and in Canada it’s a much more concentrated business,” Daviau said. “But if we can find the right acquisition, we’re looking at that as well.”
Canaccord’s combined global wealth-management business pulled in C$215.9 million in quarterly revenue, up 13% from a year earlier. Revenue from capital markets rose by just over 41% to C$205.6 million as investment banking and advisory fee revenue picked up.
Canaccord management will host a conference call on Friday morning at 8 a.m. Toronto time.
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