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AGF Management Limited (AGF.B)

F2Q10 (Qtr End 05/31/10) Earnings Call Transcript

June 23, 2010 11:00 am ET

Executives

Robert Bogart – SVP and CFO

Blake Goldring – Chairman and CEO

Rose Cammareri – EVP, Retail Distribution

Mario Causarano – President and COO, AGF Trust Company

Rob Badun – EVP, Investments

Analysts

Geoff Kwan – RBC Capital Markets

Doug Young – TD Newcrest

Stephen Boland – GMP Securities

John Reucassel – BMO Capital Markets

Jeff Fenwick – Cormark Securities

Paul Holden – CIBC World Markets

Presentation

Operator

All participants thank you for standing by. Welcome to AGF’s second quarter 2010 financial earnings conference call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. As a reminder, this conference call is being recorded, Wednesday, June 23, 2010. Your speakers for today are Mr. Blake C. Goldring, Chairman and Chief Executive Officer of AGF Management Limited; and, Mr. Robert J. Bogart, Senior Vice President and Chief Financial Officer of AGF Management Limited.

Today's call and accompanying presentation may include forward-looking statements. Such forward-looking statements are given as of the date of this call and involve risks and uncertainties. A number of factors and assumptions were applied in the formulation of such statements and actual results could differ materially. For additional information regarding such forward-looking statements, factors and assumptions, AGF directs you to the caution regarding forward-looking statements which is contained at page two of the presentation, AGF's MD&A for the three months ended May 31, 2010, and AGF’s most recent annual information form.

I will now turn the call over to Mr. Bogart. Please go ahead, sir.

Robert Bogart

Thank you, operator. Good morning, everybody. I am Bob Bogart, CFO of AGF Management Limited. It's a pleasure to have you join us for today’s call. Please note that slides supporting today's call and webcast can be found in the Investor Relations section of AGF.com.

Today, Blake Goldring, Chairman and CEO and I will discuss AGF’s second quarter results. Also joining us on the call and available to answer questions are Mario Causarano, President and COO of AGF Trust; Martin Hubbes, Executive Vice President and Chief Investment Officer; Rob Badun, Executive Vice President, Investments; and Rose Cammareri, Executive Vice President, Retail Distribution.

And with that, I’ll turn over to Blake.

Blake Goldring

Thank you, Bob, and welcome to everyone listening to today's conference call. This quarter has been an interesting one for the markets to say the least. Sovereign debt crisis in Europe brought with it a return to volatility and fragile confidence that's been rebuilding was shaken once again. At AGF, we continue to forge ahead and have confidence in our long-term strategy despite the short-term challenges.

Many of you joined us at our annual stakeholder day last month and my message from then has been unchanged. Just to recap, we are committed to running a cost-effective efficient operation that’s profitable, successful and delivers value for all our stakeholders. Our overall financial picture remains strong and we continue to plug away at the redemption trend focus on our product development, which I will speak to in a moment.

Let me begin by providing with our financial highlights for the last quarter. Similar to the previous quarter, we continue to track well on all fronts. For example, our AUM, assets under management, is up year-over-year. At quarter end, AUM was at $42.9 billion, up 14.6% from 2009.

Consolidated revenue remains relatively steady from the previous quarter ending at $153.8 million for the quarter. EBITDA also increased by 27.8% year-over-year to $62.6 million. On the Trust side of the business, our financial picture was equally positive and our capital position remains strong. Bob will get into more detail of our Trust in a few minutes.

Finally, after adjusting for some one-time items, our diluted earnings per share were $0.35 in the second quarter compared with $0.19 last year. Bob is gone to have more to say about those items very shortly. You may recall from Q1 that we increased our dividend which today remains at $0.26.

Moving to the next slide, I want to share with you the latest developments in our product lineup. During the quarter, we introduced five new products spanning our major business lines. In response to demand, we launched new Global Resources mandate for institutional clients, leveraging the strength we already have on the retail fund side in this category.

You may recall from stakeholder day that we were also in the process of preparing to launch an Asia ex-Japan and Global ex-US mandate to expand our institutional offerings while leveraging our Investment Management bench strength. As you know, the institutional sales cycle is a long one, but we've seen steady growth.

Our retail fund lineups saw us add two new products, AGF Pure Canadian Balanced Fund and the AGF Traditional Income Fund. We also announced the launch of AGF Global Aggregate Bond Fund, which was made available for sale earlier this month. These funds support our strategy to focus our sales efforts on the fund categories we believe are the greatest opportunity for short-term net sales. Investors continue to look for income and growth and our new funds are designed to generate income, preserve capital and deliver sustainable long-term returns.

On the sales side of the equation, we continue to increase our client facing activities. I've recently been on the road, myself with Rose, Martin and a number of our fund managers meeting with advisors at our due diligence events that was been held across the country. What I can tell you from our discussions is that we are gaining traction and have solid support. We're going to continue to focus on building up those relationships, aggressively pursuing strategic partnerships and moving our sales back into positive territory. We are confident that over the long term our frontline activities, constant communication and strategic adjustments to our product mix will all pay off.

Read the rest of this transcript for free on seekingalpha.com