1st Quarter Results

Canaccord Genuity Group Inc. reports first quarter fiscal 2015 results Excluding significant items, first quarter diluted earnings per share of $0.20driven by significant increases in Canadian and US investment banking revenues(1) (All dollar amounts are stated in Canadian dollars unless otherwise indicated) TORONTO, Aug. 5, 2014 /CNW/ - In the first quarter of fiscal 2015, the quarterended June 30, 2014, Canaccord Genuity Group Inc. (Canaccord, the Company, TSX:CF, LSE: CF.) generated $245.6 million in revenue. Excluding significant items(1) (a non-IFRS measure), the Company recorded net income of $24.0 million ornet income of $20.0 million attributable to common shareholders(2) ($0.20 perdiluted common share). Including all expense items, on an IFRS basis, theCompany recorded net income of $18.9 million or net income attributable tocommon shareholders(2) of $15.1 million (earnings per diluted common share of$0.15). "Our fiscal first quarter results were characterized by the positive momentumin our Canadian capital markets business that started in the second half offiscal 2014", said Paul Reynolds, President and CEO of Canaccord Genuity GroupInc. "During the quarter, we made continued progress growing all of ourbusinesses, reflecting the impact of our diversification strategy and thedifferentiated global service we provide." First quarter of fiscal 2015 vs. first quarter of fiscal 2014 · Revenue of $245.6 million, an increase of 31% or $58.4 million from$187.2 million · Excluding significant items, expenses of $215.9 million, up 24% or$41.4 million from $174.5 million(1) · Expenses of $222.3 million, an increase of 25% or $44.2 million from$178.1 million · Excluding significant items, diluted earnings per common share (EPS)of $0.20 compared to diluted EPS of $0.09(1) · Excluding significant items, net income of $24.0 million compared tonet income of $11.8 million(1) · Net income of $18.9 million compared to net income of $7.9 million · Diluted EPS of $0.15 compared to diluted EPS of $0.06 First quarter of fiscal 2015 vs. fourth quarter of fiscal 2014 · Revenue of $245.6 million, down 3 % or $8.1 million from $253.7million · Excluding significant items, expenses of $215.9 million, down 1% or$1.9 million from $217.8 million(1) · Expenses of $222.3 million, an increase of $0.6 million from $221.7million · Excluding significant items, diluted EPS of $0.20 compared to dilutedEPS of $0.25(1) · Excluding significant items, net income of $24.0 million compared tonet income of $29.1 million (1) · Net income of $18.9 million compared to net income of $25.9 million · Diluted EPS of $0.15 compared to diluted EPS of $0.22 Financial condition at end of first quarter fiscal 2015 vs. fourth quarterfiscal 2014 · Cash and cash equivalents balance of $273.9 million, down $90.4million from $364.3 million · Working capital of $435.1 million, down $34.3 million from $469.4million · Total shareholders' equity of $1.12 billion, down $45.4 million from$1.17 billion · Book value per diluted common share of $8.70, down $0.35 from $9.05(3) · On August 5, 2014, the Board of Directors approved a quarterlydividend of $0.05 per common share payable on September 10, 2014 with a recorddate of August 29, 2014 · On August 5, 2014, the Board of Directors also approved a cashdividend of $0.34375 per Series A Preferred Share payable on September 30, 2014with a record date of September 19, 2014, and a cash dividend of $0.359375 perSeries C Preferred Share payable on September 30, 2014 to Series C Preferredshareholders of record as at September 19, 2014 SUMMARY OF OPERATIONS Corporate · On May 23, 2014, Canaccord Genuity announced that Peter Brown steppeddown as a Director and Honorary Chairman · On June 20, 2014, Canaccord Genuity was added to the S&P/TSXComposite Index, the S&P/TSX Composite Dividend Index and the S&P/TSX High BetaIndex · On June 24, 2014 Canaccord Genuity announced the nomination ofKalpana Desai as an Independent Director for election at the upcoming annualgeneral meeting of shareholders · During the quarter, the Company purchased and cancelled 264,200 ofits common shares under the terms of its normal course issuer bid (NCIB) · On August 5, 2014, the Board of Directors approved the filing of anapplication to renew the NCIB to provide for the ability to purchase, at theCompany's discretion, up to a maximum of 5,100,049 common shares through thefacilities of the TSX during the period from August 13, 2014 to August 12,2015. The purpose of any purchases under this program is to enable the Companyto acquire shares for cancellation. The maximum number of shares that may bepurchased represents 5.0% of the Company's outstanding common shares. Capital Markets · Canaccord Genuity led or co-led 50 transactions globally, raisingtotal proceeds of C$4.0 billion(4) during fiscal Q1/15 · Canaccord Genuity participated in 115 transactions globally, raisingtotal proceeds of C$11.3 billion(4) during fiscal Q1/15 · Canaccord Genuity participated in the following significantinvestment banking transactions during fiscal Q1/15: · US$828.7 million for Abengoa Yield on the NASDAQ · £352.0 million for Zoopla Property Group PLC on the LSE · US$316.8 million for 3D Systems, Inc. on the NYSE · £294.0 million for Polypipe Group PLC on the LSE · C$289.8 million for Callidus Capital Corp. on the TSX · £194.3 million for Cambian Group on the LSE · €180.0 million for SLM Solutions AG on the FSE · C$178.3 million for Pure Industrial Real Estate Trust on the TSX · C$172.6 million for Bellatrix Exploration Ltd. on the TSX and NYSE · £154.4 million for OneSavings Bank PLC on the LSE · C$125.0 million for Canacol Energy Ltd. on the TSX · £120.8 million for Game Digital PLC on the LSE · AUD$120.0 million for Greencross Limited on the ASX · C$115.7 million for Kinaxis Inc. on the TSX · C$115.1 million for Artis Real Estate Investment Trust on the TSX · C$115.0 million for Lumenpulse Inc. on the TSX · £100.0 million for Volution Group PLC on the LSE · US$90.5 million for ePlus, Inc. on the NASDAQ · £79.3 million for Patisserie Holdings PLC on AIM · AUD$67.2 million for TFS Corporation Limited on the ASX · US$62.0 million for SCYNEXIS, Inc. on the NASDAQ · US$57.5 million for Abraxas Petroleum on the NASDAQ · US$56.1 million for Radius Health, Inc. on the NASDAQ · C$50.7 million for American Hotel Income Properties REIT LP on theTSX · £50.0 million for HICL Infrastructure Company Limited on the LSE · £41.5 million for River & Mercantile Group on AIM · AUD$33.6 million for iBuy Group Limited on the ASX · C$31.3 million for Merus Labs International Inc. on the TSX · C$28.8 million for Mosaic Capital Corporation on the TSX-V · £26.0 million for EKF Diagnostics on the LSE · AUD$25.0 million for Rubik Financial Limited on the ASX · £24.0 million for Rathbones on the LSE · C$22.8 million for Transeastern Power Trust on the TSX · US$22.5 million for Hydrogenics Corporation on the NASDAQ · C$20.7 million for MBAC Fertilizer Corp. on the TSX · AUD$20.4 million for Tiger Resources Limited on the ASX · US$20.0 million for Venaxis, Inc. on the NASDAQ · In Canada, Canaccord Genuity participated in raising $342.8 millionfor government and corporate bond issuances during fiscal Q1/15 · Canaccord Genuity generated advisory revenues of $32.7 million duringfiscal Q1/15, a decrease of 9% compared to the same quarter last year · During fiscal Q1/15, Canaccord Genuity advised on the following M&Aand advisory transactions: · Yamana Gold on the C$3.9 billion joint acquisition with Agnico Eagleof Osisko Mining Corporation · Iridium Communications on the amendment of its US$1.8 billion Cofaceexport financing · Jaguar Mining Inc. on its US$315.0 million recapitalization · Viewpoint Construction Software on its recapitalization · Chalet Bidco Limited on debt financing supporting the acquisition ofOgier Fiduciary Services Limited · AIB, RBS and Santander on their disposal of Morethan Hotels Group toSomerston Capital and Lone Star · Gaucho on the refinancing of its debt facilities · HgCapital on its disposal of Americana International Limited · Minova Insurance Holdings on its fundraise from Capital Z PartnersManagement · EKF Diagnostics on its acquisition of DiaSpect Medical AB · EKF Diagnostics on its acquisition of Selah Genomics · Photomedex, Inc. on its acquisition of LCA-Vision Inc. Canaccord Genuity Wealth Management (Global) · Globally, Canaccord Genuity Wealth Management generated $64.1 millionin revenue in Q1/15 · Assets under administration in Canada and assets under management inthe UK and Europe and Australia were $32.1 billion at the end of Q1/15(3) Canaccord Genuity Wealth Management (North America) · Canaccord Genuity Wealth Management (North America) generated $32.4million in revenue and, after intersegment allocations, recorded a net loss of$2.3 million before taxes in Q1/15 · Assets under administration in Canada were $11.0 billion as at June30, 2014, up 8% from $10.2 billion at the end of the previous quarter and up18% from $9.3 billion at the end of fiscal Q1/14(3) · Assets under management in Canada (discretionary) were $1.3 billionas at June 30, 2014, up 5% from $1.2 billion at the end of the previous quarterand up 44% from $880 million at the end of fiscal Q1/14(3) · As at June 30, 2014, Canaccord Genuity Wealth Management had 163Advisory Teams(5), a decrease of 10 Advisory Teams from June 30, 2013 and anincrease of three from March 31, 2014 Canaccord Genuity Wealth Management (UK and Europe) · Wealth management operations in the UK and Europe generated $30.1million in revenue and, after intersegment allocations, and excludingsignificant items, recorded net income of $5.1 million before taxes in Q1/15(1) · Assets under management (discretionary and non-discretionary) were$20.5 billion (£11.2 billion) (3) Non-IFRS Measures The non-International Financial Reporting Standards (IFRS) measures presentedinclude assets under administration, assets under management, book value perdiluted common share and figures that exclude significant items. Significantitems include restructuring costs, amortization of intangible assets, andacquisition-related expense items, which include costs recognized in relationto both prospective and completed acquisitions. Book value per diluted commonshare is calculated as total common shareholders' equity divided by the numberof diluted common shares outstanding and, commencing in Q1/14, adjusted forshares purchased under the NCIB and not yet cancelled, and estimatedforfeitures in respect of unvested share awards under share-based paymentplans. Management believes that these non-IFRS measures will allow for a betterevaluation of the operating performance of Canaccord's business and facilitatemeaningful comparison of results in the current period to those in priorperiods and future periods. Figures that exclude significant items provideuseful information by excluding certain items that may not be indicative ofCanaccord's core operating results. A limitation of utilizing these figuresthat exclude significant items is that the IFRS accounting effects of theseitems do in fact reflect the underlying financial results of Canaccord'sbusiness; thus, these effects should not be ignored in evaluating and analyzingCanaccord's financial results. Therefore, management believes that Canaccord'sIFRS measures of financial performance and the respective non-IFRS measuresshould be considered together. Selected financial information excluding significant items(1) Three months ended Quarter- June 30 over-quarter (C$ thousands, except per share and % amounts) 2014 2013 change Total revenue per IFRS $245,556 $187,231 31.2% Total expenses per IFRS 222,268 178,118 24.8% Significant items recorded in Canaccord Genuity Amortization of intangible assets 1,741 1,702 2.3% Significant items recorded in Canaccord GenuityWealth Management Amortization of intangible assets 2,240 1,889 18.6% Restructuring costs 783 - n.m. Significant items recorded in Corporate andOther Restructuring costs 1,600 - n.m. Total significant items 6,364 3,591 77.2% Total expenses excluding significant items 215,904 174,527 23.7% Net income before taxes - adjusted $29,652 $12,704 133.4% Income taxes - adjusted 5,635 894 n.m. Net income - adjusted $24,017 $11,810 103.4% Earnings per common share - basic, adjusted $0.22 $0.10 120.0% Earnings per common share - diluted, adjusted $0.20 $0.09 122.2% (1) Figures excluding significant items are non-IFRS measures. See Non-IFRSMeasures on page 4. n.m.: not meaningful Fellow Shareholders: Our solid results this quarter reflect the impact of our diversificationstrategy and the ongoing strength of our global platform. For the first threemonths of fiscal 2015, Canaccord Genuity Group earned $245.6 million inrevenue, an increase of 31% compared to the same period last year. While the strength of our global business and diversified revenue streams werethe main drivers of our revenue growth, the impact of foreign currencytranslation, particularly the US dollar and British pound, further supportedour revenue growth for the period. We continue in our efforts to realize cost synergies across our globalbusiness. Despite higher expenses related to increased business activity andthe occurrence of one-time costs associated with certain restructuring charges,our expenses as a percentage of revenue during the quarter decreased by 4.6%compared to the same period last year. Canadian capital markets revenue increases 77% year-over-year Driven by robust performance on the TSX, we are experiencing a welcome recoveryin financing and advisory activity in Canada. On a year-over-year basis, ourCanadian capital markets division experienced a 162% increase in investmentbanking revenue and a 166% increase in advisory fees, resulting in revenue of$58.2 million, an overall increase of 77% over the same period last year. In addition to an improved market environment, the growth in our financing andadvisory businesses is attributable to the long-standing relationships andtrack record of success we have historically achieved for our clients in theregion. Our position as the leading Canadian independent firm for M&A advisorywas reflected in our engagement by Yamana Gold on the C$3.9 billion acquisitionof Osisko Mining Corporation. Another example of our strong market position anddifferentiated global service level was demonstrated in our role as leadadvisor and bookrunner to long time client, Amaya Gaming Group in a significanttransaction that closed on August 1st. Increased financing activity in all regions During the first fiscal quarter, Canaccord Genuity participated in 115transactions globally, raising a total of $11.3 billion. By establishingconsistent advisory and equity transaction leadership across our capitalmarkets businesses, we have increased our market share and continue to improveour relevance to clients in all regions. Our global capital markets division generated revenue of $179.2 million duringthe first quarter, an increase of 37% compared to the same period last year.While financing activities increased across all regions, our US and Canadiancapital markets divisions were the largest contributors during the quarter,with 35% and 32% of total global capital markets revenues, respectively. Through our integrated approach to leadership in the Asia-Pacific region, wecontinue to gain market share and broaden our reach into additional sectors.For the fiscal first quarter, this region contributed 8% of total CanaccordGenuity revenues, doubling its contribution from 4% during the first quarter oflast year. Global assets under administration and management increase 24% Further reflecting improved market conditions, our Canadian wealth managementdivision increased revenues by 22% to $32.4 million and increased assets underadministration to $11 billion, an improvement of 18% compared to the firstquarter of last year. We continue to focus on growing our share of fee-basedand discretionary managed accounts with existing Advisory Teams and throughtargeted recruitment. As a result of these initiatives, we have successfullyincreased Canadian assets under management by 44% year over year to $1.3billion. The momentum we are building in our Canadian wealth management division and theimpact of strategic and operational changes led to a 56% reduction inyear-over-year losses for this business. Assets under management in our UK and Europe wealth management operationsincreased to $20.5 billion, an improvement of 27% over the same period lastyear. We are committed to growing our global wealth management operations and we havebegun to invest strategically in advancing the scale and scope of thisbusiness. The Canadian launch of our proprietary Global Portfolio Solutions(GPS) product is expected later in the fiscal year. In the UK, the November,2014 projected launch of a new front- and back- office system will provide thenecessary infrastructure for continued growth in the region. A stronger business for all stakeholders Monday, June 30 marked the ten-year anniversary of Canaccord Genuity's initialpublic offering on the Toronto Stock Exchange. Over the past decade, we haveworked hard to grow from our roots as a Canadian brokerage into a leadingindependent global investment bank. Through sector and regionaldiversification, our business is able to maintain a level of stability involatile markets that is not shared by our domestically focused competitors.This not only protects value for shareholders, but ensures we are able toprovide a consistent service offering to clients in all regions. On June 20, Canaccord Genuity was added to the S&P/TSX Composite Index, theprincipal broad market measure for the Canadian equity markets. With our recentsuccesses and robust pipeline of activity for the coming quarters, thismilestone achievement comes at a time when our firm is well positioned tobenefit from the increased visibility and broader market participationassociated with being a part of the index. Looking Forward By leveraging our expanded operations and integrated service model, we willcontinue to reinforce a culture of cost containment across the firm, whilemaking disciplined investments in areas that support our growth and enhance ourcompetitive strengths. We are committed to maintaining our strong position in Canadian capital marketsand growing our wealth management business in that geography. We will continueto invest strategically in our US capital markets division, a business weexpect to grow aggressively in the coming years. In the UK and Europe, we will focus on enhancing our leading position in themid-market and growing our advisory capability in continental Europe. We willalso continue to pursue strategic opportunities to grow our UK wealthmanagement business. We see significant opportunity for growth in the Asia-Pacific region and inresponse to growing client demand, are working towards establishing a robustsales, trading and research capability in Singapore. I am confident in the outlook for our business. We expect the diversificationstrategy within our long term business plan will continue to deliver strongresults. I am thankful to see all of our teams working together so effectively,as we continue to establish leadership in the global mid-market. Kind regards,Paul ReynoldsPresident & Chief Executive Officer ACCESS TO QUARTERLY RESULTS INFORMATIONInterested investors, the media and others may review this quarterly earningsrelease and supplementary financial information at http://www.canaccordgenuitygroup.com/EN/IR/Pages/default.aspx . CONFERENCE CALL AND WEBCAST PRESENTATIONInterested parties are invited to listen to Canaccord's first quarter fiscal2015 results conference call with analysts and institutional investors, via alive webcast or a toll free number. The conference call is scheduled forWednesday, August 6, 2014 at 5:00 a.m. (Pacific Time), 8:00 a.m. (EasternTime), 1:00 p.m. (UK Time), 8:00 p.m. (China Standard Time) and 10:00 p.m.(Australia Eastern Daylight Time). At that time, senior executives will commenton the results for the first quarter of the fiscal 2015 year and respond toquestions from analysts and institutional investors. The conference call may be accessed live and archived on a listen-only basisvia the Internet at: http://www.canaccordgenuitygroup.com/EN/NewsEvents/Pages/Events.aspx . Analysts and institutional investors can call in via telephone at: · 647-427-7450 (within Toronto) · 1-888-231-8191 (toll free in North America) · 0-800-051-7107 (toll free from the UK) · 1-800-760-620 (toll free from Ireland) · 0-800-917-449 (toll free from France) · 0-800-183-0171 (toll free from Germany) · 10-800-714-1191 (toll free from Northern China) · 10-800-140-1195 (toll free from Southern China) · 1-800-287-011 (toll free from Australia) Please request to participate in Canaccord Genuity Group Inc.'s Q1/15 earningscall. If a passcode is requested, please use 62228933. A replay of the conference call can be accessed after 8:00 a.m. (Pacific Time),11:00 a.m. (Eastern Time) on Wednesday, August 6, 2014 until September 16, 2014at 416-849-0833 or 1-855-859-2056 by entering passcode 62228933 followed by thepound (#) sign. ABOUT CANACCORD GENUITY GROUP INC.: Through its principal subsidiaries, Canaccord Genuity Group Inc. (the Company)is a leading independent, full-service financial services firm, with operationsin two principal segments of the securities industry: wealth management andcapital markets. Since its establishment in 1950, the Company has been drivenby an unwavering commitment to building lasting client relationships. Weachieve this by generating value for our individual, institutional andcorporate clients through comprehensive investment solutions, brokerageservices and investment banking services. The Company has offices in 10countries worldwide, including wealth management offices located in Canada,Australia, the UK and Europe. Canaccord Genuity, the international capitalmarkets division, operates in Canada, the US, the UK, France, Germany, Ireland,Hong Kong, China, Singapore, Australia and Barbados. To us there are no foreignmarkets.™ Canaccord Genuity Group Inc. is publicly traded under the symbol CF on the TSXand the symbol CF. on the London Stock Exchange. Canaccord Series A PreferredShares are listed on the TSX under the symbol CF.PR.A. Canaccord Series CPreferred Shares are listed on the TSX under the symbol CF.PR.C. FOR FURTHER INFORMATION, CONTACT: North American media: Investor relations inquiries: Broker:Scott Davidson Christina Marinoff Oliver HearseyExecutive Vice President, Global Head of Vice President, Investor RBC Europe LimitedCorporate Development & Strategy Relations & Communications Phone: +44 (0) 20 7653 4000Phone: 416-869-3875 Phone: 416-687-5507 Email: [email protected]: [email protected] Email: [email protected] London media:Robert Morgan or Nicola RatchfordStockwellPhone: +44 (0) 20 7240 2486Email: [email protected]@stockwellgroup.com None of the information on the Company's websites at www.canaccordgenuity.com ,www.canaccordgenuitygroup.com , and www.canaccordgenuity.com/cm should beconsidered incorporated herein by reference. ___________________________1 Excluding significant items. See Non-IFRS Measures on pages 4 and 8.2 Net income attributable to common shareholders is calculated as net incomeadjusted for non-controlling interests and preferred share dividends.3 See Non-IFRS Measures on pages 4 and 8.4 Source: Transactions over $1.5 million. Internally sourced information.5 Advisory Teams are normally comprised of one or more Investment Advisors(IAs) and their assistants and associates, who together manage a shared set ofclient accounts. Advisory Teams that are led by, or only include, an IA who hasbeen licensed for less than three years are not included in our Advisory Teamcount, as it typically takes a new IA approximately three years to build anaverage-sized book of business. SOURCE: Canaccord Genuity Group Inc. For further information: North American media:Scott DavidsonExecutive Vice President, Global Head of Corporate Development & StrategyPhone: 416-869-3875Email: [email protected] London media:Robert Morgan or Nicola RatchfordStockwellPhone: +44 (0) 20 7240 2486Email: [email protected]@stockwellgroup.com Investor relations inquiries:Christina MarinoffVice President, Investor Relations & CommunicationsPhone: 416-687-5507Email: [email protected] Broker:Oliver HearseyRBC Europe LimitedPhone: +44 (0) 20 7653 4000Email: [email protected]

(CF.)