While certainly not without challenges,
2017 highlighted the important role that
fully integrated Canadian independent firms,
like GMP, continue to play in the efficient
functioning of the Canadian capital markets.
GMP continues to demonstrate considerable
resilience in the face of daunting cyclical
lows in commodities. And, more importantly,
as a much leaner organization, it is better
capable of responding to emerging
revenue opportunities as they arise. GMP
continues to enjoy a leadership position
in the Country’s two largest economic
sectors, mining and energy, and has been
aggressively gaining greater market
share in the non-commodities portion of
the business. While the firm’s financial
performance is not where the Board and
management would like it to be, the strides
made to date have been encouraging and
the Board believes the pre-requisites for
sustainable growth are in place
In 2017, GMP Securities established itself
as an emerging leader in the provision
of advice and financing solutions to
the blockchain and cannabis sectors.
These sectors are a logical extension of
GMP’s proven expertise and rich history
in providing advice and capital raising
services to the small- to mid-cap segments
– the lifeblood of the Canadian economy.
They also help re-inforce the strength and
capabilities GMP has always maintained
outside of commodities. These two sectors
represented key investment themes in
2017 and we believe this momentum will
continue in 2018.
The Board was closely involved in the firm’s strategic agenda to expand its capabilities in the non-commodities portion of the business. We actively participated in a number of strategic reviews to help ensure that identified growth opportunities received the requisite discussion, analysis, monitoring and oversight.
The response from clients has been overwhelmingly positive, and investor interest in these sectors surged in 2017. More specifically, the benefits of this diversification were clearly evident in our fourth quarter performance.
Working Closely with our Partners at Richardson GMP
GMP stands alongside its partners at
Richardson GMP at the forefront of change.
Market leadership and solid profitability at
Richardson GMP over the past several years
evidences the success of this partnership.
Both firms continue to benefit from a high
degree of professional collaboration and
significant mutual business synergies,
namely in the areas of product origination
and distribution, access to diverse product
offerings, and operational scale support
services. We remain committed to deriving
further synergies between our wholesale
and retail businesses.
Risk Management and Capital
Chief among the lessons learned from the
Global Financial Crisis is the importance
of a strong risk culture in identifying,
anticipating, and responding to the
principal risks and challenges facing the
industry. An effective integrated risk
management framework ensured the
Board proactively debated and assessed
growth opportunities in the blockchain/
cryptocurrencies and cannabis spaces.
The Board remains committed to ensuring
the firm maintains strong capital positioning
to weather the inevitable market cycles,
but more importantly, have the flexibility to
pursue growth opportunities as they arise.
The Board is comfortable that GMP has
ample capital to do both.
Given GMP’s improved operating
performance, its strong capital position and
the Board and management’s outlook for
the first half of 2018, we declared a special
cash dividend of 10 cents per common
share on March 1, 2018. As the firm’s future
results allow, the Board plans to continue to
return excess capital to shareholders.
At our Annual and Special Meeting of
Common Shareholders on May 3, 2018,
James (Jim) Meekison will retire from our
Board. Jim has been a valued member of our
Board since 2008. On behalf of the Board,
we extend thanks to Jim for his wise counsel
and considerable contributions to the firm
over the past decade.
Under the guidance of the Governance
Committee, we have commenced a
recruitment process to identify and
recommend to the Board two individuals
qualified to become independent members
of the Board. Consistent with our diversity
policy, the Governance Committee will
take into account diversity considerations
such as gender, age and ethnicity, with a
view to ensuring that the Board benefits
from a broad range of perspectives and
We believe GMP remains on the right track
and in a stronger position moving forward.
GMP delivered on its promise to remain a
dominant Canadian independent player in
the small- to mid-cap segments of the capital
markets. GMP has successfully extracted
considerable fixed cost savings over the past
two years while simultaneously expanding
its capabilities and winning greater market
share in the non-commodities portion
of its business. With significantly leaner
operations, a growing non-commodities
business, and a leading independent
Wealth management franchise, it is plainly
evident that GMP will remain disruptively
competitive moving forward.
I would like to thank our shareholders
for their ongoing support and my fellow
Board members for their insight and
DONALD A. WRIGHT
Chair of the Board of Directors