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GMP Reports First Quarter 2020 Results

Toronto, April 30, 2020 - GMP Capital Inc. (GMP) (TSX: GMP) today reported a net loss from continuing operations of $3.0 million in first quarter 2020 compared with net income of $0.2 million in first quarter 2019. The $3.2 million change from first quarter last year was due largely to several factors including:

  • $1.6 million in professional fees and restructuring costs incurred in first quarter 2020 in connection with GMP's intention to consolidate the ownership of Richardson GMP;
  • $0.8 million decrease in GMP's proportionate share of Richardson GMP's net income;
  • $0.5 million tax expense recorded in first quarter 2020 in connection with Part V1.1 tax relating to dividends paid on GMP's preferred shares;
  • $0.6 million in dividends received on GMP’s preferred share investments in Richardson GMP in first quarter 2019, compared with nil in first quarter 2020;
  • $0.4 million decline in the net contribution from our Emerging Markets operations this quarter compared with the quarter ended March 31, 2019; and
  • partly offset by a $0.7 million increase in other revenue largely due to higher carrying broker services provided to Stifel Financial Corp.'s (Stifel) Canadian capital markets business and higher foreign exchange translation gains recorded in first quarter 2020.

“Our top priority this quarter, before the current and severe public health crisis, was to complete the Potential RGMP Transaction we announced on February 26, 2020,” said Kish Kapoor, Interim President and CEO of GMP. “However, once it was clear that we were in the midst of a prolonged pandemic, we made the responsible decision to defer the transaction and shifted our priority to assisting our clients, partners and employees in navigating the unprecedented health and safety challenges and heightened volatility in financial markets. Our results this quarter reflect the impact of both these events,” added Kapoor.

  • GMP, Richardson Financial Group and investment advisor representatives extend negotiation period for consolidation of 100% of the ownership in Richardson GMP under GMP (the Potential RGMP Transaction) due to ongoing COVID-19 outbreak
  • Net working capital as at March 31, 2020, was $126.1 million
  1. AUA1 at Richardson GMP dropped 11% during the quarter compared with a 21.6% decline in S&P/TSX Composite Index

For further information about GMP Capital Inc., our results for first quarter 2020 and the meaning of certain references, this earnings release should be read in conjunction with our unaudited interim condensed consolidated financial statements as at and for the three months ended March 31, 2020 (First Quarter 2020 Financial Statements) and our management's discussion and analysis for the three months ended March 31, 2020 (First Quarter 2020 MD&A) and our annual information form, which can be accessed on our website at gmpcapital.com and on SEDAR at sedar.com. Unless otherwise indicated, all dollar amounts are expressed in Canadian dollars and have been taken from our First Quarter 2020 Financial Statements prepared in accordance with International Financial Reporting Standards (IFRS).

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GMP Provides Update on Potential RGMP Transaction and Announces Q1/20 Earnings Release Date

TORONTO, ON. (April 14, 2020) – GMP Capital Inc. (“GMP” or the “Company”) (TSX: GMP) today provided an update on the previously announced transaction (the “Potential RGMP Transaction”) to consolidate the ownership of Richardson GMP Limited (“Richardson GMP”). Pursuant to the Shareholders' Agreement governing Richardson GMP and in light of the COVID-19 pandemic, all three of Richardson GMP’s shareholder groups, being GMP, Richardson Financial Group Limited (“RFGL”) and the two elected investment advisor representatives on the board of Richardson GMP, have agreed to extend the 30 day contractual negotiation period between GMP and RFGL, that was set to expire on April 16, 2020, to 60 days following the date that the Declaration of Emergency ordered by the Lieutenant Governor of Ontario, and any similar or replacement orders thereto, have been withdrawn or terminated by the Government of Ontario.

The parties are continuing to work toward entering into a definitive agreement and remain hopeful that they will do so in the future. The Company cautions its shareholders and other stakeholders that there is no assurance that any transaction involving Richardson GMP will result from these discussions or on what terms or structure any transaction may occur.

The Shareholders Agreement governing Richardson GMP, including material aspects of the RGMP liquidity mechanism that was triggered on February 25, 2020, is available on the SEDAR profile of GMP at www.sedar.com.

GMP also announced today that it intends to release its first quarter 2020 financial results on Thursday, April 30, 2020. Financial results are expected to be released at approximately 6:00 a.m. (EST).

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GMP Announces Appointment of Interim Chief Financial Officer

Toronto, March 20, 2020 - GMP Capital Inc. (GMP) (TSX: GMP) today announced that Ben Scholten will assume the role of Interim Chief Financial Officer. Mr. Scholten will replace Deb Starkman, the Company’s current CFO and Corporate Secretary, following her previously announced departure effective March 31, 2020. Mr. Scholten joined GMP in 2006 and has a wide breadth of experience in all aspects of the Company's financial operations. Additionally, Krista Coburn, General Counsel of GMP, has also been appointed as the Corporate Secretary of the Company.

"On behalf of the board of directors and her team, we thank Deb for her many contributions and leadership over the years," said Kish Kapoor, Interim President and Chief Executive Officer. "And thank Ben and Krista for their strong support in helping us transition effectively during this pandemic.”

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GMP Announces Appointment of Interim Chief Financial Officer

Toronto, March 20, 2020 - GMP Capital Inc. (GMP) (TSX: GMP) today announced that Ben Scholten will assume the role of Interim Chief Financial Officer. Mr. Scholten will replace Deb Starkman, the Company’s current CFO and Corporate Secretary, following her previously announced departure effective March 31, 2020. Mr. Scholten joined GMP in 2006 and has a wide breadth of experience in all aspects of the Company's financial operations. Additionally, Krista Coburn, General Counsel of GMP, has also been appointed as the Corporate Secretary of the Company.

"On behalf of the board of directors and her team, we thank Deb for her many contributions and leadership over the years," said Kish Kapoor, Interim President and Chief Executive Officer. "And thank Ben and Krista for their strong support in helping us transition effectively during this pandemic.”

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GMP CAPITAL INC PROVIDES UPDATE ON THE POTENTIAL RGMP TRANSACTION DUE TO CORONAVIRUS

    GMP CAPITAL INC. PROVIDES UPDATE ON THE POTENTIAL RGMP TRANSACTION DUE TO CORONAVIRUS

Toronto, March 16, 2020 - GMP Capital Inc. (“GMP” or the “Company”) (TSX: GMP) today provided an update on the previously announced transaction (the “RGMP Transaction”) to consolidate the ownership of Richardson GMP Limited (“Richardson GMP”). On February 26, 2020, the Company announced that it entered into a non-binding term sheet with Richardson Financial Group Limited (“RFGL”) in furtherance of the RGMP Transaction and that it anticipated entering into a definitive agreement shortly following the end of a contractual 15 business day notice period under the Shareholders' Agreement governing Richardson GMP. In light of the ongoing COVID-19 outbreak and recent market volatility, the Company, RFGL and the two elected investment advisor representatives on the board of Richardson GMP no longer expect that the definitive agreement concerning the Potential RGMP Transaction will be entered into in the time period initially anticipated and, therefore, the special meeting of common shareholders called for April 21, 2020 has been postponed.  The parties are continuing to work toward entering into a definitive agreement and remain hopeful that they will do so in the future.  The Company cautions its shareholders and other stakeholders that there is no assurance that any transaction involving Richardson GMP will result from these discussions or on what terms or structure any transaction may occur.  GMP does not intend to provide further updates regarding its ongoing discussions relating to the RGMP Transaction, except as required by applicable securities laws or the policies of the Toronto Stock Exchange. 

The Company also announced several other responses to the ongoing COVID-19 outbreak. Specifically, the Company announced that it is cancelling all non-essential travel and, until further notice, has mandated that all face to face meetings be conducted online.  The Company takes its responsibility seriously to do all that it can to play its part in the community to keep everyone safe and healthy. 

Kish Kapoor, Interim President and Chief Executive Officer, stated. "We continue to monitor closely the growing concerns about the spread of COVID-19 and are following the advice and guidance of public health authorities in an effort to help minimize the spread of the virus. Like you, we are understandably concerned, and as we have watched the situation unfolding it has become necessary to take these prudent steps.” 

FORWARD-LOOKING INFORMATION 

This press release contains “forward-looking information” as defined under applicable Canadian securities laws. This information includes, but is not limited to, statements concerning our objectives, our strategies to achieve those objectives, as well as statements made with respect to management’s beliefs, plans, estimates, projections and intentions, and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Forward-looking information generally can be identified by the use of forward-looking terminology such as “outlook”, “objective”, “may”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “should”, “plans” or “continue”, or similar expressions suggesting future outcomes or events. Such forward-looking information reflects management’s current beliefs and is based on information currently available to management.  The forward-looking information contained herein is expressly qualified in its entirety by this cautionary statement.  

The forward-looking statements included in this press release, including statements regarding the RGMP Transaction and the execution of any of the Company’s potential plans, are not guarantees of future results and involve numerous risks and uncertainties that may cause actual results to differ materially from the potential results discussed in the forward-looking statements. In respect of the forward-looking statements and information concerning the consolidation of 100% of ownership in Richardson GMP, and the Company’s strategy going forward, management has provided same based on reliance on certain assumptions it considers reasonable at this time including that a transaction involving Richardson GMP can be completed on acceptable terms and that any conditions precedent can be satisfied.  There is no assurance that any transaction involving Richardson GMP will result from the discussions with RFGL or on what terms or structure any transaction may occur as proposed or at all, including the timing of the completion of any transaction involving Richardson GMP. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. 

Risks and uncertainties related to the RGMP Transaction include, but are not limited to: failure of GMP and RFGL to enter into the RGMP Transaction on satisfactory terms, or at all; failure of GMP and RFGL to obtain the required shareholders and regulatory approvals for, or satisfy other conditions to effect, the RGMP Transaction; the risk that the RGMP Transaction may involve unexpected costs, liabilities or delays; the risk that, prior to or as a result of the completion of the RGMP Transaction, the business of GMP and/or Richardson GMP may experience significant disruptions, including loss of clients or employees due to transaction related uncertainty, industry conditions or other factors; risks relating to employee retention; the risk that legal proceedings may be instituted against GMP or Richardson GMP; risks related to the diversion of management’s attention from GMP’s ongoing business operations and risks related to the COVID-19 outbreak.  For a description of additional risks that could cause our actual results to materially differ from our current expectations, see the “Risk Management” and “Risk Factors” sections of GMP’s most recent Annual MD&A and the “Risk Factors” section in the Company’s AIF. For additional information on the risk factors related to the RGMP Transaction, see “The Sale Transaction – Reasons for the Sale Transaction” 
and “The Sale Transaction – Risk Factors” in GMP’s Notice of Special Meeting and Management Information Circular dated July 8, 2019 (the “July 2019 Circular”). Material assumptions and factors underlying the forward-looking information in this press release include, but are not limited to, those set out in “Business Environment – Outlook” in GMP’s most recent Annual MD&A. GMP’s most recent Annual MD&A and July 2019 Circular are filed under the Corporation’s profile on SEDAR at www.sedar.com. 

Although forward-looking information contained in this press release is provided based on management’s reliance on certain assumptions it considers reasonable, there can be no assurance that such expectations will prove to be correct. Certain statements included in this press release may be considered a “financial outlook” for purposes of applicable Canadian securities laws, and as such, the financial outlook may not be appropriate for purposes other than this press release. Readers should not place undue reliance on the forward-looking statements and information contained in this press release. When relying on forward-looking statements to make decisions, readers should carefully consider the foregoing factors, the list of which is not exhaustive.  

The forward-looking information contained in this press release is made as of the date of this press release, and should not be relied upon as representing GMP’s views as of any date subsequent to the date of this press release. Except as required by applicable law, Management and the Board undertake no obligation to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise. 

ABOUT GMP CAPITAL INC. 
GMP currently operates through two business segments; Operations Clearing and Wealth Management; and a corporate segment.  Operations Clearing will continue to provide carrying broker services to Richardson GMP and will provide carrying broker services to Stifel’s Canadian capital markets business, including trade execution, clearing, settlement, custody, and certain other middle- and back-office services, and other expenses associated with providing such services. Wealth Management consists of GMP’s non-controlling ownership interest in Richardson GMP. Richardson GMP, one of Canada’s largest independent wealth management firms, is focused on providing exclusive and comprehensive wealth management and investment services delivered by an experienced team of investment professionals. GMP is listed on the Toronto Stock Exchange under the symbol “GMP”. For further information, please visit our corporate website at gmpcapital.com. 

For further information please contact: 

GMP Capital Inc. 
Rocco Colella, Director, Investor Relations 
145 King Street West, Suite 200, Toronto, Ontario M5H 1J8 
Tel: (416) 941-0894; Fax: (416) 943-6175 
rcolella@gmpcapital.com or investorrelations@gmpcapital.com 

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GMP Reports Fourth Quarter and 2019 Results

Toronto, February 28, 2020 - GMP Capital Inc. (GMP) (TSX: GMP) today reported revenue from continuing operations of $8.4 million in fourth quarter 2019; up 8% from $7.0 million reported in fourth quarter 2018. Net loss from continuing operations was $5.3 million in fourth quarter 2019 compared with net income of $1.1 million in fourth quarter 2018. The $6.4 million change from fourth quarter last year was due to several factors including $2.6 million in deferred tax asset recognized in fourth quarter 2018, a $1.8 million tax expense recorded in fourth quarter 2019 in connection with Part V1 tax relating to GMP's preferred shares, and $1.1 million in costs incurred this quarter to consolidate the ownership of Richardson GMP.

Revenue from continuing operations for the year ended 2019 was $36.8 million, up 18% compared with 2018.  Net loss and diluted loss per share for the year ended 2019 from continuing operations was $13.7 million and $0.26, compared with a net loss of $2.4 million and a diluted loss per share of $0.10 in 2018.  The $11.3 million increase in net loss is largely due to an $8.0 million non-cash write-down of deferred tax asset in 2019, $3.1 million ($2.8 million after-tax) in professional fees and restructuring costs related to consolidating the ownership of Richardson GMP, a $1.8 million tax expense recorded in fourth quarter 2019 in connection with Part V1 tax relating to GMP's preferred shares, partly offset by a net increase in stock borrowing and lending activity in 2019.

 

  • Completes the sale of Capital Markets business in December 2019
  • Enters into non-binding term sheet to consolidate ownership of Richardson GMP in first quarter 2020
  • New era of aggressive but prudent expansion in wealth management
  • Richardson GMP to be renamed Richardson Wealth

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GMP Capital Inc Enters into Non-Binding Term Sheet to Consolidate Ownership of Richardson GMP

    GMP CAPITAL INC. ENTERS INTO NON-BINDING TERM SHEET TO CONSOLIDATE OWNERSHIP OF RICHARDSON GMP

Toronto, February 26, 2020 - GMP Capital Inc. (“GMP” or the “Company”) (TSX: GMP) announced today that, based on the unanimous recommendation of an independent special committee (the “Special Committee”) of its board of directors (the “Board”) following an extensive review and analysis, it has entered into a non-binding term sheet with Richardson Financial Group Limited (“RFGL”) in respect of a transaction (the “RGMP Transaction”) to consolidate the ownership of Richardson GMP Limited (“Richardson GMP”). Pursuant to the terms of the RGMP Transaction, GMP will acquire all of the common shares of Richardson GMP that are not owned by the Company for a purchase price of two (2) common shares of GMP (the “Common Shares”) per common share of RGMP (“RGMP Common Share”). The RGMP Transaction will proceed pursuant to the terms of the Shareholders’ Agreement governing Richardson GMP (the “RGMP Shareholders’ Agreement”) and in connection therewith, contemporaneously with the execution of the non-binding term sheet, all three of Richardson GMP’s shareholder groups have jointly provided written notice to commence the liquidity mechanism process (the “RGMP Liquidity Mechanism”) under the RGMP Shareholders’Agreement.

Donald Wright, Chair of the Board and of the Special Committee commented, “Today’s announcement is the culmination of a strategic review process that resulted in the decision to make wealth management the centerpiece of the Company’s growth strategy. Consolidating the ownership of Richardson GMP is the natural next step to that end and will position the business for future success.”

“We are thrilled to have such a strong show of support from our partners at Richardson GMP. With their support we can confidently move to transform our company into a wealth management focused firm. Richardson GMP has the national scale, platform and services that will afford us the greatest opportunity to create long term value for our combined shareholders,” said Kish Kapoor, Interim President and CEO of GMP. “Our mission is to create the destination of choice for Canada’s top advisors who share our entrepreneurial spirit, independent culture and philosophy to deliver unparalleled face-to-face advice to affluent clients opting for non-bank points of access for holistic wealth management solutions. Powered by a strong balance sheet at the combined firms and the Richardson brand, which has a rich 90-year history of success in financial services, we are well positioned for an exciting period of growth in the company for generations to come,” added Kapoor.

Following an extensive review and analysis of the RGMP Transaction and other alternatives available to the Company, the Board (excluding conflicted directors, who did not participate in deliberations), having received the unanimous recommendation of the Special Committee, determined that the RGMP Transaction is in the best interests of GMP. The Board intends to recommend that GMP’s shareholders (other than RFGL) vote in favour of the RGMP Transaction at a special meeting of shareholders to be held to approve the RGMP Transaction (the “Special Meeting”).

In connection with its review, the Special Committee retained RBC Capital Markets (“RBC”) to prepare a formal valuation of the RGMP Common Shares (the “RGMP Valuation”) and of the Common Shares (the “Common Share Valuation”) to be issued by the Company pursuant to the RGMP Transaction (the “GMP Consideration”) as required under Multilateral Instrument 61- 101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). RBC concluded that, as of February 25, 2020, and subject to the assumptions, limitations and qualifications as set out in the RGMP Valuation, that the value of the RGMP Common Shares on an en bloc basis was in the range of $4.25 to $5.15 per share, which represents a total equity value of the RGMP Common Shares of $355 million to $430 million. As part of the RGMP Valuation, RBC included the after tax, net present value impact of $36 million in retention-related bonuses as described further below. RBC also concluded that, as of February 25, 2020, and subject to the assumptions, limitations and qualifications as set out in the Common Share Valuation, the value of the Common Shares on an en bloc basis was in the range of $2.20 to $2.90 per share. A significant portion of the Common Share Valuation was directly derived from the RGMP Valuation given the Company’s ownership interest in Richardson GMP. RBC has also provided its opinion (the “Fairness Opinion”) to the Special Committee and the Board that, as of February 25, 2020, and subject to the assumptions, limitations and qualifications contained therein, the GMP Consideration to be paid by the Company pursuant to the RGMP Transaction is fair, from a financial point of view, to the Company

Transaction Rationale

The conclusions and recommendations of the Special Committee and the Board have been based on a number of factors, including the following:

  • Wealth Management Strategy – The RGMP Transaction represents the next critical step in executing on the Board’s strategy of focusing on wealth management, which the Board believes offers the greatest potential for long-term value creation for shareholders. The first step of that process was the sale of the Company’s capital markets to Stifel Financial Corp. (“Stifel”). As of December 31, 2019, the Company has approximately $131 million of working capital (after the $21 million return of capital distribution and quarterly common and preferred dividends paid on December 31, 2019) , which together with the approximately $37 million of working capital at Richardson GMP as of December 31, 2019, and excluding the retention plan payments described below, will allow the Company to deploy considerable capital to accelerate the growth of the wealth management business following the completion of the RGMP Transaction.
  • Partnership with the Richardson Family – By completing the RGMP Transaction, the Company is partnering with and leveraging the Richardson family brand to create the destination of choice for Canada’s top advisors who share Richardson GMP’s entrepreneurial spirit, independent culture and philosophy to deliver unparalleled face-to-face advice to Canadians opting for non-bank points of access for wealth management advice. RFGL will own approximately 39.7% of the Common Shares of the Company upon closing of the RGMP Transaction.
  • Growing Market Opportunity – With $4.4 trillion in retail financial wealth in Canada in 2018, which is expected to grow to $7.7 trillion by 2028, the opportunity in the market for an independent competitor or independent firm with national scale is significant. The Company believes that demographic trends driving a generational shift have created a growing degree of complexity and sophistication of wealth solutions, supporting the long-term value proposition. Firms and advisors that have embraced the evolution of wealth advice and have enhanced professional accreditation possess the expertise required to provide face-to-face advice across the entire household balance sheet.
  • Leading Wealth Management Advisors – Richardson GMP is one of Canada’s leading wealth management firms with 162 highly qualified professional advisory teams serving over 33,000 high net worth families and businesses across Canada. With approximately $29 billion of assets under administration (“AUA”) as at December 31, 2019, Richardson GMP’s advisors have amongst the best practices in Canada with one of the highest AUA per advisory team and is recognized as one of Canada’s best workplaces. For the year ended December 31, 2019, Richardson GMP had revenues of $272 million and adjusted EBITDA of $50 million.
  • Strong Management Team – Led by Kish Kapoor, Interim President and Chief Executive Officer of GMP, who has decades of experience at prominent wealth management firms, including having served as President of Wellington West Holdings Inc., Executive Vice-President Corporate Development of Loring Ward International Ltd., and Executive Vice President Corporate Development at Assante Corporation (a firm Mr. Kapoor co-founded), along with Andrew Marsh, President and Chief Executive Officer of Richardson GMP, who has over 30 years of wealth management experience, including as a founding executive of Richardson GMP, and other seasoned executives, following completion of the RGMP Transaction, the Company will have in place a strong management team to execute on its growth strategy.
  • Special Committee Process – The RGMP Transaction is the result of an extensive process conducted by the Special Committee, consisting entirely of independent directors, to review and analyze the RGMP Transaction and available alternatives, and extensive negotiations with RFGL and other shareholders of Richardson GMP on the pricing and other terms of the RGMP Transaction.
  • Fairness Opinion – The Special Committee and the Board received an opinion from RBC that, as of February 25, 2020, and subject to the assumptions, limitations and qualifications contained therein, the GMP Consideration to be paid by the Company pursuant to the RGMP Transaction is fair, from a financial point of view, to the Company.
  • Procedural Protections – The RGMP Transaction is subject to a number of procedural protections under MI 61-101, including the requirement for approval by the holders of a majority of the Common Shares (excluding RFGL and any other shareholders required to be excluded under MI 61-101). In evaluating the RGMP Transaction, the Company’s shareholders will have the benefit of enhanced disclosure requirements under MI 61-101 and the independent formal valuation conducted by RBC, which will be included in the Company’s management information circular for the Special Meeting.

Transaction Details

Pursuant to the terms of the RGMP Transaction, GMP will acquire all of the RGMP Common Shares that are not owned by the Company for a purchase price of two (2) Common Shares per RGMP Common Share. In negotiating the RGMP Transaction, the Special Committee and RFGL mutually agreed to use $5.14 and $2.57 per share as reference values for the RGMP Common Shares and Common Shares, respectively. It is expected that the Company will issue to shareholders of Richardson GMP an aggregate of approximately 110.994 million Common Shares (the “Consideration Shares”). Upon closing of the RGMP Transaction, 10% of the Consideration Shares will be paid to Richardson GMP’s shareholders and the remaining 90% will be placed in escrow to be released in equal amounts on the first, second and third anniversaries of the closing subject to the satisfaction of certain conditions. The Consideration Shares will also be subject to downward adjustment if investor advisor departures over the first year following closing exceed a certain threshold, measured on the AUA associated with those investments advisors as of the closing date.

After giving effect to the RGMP Transaction, if completed, the Company will have an estimated 186.428 million Common Shares issued and outstanding. RFGL, GMP’s largest shareholder with an aggregate ownership stake of approximately 24.1% of Common Shares immediately prior to the RGMP Transaction, will have an estimated aggregate ownership position of approximately 39.7% following completion of the RGMP Transaction. Existing GMP shareholders (other than RFGL) and Richardson GMP investment advisors will hold 30.7% and 29.6%, respectively, of the Common Shares following completion of the RGMP Transaction.

 

Hartley Richardson, President and Chief Executive Officer of James Richardson & Sons, Limited added, “We are very pleased with this opportunity to reinforce and renew our long-term commitment to Richardson GMP, and to provide our expertise, reputation, and brand as we continue to build a firm that serves the complete wealth management needs of Canadian families. We fully support the transaction to make Richardson GMP the engine for future growth in value for GMP shareholders. We also believe that GMP’s exclusive focus on wealth management will be of great benefit to Richardson GMP’s highly valued clients, investment advisors, management and employees.”

Pursuant to the RGMP Transaction, GMP will also purchase for cash all of the preferred shares in the capital of Richardson GMP held by RFGL in consideration for a payment equal to the redemption price of such preferred shares, together with all accrued but unpaid dividends, and will purchase for cash outstanding indebtedness of current investment advisors and other employees of Richardson GMP and their affiliated entities and their related employees owing to RFGL and its affiliates for the aggregate principal amount thereof, together with all accrued but unpaid interest thereon.

Upon successful completion of the RGMP Transaction, RGMP intends to allocate $36 million toward a retention plan award program for existing investment advisors.

“Marc Dalpe and Neil Bosch, the two elected investment advisors representatives on the board of Richardson GMP, with the strong support of our fellow shareholders in Richardson GMP, joined me in fully endorsing the proposed transaction at our nationally broadcast town hall meeting from Calgary following the close of markets last evening,” said Andrew Marsh, President and Chief Executive Officer of Richardson GMP. “We believe this transaction affords our advisors, who are amongst the best in the country, and the growing number looking to join us, the best opportunity to serve the unique wealth management needs of high net worth families across Canada."

Richardson GMP investment advisors, collectively representing over 75% of Richardson GMP’s assets under administration, have already indicated their support for the RGMP Transaction by entering into acknowledgment and support letters. More are expected to support the RGMP Transaction over the next few days as the leadership team reaches out to those who were unable to attend the event last night.

Name Changes – at GMP and Richardson GMP

In the coming months, both GMP and Richardson GMP will change their corporate names to one that will be more aligned with the Richardson brand and the go-forward wealth management strategy of the Company.

Richardson GMP Liquidity Mechanism Details

The RGMP Transaction will proceed pursuant to the terms of the RGMP Shareholders’ Agreement and, in connection therewith, contemporaneously with the execution of the non-binding term sheet all three of Richardson GMP’s shareholder groups have jointly provided written notice to commence the RGMP Liquidity Mechanism. Shortly following a contractual 15 business day notice period under the RGMP Liquidity Mechanism, GMP and RFGL intend to enter into a definitive agreement for the RGMP Transaction, which will enable GMP to acquire all of the RGMP Common Shares it does not already own.

The material aspects of the RGMP Liquidity Mechanism can be found in GMP’s most recent annual information form, which is available on the SEDAR profile of GMP at www.sedar.com.

Special Meeting 

In anticipation of the execution of the definitive agreement for the RGMP Transaction, GMP has called a special meeting of common shareholders for April 21, 2020, to approve the RGMP Transaction in accordance with applicable Toronto Stock Exchange and securities rules. 

The RGMP Transaction is expected to close in the second quarter of 2020, subject to shareholder and regulatory approvals and other customary closing conditions. The terms and conditions of the RGMP Transaction will be disclosed in greater detail in a management information circular for the Special Meeting that is expected to be mailed to GMP’s shareholders shortly following the execution of the definitive agreement for the RGMP Transaction. Copies of the definitive agreement and of the management information circular for the Special Meeting will be filed with Canadian securities regulators and will be available on the SEDAR profile of GMP at www.sedar.com. Shareholders are urged to read those and other relevant materials when they become available. 

There can be no assurance that GMP and RFGL will enter into a definitive agreement for the RGMP Transaction or that the RGMP Transaction will occur as proposed or at all. 

NON-GAAP MEASURES 

Non-GAAP Measures We use certain measures to assess our financial performance that are not generally accepted accounting principles (“GAAP”) measures under International Financial Reporting Standards (“IFRS”). These measures do not have any standardized meaning prescribed by GAAP and are therefore unlikely to be comparable to similar measures presented by other issuers. Non-GAAP measures should not be considered as alternatives to net income or comparable metrics determined in accordance with IFRS as indicators of GMP’s performance, liquidity, cash flows, and profitability. 

Assets Under Administration 

Assets under administration (“AUA”) is a non-GAAP financial measure of client assets that are common to the wealth management business. AUA represents the market value of client assets managed and administered by the Company from which the Company earns commissions and fees. This measure includes funds held in client accounts as well as the aggregate market value of long and short security positions. The Company’s method of calculating may differ from the methods used by other companies and therefore may not be comparable to other companies. Management uses these measures to assess Richardson GMP’s operational performance.

Adjusted Measures

Financial statement items that exclude significant items are non-GAAP measures under IFRS. Management believes adjusting certain results and measures by excluding the impact of specified items may be more reflective of ongoing operating results and provides readers with an enhanced understanding of how management views GMP’s and Richardson GMP’s core performance. Management assesses performance on both a reported and an adjusted basis and considers both bases to be useful in assessing underlying, ongoing business performance. Presenting results on both bases also permits readers to assess the impact of the specified items on the results for the periods presented.

Richardson GMP presents earnings before interest, income tax, depreciation and amortization (EBITDA) which excludes:

  • Interest expense recorded primarily in connection with subordinated loan financing arrangements. 
  • Income tax expense (benefit) recorded. • Depreciation and amortization expense recorded primarily in connection with equipment and leasehold improvements. 
  • Transition assistance loan amortization in connection with investment advisor loan programs. Richardson GMP views these loans as an effective recruiting and retention tool, the cost of which is assessed by management upfront when the loan is provided rather than over its term. 

Richardson GMP also presents an adjusted EBITDA which excludes the following (“adjusted EBITDA”):

  • Share-based compensation costs recorded in connection with awards granted to employees and investment advisors of Richardson GMP.

EBITDA and adjusted EBITDA do not have any standardized meaning prescribed by GAAP and are therefore unlikely to be comparable to similar measures presented by other issuers. These non-GAAP measures should not be considered as alternatives to net income or comparable metrics determined in accordance with IFRS as indicators of Richardson GMP’s performance, liquidity, cash flows, and profitability. Richardson GMP’s management believes adjusting results by excluding the impact of the specified items is more reflective of ongoing financial performance and cash generating capabilities and provides readers with an enhanced understanding of how management views Richardson GMP’s core performance.

FORWARD-LOOKING INFORMATION

This press release contains “forward-looking information” as defined under applicable Canadian securities laws. This information includes, but is not limited to, statements concerning our objectives, our strategies to achieve those objectives, as well as statements made with respect to management’s beliefs, plans, estimates, projections and intentions, and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Forward-looking information generally can be identified by the use of forward-looking terminology such as “outlook”, “objective”, “may”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “should”, “plans” or “continue”, or similar expressions suggesting future outcomes or events. Such forward-looking information reflects management’s current beliefs and is based on information currently available to management. The forward-looking information contained herein is expressly qualified in its entirety by this cautionary statement.

The forward-looking statements included in this press release, including statements regarding the RGMP Transaction, the nature of GMP’s growth strategy going forward and execution of any of its potential plans, are not guarantees of future results and involve numerous risks and uncertainties that may cause actual results to differ materially from the potential results discussed in the forward-looking statements. In respect of the forward-looking statements and information concerning the consolidation of 100% of ownership in Richardson GMP, and the Company’s strategy going forward, management has provided same based on reliance on certain assumptions it considers reasonable at this time including that a transaction involving Richardson GMP can be completed on acceptable terms and that any conditions precedent can be satisfied. There is no assurance that any transaction involving Richardson GMP will result from the discussions with RFGL or on what terms or structure any transaction may occur as proposed or at all, including the timing of the completion of any transaction involving Richardson GMP. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release.

Risks and uncertainties related to the RGMP Transaction include, but are not limited to: failure of GMP and RFGL to enter into the RGMP Transaction on satisfactory terms, or at all; failure of GMP and RFGL to obtain the required shareholders and regulatory approvals for, or satisfy other conditions to effect, the RGMP Transaction; the risk that the RGMP Transaction may involve unexpected costs, liabilities or delays; the risk that, prior to or as a result of the completion of the RGMP Transaction, the business of GMP and/or Richardson GMP may experience significant disruptions, including loss of clients or employees due to transaction related uncertainty, industry conditions or other factors; risks relating to employee retention; the risk that legal proceedings may be instituted against GMP or Richardson GMP; and risks related to the diversion of management’s attention from GMP’s ongoing business operations. For a description of additional risks that could cause our actual results to materially differ from our current expectations, see the “Risk Management” and “Risk Factors” sections of GMP’s most recent Annual MD&A and the “Risk Factors” section in the Company’s AIF. For additional information on the risk factors related to the RGMP Transaction, see “The Sale Transaction – Reasons for the Sale Transaction” and “The Sale Transaction – Risk Factors” in GMP’s Notice of Special Meeting and Management Information Circular dated July 8, 2019 (the “July 2019 Circular”). Material assumptions and factors underlying the forward-looking information in this press release include, but are not limited to, those set out in “Business Environment – Outlook” in GMP’s most recent Annual MD&A. GMP’s most recent Annual MD&A and July 2019 Circular are filed under the Corporation’s profile on SEDAR at www.sedar.com.

Although forward-looking information contained in this press release is provided based on management’s reliance on certain assumptions it considers reasonable, there can be no assurance that such expectations will prove to be correct. Certain statements included in this press release may be considered a “financial outlook” for purposes of applicable Canadian securities laws, and as such, the financial outlook may not be appropriate for purposes other than this press release. Readers should not place undue reliance on the forward-looking statements and information contained in this press release. When relying on forward-looking statements to make decisions, readers should carefully consider the foregoing factors, the list of which is not exhaustive.

The forward-looking information contained in this press release is made as of the date of this press release, and should not be relied upon as representing GMP’s views as of any date subsequent to the date of this press release. Except as required by applicable law, Management and the Board undertake no obligation to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise.

ABOUT GMP CAPITAL INC.

For further information please contact: GMP Capital Inc. Rocco Colella, Director, Investor Relations 145 King Street West, Suite 200, Toronto, Ontario M5H 1J8 Tel: (416) 941-0894; Fax: (416) 943-6175 rcolella@gmpcapital.com or investorrelations@gmpcapital.com

 

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GMP to Announce Fourth Quarter and Fiscal 2019 Results

TORONTO, ON. (February 6, 2020) – GMP Capital Inc. (GMP) (TSX:GMP) will release its fourth quarter and fiscal 2019 financial results and host an earnings conference call on Friday, February 28, 2020.  Financial results are expected to be released at approximately 6:00 a.m. (EST).

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GMP Capital Announces Completion of Sale of Capital Markets Business to Stifel

GMP CAPITAL INC. COMPLETES SALE OF CAPITAL MARKETS BUSINESS TO STIFEL FINANCIAL CORP.

• Marks the first step toward transforming GMP into a publicly traded pure-play wealth management firm
• Board of directors declares a one-time return of capital distribution in the amount of $0.275 per common share, previously approved by GMP’s common  shareholders on August 6, 2019
• GMP remains in discussions with Richardson Financial Group Limited to consolidate 100% of the ownership of Richardson GMP Limited

Toronto, December 6, 2019 - GMP Capital Inc. (GMP or the Company) (TSX: GMP) announced today that it has completed the sale of substantially all of its capital markets business to Stifel Financial Corp. (Stifel or the Purchasers) as previously announced on June 17, 2019 (the Sale Transaction).



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GMP Capital Announces Third Quarter 2019 Results

Toronto, November 8, 2019 - GMP Capital Inc. (GMP) (TSX: GMP) today reported a net loss of $25.4 million in third quarter 2019 compared with net income of $2.9 million in third quarter 2018.  The decline of $28.3 million was primarily due to an $18.0 million net loss from discontinued operations, which comprise substantially all of GMP's capital markets business. As previously announced, in August 2019 shareholders voted overwhelmingly in favor of the sale of substantially all of its capital markets business to Stifel Financial Corp. (Stifel) in an all cash transaction (the Sale Transaction).

  • Focused on closing the sale of capital markets business to Stifel Financial Corp., which remains on track to close in fourth quarter 2019
  • Focused on transforming GMP into a pure-play wealth management firm
  • Board of Directors approved a quarterly cash dividend of $0.025 per common share

For further information about GMP Capital Inc., our results for third quarter 2019 and the meaning of certain references, this earnings release should be read in conjunction with our unaudited interim condensed consolidated financial statements as at and for the three and nine months ended September 30, 2019 (Third Quarter 2019 Financial Statements) and our management's discussion and analysis for the three and nine months ended September 30, 2019 (Third Quarter 2019 MD&A) and our annual information form, which can be accessed on our website at gmpcapital.com and on SEDAR at sedar.com. Unless otherwise indicated, all dollar amounts are expressed in Canadian dollars and have been taken from our Third Quarter 2019 Financial Statements prepared in accordance with International Financial Reporting Standards (IFRS).

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