Q4 2022 Canaccord Genuity Group Inc Earnings Call
Speaker 1: Session.
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Speaker 3: As a reminder, this conference call is being recorded broadcast live on the Internet.
Speaker 2: As a reminder, this conference call is being recorded broadcast live on the Internet. I would now like to turn the conference call over to MR Dan dabo, President and CEO . Please go ahead, sir.
Speaker 3: I would now like to turn the conference call over to MR Dan dabo, President and CEO . Please go ahead, sir.
Speaker 2: I would now like to turn the conference call over to MR Dan dabo, President and CEO . Please go ahead, sir.
Speaker 4: Thank you operator, and thanks to everyone joining us for today's call. As always, I'm joined by Don mcfadon, our Chief Financial Officer.
Daniel Joseph Daviau: Thank you operator, and thanks to everyone joining us for today's call. As always, I'm joined by Don MacFayden, our Chief Financial Officer. Following the overview of our fourth quarter and fiscal 2022 results, both Don and I will be pleased to answer questions from analysts and institutional investors.
Speaker 5: Following the overview of our fourth quarter and fiscal 2022 results O on and I will be pleased to answer questions from analysts and institutional investors.
Speaker 3: Following the overview of our fourth quarter and fiscal 2022 results, both on and. I will be pleased to answer questions from analysts and institutional investors.
Speaker 5: Today's remarks are complementary to our earnings release, mdna and supplemental financials, copies of which have been made available for download on SEDAR and on the Investor Relations section of our website at CGF com.
Daniel Joseph Daviau: Today's remarks are complementary to our earnings release, MDNA, and supplemental financials, copies of which have been made available for download on SEDAR and on the Investor Relations section of our website at cgf.com.
Speaker 5: Within our update, certain reported information has been adjusted to exclude significant items in order to provide a transparent and comparative view of our operating performance. These adjusted items are non-iffrs financial measures.
Daniel Joseph Daviau: Within our update, certain reported information has been adjusted to exclude significant items in order to provide a transparent and comparative view of our operating performance. These adjusted items are non-IFRS financial measures. Please refer to our notice regarding forward-looking statements in the description of non-IFRS financial measures that appears in our investor presentation and also in our MDNA.
Speaker 5: Please refer to our notice regarding forward-looking statements in the description of non-IFRS financial measures that appears in our investor presentation and also in our mdna.
Speaker 3: These adjusted items are non-IFRS financial measures.
Speaker 3: Please refer to our notice regarding forward-looking statements in the description of non-IFRS financial measures that appears in our investor presentation and also in our mdna.
Speaker 6: Despite the abrupt broad market turndown that began in January , we delivered a solid financial performance in both our fourth quarter and fiscal year, driven by continued growth from our wealth management divisions, very strong activity levels in our advisory segment and a strong performance from our Australian business, driven by mining sector financings.
Daniel Joseph Daviau: Despite the abrupt broad market turndown that began in January, we delivered a solid financial performance in both our fourth quarter and fiscal year, driven by continued growth from our wealth management divisions, very strong activity levels in our advisory segment, and a strong performance from our Australian business, driven by mining sector financings. With the benefit of our clear strategy and targeted investments to strengthen reoccurring revenue streams, while increasing contribution from higher-margin activities, we achieved our sixth consecutive year of revenue and earnings per share growth.
Speaker 5: With the benefit of our clear strategy and targeted investments to strengthen reoccurring revenue streams, while increasing contribution from higher-margin activities, we achieved our sixth consecutive year of revenue and earnings per share growth.
Speaker 3: With the benefit of our clear strategy and targeted investments to strengthen reoccurring revenue streams, while increasing contribution from higher-margin activities, we achieved our sixth consecutive year of revenue and earnings per share growth.
Speaker 7: Revenue for the three -month period amounted to $5 million, bring our full fiscal year revenue to a new record of $2 billion, a year-over-year increase of 2%, excluding significant items. Fourth quarter diluted earnings per share was 52 cents, which contributed to a new record for our full fiscal year diluted EBS of $2 and 51 cents.
Daniel Joseph Daviau: Revenue for the three-month period amounted to $500 million, bringing our full fiscal year revenue to a new record of $2 billion, a year-over-year increase of 2%. Excluding significant items, fourth quarter diluted earnings per share was 52 cents, which contributed to a new record for our full fiscal year diluted EBF of $2.51 cents.
Speaker 8: Looking at expenses, we continue to benefit from enhanced cost savings driven by pandemic-related restrictions on travel and entertainment.
Daniel Joseph Daviau: Looking at expenses, we continue to benefit from enhanced cost savings driven by pandemic-related restrictions on travel and entertainment. And we are maintaining a strong focus on cost discipline measures, as in-person meetings and client events resume. On an adjusted basis, fourth quarter non-compensation expenses as a percentage of revenue increased by four percentage points to 21%. Despite this modest increase, our full year ratio was lower on a year-over-year basis at 18%, which is relatively consistent.
Speaker 9: And we are maintaining a strong focus on cost discipline measures as in-person meetings and client events resumed on an adjusted basis. Fourth quarter: noncompensation expenses as a percentage of revenue increased by four percentage points to 21%.
Speaker 3: And we are maintaining a strong focus on cost discipline measures, as in person meetings and client events resumed on an adjusted basis. Fourth quarter: noncompensation expenses as a percentage of revenue increased by four percentage points to 21 percentdespite this modest increase, our full year ratio was lower on a year-over-year basis at 18%, which is relatively consistent.
Speaker 8: Despite this modest increase, our full year ratio was lower on a year-over-year basis at 18%, which is relatively consistent.
Speaker 8: Adjusted compensation expenses as a percentage of revenue amounted to 61% from the fiscal year.
Daniel Joseph Daviau: Adjusted compensation expenses as a percentage of revenue amounted to 61% for the fiscal year. Turning to capital allocation, our Board of Directors has approved a quarterly common share dividend of eight and a half cents for the fourth fiscal quarter, contributing to a full year dividend payout increase of 28%.
Speaker 5: Turning to capital allocation, our Board of Directors has approved a quarterly common share dividend of eight point a half cents for the fourth fiscal quarter, contributing to a full year dividend payout increase of 28%.
Speaker 7: Through our capital deployment initiatives, which include common share dividends and share buybacks, we returned $176 million to our shareholders over the fiscal year, which represents an amount equal to over 57% of our adjusted net income for the 12 -month period.
Daniel Joseph Daviau: Through our capital deployment initiatives, which include common share dividends and share buybacks, we returned $176 million to our shareholders over the fiscal year, which represents an amount equal to over 57% of our adjusted net income for the 12-month period.
Speaker 5: With that, let's turn to the performance of our operating businesses.
Speaker 7: Our combined global capital markets business earned revenue of $312 million for the fourth quarter and $1.3 billion for the fiscal year.
Daniel Joseph Daviau: With that, let's turn to the performance of our operating businesses. Our combined global capital markets business earned revenue of $312 million for the fourth quarter and $1.3 billion for the fiscal year.
Speaker 8: Over fiscal 2022, we helped raise $61 billion for growth companies- our second highest performance on record.
Daniel Joseph Daviau: Over fiscal 2022, we helped raise $61 billion for growth companies, our second highest performance on record.
Speaker 7: The broad market decline in EC activity that have been anticipated for some time began in our fourth quarter, and we expect it will persist for several more months.
Daniel Joseph Daviau: The broad market decline in EC activity that have been anticipated for some time began in our fourth quarter, and we expect it will persist for several more months.
Speaker 8: Investment banking revenue of $95 million for the three -month period represents a 64% decrease from the unprecedented record level in the same period a year ago, driven by contraction in MA activity.
Daniel Joseph Daviau: Investment banking revenue of $95 million for the three-month period represents a 64% decrease from the unprecedented record level in the same period a year ago, driven by contraction in M&A activity. I will note that this is still a strong result when compared to historical averages and reflects our enhanced market position in our chosen focus areas.
Speaker 8: I will note that this is still a strong result when compared to historical averages and reflects our enhanced market position in our chosen focus areas.
Speaker 3: I will note that this is still a strong result when compared to historical averages and reflects our enhanced market position in our chosen focus areas.
Speaker 8: Our Australian business was an outlier in this segment, with fourth quarter revenue increasing 29% year-over-year to $62 million, driven by a 25% increase in investment banking revenue.
Daniel Joseph Daviau: Our Australian business was an outlier in this segment, with fourth quarter revenue increasing 29% year-over-year to $62 million, driven by a 25% increase in investment banking revenue. This was the strongest quarter on record for this business.
Speaker 8: This was the strongest quarter on record for this business.
Speaker 5: Partially offsetting the decline in investment banking revenue that impacted all the other geographiestotal advisory revenue from the three and 12 -month period increased by 86% and 153% year-over-year to $122 million and $489 million.
Speaker 4: This was the strongest quarter on record for this business.
Daniel Joseph Daviau: Partially offsetting the decline in investment banking revenue that impacted all the other geographies, total advisory revenue for the three and 12-month period increased by 86% and 153% year-over-year to $122 million and $489 million, which is a full year record for this segment. This compares favorably to industry-wide global completed advisory fees which, over the three-month period, increased by 8% versus the same period a year ago.
Speaker 5: Which is a full year record for this segment.
Speaker 7: This compares favorably the industry-wide global completed advisory fees which, over the three -month period, increased by 8% versus the same period a year ago.
Speaker 4: Which is a full year record for this segment.
Speaker 4: This compares favorably the industry-wide global completed advisory fees which, over the three -month period, increased by 8% versus the same period a year ago.
Speaker 5: The most substantial contribution came from our U's business.
Speaker 7: Which increased advisory revenue by 195% for the fourth quarter and 219% for the fiscal year to a record $317 million.
Daniel Joseph Daviau: The most substantial contribution came from our US business, which increased advisory revenue by 195% for the fourth quarter and 219% for the fiscal year to a record 317 million dollars.
Speaker 4: Which increased advisory revenue by 195% for the fourth quarter and 219% for the fiscal year to a record 300 and seventeteen million dollars.
Speaker 8: I will note that the adjusted pretax net income contributions from our U's business has grown substantially, amounting to a new record of $158 million for fiscal 2020. -two and.
Daniel Joseph Daviau: I will note that the adjusted pretax net income contribution from our US business has grown substantially, amounting to a new record of $158 million for fiscal 2022. For context, prior to our initial investment to grow our advisory business in 2019, this business was operating near breakeven.
Speaker 5: For context, prior to our initial investment to grow our advisory business in 2019, this business was operating near breakeven.
Speaker 4: For context, prior to our initial investment to grow our advisory business in 2019, this business was operating near breakeven.
Speaker 10: Looking forward, we expect further enhanced contribution from our recent acquisition of saaya partners, which has been performing in accordance with our expectations.
Daniel Joseph Daviau: Looking forward, we expect further enhanced contribution from our recent acquisition of Sawyer partners, which has been performing in accordance with our expectations.
Speaker 7: Our Canadian and U K and Europe capital markets business also increased advisory revenues for the fiscal year by 66% and 118% respectively.
Daniel Joseph Daviau: Our Canadian and UK and Europe capital markets business also increased advisory revenues for the fiscal year by 66% and 118% respectively.
Speaker 11: Finally fourth quarter revenue from our combined trading business was down 36% year-over-year but increased 24% sequentially, reflecting increased volumes in the three -month period.
Daniel Joseph Daviau: Finally, fourth quarter revenue from our combined trading business was down 36% year-over-year but increased 24% sequentially, reflecting increased volumes in the three-month period.
Speaker 7: While new market realities point to a difficult period ahead for our industry, we see no reason to retrench from our commitment to fully supporting growth companies and investors. Regardless of the market backdrop, we are driven to identify the clients who need us most and do everything to supportthem.
Daniel Joseph Daviau: While new market realities point to a difficult period ahead for our industry, we see no reason to retrench from our commitment to fully supporting growth companies and investors. Regardless of the market backdrop, we are driven to identify the clients who need us most and do everything to support them.
Speaker 4: Regardless of the market backdrop, we are driven to identify the clients who need us most and do everything to supportthem.
Speaker 6: Despite difficult market conditions, client engagement continues to be very strong by historical standards.
Daniel Joseph Daviau: Despite difficult market conditions, client engagement continues to be very strong by historical standards. Our investment banking pipelines are healthy across sectors and regions, but the conversion from pipeline to real life will be largely dependent on market conditions. Similarly, M&A activity remains strong, but advisory completions are likely to be extended as we navigate bouts of market volatility. And finally, our trading businesses are positioned for excellence in the face of any broad market volatility. We will execute for our clients, just as we did through the unprecedented volatility at the onset of the COVID-19 pandemic.
Speaker 5: Our investment banking pipelines are healthy across sectors and regions, but the conversion from pipeline to realize will be largely dependent on market conditions.
Speaker 4: Our investment banking pipelines are healthy across sectors and regions, but the conversion from pipeline to realize will be largely dependent on market conditions.
Speaker 7: Similarly, MNA activity remains strong, but advisory completions are likely to be extended as we navigate bouts of market volatility.
Speaker 4: Similarly, MNA activity remains strong, but advisory completions are likely to be extended as we navigate bouts of market volatility.
Speaker 5: And finally, our trading businesses are positioned for excellent in the face of any broad market volatility.
Speaker 4: And finally, our trading businesses are positioned for excellence in the face of any broad market volatility.
Speaker 12: we'will execute for our clients, just as we did through the unprecedented volatility at the onset of the COVID-19 pandemic.
Speaker 4: We will execute for our clients, just as we did through the unprecedented volatility at the onset of the COVID-19 pandemic.
Speaker 7: Our global wealth management businesses continue to deliver an impressive financial performance.
Daniel Joseph Daviau: Our global wealth management businesses continue to deliver an impressive financial performance. Client assets at the end of the fiscal year amounted to $96.1 billion, a year-over-year increase of 8%, but a modest decrease from the high reached in our third fiscal quarter, reflecting lower market valuations at the end of the 12-month period.
Speaker 8: Client assets at end of the fiscal year amounted to $96.1 billion, a year-over-year increase of 8%, but a modest decrease from the high reached in our third fiscal quarter, reflecting lower market valuations at the end of the 12 -month period.
Speaker 3: Client assets at the endof the fiscal year amounted to $96.1 billion, a year-over-year increase of 8%, but a modest decrease from the high reached in our third fiscal quarter, reflecting lower market valuations at the end of the 12 -month period.
Speaker 7: Our combined wealth management operations and revenue of $174 million for the fourth fiscal quarter, a year-over-year decrease of 13%. This was primarily due to the anticipated reduction in new issue activity which flows through our North American wealth business.
Daniel Joseph Daviau: Our combined wealth management operations earned revenue of $174 million for the fourth fiscal quarter, a year-over-year decrease of 13%. This was primarily due to the anticipated reduction in new issue activity which flows through our North American wealth business. Revenue for the fiscal year amounted to $720 million, an increase of 9% compared to the prior year.
Speaker 8: Revenue for the fiscal year amounted to $72 million and the increase of 9% compared to the prior year.
Speaker 8: Notably commission and fees, increased by 12% to a new record of $587 million to the fiscal year, reflecting record contributions from all geographies.
Daniel Joseph Daviau: Notably, commission and fees increased by 12% to a new record of $587 million for the fiscal year, reflecting record contributions from all geographies.
Speaker 8: Excluding significant items our combined global wealth management business recorded pretax net income of $149 million. A year-over-year increase of 10% for.
Daniel Joseph Daviau: Excluding significant items, our combined global wealth management business recorded pre-tax net income of $149 million, a year-over-year increase of 10%.
Speaker 13: In the U? K and Crown Dependencies. Our integration of adamand company is progressing nicely and we recently completed the acquisition of punter South all wealth.
Daniel Joseph Daviau: In the UK and Crown Dependencies, our integration of Adam and company is progressing nicely. And we recently completed the acquisition of Punter South Hall Wealth. This supports our priority of increasing the scale of both our financial planning and investment management businesses.
Speaker 8: This supports our priority of increase in the scale of both our financial planning and investment management businesses.
Speaker 3: And we recently completed the acquisition of punter southall wealth.
Speaker 3: This supports our priority of increas the scale of both our financial planning and investment management businesses.
Speaker 8: Revenue for this business amounted to $8 million to the fourth quarter and $31 million to the fiscal year. Increases of 7% and 12% respectively, primarily due to higher commissions and fee revenue and interest income attributable to the higher interest rate environment.
Daniel Joseph Daviau: Revenue for this business amounted to $80 million for the fourth quarter and $310 million for the fiscal year, increases of 7% and 12% respectively, primarily due to higher commissions and fee revenue and interest income attributable to the higher interest rate environment. Following the completion of the PSW acquisition, HPS increased their investment through the purchase of a new series of convertible preferred shares of this business in the amount of $110.5 million. With this investment and with the small equity component to be issued in connection with the acquisition, the company will hold an approximate 67% equity equivalent interest in CGWM UK. Despite this modestly lower interest, we expect the benefits of increased scale, in combination with organic growth initiatives will drive continued growth of the financial contributions from this business.
Speaker 8: Following the completion of the psw acquisition, HPS increased their investment through the purchase of a new series of convertible preferred shares of this business in the amount of $110.5 million.
Speaker 8: With this investment and with the small equity component to be issued in connection with the acquisition, the company will hold an approximate 67% equity equivalent interest in CG WM U K. despite this modestly lower interest, we expect the benefits of increased scale in combination with organic growth initiatives will drive continued growth of the financial contributions from this business.
Speaker 6: While lower new issue activity led to softer revenue and net income, contributions from our Canadian business client assets have continued to strengthen, amounting to $38 billion for the end of the fiscal year, an increase of 18% from the same period last year.
Daniel Joseph Daviau: While lower new issue activity led to softer revenue and net income contributions from our Canadian business, client assets have continued to strengthen, amounting to $38 billion for the end of the fiscal year, an increase of 18% from the same period last year. Over fiscal 2022, the average book per advisory team grew 17% year-over-year to $260 million, and this team also continued to grow discretionary assets under management by 35% compared to last year. The recruiting environment in Canada has become increasingly competitive, but we've continued to attract talented teams who see differentiated opportunities to grow their business with CG.
Speaker 12: Over fiscal 2022, the average book per advisory team grew 17% year-over-year to $26 million, and this team also continued to grow discretionary assets under management by 35% compared to last year. The recruiting environment in Canada has become increasingly competitive, but we've continued to attract talented teams who see differentiated opportunities to grow their business with CG.
Speaker 5: This business was also recently recognized as a top ran Canadian wealth management firm and a national survey of an investment advisers.
Daniel Joseph Daviau: This business was also recently recognized as a top-ranked Canadian wealth management firm in a national survey of an investment advisers. And finally, our Australian wealth business continues to grow client assets and related revenue, benefiting from its alignment with our leading capital markets business in the region.
Speaker 5: And finally, our Australian wealth business continues to grow client assets and related revenue, benefiting from its alignment with a leading capital markets business in the region.
Speaker 12: This business earned revenue of $18 million in the fourth quarter and $75 million for the fiscal year, year-over-year increases of three per and 20% respectively.
Daniel Joseph Daviau: This business earned revenue of $18 million in the fourth quarter and $75 million for the fiscal year, year-over-year increases of three and 20% respectively.
Speaker 12: Commission and fee revenue for the fiscal year reached a new record of $58 million and increase of 12% compared to the prior year.
Daniel Joseph Daviau: Commission and fee revenue for the fiscal year reached a new record of $58 million, an increase of 12% compared to the prior year.
Speaker 6: The number of an investment advisers in this business increased by 5% year-over-year, reflecting strong recruiting momentum.
Daniel Joseph Daviau: The number of investment advisers in this business increased by 5% year-over-year, reflecting strong recruiting momentum.
Speaker 12: Whether through acquisitions or recruit.ing, the businesses and professionals that join CG wealth management have been able to unlock greater value on our platform, which is driving organic growth opportunities in all of our regions.
Daniel Joseph Daviau: Whether through acquisitions or recruiting, the businesses and professionals that join CG wealth management have been able to unlock greater value on our platform, which is driving organic growth opportunities in all of our regions.
Speaker 10: Looking ahead, we will continue to explore a range of opportunities for profitable growth in this important segment.
Daniel Joseph Daviau: Looking ahead, we will continue to explore a range of opportunities for profitable growth in this important segment.
Speaker 13: In closing while emana pipelines have continued to deliver and our wealth businesses continued to provide a source of stable reoccurring revenue. We do not expect fiscal 2023 to resemble 2022 or 2021 and.
Daniel Joseph Daviau: In closing, while M&A pipelines have continued to deliver and our wealth businesses continue to provide a source of stable, reoccurring revenue, we do not expect fiscal 2023 to resemble 2022 or 2021.
Speaker 7: Alongside our clients. We are navigating a challenging and uncertain backdrop which includes rising interest rates inflation, a continuing tightening of monetary policy and ongoing market and trade disruptions driven by the devastating war in Ukraine.
Daniel Joseph Daviau: Alongside our clients, we are navigating a challenging and uncertain backdrop which includes rising interest rates, inflation, a continuing tightening of monetary policy, and ongoing market and trade disruptions driven by the devastating war in Ukraine.
Speaker 5: Having said that, we begin fiscal 2023 with the confidence that our business has stronger downside protection than at any time in our history.
Daniel Joseph Daviau: Having said that, we begin fiscal 2023 with the confidence that our business has stronger downside protection than at any time in our history.
Speaker 12: Just as our recent successes were many years in the making. We have spent years shaping our business to deliver predictable performance for our shareholders in uncertain times.
Daniel Joseph Daviau: Just as our recent successes were many years in the making, we have spent years shaping our business to deliver predictable performance for our shareholders in uncertain times.
Speaker 14: Our strong and properly managed balance sheet supports our ability to deliver market-leading services for our clients, while maintaining ample liquidity and flexibility.
Daniel Joseph Daviau: Our strong and properly managed balance sheet supports our ability to deliver market-leading services for our clients while maintaining ample liquidity and flexibility.
Speaker 8: Consistent with what we've done in the past, we are using this challenging period productively to further entrench our position as the leading independent wealth management and capital markets business dedicated to the needs of growth companies and investors.
Daniel Joseph Daviau: Consistent with what we've done in the past, we are using this challenging period productively to further entrench our position as the leading independent wealth management and capital markets business dedicated to the needs of growth companies and investors.
Speaker 12: We see several opportunities to increase our relevance in our core-focused areas, and we are seizing opportunities for targeted and disciplined growth.
Daniel Joseph Daviau: We see several opportunities to increase our relevance in our core-focused areas, and we are seizing opportunities for targeted and disciplined growth.
Speaker 12: With that donawn and I would be pleased to take your questions. Operator, could you please open the lines?
Daniel Joseph Daviau: With that, Don and I would be pleased to take your questions. Operator, could you please open the lines?
Speaker 15: Thank you, sir.
Speaker 2: Ladies and gentlemen, we will now begin the question-and-answer session.
Operator: Thank you, sir. Ladies and gentlemen, we will now begin the question and answer session. If you would like to ask a question, please press star followed by the number one on your telephone keypad. If you would like to withdraw your question, please press the star followed by the number two. One moment while we compile the Q&A roster. Your first question comes from Jeff Fenwick of Courmark. Please go ahead.
Speaker 2: If you would like to ask a question, please press star, followed by the number one on your telephone keypad.
Speaker 2: If you would like to withdraw your question, please press the star, followed by the number two.
Speaker 2: If you would like to withdraw your question, please press the star, followed by the number two.
Speaker 2: one moment while we compileed the QA roster.
Speaker 2: one moment while we compileed the QA roster.
Speaker 15: Your first question comes from Jeff Fenwick of Cormark. Please go ahead.
Speaker 6: Your first question comes from Jeff Fenwick of courmark. Please go ahead.
Speaker 16: higood morning everybody Ning dany just wanted to start the the questions here with Australia. I mean it's been a nice bright spot for for Canaccord. On both aspects of the business wealth and capital markets can you just remind us in the in the capital markets group. There I know a pretty significant amount of the revenues driven from from broker warrants and equity awards that you get when you you do work with the different issuers down. There. What does that makes kind of look like are you tending to to crystallize on that that revenue or there's some risk of Mark to market here. If you know some of these things sell off in future quarters like how should we think about that I mean we've managed to a similar scenario in Canada in the past as you know like with broker warrants bouncing around and we then we do tend to try and monetize them as.
Multiple speakers: Hi, good morning everybody. So Dan, just wanted to start the questions here with Australia. I mean it's been a nice bright spot for Canaccord on both aspects of the business wealth and capital markets. Can you just remind us in the capital markets group there, I know a pretty significant amount of the revenue is driven from broker warrants and some equity awards that you get when you do work with the different issuers down there. What does that mix kind of look like? Are you tending to crystallize on that revenue or is there some risk of mark to market here if some of these things sell off in future quarters, like how should we think about that? I mean, we've managed through a similar scenario in Canada in the past as you know like with broker warrants bouncing around. And we do tend to try and monetize them as quickly, as rationally possible. Often you're restricted on them, from time to time you'll have insider information on them, and you just can't trade them, so you don't have perfect liquidity. This last year was better than the year before. It's hard to look at it quarter to quarter, but in terms of cash fees versus stock fees, so to speak, unrealized stock fees, you know we don't pay out on stock fees until they're sold, but they do get--there's obviously provisions for compensation on them as well, and we mark them down substantially as much as the auditors will let Don do. So we do take big provisions for them regardless. So hopefully the volatility is muted. It's not going to be zero, but it's muted relative to what the actual volatility is. In busy markets those positions expand and in busy markets that are going up, they expand and become more valuable. So there is volatility in those results. We can't avoid it. We are actively monetizing them both pre the quarter and certainly In calendar Q1 this year.
Speaker 4: Quickly is rationally possible. Often in you're restricted on themfrom time totime you'll have insider information on and you just CAn't trade them, So you don't have perfect liquidity. This last year was better than the year before. Know hard to look at a quarter to quarter but in terms of you know cash fees verse stock fees, So to speak, unrealized stock fees. You know we don't pay out on stock fees until they're sold but they do get. You know there's obviously provisions for compensation and them as well and we mark them down substantially. You know as much as you know the auditors all let do do so we do take big provisions for them regardless. So hopefully the volatility is muted. It's not it's going to be zero, but it's muted relative to what the actual volatility is. You know in busy markets those positions expand and busy, you know, markets that are going up, they expand and become more valuable. So there is volatility in those resource, in those results. We CAn't avoid that. We are actively monetizing them both. You know pre the quarter and certainly posted this last quarter, we monetized a bunch more of them. So that's kind of the know and I'd give you. I wouldn't really give you Jeff but, but.
Speaker 8: Quickly is rationalationally possible. Often in you're restricted on them. From time time you'll have insider information on them and you just CAn't trade them. So you don't have perfect liquidity. This last year was better than the year before, the hard to look at a quarter to quarter. But in terms of, you know cash fees verse stock fees, So to speak, unrealized stock fees. You know we don't pay out on stock fees until they're sold, but they do get. You know there's obviously provisions for compensation and them as well, and we mark them down substantially. You know as much as you know the auditors all let do do so we do take big provisions for them regardless. So hopefully the volatility is muted. It's not it's going to be zero, but it's muted relative to what the actual volatility is. You know in busy markets those positions expand and busy, you know, markets that are going up, they expand and become more valuable. So there is volatility in those resource, in those results. We CAn't avoid that. We are actively monetizing them both. You know prethe.
Speaker 17: I CAn't give you splits because it B turns around all the time, some quarters and zero, some quarters it's 30%, right that it. It kind of moves around a lot. Yeah, and iguess I was kind ofwhat I was driving at too, to it was such a, such a strong quarter on the revenue line there. I wasn't sure if your, But when I did to the ACH Yeah, but But in fairness, we did 27 mining deals in Australia in the quarter.
Speaker 4: Like remember that that market is a very, very active resource financing market. We dominate a delithium trade were the number one mining underwriter worldwide. So it it was a busy time- 27 equity deals there and where the number one underwriter by dollar volume.
Speaker 4: Not a big deal number in Australia in calendar Q1 this year.
Speaker 18: sgreat. Okay, and then why don't we talk about the, the wealth management growth there as welli, and that's you refer to it in your opening remarks. Is it? What's the mixof the growth coming from? Is it bring in some, some new advisor or teams into the platform? Is it? I know you're trying to capture more of the assets that are remanaged elsewhere within the business. How has that been progressing? Yeah, I think all of we're doing all of the above and it's all do would take time and has been taking time, which is what we expected. So, but we brought on Twenty.
Speaker 8: In calendar Q1 this year.
Speaker 7: sgreat. Okay, and then when don't we talk about the wealth management growth there as well, and that's you refer to it in your opening remarks, is it? What's the mix of the growth coming from? Is is it bring in some of some advisor or teams into the platform? Is its? I know you're trying to capture more of the assets that remanaged elsewhere within the business- how that been progressing. I think all of we're doing all of the above and it's all do to take time and has been taking time, which is what we expected. So, but we brought on 20 teams of advisers, you know, and most of them have worked out pretty well. We've also been converting those assets over the- for lack of a better term than onfee paying assets- to FE paying assets, but that takes a long, long time. You effectively got to bring a whole new team involved to do that, but there's an active effort in place to do that, but that will that will take time. So, on balance, we're doing both things.
Speaker 4: Of advisers, you know, and most of them have worked out pretty well. We've also been converting those assets over the- for lack of a better term- the nonfee paying assets to fee paying assets. But that takes a long, long time effectively got to bring a whole new team involved to do that, but there's an active effort in place to do that. But that will that will take time. So on balance we're doing both things. I'd say it's probably more recruiting these days, less converting, but you know both are, both are impacting him.
Speaker 8: 'd say it's probably more recruiting these days less converting but you both are both are impacting him ok and then maybe. We'd speak a bit of bit wealth management and Canada your comments mentioned a range of opportunities for profitable growth. And I know recruiting's been front and center for you I imagine that gets a little more sticky through market volatility. But what you know what's the outlook for the pipeline and I'm guessing. This maybe the prospect of a platform out and there beyond just adviser teams or how do we think of about again. I I don't want to you know speculate as to the different things we can do but to be clear. We're continuing to hire advisers. I mean we brought on you a couple of huge teams in the quarter we brought on another to you know two weeks ago. You know great additions to the to the team that's continuing that pace of activity is continuing even with the volatile markets So.
Speaker 18: ok and then maybe we speak a of bit wealth management and Canada. Your comments mentioned a range of opportunities for profitable growth and I know recruiting's been front and center for you. I imagine that gets a little more sticky through market volatility. But what you know, what's the look for the pipeline? And I'm guessing this, maybe the prospect of a platform out and there, beyond just adviser teams, or how do we think of it? Yeah again, I don't want to, you know, speculate as to the different things we can do, but to be clear, we're continuing to hire advisers. I mean, we brought on, you know, a couple of huge teams. In the quarter. We brought on another 2, you know, two weeks ago, you know, great additition to the, to the team. That's continuing. That pace of activity is continuing, even with the volatile markets. Soyou know, we don't, you know, more of the same is not a bad thing. That being said, we do have a fairm on the capital. We continue to believe in the Canadian wealth management space and we are looking at other ways of, you know, related to our business, but other ways to grow our business there. So hopefully in the next couple of quarters that will start becoming a little more tangible for people. So you knowyeah we, we will continue to commit capital towards growing that.
Speaker 8: You know we don't you know more of the same is not a bad thing that being said we do have aaffairm ounon. The capital. We continue to believe in the Canadian wealth management based and we are looking at other ways of you know related to our business but other ways to grow our business there so hopefully in the next couple of quarters that will start to becoming a little more tangible to people. So you we will continue to make capital towards growing that and then maybe one one on the the U K wealth I mean the the assets under hundred men there dipped a bit more and maybe it might have expected just wondering. If there's a is that a portfolio mix is it. It fsex changes or you know sort of an elevenmin cent tiip there great great observation if if you look at the currency. The we we report that number our assets and pounds as well as dollars and you'll see most of that or all of that is pounds. It's just the the Canadian dollar rally against the pounds. So the business continues to grow and in fact.
Speaker 18: okgreat. And then maybe 1: one on the, the U K well, I mean the, the assets under hundred men there dipped a bit more and maybe it might have expected. Just wondering if there's A. is that a portfolio mix? Is it? Is it FX changes or you know, that's sort of an elevenar cent di there. Great, great observation. If you look at the currency we, we report that number, our assets and pounds as well as dollars, and then you'll see most of that or all of that, is pounds.
Speaker 17: yesit's just the Canadian dollar rally against the pan. So the business continues to grow and in fact obviously the market will impact it, and when the market was down, for sure it will impact it. But we do have organic growth aggressive program on creating organic growth and we're actually cautiously optimistic that that's really working. So we're that's where our money is being spent and thats where efforts are being spent. Now that we've got all these acquisitions done is organically growing that business and we've had really good progress in our first year of kind of doing that.
Speaker 8: You know, obviously the market will impact it and you know when the market was down for sure it'll impact it. But we do have organic growth aggressive program on creating organic growth and we're actually cautiously optimistic that's really working. So we're an know. That's's where our money is being SP and that's where efforts are beingsp now that we've got all these acquisitions done's, organically growing that business and we've had really good progress in our first year of kind of doing that. ok, Thank you. Thank you, Re that. I'll reach you great, great question things. Your next question comes from Rob goofff of ashchelon. Please go ahead.
Speaker 18: Okay Thank you for Thank you that I'll reach you very great questions, thanks.
Speaker 15: Your next question comes from Rob golf of echelon. Please go ahead.
Speaker 19: Rob.
Speaker 20: Thank you for taking my question. My first question would be on your outlook for inorganic growth in terms of. Could you talk to your priorities, referencing advisory or geographically, Australia versus the U? K and have you seen private market values adjust as we've all seen capital or public market values sujust?
Speaker 9: Thank you for taking my question. My first question would be on your outlook for inorganic growth in terms of could you talk to your priorities, referencing advisory or geographically, Australia versus the U? K and have you seen private market values adjust as we've all seen capital or public market values suggjust in in wealth assets, potential wealth acquisitions? Yeah no, unfortunately, there's still lotcktythe expectations. That being said, where we really buy in the plac, historically we bought has been in the.
Speaker 21: In Wealth assets: potential wealth acquisitions.
Speaker 22: That question around Yeah no unfortunately know you know there's still lofty expectations that being said where we really buy in the place. Historically we bought has been in the.
Speaker 4: Right we Yeah, we've doneou led a couple of little things in Australia, nothing really in Canada on the acquisition front. But in the U K business even evaluations haven't adjusted. I mean, literally the ink is still fresh on the deal we saw, you know, we closed on, you know, three days ago or two days ago, where we spent you two hundred million pounds to by psw.
Speaker 8: Right like we. Yeah, we've done a, a couple little things in Australia, nothing really in Canada on the acquisition front. But in the U? K business even the valuations haven't adjusted. I mean, literally the in is still fresh on the deal we saw, you know, we closed on, you know three days ago or two days ago where we spent, you know, two hundred million pounds of by P's W. we're not in the market. That the second, I mean there could be do a little tuck in thing, but you, we have that's a big acquisition for us and one that we want to make sure is right. That's where the management team is focused as an integrating that in. So you know, never say never, but it's not like we're buying something tomorrow morning and I can tell you that. So by that point, who those valuations may or may not adjust, I think what you'll see and- and you see you saw it in R B C's acquisition, obviously in that marketi mean even though the public market valuations was down, they pid a 60% premium. The price they paid was the same prices that we pay in the private market. So it's easy to say it's trading for a way, but they're not. They're not trading wholesale.
Speaker 4: We're not in the market at the second. I mean there could be do a little tuck in thing. But you know we have that's a big acquisition for us. And one that we want to make sure is right. That's where the management team is focused, is integrating that in. So you know, never say never, but it's not like we're buying something tomorrow morning. I can tell you that. So by that point, who knows, valuations may or may not adjust. I think what you'll see, and you see, you saw it in R B C's acquisition, obviously in that market, I mean, even though the public market valuation was down, they paid a 60% premium. The price they paid was the same prices that we pay in the private market. So it's easy to say it's trading PO aly, but they're not. They're not trading wholesale poorly. You know they're being bought. It know the same or better prices than the private companies.
Speaker 8: For you know there we bought it. You know the same or better prices on the private couples. We, and then as a follow up- this maybe more for dawn- could you talk to how we might look at the profit margins going head. The impact of noncompensation expenses know, as we all go back to back to work in travel, such a do creep back up. Well, I think, in terms of the noncomp expenses, a large part of that is fixed. So if there is a, you know, in a challenging revenue environment that will creep up just because of the fixed nature of those costs. T? E is a variable component to that. But I think we're coming off of extremely depressed levels in ary two and 20, but obviously in two thousand and 20 one as well, and so I think we're getting back to more, more natural levels and there's a natural, you know we have controls and polic.
Speaker 15: And then, as a follow-up- this maybe more for dawn- could you talk to how we might look at the profit margins going ahead? The impact of noncompensation expenses.
Speaker 23: As we all go back to back to work and travets that are do creep back up.
Speaker 24: Well I think in terms of the noncomp expenses. A large part of that is fixed So.
Speaker 4: If there is a rip.
Speaker 4: In a challenging revenue environment that will creep up just because of the fixed nature of those costs.
Speaker 24: Tne is a variable component to that, but I think we're coming off of extremely depressed levels in.
Speaker 24: dary 2020, but obviously in 2021 as well, and so I think we're getting back to more, more natural levels and there's an unnatural. We have controls and policy ilities deserve. Let them get out of.
Speaker 4: Get excessive. But it's an esstential part of business to be doing some promo and produof activity and it's just natural that it's going to.
Speaker 8: ornot let them get out of control or get excessive. But you know it's an esscentential part of business to be doing some promo and proro activity and it's just natural that it's going to sort to be higher just coming year than it was last year, although I think our run rate, you know, towards the end of last fiscal year, is probably a steady state kind of level for this comp here. Very good, Thank you, was Al quick and easy, Thank you.
Speaker 4: Sort of be higher just coming year than it was last year, although I think our run rate towards the end.
Speaker 4: Last fiscal year is probably a steady state kind of level for this coming year.
Speaker 25: verygood, Thank you.
Speaker 26: It quick and easy, Thank you.
Speaker 15: Your next question comes from rasie banji of TV securities. Please go ahead.
Speaker 5: Your next question comes from rasie banji of TV securities. Please go ahead.
Speaker 27: Morning thanks. I guess the first question would be on the comp ratio. So like more like a two -part question. But the compcreary this quarter at 60% lower versus last quarter. So first part is the lower compcreat, just a refction of lower share based comp, given the lower share price in the first quarter, calter quarter. And then secondly, how should we think about the compcreatio going forward if we go to reperiod of potentially softer capital market activity and given the really tight labor markets, would it be fair to say that the compcreat might move in slightly higher this year?
Speaker 10: Morning thing. Thanks, right time. I guess the first question would be on the comp atio. So like more like a two part question. But the compcre this quarter at 60% lower versus last quarter. So first part is the lower compcreress just a reflection of lower share based, given the lower share price in the first quarter, cal or quarter. And then secondly, how should we think about the compcreat going forward if you go to reperiod of potentially softer capital marketts activity and given the really tightly labor markets, would it be fair to say that the compcre might move in slightly higher this year?
Speaker 28: I think on the comp ratio I mean yes stock price does have have some effect on it but it's not totally attributable to stock price in terms of the stock component of our compensation programs. I think quarter-over-quarter fluctuation and comp ratio will always contain a little bit of bumps and bruises as it go from quarter. I think the better way to look at it really annual because you sort of smooth out those quarterly bumps that naturally occur. So I think I think if you look at the annual comp ratio or just about pretty much on par a little bit down from last year and I think.
Speaker 11: I think on the comp ratio I mean yes stock price does have have some effect on it but it's not totally attributable to stock price in terms of the stock component of our compensation programs. I think quarter-over-quarter fluctuation in comp ratio will always contain a little bit of bumps and bruises as we go from quarter. I think the better way to look at it is really annual because you sort of smooth out those quarterly bumps that naturally occur. So I think I think if you look at the annual comp ratio or just about pretty much on par a little bit down from last year and I think.
Speaker 24: I think that's the right way to think about the comp ratio. I think it's been held pretty steady at that 61% level year-over-year for several years now and we tyly managed to make sure that it stays within that brain.
Speaker 11: I think that's the right way to think about the comp ratio. I think it's been held pretty steady at that 61% level year-over-year for several years now and we tyly managed to make sure that it stays within that range.
Speaker 24: A large part of the compensation is discretionary bonus based, So it can have some pressure on that is as revenues declineed. If revenues decline, but because the variable nature of the bonus compensation part of that, it will be less impactful than that were're.
Speaker 8: A large part of the compensation is creressionary bonus based, So it CAn't have some pressure on that is as revenues decline. Revenues decline but because the variable nature of the, the bonus compensation part of that, it will be less impactful than it were some sort of a really high fixed cost base it. You know that the comp ratio in our markets, even in a lower revenue in each individual market won't become problematic,'ll be the same. You know we manage to those cocomp ratios, So that's pretty easy. The only time we get in trouble as an organization trouble But our comp ratio can go up beyond our range is if a jurisdiction just falls completely at a bad. In other words it's not enough revenue to even cover people's fixed salaries. You know, and that's kind of where you get in trouble. So occasionally you and it will be very understandable to you. So you know I won't mention a jurisdiction.
Speaker 4: Some sort of a really high fixed cost. It's you know that the comp ationratio in our markets, even in a lower revenue in each individual market, won't become problematic,'ll be the same. You know we manage to those cocomp ratio, So that's pretty easy. The only time we get in trouble as an organization trouble, but our cocomp ratio can go up beyond our range, is if a jurisdiction just falls completely at a bad. In other words it's not enough revenue to even cover people's fix salaries. You know, and that's kind of where you get in trouble. So occasionally you ll- and it'll be very understandable to you. So you know I won't mention a jurisdion, but let's say say, have a urisdion, the compration in that jurisdiction go to 90%, not because there's a bonus, because the salaries kind of eat into a very, very low revenue environment in and omalally in a court, in a particular corarter. But overall you know people shouldn't be planning that our cocomp ratio will go up. That's you know, a covenant with our shareholders.
Speaker 4: But let's say, saywe have jisdict, the compperation jurdion will go to 90%, not because there's a bus pool, because the salaries is kind of eat into a very, very low revenue environment and then then noromalally in the court in a particular quarter. But overall people shouldn't be planning that our cocomp ratio will go up. That's a covenant with our shareholders.
Speaker 29: ok just NSE.
Speaker 30: If I could switch ERS to capital markets, then could you speak to the pipeline and your outlook for the different geographies and was related to investment banking engagements and advisory engagements. How would you say shaping up like relative to the last maybe one or two quarters?
Speaker 10: Sense if I could switch herears to calcital markets, then could you speak to the pipeline and your outlook for the different geao fees and related to miss banking engagements and wasically engagements? How would you see it shaping make relative to those maybe one or two quarers the pipeline this important? That's not the problem. We've got lots of people who want capital, a question of whether we can sell it. So the new issue revenue was down and I mean obviously you know that', S that's not going to catch anyone surprised. But there are market windows, like last week in Canada. Our Canadian team, you know, popped in four or five deals in a you know. You know the one week there where the market was this, you know, accepting deals, but obviously from a new issue perspective last year are you know?
Speaker 31: The the pipeline, this in orness, that's not the problem. Yeah, we've got lots of people who want capital. It's a question of whether we can sell it. So the new issue: revenue is down. I mean, obviously you know that's, that's not going to catch anyone surprised. But there are market windows, like last week in Canada. Our Canadian team, you know, popped in four or five deals in a you know. You know the one week there where the market was just, you know, accepting deals.
Speaker 32: But obviously from a new issue perspective. Last year our MMA revenue was up $3 million.
Speaker 7: Our new issue. Revenue was down $2 million. Don't quote me on those numbers, but it's close enough.
Speaker 4: M N a revenue was up $3 million. Our new issue revenue was down $2 million. Don't quote me on those numbers, butthat's close enough. So and right now, an M N? A, we're doing in a quarter what we used to do in a year. Now that's not just becausethe M N? A markettss up, it's because we made a material investment and you know M N? A boutiques and change the culture, the organization, over the last several year. So, which is good, our M N? A pipeline continues to be incredibly robust and we're executing upon. It's So absent. You know something happening to them: mn market liquidity falling away, massive volatility in the market. We continuue to think we will execute and then not probably at exact level we were executing before because that was massive. But it continues to be a pretty robust environment. The issue on pipeline comes down to the new issue: business obviously, and that really isn't a function of do we have customers? We have lots of companies that want to raise money in our core verticals. It's a question of whether the market will open up and it's not even so much price the lead an issue in at these prices.
Speaker 32: So and right now an M N? A, we're doing in a quarter what we used to do in a year. Now that's not just because the M? A markets up, it's because we made a material investment and you know, M N? A boutiques and change the culture of the organization over the last several years. So, which is good, our M pipeline continues to be incredibly robust and we're executing upon it. So absent, you know, something happening to the M N? A: market liquidity falling away, massive volatility in the market. We continue to think we will excute, and then not probably actually the level we were executing before, because it was massive, but it continues to be a pretty roust environment. The issue on pipeline comes down to the new issue: business, obviously.
Speaker 32: And that really isn't a function of do we have customers? We have lots of companies that want to raise money in our core verticals. It's a question of whether the market will open up, and it's not even so much price- the ave- an issue with at these prices. It's a matter of: do we have buyers, and isn't that a smart decision, long-term decision for those companies? So it's not a perfect answer to your question, but that's the.
Speaker 4: It's a matter of: do we have buyers, and isn't that a smart decision, long-term decision for those companies? So it's not a perfect answer to your question, but that's the the beauty in the the beast of capital markets. It's very hard to predict three months ahead.
Speaker 7: The beauty in the beast of capital markets is it's very hard to predict three months ahead.
Speaker 30: No I appreciate more H est and the helpilful, and then I guess just not last question then. So if we go, is we potentially be go through a period of softterare capital market lines? How would you, how are you feeling about your level of excess capital currentcy and your ability to buy back shares if we go through that scenario?
Speaker 10: I appreciate the tyical and I guess just an next question then. So if we- if the potentially be- go through a period of self TR capital market nings, I would you, how are you feeling about your level of excess capital currency and your ability to do buy back if we go through the scenariowell, our capital position will continue to remain strong and we're now worried about that in a risk produced capital markets environment and the N? T I B we continue to manage, you know, appropriately from time to time. So that gets, that gets adjusted as we go forward. We do active buyers, but it's not been huge amount. And make a couple of additional points on that number 1, we've always said we're going to pay our dividend to commensurate with our wealth earnings. As our wealth earnings go up will increase our dividend. We've increased in five times, or twenty, 5% year over year.
Speaker 15: Well our capital position will continue to remain strong and we're not worried about that in the risk-produced capital markets.
Speaker 24: Environment and the N? T I B we continue to manage, you know, appropriately from time to time. So that gets that gets adjusted as we go forward. Active buyers, but it's not been huge amount. And I make a couple of additional points on that. Number 1: we've always said we're going to pay our dividend commensurate with our wealth earnings. As our alth earnings go up we increase our dividend. We've increased their five times or Twenty, 5% year over year and as our wealth earning we'recovering, continue to go up, we will use our capital for that. We've also said that we're going to use our excess capital on money that we've made in capital markets to buy back our shares. That hasn't changed. You know query what our our excess capital, which is the nature of your question. It will be to buy back shares. The only provisoy make on that in the current market is not that we. You need to keep capital because maybe the market will be to volatile opportunities. T changed to, you know, to Rob God's question. You know, maybe valuations of change, maybe all of a sudden there's a better use of our capital. Then you know doing one hundred million dollars, substantial issue BS.
Speaker 4: And as our wealth earnings' recovering continue to go up, we will use our capital for that. We've also said that we're going to use our excess capital on money that we made in capital markets to buy back our shares. That hasn't changed. Query what our our excess capital, which is the nature of your question. It will be to buy back shares. The only provisoid make on that in the current market is not that we you need to keep capital because maybe the market will be volatile. Opportunities changed to, to Rob God's question, maybe valuations will change, maybe all of a sudden there's a better use of our capital then doing $1 million substantial issue bids. So we'll have to see, we'll have to assess. We're going to be flexible. We're obviously in an immensely strong position. I earned $27 million last year and a similar number of the year before. We obviously have a pretty good balance sheet here to manage through any business transitions and opportunities that arise that's.
Speaker 7: So we'll have to see, we'll have to assess. We're going to be flexible. We're obviously in an immensely strong position, having earned $27 million last year and a similar number of the year before. We obviously have a pretty good balance sheet here to manage through any business transitions and opportunities that arise.
Speaker 15: Okay that's helpful. Those are on questions. Thank you.
Speaker 32: Great questions thanks.
Speaker 15: Your next question comes from Stephen. bowling of ringham James, Please go ahead.
Speaker 10: No there's all ES. Thank you, great questions, Thank. Your next question comes from Stephen bowing. Kind rate of James. Please go ahead morning. Thanks to take mentmy questions. Maybe again just talk about. You mentioned your focus in the U K and the wealth management practice is integration. So obviously no you, no acquisitions over the next little while. But I'm just wondering about your ownership level at 67%. What level are you comfortable at keeping that, that ownership level? You continue to think about further acquisitions down the road. There's no, there's no magic number there, as when you think about it. Take the last acquisition we did of P W. I think it's illust sort of, in that we bought PS W costes on £6 million roughly. We raised £1 million of incremental that from U K normal lenders.
Speaker 33: Good morning. Thanks to taking my questions. Maybe again just talk about. You mentioned your focus in the U K and the wealth management practice is integration. So obviously no acquisitions over the next little while. But I'm just wondering about your ownership level at 67%. What level are you comfortable at keeping that ownership level? Will you continue to think about further acquisitions down the road?
Speaker 34: There's no, there's no magic number there as, when you think about it. P the last acquisition we did of psw. I think it's illustrate of in that we bought psw costes hundred than £6 million roughly. We raised £1 million of incremental de from U K normal lenders and then the £65 million came from HPS, our financial partner in the transaction, through a preferred share which would have valued our interest in that company at not only eight $9 a share. That type of when you do all the translations of pounds back in our minority interest.
Speaker 4: And then the £65 million came from hps- our financial partner in the transaction- through a preferred share which would have valued our interest in that company at eight $9 a share. That that type of- when you do all the translations of pounds back in the- our minority interest. The point that I'm trying to make is we didn't spend a penny of our own. If you think about it as a public company, we didn't spend a penny of our own capital to do that acquisition. We used de and we used HPS equity, which values the business at 17- 18 times earnings. It's, by definition, going to be accretive to us, even though our ownership interest came down.
Speaker 35: The point that I'm trying to make is we didn't spend a penny of our own, if you think about it as a public company, we didn't spend a penny of our own capital to do that acquisition. We used debt and we used HPS equity, which values the business at 17- 18 X earnings. It's, by definition, going to be accretive to us, even though our ownership interest came down.
Speaker 35: We didn't REA check and it was an accretive acquisition. So therefore, our earnings go up, So no capital, our earnings go up, So we'll continue to do that type of transaction as it comes up. We there's no magic of 50% or any other number, that being said, to dilut us below 50%. We'd be pretty aggressive on the acquisition front to to require that kind of capital to continue to grow that business, but certainly no magic prepared to get further diluted in that business, accretively further diluted, if that makes any sense at all, and we'll continue to do that activity. That being said, you pointed out to start your question.
Speaker 4: We didn't Re and it was an accretive acquisition. So therefore, our earnings go up, So no capital, our earnings go up, So we'll continue to do that type of transaction as it comes up. We there's no magic of 50% or any other number, that being said, to dilut below 50%. We'd be pretty aggressive on the acquisition front to to require that kind of capital to continue to grow that business, but certainly no magic prepared to get further diluted in that business, accretively further diluted, if that makes any sense at all, and we'll continue to do that activity. That being said, you pointed out to start of your question we don't have anything on the horizon right at this moment. We are busy, focused on integrating a very large acquisition. Okay, that's hopeful. And maybe just a more general question on your energy practice: P cycles or seen oil gsh when they're at this prices, the banking being pretty robust, we we haven't seen not, I believe.
Speaker 35: We don't have anything on the horizon right at this moment. We are busy, focused on integrating a very large acquisition.
Speaker 36: Okay that's helpful and maybe just a more general question on your energy practice. Past cycles we've seen oil and gas when they're at this prices, the banking being pretty robust. We we haven't seen that, I believe. I'm just wondering in your mind, is this like a permanent structural change on the buly side in terms of demand for oil and gas product?
Speaker 12: I'm just wondering in your's like a permanent structural change on the body side in terms of demand for oil and and gas product you got to thinkabout where we operate in the nature of oiland as product and they don't want to be too bearish on it. But our biggest capital markets. Businesses are in resource. Oriented sectors tend to be Canada and Australia in Canada. That's not an attractive market from a oil and gas perspective simply because the companies that are there are making lots of money and they tend to have strong relationships with balance sheet participants. So it's it's we tend to excel where people don't make lots and lots of money. They need lots of money and they don't T to have strong banking relationships commercial banking relationships. So we don't necessarily see the oil and G gas market the domestic oil and G market is a very active market plus. We have a political environment in this country which doesn't really isn't really susceptible to attracting foreign capital to the oil and gas sector because.
Speaker 37: You got to think about where we operate in the nature of oil and gas product and I don't want to be too bearish on it, but our biggest capital markets business in resource-oriented sectors.
Speaker 7: Tend to be Canada and Australia. In Canada, that's not an attractive market from an oil and gas perspective, simply because the companies that are there are making lots of money and they tend to have strong relationships with balance sheet participants.
Speaker 32: So it's know it's. We tend to excel where people don't make lots and lots of money. They need lots of money and they don't tend to have strong banking relationships- commercial banking relationships. So we don't necessarily see the oil and gas market. The domestic oil and gas market is a very active market. Plus, we have a political environment in this country which doesn't really isn't really susceptible to attracting foreign capital to the oil and gas sector, because difficult to get that to market, So to speak.
Speaker 35: That being said, we let a $7 million deal last week like we're going to continue to be active in the sector. We do have a presence in the sector. We continue to be focused on it. It'll mainly be on the energy transition sector as opposed to the energy sector. We've had an incredibly strong sustainability practice globally and that's important for us in the U K, that's important for usin Canada, the? U's obviously, and Australia. So I'd argue we're more focused on energy transition than we are on pure oil and gas in your question was pure oil and gas?
Speaker 4: You know, difficult to get that to market, So to speak. That being said, we let a $7 million deal last week. You know like we're going to continue to be active in the sector. We do have a presence in the sector. We continue to be, you know, focused on it. It'll mainly be on the energy transition sector as opposed to the energy sector. You we've been incredibly strong sustainability practice globally and that's important for us in the? U K, it's important for us in Canada, the? U us obviously, and Australia. So I'd argue we're more focused on energy transition than we are on pure oil and gas. In your question was pure oil and gas all right, that's all out. It's very much, Thank you. There are no further questions from the phone lineines. I would like to turn the conference back to MR dael for closing remarks. ok thanks, and those are all great questions. An operator really appreciate it and never an appreciate joining to the.
Speaker 36: Okay all right, that's all I out. Thanks very much, Thank you.
Speaker 15: There are no further questions from the phone lines. I would like to turn the conference back to MR dabel for closing remarks.
Speaker 32: Okay thanks, those are all great questions and operator, I really appreciate it and never an appreciate joining today we're going to be. This was our year-end results So obviously took us a little longer report. We'll be reporting again in early August , So look forward to speaking to everyone then. And of course, Don and I and Christine and others are available for questions. Thanks so much and operator, from sort of close the lines, that'would be great.
Speaker 2: Ladies and gentlemen, this does conclude your conference call for this morning. We would like to thank you all for participating, ask you to please disconnect your lines and hope everybody has a great weekend.