Canadian Brokerage, Advisory Firm Swings Into Loss

Tom Burroughes

7 November 2008

Canadian brokerage and advisory firm Canaccord Capital swung into a loss of C$5.4 million in the three months ending in 30 September 2008 in contrast to a profit of $12.4 million in the same period a year ago.

Canaccord is suspending its dividend, and it will evaluate the dividend policy on a quarterly basis, the firm said.

Vancouver, British Columbia-based Canaccord has operations in Canada, UK and the US. Assets under administration fell by 24.2 per cent to C$11.6 billion from the same period a year ago. Assets under management stood at C$609.0 million, down 21.6 per cent from the same period a year ago.

As of 30 September, 2008, Canaccord had 341 advisory teams, down 37 from the same period a year ago, and down 13 from Q1/09. It has hired four additional advisory teams since 30 September and had 345 Advisory Teams as of 31 October.

“We are not pleased with these results. They reflect extremely challenging market conditions that have left no one in the financial services industry unscathed. Importantly, private client services generated nearly $8 million in earnings before taxes and overhead allocations for the three months and our Canadian operations were profitable in the second quarter,” the firm said.

“Perhaps more importantly, Canaccord remains in excellent financial condition, with $521 million in cash and working capital of $308 million,” it added.