TORONTO, Feb. 20 /CNW/ - Philip Armstrong, President of Jovian Capital Corporation ("Jovian") (JVN: TSX-V) announced Jovian's third quarter results.
In just under six months since the merger of Jovian Asset Management Inc. (formerly Jovian Capital Corporation) and Rice Capital Management Plus Inc. (now Jovian), we have achieved a number of key goals:
- Our wealth management platform now has three significant companies,
Rice Financial Group Inc. (Rice), McFarlane Gordon Inc. (MGI), and
T.E. Financial Consultants Ltd. (TE), advising Canadians from all
walks of life, coast to coast, with over $5.3 billion of assets under
administration.
- We raised an additional $17 million in equity and a convertible
debenture, and secured a $9 million acquisition line of credit from
Brascan Financial Corporation.
- Our revenue base was diversified with the acquisition, in October
2003, of T.E. Financial Consultants Ltd., a FEE ONLY (TM) advisor
providing financial planning, asset mix management and corporate
group services across Canada.
- Acquired in December, 2003, Felcom Data Services Inc. (Felcom Data)
provides third party support services to fund companies and will
broaden the level of services offered by Jovian.
- Our brokerage firm, MGI, became a full service dealer, with a retail
division complimented by a capital market group that has been very
active in underwriting a number of issues, and building out its
trading and research teams. MGI has recently opened two Branch
offices, in Winnipeg, Manitoba and London, Ontario.
- The asset management business platform is progressing with
investments in the Alternative Asset business and two hedge funds;
the Pescara Fund of Funds, and Mountainview.
Financial Highlights
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Due to the accounting treatment of the July 2, 2003, share exchange transaction between Jovian Asset Management or "JAM" and Rice Capital Management Plus Inc. (RCM) the comparative figures solely represent that of JAM and not the consolidated operations of the combined company. Any reference to previous year's comparable figures and the perceived growth in the underlying revenues and expenses is directly a result of the consolidation of the two entities. Management has continued to provide comments on the quarterly results on a standalone basis by referencing the contribution of the pre-share exchange entities ("JAM" and "RCM").
EBITDA (Earnings (loss) before interest, amortization and income taxes) and Net Earnings
EBITDA is $1,105,000 for the three months ended December 31, 2003, compared to a loss of $95,000 for the quarter ended September 30, 2003 (previously termed Operating loss before the following).
Jovian reported net earnings totaling $278,000 for the three months ended December 31, 2003, compared to a previously disclosed quarterly loss of $247,000 for the quarter ended September 30, 2003. The quarter prior to the share exchange, June 30, 2003, Rice reported a net loss of $890,000.
For the nine months ended December 31, 2003, the reported net loss is $134,000.
Commissions and Fee Revenue
Total revenue for the nine months ended December 31, 2003, was $21.3 million. Revenue for the three months ended December 31, 2003 was $12.3 million compared to the September quarter of $7.3 million.
Increased revenues are directly attributed to the increased retail and institutional activities in the financial markets and the increased number of underwriting activities.
Distribution Commissions and Net Revenue
Distribution commissions for the quarter were 40% of gross revenue, making it a lower percentage than the 43.7% disclosed in the quarter ended September 30, 2003. Eliminating the revenue contributed by TE (as TE has no direct commission expense), results in a comparable 45% distribution commission as a percentage of commission and fees revenue.
Administrative, Other Selling and Office Costs
Administrative, other selling and office costs totaled $6.4 million for the three months and $11.5 million for the nine months ended December 31, 2003. This compares to $4.4 million presented in the quarter ended September 30, 2003. Rice for the quarter represented 44% of these costs; followed by JAM at 29% and TE at 27%.
Excluding TE, the expenses for the quarter were $4.7 million, compared to the $4.4 million of the prior quarter. Management continues to implement cost savings initiatives and identify economies of scale while managing a high growth and expansion environment within the various operating subsidiaries.
Capital Resources, Liquidity and Working Capital
Jovian's successful financing has provided it with ample working capital to meet its current operational needs. The establishment of an acquisition line of credit has positioned Jovian to take advantage of opportunities within the market place.
The encouraging outlook towards the market in combination with our commitment to maximizing savings, through the integration of common services and platforms amongst our operating subsidiaries, will continue to produce positive cash flows from operations.
Outlook
Jovian's Asset Management platform is in a growth mode. In the fourth quarter we expect to bring to market four prospectus mutual funds, continue to look for opportunities to partner and acquire interests in specialty asset managers and alternative asset products, and begin to market the services provided by our subsidiary Felcom Data.
Assessing the individual companies within Jovian's Wealth Management platform, Rice continues to make significant strides in reducing costs and reorganizing its business lines. MGI, an IDA member that offers brokerage, research and investment banking services to individual and institutional clients, continues to grow its operations. TE provides Jovian with an opportunity for growth in the FEE ONLY (TM) financial advisory services market segment. Growth in this market will be one of our main focuses over the coming year.
Overall, we are encouraged by the progress our Wealth and Asset Management platforms are making in achieving our growth targets.
About Jovian Capital Corporation
Jovian is a publicly-traded company listed on the TSX Venture Exchange (JVN). Jovian is a management and holding company with interests in a variety of financial service firms specializing in wealth(x) and asset(xx) management. The Jovian group of companies operates as a national financial services organization with over 75 locations and more than $5.3 billion of client assets.
(x) Wealth management entities include Rice Financial Group Inc., McFarlane Gordon Inc., T.E. Financial Consultants Ltd., Gibraltar Alternative Asset Consulting Group Inc. and Independent Hedge Inc. (xx) Asset Management entities include Jovian Asset Management Inc., Felcom Management Corp., RJS Global Investments Inc., Pescara Partners Inc., T.E. Investment Counsel Inc. and Felcom Data Services Inc.
The TSX Venture Exchange does not accept responsibility for the
adequacy or accuracy of this release.
/For further information: Philip Armstrong, CEO & President, Jovian Capital Corporation, (416) 864-6488; Jason Mackey, Chief Financial Officer, Jovian Capital Corporation, (416) 864-6484/
