AGF Management posts loss on lower managed assets

Wed Sep 26, 2012 12:05pm EDT

(Reuters) - Canadian fund manager AGF Management Ltd (AGFb.TO) reported a sharper than expected quarterly loss on Wednesday as market volatility kept investors on the sidelines and net redemptions and market losses cut assets under management.

AFG shares were down almost 7 percent after the company reported a loss of C$13.3 million ($13.5 million), or 14 Canadian cents a share, for the third quarter, compared with a profit of C$15.4 million, or 16 Canadian cents a share, a year earlier.

The results included a myriad of charges, including a restructuring charge of C$3.8 million for the sale of AGF Trust to B2B Bank, a unit of Laurentian Bank of Canada (LB.TO), completed during the quarter.

"AGF reported core, recurring earnings per share of 11 Canadian cents, below consensus of 19 Canadian cents and our forecast of 18 Canadian cents," said Barclays Capital analyst John Aiken.

While Aiken said the results were disappointing, he said the company's share repurchase program should support earnings per share if AGF remains aggressive with share buybacks.

"AGF's dividend appears quite safe with more than $400 million in cash on the balance sheet and only $75 million being paid out in the quarter," Aiken said in a research note.

Total assets under management fell 14.8 percent to C$41.2 billion as of August 31.

June-August revenue dropped 21 percent to C$119.8 million.

AGF Management completed the sale of AGF Trust to B2B Bank, for C$421.6 million on August 1.

Shares of the company were down 85 Canadian cents, or 6.8 percent, at C$11.59 at mid-morning on Wednesday on the Toronto Stock Exchange.

(Additional reporting by Shounak Dasgupta in Bangalore; Editing by Peter Galloway)

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