* Canaccord reports fiscal Q1 net loss C$0.24 a share
* Reports adjusted quarterly loss of C$0.20 a share
* Cuts quarterly dividend to C$0.05/shr, from C$0.10/shr
By Euan Rocha
TORONTO, Aug 8 Canaccord Financial Inc
reported a quarterly loss and slashed its dividend payout on
Wednesday, as unfavorable market conditions led to a sharp fall
in revenues from its investment banking arm and wealth
management unit in North America.
The Toronto-based financial services company halved its
quarterly dividend payout to 5 Canadian cents a share from 10
Canadian cents, due to challenging market conditions.
Canaccord and some of its Canadian rivals that generate a
sizable chunk of revenues from equity financings in the mining
and energy sectors in Canada have been hurt by the downturn in
commodity prices due to the European debt crisis and slowdowns
in emerging economies.
The uncertainty in market conditions has led to a slump in
equity issuances by small- and mid-sized companies in the mining
and energy sectors, hurting firms like Canaccord that earn fees
from such deals.
"Our operating environment continues to be characterized by
adverse market conditions - particularly in the small to
mid-market resource space - a traditional strength for our
company," said Chief Executive Paul Reynolds in a letter to
The firm reported a fiscal first-quarter net loss of C$20.6
million, or 24 Canadian cents a share. That compared with a
profit of C$13.2 million, or 16 Canadian cents a share, a year
Excluding one-time amortization costs and other items, the
company reported a loss of C$16.3 million, or 20 Canadian cents
Revenue from the firm's investment banking business slid 52
percent in the quarter to C$28.6 million, while revenue from its
North American wealth management business fell over 30 percent
to C$36.8 million. Acquisition-related gains helped lift overall
revenues for the firm by 1.7 percent to C$162.5 million in the
Canaccord, which earlier this year bought British broker and
advisory group Collins Stewart Hawkpoint for 250 million pounds
($392 million), said it was working on lowering the cost base of
the combined business, merging common operations and business
The financial services firm said it has identified costs of
roughly C$42 million that can be eliminated from the combined
entity. It has also cut jobs and leasehold expenses in Canada to
save a further C$5.5 million a year.
To achieve these savings, Canaccord said it has restructured
its Montreal office and eliminated 16 positions there. In the
last two months, the firm said it has also cut about 60
full-time and contract positions in other offices in Canada.
Shares of Canaccord, which have fallen more than 50 percent
over the last six months, closed at C$4.46 on Wednesday on the
Toronto Stock Exchange.