When GMP Capital Inc. reported second quarter 2014 results last week the firm recognized the important contributions the company's wealth management division, Richardson GMP, is making to the botttom line.
GMP Capital Inc. reported strong revenue of $80.4 million in second quarter 2014. This is up 33% over the same period a year ago. Net income was $13.7 million and diluted earnings per share came in at $0.16. So things are going well. The company’s investment banking operations did well. Financings were broad-based, that is, there were some financings outside of the commodity space. But the company also mentioned the strong performance of the wealth management division.
GMP Capital owns a non-controlling ownership interest in Richardson GMP Limited and CQI Capital Management L.P., two Canadian investment advisory firms. According to the numbers, expenses in the wealth management area decreased in second quarter 2014 compared with second quarter 2013. At GMP Richardson revenue came in at $83.5 million, an increase of 113% compared with second quarter 2013. Those are the kind of results that demand attention. GMP has been adding advisor teams over the last year. The company has 204 investment advisory teams, up from 116 teams in the same period last year. According to the company the good results were due primarily to increased commissions and higher investment management fees “commensurate with higher average assets under administration.”
Richardson's adjusted EBITDA of $16.6 million in the second quarter 2014 compared with $3.9 million in second quarter 2013. Assets under administration now sit at $28.9 billion as of June 30, 2014, up $14.2 billion or 97% relative to June 30, 2013. As a result GMP's share of Richardson GMP's net income increased to $0.7 million in second quarter 2014 compared with $0.2 million in second quarter 2013. “We are pleased with the performance of our partners at Richardson GMP as they continue to build on their standing as Canada's largest independent wealth management firm," said Harris Fricker, chief executive officer of the parent company GMP Capital Inc.
GMP Capital Inc. also announced it David C. Ferguson has been appointed as an independent director and chair of the company’s audit committee. From December 1999 until his retirement in December 2012, Mr. Ferguson served as executive managing director and chief financial officer of BMO Capital Markets, the wholesale banking and institutional brokerage pillar of the Bank of Montreal. Mr. Ferguson's previous experience includes a 25 year career in public accounting including serving as national director of KPMG's investment dealer practice.