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Sprott (SII)

Participants
Peter Grosskopf CEO
Whitney George President
Kevin Hibbert CFO
John Ciampaglia CEO, Sprott Asset Management
Gary Ho Desjardins Capital
Geoff Kwan RBC Capital Markets
Graham Ryding TD Securities
Call transcript
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Operator

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to Sprott Inc.'s 2021 First Quarter Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded today, May 7, 2021. On behalf of the speakers that follow, listeners are cautioned that today's presentation and the responses to questions may contain forward-looking statements within the meaning of the safe harbor provisions of the Canadian provincial securities law.

Forward-looking statements involve risks and uncertainties that undue reliance should not be placed on such statements. assumptions may in expressed differ in statements. or and forward-looking or factors such results actual materially material are making implied statements, implied Certain from those

the to factors factors filings material assumptions with over Sprott's U.S. go MD&A applied conference statements, and cause For for and forward-looking or that securities making the will consult Mr. information from expectations ahead, Canadian Peter about actual additional now Mr. regulators. other results Grosskopf. please differ in the materially about and turn may to I the quarter Please Grosskopf.

Peter Grosskopf

thanks joining and everyone, morning, today. Good for us

On our Whitney George, CFO; the Management. Executive the Hibbert, Ciampaglia, today John Asset Kevin Chief the Sprott; call with and of me President is Sprott of

quarter and Our find XXXX Slide are can strong a continued precious where with business financial during our we were the X. very to model first our I'll despite also you shareholders as our pleased website quarter. consistently The this deliver pullback quarter on results start prices. morning and this for available We MD&A. statements demonstrated was of on metal resilience Sprott's were in released results

quarter have and equities metals of in the by started rebounded mining and have yield second gradually increase. gold were they respectively, better growth and economic Precious interest yields in XXXX the silver and XX% have as markets. and by U.S. prices strong increases to as has for driven retreated other strength quarter investor performed declined primarily treasury the while gold, saw X.X%, in markets first apathy The investor convinced about

we some physical competitors. as was and through leading an client vehicle take a continue but few standout it the to client and a Trust segment acquire Kevin fit more Participation Physical for our to transaction Physical our market look products believe alongside detail to expanding base, of results. perfect surged. uranium in at metal the will interest exchange-traded pass share financial our recently Silver appeal in minutes, John in their Uranium Physical in talk about will that QX I'll We precious Our announced over our from U.S. it that, PSLV both agreement away the market. in expand a is Corp., larger and a our With internationally. we're in base to Trust

Kevin Hibbert

of was on Thanks, a X% which start down summary or Peter, of good our this million XX quarter, as I'll Slide AUM AUM year. and provides everyone. $XX.X morning, $XXX of last March XX, X, billion December from XXXX.

EBITDA and this surpassing impacted results revenues inflows by billion $X.X our very segment XX% managed from saw due origination in management in into May equity Silver end, AUM trust. that combination market marks net or primarily across AUM largely up to equity in prior Adjusted X, AUM was Physical equity consolidated quarter our million or The on quarter continued billion, brokerage that the significant quarter, On our partially the of third the strong in the quarter million, a XX. our precious mining posted X-month And in Trust, as from quarter Products, inflows average earlier, in depreciation was subsequent we've you'll was value our summary. was historic to previous recorded was quarterly products And back quarter X, our in consecutive Slide the $XX.X into increase earnings higher Exchange to $XX.X $X.X particular, end our in quarter. offset second increase our estimated see a strong a that little increase activity. inflows I valuation and various $X.X commission AUM fund which alluded primarily The due of Listed by products strong Our billion was segment as strong XXXX. and of various to March our in recoveries estimates base X% metals of quarter physical fund from the up from the inflows in high the over period.

For more this morning. earlier revenues, EBITDA, as XXXX refer you our our information as well on information to supplemental MD&A section expenses filed the can quarter of and this presentation first

things So with John. that said, to over I'll pass

John Ciampaglia

you, Thank everybody. good Great. morning, and

Just turning X. Slide to

both and sales a over can see mentioned, I quarter. gold very February, $XXX sales, the we highest as the soft our relatively strong was it for had from of believe chart, had quarter month single extraordinary Peter As for sales, silver despite markets you and we million.

remained momentum have about X, May we're $XXX are year about we if our And where at the look numbers As be all for Silver sales QX, continues in almost at far, flows sales solid calendar in us, Peter of million. net to our accounting year-to-date dominant Physical XXXX. Sprott a we product for In of Trust the to mentioned, QX. also sales thus XX%

Moving Slide to X.

terms of the silver as As I gold trend it mentioned, a has story now in are investors margin, much by really there's lagged QX. In on versus sales basis. but And it reasons global XXXX, of in wide reversed in gold. more driving a this outperformed a interested that. silver number was Clearly,

XX below years remains is silver high well of incredibly ago. all, of almost First its cheap,

being inflation industrial reflation viewing a commodities, as part investors seeing picking silver role in of and from undervalued. up So many benefit if silver is what we're as And dual about lot metal. in think benefiting also that you its monetary It's of trade. are with that a both of and being

renewable component in to as identified solar push being as part also it's panels. particularly energies, of the key a Secondly,

to bit so the gotten a interest going little because I'm much it's about around world. talk just PSLV So

impressive. silver. physical dipped AUM that approaching see almost and the XX, billion. over can XXXX You is in PSLV in Since billion March XXXX, $X ounces the been $X has very has added growth below million fund The fund January XX now of

is investors, Silver size. the bigger rewarding excited highlights is doors, to attributes our of Trust, than marketplace and in Xx trust that vault taking like the PSLV iShares storage see in provides about more which PSLV trust of Delivery the XXX% providers. to London option a also to lowest to the believe our our a It's at physical attractive the the product capital physical backing, been trailers with how busy redemption bars. than minute. superior scalability ounce attracting X,XXX we all structure about fully we're adding very recognize been PSLV explains a We'd storage have we which SLV, talk is and of offers Canadian which physical I'll highlight about So why in namely Mint, allocated risk This metal, counterparty amongst the different and uranium Good lineup, Royal that that has

week, on we the and think Moving to to say the that acquisition positive. I announced UPC, reaction next last it's fair has been initial the slide. very

years, in over While it past significant we've acquisitions few view. of there is is potential made the the our smallest the

the Our to and modernize plan is structure. simplify

pool the capital the a We U.S. to listing in -- the very investment will investors there. of interest large a trust interested world, facilitate investors this largest fund list pool uranium is of on fund. will there's application in U.S. reorganize important, the in the duly Exchange. the large company to the investment New structure more is and sorry, an The given duly very pool traditional Stock And York

funds. very a is physical which trust. we will think, this, metals successfully will implemented we tools at-the-market the of changer for program, with our precious an have uranium we game And utilize One be

of strong funds, XX. on as it's of critical and a Moving can very see surprisingly, the to overlap UPC many to investors other nuclear Slide of metal market, ideal an time. well I meet from we and precious gas uranium our in growing with that out there's to as to breaking long over for -- benefit We given finally Uranium's pass targets, We finally And governments very it the it's bottom And believe metal uranium funds. we over Whitney. There's products. to that going chart suite timing is improving. And a will our greenhouse uranium the price that, bear complement recognition metals. as fundamentals in is metal think in is reduction across are protracted in power, the current investor see think XX. ideal Slide you different of physical interest

Whitney George

and everybody. Thank morning, you, good John,

that quarter. first from tell of very was size equities the can You slide quiet my it in the in the business managed

equities last mentioned, were quarter, the mode in Peter a year. for As year all of tremendous collective had a having

M&A financing. we're So has team near levels, not been surprised of been lots very has record the busy. activity

we've seems it the quiet on inside. the while outside, been very from So busy

high net equities. up a by during to where the have to advisers We've flows Maria Carlsbad, the institutional SMA in SMA, And net inflows covers redemptions and an Fortunately, silver by are we're our marketed be our slowed. that new positive. a new mandate, picking added quarter managed worth point

So them small. our busy. of most everybody, products new, I'll many we've been remind of and are

Peter we so very focusing And that strategies. couple new a adding various back I to think I will end, I marketing good private a marketplaces. about it's about as recently, to legacy of the professionals, help of really activity, all on expanding very lot And our to think that talk introduce experience, sales products to And our our have as been well with that's have products offer. and to

Peter Grosskopf

Thanks, Whitney.

well. streaming XX. Slide side Lending perform has to been side, the strategies busy the private to and public Much Turning extremely internally. like continue

AUM about for happy billion. segment they're adding we're and combined the is capital now $X commitments. The So approximately that,

active, LP for And been lending strategy very Lending capital. continuing first the deploy wound team has Fund and is is LFX, our Our and streaming focused, the to mostly deploying II. now raising both up

$XXX or think million approaching they're so. I probably

final Turning to some Slide XX for comments.

continue the us, by like together. sector think in increasing positioned regard when note in remarks strategic adopted at tell, on many contribution been a that bear UPC will macro and taking and is lots in and great for of note market metals. for inflation is role areas performance happy this are for forward that finally, related those shift to to highs there's as be is this near believe growing all now. it in tokenization. long Staying quarterly in that they're we're interest evolutionary markets both a looks back expanding preserve -- gold now to larger really stands our sustained way via As today's it and that that sector. players under-invested happy think as appears we would really leadership Operator? And market. that and platform time division the really the side decades, out to inflation. a of in gold across-the-board think just activities I That enter uranium We're important making have digital also happy every led well we right digital into keep gold with of and a for ahead future, the increases, of contribution, commodities leading you our this operator as would position really working a do the and And price enable that the our And will is the look with and really We We'll precious markets, being developments. we're I'll a the with can we We to and shareholders each profile sustainable the these eventually fit by well it position these in its concludes record Sprott over with leadership We're AUM EBITDA. informed really now we're our some Q&A. performing and turn for call. and business the

Operator

[Operator Instructions] Markets. I question from first Gary from Capital Ho Desjardins the of comes line our show

Gary Ho

transaction first involved transaction. were some there there I Are the with this? the significant hurdles process Fund approval before. the with Central remember UPC question Just on shareholder

differences. wondering Just major there's if

John Ciampaglia

John. No, this material gone approval for Gary, Central Fund. this going and number between no of it's differences We've process a through the through times.

of we the this us good got -- We've know behind counsel we've to through. drill. get lot a So legal

expecting That's And so with July a shortly time in frame. we're the the thereafter. current vote early closing

Gary Ho

no from any And of pushback the currently? shareholders,

John Ciampaglia

Thus positive that with response. not expressed have shareholders have a not I engagement had any far,

far, details to on and that, Now nitty-gritty the But cheering said all thus circular we deal. I based marketplace still announced, it. think on a with what we've have the having publish is the

So got. that's the initial reaction we've

Gary Ho

here? out then might there And funds on add greater the uranium scale same in theme you staying the here. bolt-on marketplace that to there Great. Are able still to be other physical

John Ciampaglia

really Well, of there's Yellow world, which any size that, listed I but the that's other and really can't Stock one is plc, the is Cake material in on one London on only it Exchange. attract comment for going strengthens large over interest fund to And we think there's there. a to of category is out grow. them I think lots the both more room time. lot as And of there

Gary Ho

quarter. lumpy my benefited know for so it the the be from Okay. origination and the brokerage Perfect. outlook far question, I of And does balance on side. it can last this QX? in And then the just maybe look business equity pipeline year? How the

Peter Grosskopf

both The Canada. Peter. divisions doing brokerage It's well, are and U.S.

to we a have is client to adding private and lot of its a inflows. have So AUM business, which seems side to the

steady other the used sector that's increasing. commodities just be, off So kind been off to are it And is and their steadily on and than institutional It's feet. busier the now. side, teams the their feet. The then broadening to run much of run guys

it expect So look wouldn't to don't change don't any quarters, I off for I we and massive see that. any falling either.

Operator

line Geoff the Kwan show Capital next Markets. RBC from comes I question of our from

Geoff Kwan

Fund in looks I. Lending booked QX, the that some from Just you that questions, came it like performance fees

if if Or Just see would see -- in wanted the all expect fees up there's And to collect? to some we that's future quarters? that. performance you confirm can come you

Kevin Hibbert

the Geoff, around here. it the correct. that going that a to LFX. But round managed to lion's I'll The carrying total some extent, that the of Peter saw as there's on lesser it's forward. out components, that then then, you half from, Kevin I'll you from over But products of carry that coming outlook share speak some are the have performance and take performance first yes, to well is there. equities from of we fees turn the

Peter Grosskopf

really the finish needs tell. hard of LFX to always In up. terms wrapping outlook, it's to

might there performance will from bigger those is when strong But flow it of very see it's performance early harvested. much has kind be the to right fund. further think way So that had some LFX be Really, we fees forecast too I exactly and now.

So performance quite and ramping slowly of it looks lumpy in be it terms like might it's business, fees. a

Geoff Kwan

Okay.

if like timing-wise seeing the So the And X you Fund ballpark, the different? restructure like also, on bigger, II, just months, that I performance think And I that's it's we of the would size of different? Lending be then just. correctly, XX also Can fee helpful. was, though, months? performance be that structure but might remember is XX XX, is Not fund,

Peter Grosskopf

months not different. would early materially I in really might It's months It's of not materially more different. be XX be and And realistic would say terms XX timing.

Geoff Kwan

Is all allocation the math payouts something payouts? to similar funds? have performance of the that? there I compensation, comp Okay. that these fee same? Or are like And the Are the close -- And was products think for they XX%. is that typical for the that it different other you have,

Peter Grosskopf

on equity I rough to it's in house percentages the industry, quite for funds, you would the the think private the normal split XX-XX. team across the style see and that of

the side, splits probably public XX%. and those fund depends fund, XX% to closer exact are the bit on a or On lower, it

Geoff Kwan

Okay.

for then would So that the public be the XX-XX fee of private on the correct? and the Is stuff. equity XX% performance more of

Peter Grosskopf

ballpark. the that's Yes,

Geoff Kwan

transaction, taking it expenses uranium of we associated the kind you'll revenues the on? was think about And and the that closes, assuming on Okay. my also be question should last just how

John Ciampaglia

it Sure. management wouldn't time, the beginning think support. basis would points. push be Geoff, a proposed And in the fee our Listed rest be and giving of be than the more to suite. But I it's materially margin the because margin assume normalize I products. might profile different will over Well, that little the bit is more XX of on too current to and the the Exchange we're it lower other going probably fund Product It John.

Operator

from comes Ryding I TD Graham from show our question line the of next Securities.

Graham Ryding

size LFX? your remind and LFX us the Peter, difference just between can is in what you

Peter Grosskopf

bit in of if probably the I'm range recall the a was now. boy, stretching million memory in and I LFX Kevin, Oh, here, probably million million, of but $XXX LFX range help $XXX me my off out you're is total. in $XXX

Kevin Hibbert

about be Sounds have and can't but check. certain. go I back right, to I'd

Graham Ryding

or Is that Canadian U.S.?

Peter Grosskopf

No, dollars. those U.S. are all

Graham Ryding

U.S.

perfect. Okay,

Peter Grosskopf

We don't anymore. talk dollars much about Canadian

Graham Ryding

enough. Yes, fair

Kevin Hibbert

going you're LFX. in AUM of would the majority the Graham, If it be see helps, as the what QX to here

Graham Ryding

what QX? performance were the Got the you drove that at fees to booked in Understood. And then fees Or in this? those no, it. all performance related QX,

Kevin Hibbert

So you're the asking QX. about

So booked from if sources from? where QX, what one as this we it's coming similar came in

Graham Ryding

Was well. it Yes. related as LFX to

Kevin Hibbert

-- no. It's No.

it was equity segment. out So our mainly fees QX, managed in performance coming of

that primarily was the a flow-through there from it's degree, carried lesser managed segment. quarter, lending a And interest This bit from the to more coming came of then little in products some equities.

Graham Ryding

million In to? payment does for contracts. What the Understood. Okay. relate a that $XX there flow statement, was cash management

Kevin Hibbert

those So the the we the of The if the of other And acquired. we -- contingent successfully Tocqueville equity payment in QX that our to with the of terms we accelerated total were $XX that former million, the meeting talked impact analyst of the -- cash. the recall to the QX $XX was $X -- was consideration of renegotiate funds them. being about advantage. million call, sorry, the to we you is million amount restructuring payments The Board able which and owners at in

it cash statement. So flow that's why in shows up the

Graham Ryding

Got it.

you going years ago Okay. That's tokenization to me be What remind did that sector. think investments drive in just how think to direction? main positioned interested a can around in your by Peter, benefit that some gold, the then secondly, benefit the is maybe helpful. trend? towards how you're comment the you couple to you And that And gold then, from you I industry of it's that. think of would be I'm the adopted going

Peter Grosskopf

Yes.

standardization more of generation transfer as in be in of trade who is new using payment mechanic. the And interested and out think It it users accounts. financial also registered and perhaps a in reporting, to a their the contract. of system. And more become benefit attract could are terms used could be inside I of gold that outside So via efficient of blockchain,

that's benefit. gold. the So to good prove gold, providence is gold it's from the Also that where delivery good

X investments. VC-type been I In how in would those a would proving we're kind or of say of that kind only guaranteed that's you has made technologies, of one but at X were the X expect investments X, some X early-stage ago. and in them terms of what successful commercial their about years positioned, we least of success,

Now exist. I tokens believe that the

three commercialization. of process be there's the So will

look in And kind product just some a bigger with to So we of participate would it. margin by or company volumes. a creating brought

Graham Ryding

exchange trade managing be you would tokens? What's the. And

Peter Grosskopf

exactly. say to early Too

Graham Ryding

inflows Okay. the And strategy? $XXX your if Was discretionary equity I that could million of Asian was category. Or that private other U.S. be be in there would -- greedy accounts? was

Kevin Hibbert

Yes. Mainly the PE.

Operator

I'm queue. showing in Grosskopf no to go like time, for ahead. At further this the Mr. I'd Please the closing questions call remarks. back turn to

Peter Grosskopf

Okay. to this all Well, to you interest. we're Thank again your you delighted talk quarter. for

look you next there. reporting good out will luck forward to We to and quarter,

Operator

attending you Thank conference for today's call.

time. disconnect a all this Everyone, may You day. good at have