Canaccord Genuity Group (TSX:CF) posted record earnings for its fiscal fourth quarter as clients seeking to take advantage of soaring equity markets used the company to arrange share sales.
Net income in the three months through March surged more than fivefold from a year earlier, to $139.4 million or 93 cents a share, the company said. Analysts had expected earnings per share of 61 cents for the fiscal fourth quarter.
Rising equity markets and investor demand for technology stocks are spurring more companies to go public or sell additional shares, pushing Canada’s market for initial public offerings (IPOs) to its best first quarter in 15 years in 2021.
Canaccord’s investment-banking revenue advanced more than sixfold in the fiscal fourth quarter, while total revenue more than doubled to a record $706.5 million.
The strong stock market has provided a tailwind for other Canaccord business lines. An increase in retail activity in the markets helped principal trading revenue more than double to $87.8 million, while global wealth-management revenue climbed 44% to $199.2 million.
Canaccord’s stock price has risen 18% this year compared with 15% for the TSX Composite Stock Index.
In announcing its latest earnings, Canaccord also said it is ending its pursuit of wealth management firm RF Capital after the wealth-management firm’s board of directors refused to enter into discussions.
Canaccord had offered $366.6 million for Toronto-based RF Capital (TSX:RCG) and said previously that it would have been willing to increase that proposal.
Even without RF Capital, Canaccord will continue to expand its wealth unit by recruiting advisers, buying other firms, or adding ancillary businesses that complement its existing services, the company said in a news release.
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