Fiera Capital finds a Better Way to Grow

      On March 23,2018 Fiera Capital released it's fourth quarter and 2017 results.Assets under management grew by 10% to $129 billion  and annual revenues by 33% but net earnings only were $11 million for the year or $0.13 per share compared to $21 million or $0.27 per share for 2016.And only made $.8 million or $.01 per share for the quarter in comparison to $5 million or $.07 per share in 2016.At the same time the dividend was increased by 5.6% to $.19 per share which was the second increase in the last 12 months.

            Acquisitions                                                

            Fiera Capital ,on the same date, announced the acquisition of the institutional investment firm CGOV Asset Management worth $114 million;the deal will be paid for 42% by cash and 58% by shares.This is just one of several acquisitions made by Fiera in the last 24 months.Consequently Fiera has continually increased it's capital structure and now has 91 million shares.However it has also reduced it's debt by about $70 million.The result of the increases in capital has reduced it's earnings per share and all other  per share indicators.While increasing it's dividend has made the stock  more attractive and put it's yield at 6.6% versus 4.8% for it's competitor AGF management.This strategy has also raised it's dividend payout ratio to 86%. 
                   The Rest of 2018
    Revenues for 2017 were $142 million which is an increase of $21 million or 17% above 2016.This is mainly due to the acquisition of Charlemagne Capital,a full quarter of European activities and acquiring the management of the Emerging Markets Fund.There is no doubt that of the new junior financials Fiera will have the greatest growth in revenues and AUM.However it is true that the increase in the number of shares will dilute earnings.Still earnings for 2018 will likely be back close to 2016 levels although down on a per share basis.The new acquisitions will be more profitable in 2018 and 2019.Net earnings will be close to 2016 levels in 2018 and per share indicators will be back to 2016 levels in 2019.At the same time this blog expects another 25 to 30% increase in revenues in 2018.This company is geared to growth.
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