Fiera Capital makes another Acquisition and Raises Earnings
Fiera Capital has made another small acquisition in Europe called Palmer Capital Partners and expects it to be immediately accretive.Fiera is expecting to pay 10 million British pounds in shares for 80% of Palmer.This is just after Fiera reported it's third quarter results which were better than average.But more importantly Fiera is constantly growing it's Assets under Management (AUM).In 2017 it had $125 billion in assets under management and now it is approaching $145 billion ;this is close to 20% growth in one year.At the same time revenues grew by almost 30%% over Q3 2017.If Fiera management continues on this path it could own close to $200 billion in AUM by the start of 2020.However Fiera continues to issue shares to pay for it's acqisitions.This has and will continue to dilute it's e.p.s.
Most of it's financial indicators were ahead of 2017 in Q3.AUM showed an increase of almost 20% including it's acquisition of Palmer Capital. Palmer was acquired for 10 million British pounds in shares. Fiera will issue 1 million common shares to pay for it's' 80% share. New shares issued have constrained the growth of net earnings per share;for example, in Q3 e.p.s grew from $.28 per share in 2017 to $.29 per share in Q3 2108.While adjusted EBITDA per share grew from $.33 to $.38 per share in Q3 2018.FSZ needs to concentrate for awhile on organic growth with little issuance of new shares.Then the growth of AUM will slow down and the growth of e.p.s will start to increase gradually.
Acquisitions
In 2017 Fiera increased it's presence in Asia with Clearwater Capital Partners .This follows the acquisition of Charlemagne Capital in the U.K. Whereas Palmer is a real estate investment manager with total assets of about $1.5 billion.Their CEO says "the combined business significantly expands the range of offerings to our client base".
Summary
Fiera Capital is one of the most active junior financials.They both buy and sell assets more than most Canadian financials of any size.Consequently their growth in AUM and revenues outstrips most other Canadian financials.So that now they have 98 million outstanding shares.This compares to 319 million for ECN Capital, 433 million for Element Financial,88 million for Cdn. Western Bank and 79 million for AGF Management.It is time for Fiera to take on a little more debt and spend more on making more profitable their present stock of investments. Their diluted earnings per share will be about $.01 to $.02 per share for 2018.However FSZ is on track to hit $1.20 adjusted earnings per share for 2018 and adjusted EBITDA of $1.25 to $1.50 per share.Usually EBITDA is considered the best indicator of financial performance. Using adjusted EBITDA this should keep their p/e ratio at 9 to 10. This will likely put it's price in the $11 to $13 range mostly as a reward for it's solid growth in AUM and revenues.Which end of the range will depend on them making no acquisitions or even selling off a few non-core assets and raising their diluted earnings. https://www.credit-suisse.com/ca/en.html http://www.caissepopulaire.ca/ http://a2acquisitions.com/?reqp=1&reqr=
Acquisitions
In 2017 Fiera increased it's presence in Asia with Clearwater Capital Partners .This follows the acquisition of Charlemagne Capital in the U.K. Whereas Palmer is a real estate investment manager with total assets of about $1.5 billion.Their CEO says "the combined business significantly expands the range of offerings to our client base".
Fiera Capital is one of the most active junior financials.They both buy and sell assets more than most Canadian financials of any size.Consequently their growth in AUM and revenues outstrips most other Canadian financials.So that now they have 98 million outstanding shares.This compares to 319 million for ECN Capital, 433 million for Element Financial,88 million for Cdn. Western Bank and 79 million for AGF Management.It is time for Fiera to take on a little more debt and spend more on making more profitable their present stock of investments. Their diluted earnings per share will be about $.01 to $.02 per share for 2018.However FSZ is on track to hit $1.20 adjusted earnings per share for 2018 and adjusted EBITDA of $1.25 to $1.50 per share.Usually EBITDA is considered the best indicator of financial performance. Using adjusted EBITDA this should keep their p/e ratio at 9 to 10. This will likely put it's price in the $11 to $13 range mostly as a reward for it's solid growth in AUM and revenues.Which end of the range will depend on them making no acquisitions or even selling off a few non-core assets and raising their diluted earnings. https://www.credit-suisse.com/ca/en.html http://www.caissepopulaire.ca/ http://a2acquisitions.com/?reqp=1&reqr=
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