W.P. Stewart & Co., Ltd.
19.09.2012 22:30
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NEW YORK, 2012-09-19 22:30 CEST (GLOBE NEWSWIRE) --
W.P. Stewart & Co., Ltd. Reports First Half 2012 Financial Results, Including:
-- AUM of $1.6 Billion at August 31, 2012
-- Cash/Marketable Securities of $20.8 Million at September 4, 2012
Financial Results
First Half Highlights
W.P. Stewart & Co., Ltd. ('W.P. Stewart' or the 'Company') today reported a net
loss on a GAAP basis of -$2.0 million, or -$0.42 per share (diluted) and -$0.42
per share (basic), for the six months ended June 30, 2012 compared to a loss on
a GAAP basis of -$3.0 million in the first half of 2011, or -$0.60 per share
(diluted) and -$0.60 per share (basic).
On a cash basis the Company reported a net loss of -$1.9 million, or -$0.39 per
share (diluted) and -$0.39 per share (basic), for the six months ended June 30,
2012 compared to a loss on a cash basis of -$0.5 million in the first half of
2011 or -$0.10 per share (diluted) and -$0.10 per share (basic). The cash basis
results reflect adjustments to net income of $0.1 million and $2.4 million in
the first half of 2012 and 2011, respectively, representing non-cash income and
expenses consisting of unrealized gains and losses, non-cash compensation, a
gain on the acquisition of a subsidiary, the reversal of a tax reserve,
depreciation, amortization, and other non-cash charges, on a tax-effected
basis.
First-Half Business Commentary
-- The first half of 2012 saw a strong performance from U.S. equities as
investors reflected on the strong earnings growth seen in 2011 that had not
been matched by market appreciation. Continued good earnings reports in the
first half finally convinced investors that equities were a good value
despite the continued uncertainties regarding global growth and the
sovereign debt crisis in Europe. The market's move up was particularly
pronounced in the first quarter but some of those gains were given back in
the second quarter as some profits were taken and further concerns
regarding growth, particularly in China, resurfaced.
-- As yet this better performance by equities has not yet manifested itself
into strong flows into the asset class; indeed bonds continue to be the
area seeing the most growth; however, we do believe investors will take
heart from these better returns and begin to reassess their exposure to
equities. In Europe we are seeing a more positive attitude to U.S. equities
as investors look to diversify away from those depressed economies and
reduce their exposure to the Euro. The launch of a new Euro denominated
class for the WP Stewart Holdings Fund has given us access to a number of
new clients and we have seen positive flows into that fund class since its
launch.
-- Our belief that asset flows will improve are further strengthened by our
continued good investment performance. As of August 31, 2012, for both the
U.S. and global products our composite performance is generally ahead of
the benchmarks over 1, 3 and 5 years.
-- During the first-half of 2012, assets under management ('AUM') increased to
approximately $1.5 billion as a result of roughly equal client inflows and
outflows as well as the impact of market performance. The Company follows a
practice of billing in advance based on prior quarter ending AUM. As a
result, the drop in the S&P and client outflows during 4th Quarter 2011
decreased year end AUM and led to lower 1st Quarter 2012 billings. The
impact is reflected in fee revenue for the first half of 2012 being lower
by approximately $530,000 or 6.5% compared to the same period in the prior
year. On a cash basis, revenue was also negatively impacted by lower
realized gains during the period compared to the first-half of 2011.
-- Compensation expense was higher during the first-half of 2012 compared to
first-half 2011 due in part to accruals related to investment team
performance bonuses and to severance costs associated with the acquisition
of Bowen.
-- We have also begun to see inflows into the UCITS IV global growth fund
launched at the end of 2011 in Luxembourg, although as yet these flows have
not been significant.
-- On May 14, 2012 the Company completed the previously announced purchase of
all the outstanding shares of Bowen Asia Limited, a Hong Kong private
limited company, for a nominal amount. Since the total fair value of
Bowen's identifiable net assets exceeded the nominal amount paid, the
Company has recorded a gain included in Interest and Other Revenue for the
period ending June 30, 2012. The Company had previously indirectly held a
minority interest in Bowen until December 2009 when it sold its interest
for a nominal amount plus an option to purchase a certain amount of shares
for $1 under certain circumstances. At December 31, 2011, Bowen had
approximately $35 million in assets under management. The Company has been
working closely with Bowen since 1994 on the Asian investments.
-- Year-to-date through the end of August, for the Company's U.S. and Global
Equity Composites, the Company had a period of relative outperformance as
compared to the S&P 500 and MSCI World Index, respectively, adding to
our positive cumulative longer-term track records of 37 years for our U.S.
Composite and 7 years for our Global Composite.
Investment Performance and Assets Under Management Update
The performance for the W.P. Stewart U.S. Equity Composite (the 'Composite')
for the six month period ended June 30, 2012, was 10.3%, gross, and 9.8%, net,
compared with 9.5% for the S&P 500. For the three years ending June 30, 2012,
annualized performance for the Composite was 16.6%, gross, and 15.5%, net,
which was 0.9% behind of the S&P 500 at 16.4% for the same period. For the five
years ending June 30, 2012, annualized performance for the Composite was 4.0%,
gross, and 2.9%, net, which was 2.7% ahead of the S&P 500 at 0.2% for the same
period.
As of August 31, 2012, year-to-date performance for the Composite was 17.5%,
gross, and 16.8%, net, compared with 13.5% for the S&P 500. For the three year
period ending August 31, 2012, performance for the Composite was 15.9%, gross,
and 14.9%, net, compared with 13.6% for the S&P 500. For the five years ending
August 31, 2012, annualized performance for the Composite was 5.0%, gross, and
3.9%, net, which was 2.6% ahead of the S&P 500 at 1.3% for the same period.
The performance for the W.P. Stewart Global Composite (the 'Global Composite')
for the six month period ended June 30, 2012, was 7.9%, gross, and 7.4%, net,
compared with 5.9% for the MSCI World Index. For the three years ending June
30, 2012, annualized performance for the Global Composite was 14.1%, gross, and
13.0%, net, which was 2.0% ahead of the MSCI World Index at 11.0% for the same
period. For the five years ending June 30, 2012, annualized performance for the
Global Composite was 1.6%, gross, and 0.7%, net, which was 3.7% ahead of the
MSCI World Index at -3.0% for the same period.
As of August 31, 2012, year-to-date performance for the Global Composite was
13.1%, gross, and 12.4%, net, compared with 10.0% for the MSCI World Index. For
the three year period ending August 31, 2012, performance for the Global
Composite was 12.5%, gross, and 11.4%, net, compared with 7.9% for the MSCI
World Index for the same period. For the five years ending August 31, 2012,
annualized performance for the Global Composite was 2.4%, gross, and 1.5%, net,
which was 3.3% ahead of the MSCI World Index at -1.8% for the same period.
AUM at August 31, 2012 was approximately $1.6 billion (preliminary), compared
with approximately $1.5 billion at June 30, 2012, $1.4 billion at December 13,
2011 and $1.5 billion at June 30, 2011. In the attached tables a complete
breakdown of AUM flows for the period ended June 30, 2012 with comparisons to
earlier periods is provided.
The Company releases composite portfolio investment returns on a monthly basis
and intends to release AUM data at least on a quarterly basis. The performance
returns are posted on the Company's website at www.wpstewart.com, usually
within one week of month-end and AUM quarterly updates will be posted usually
within one month of the quarter-end. A complete history of the performance of
the Composite is available on the Company's website. Performance results and
AUM data are subject to change on final reconciliation of all relevant data.
The Company had cash and marketable securities at June 30, 2012 of $20.3
million. The Company has no debt. As of September 4, 2012, the Company had cash
and marketable securities balances of approximately $20.8 million. In addition,
the joint venture company that owned the Company's headquarters building in
Bermuda completed its sale of the building in May 2010 and is expected to
distribute its assets, including the proceeds of the sale, to its joint venture
partners, The Bank of Bermuda and the Company.
Other Items
For the six months ended June 30, 2012 non-cash compensation expense related to
the Company's restricted share issuances to employees was approximately $1.7
million. For the same period of the prior year, the non-cash compensation
charge was approximately $2.1 million. These non-cash compensation expenses are
included in 'employee compensation and benefits'.
The Company's provision/(benefit) for taxes for the six months ended June 30,
2012 was -$0.94 million (benefit) versus $48,000 (provision) in the comparable
period of the previous year reflecting the settlement of an ongoing tax audit
with the State of New York. The Company is currently engaged in an audit with a
taxing authority.
Shareholders' equity at June 30, 2012 was approximately $19.2 million.
Please see the tables included in this release for further detail on revenue
and expenses for the six months ended June 30, 2012 and 2011.
W.P. Stewart & Co., Ltd. is an asset management company that has provided
research-intensive equity management services to clients throughout the world
since 1975. The Company is headquartered in New York, New York and has
additional operations or affiliates in Europe and Hong Kong.
The Company's shares are currently traded on the Pink Sheets under the symbol
'WPSL'.
For more information, please visit the Company's website at
http://www.wpstewart.com, or call W.P. Stewart Investor Relations at
1-888-695-4092 (toll-free within the United States) or 1-212-750-8585 (outside
the United States) or e-mail to IRINFO@wpstewart.com. Statements made in this
release concerning our assumptions, expectations, beliefs, intentions, plans or
strategies are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Such statements involve risks and
uncertainties that may cause actual results to differ from those expressed or
implied in these statements. Such risks and uncertainties include, without
limitation, the effects of the Company's 2010 corporate reorganization, the
adverse effect from a decline or volatility in the securities markets, the
general downturn in the economy, the effects of economic, financial or
political events, a loss of client accounts, inability of the Company to
attract or retain qualified personnel, a challenge to our former U.S. tax
status, competition from other companies, changes in government policy or
regulation, a decline in the Company's products' performance, inability of the
Company to implement its operating strategy, the effects of the Company's
delisting and deregistration under the U.S. Securities Act of 1934, inability
of the Company to manage unforeseen costs and other effects related to legal
proceedings or investigations of governmental and self-regulatory
organizations, industry capacity and trends, changes in demand for the
Company's services, changes in the Company's business strategy or development
plans and contingent liabilities. The information in this release is as of the
date of this release, and will not be updated as a result of new information or
future events or developments.
SUMMARY of KEY COMPARATIVE STATISTICS
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For the Six Months
Ending
June 30
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2012 2011
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Revenue (in millions) $ 8.32 $ 8.30 0.2%
Total Operating Expenses (in millions) $ 11.25 $ 11.21 0.3%
AUM (in billions) $ 1.50 $ 1.52 -1.8%
Average Gross Management Fee - Annualized
Including Performance Fee accounts1 0.99% 1.02%
Excluding Performance Fee accounts1 1.21% 1.26%
Common shares outstanding 4,777,955 4,939,242
(weighted adv. diluted & basic basis)
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GAAP BASIS
Net Income (in millions) $ (2.0) $ (3.0) 32.9%
Earnings per Share (Basic & Diluted) $ (0.42) $ (0.60) 30.0%
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CASH BASIS
Net Income (in millions)
As Reported $ (2.0) $ (3.0) 32.9%
Excluded Non-cash Income & Expenses2 $ 0.1 $ 2.5 94.5%
Net of Non-cash Income & Expenses2 $ (1.9) $ (0.5) -264.4%
Earnings per Share (Basic & Diluted)
As Reported $ (0.42) $ (0.60) 30.0%
Excluded Non-cash Income & Expenses2 $ (0.03) $ (0.50) 94.0%
Net of Non-cash Income & Expenses2 $ (0.39) $ (0.10) -290.0%
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1 Performance fee based accounts, pay a lower quarterly base fee plus an annual
performance fee at year-end if earned
2 Non-cash Income & Expenses: Consisting of unrealized gains and losses,
non-cash compensation, depreciation, amortization, and other non-cash charges
on a tax-effected basis
W.P. Stewart & Co., Ltd.
Condensed Consolidated Statements of Financial Condition
June 30, December 31,
2012 2011
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(Unaudited)
Assets:
Cash and cash equivalents $ 16,302,206 $ 18,176,603
Fees receivable 157,133 119,443
Investments in unconsolidated affiliates 2,017,832 2,017,832
Receivables from affiliates, net 535,122 1,423,414
Investments, trading (cost $2,701,009 and 2,938,491 2,624,718
$2,843,907 for 2012 and 2011, respectively)
Investments, available for sale (cost $881,026 and 815,945 431,340
$12,400 for 2012 and 2011, respectively)
Furniture, equipment, software and leasehold 478,579 463,866
improvements (net of accumulated depreciation and
amortization of $1,567,889 and $1,525,021 for
2012 and 2011, respectively)
Income taxes receivable 1,336,109 1,338,184
Deferred income taxes receivable 376,707 413,176
Other assets 938,749 2,640,134
$ 25,896,873 $ 29,648,710
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Liabilities and Shareholders' Equity:
Liabilities:
Employee compensation and benefits payable $ 605,767 $ 1,935,628
Fees payable 84,068 356,613
Vendor payables 1,736,794 2,291,320
Accrued expenses and other liabilities 4,257,336 5,424,914
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6,683,965 10,008,475
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Shareholders' Equity:
Non-controlling interest -- 99,989
Common shares, $0.01 par value (12,500,000 50,198 50,192
shares authorized; 5,019,851 and 5,019,219
shares issued, 5,017,351 and 5,016,719 shares
outstanding at June 30, 2012 and December 31,
2011, respectively)
Additional paid-in-capital 141,374,638 139,711,936
Accumulated other comprehensive income 579,094 584,196
Retained earnings/(deficit) (122,785,697) (120,800,753)
Common shares held in treasury, at cost, $0.01 (5,325) (5,325)
par value (2,500 shares at June 30, 2012 and
December 31, 2011)
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19,212,908 19,640,235
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$ 25,896,873 $ 29,648,710
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W.P. Stewart & Co., Ltd.
Unaudited Condensed Consolidated Statements of Operations
For the Six Months Ended June 30,
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2012 2011 %
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(Unaudited) (Unaudited)
Revenue:
Fees (includes fees from affiliates of $ 7,562,150 $ 8,092,121 -6.5%
$549,989 and $499,666 for 2012 and
2011, respectively)
Realized and unrealized gains/(losses) 271,203 76,226 255.8%
on investments
Interest and other 490,137 133,796 266.3%
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8,323,490 8,302,143 0.3%
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Expenses:
Employee compensation and benefits 6,040,106 5,843,534 3.4%
Fees paid out 771,998 810,922 -4.8%
Commissions, clearance and trading -- (770)
Research and administration 2,387,221 2,253,758 5.9%
Marketing 694,540 741,555 -6.3%
Depreciation and amortization 42,868 73,455 -41.6%
Other operating 1,316,068 1,490,490 -11.7%
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11,252,801 11,212,944 0.4%
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Income/(loss) before taxes (2,929,311) (2,910,801) -0.6%
Provision/(benefit) for taxes (944,367) 48,711
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Net income/(loss) $ (1,984,944) $ (2,959,512) 32.9%
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Earnings/(loss) per share:
Basic earnings/(loss) per share $ (0.42) $ (0.60) 30.0%
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Diluted earnings/(loss) per share $ (0.42) $ (0.60) 30.0%
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W.P. Stewart & Co., Ltd.
Net Flows of Assets Under Management*
(in millions)
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For the Six Months Ended
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Jun. 30, 2012 Dec. 31, 2011 Jun. 30, 2011
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Existing Accounts:
Contributions $ 102 $ 30 $ 60
Withdrawals (143) (97) (86)
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Net Flows of Existing Accounts (41) (67) (26)
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Publicly Available Funds:
Contributions 26 12 19
Withdrawals (15) (49) (21)
Direct Accounts Opened 53 11 8
Direct Accounts Closed (22) (30) (102)
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Net New Flows 42 (56) (96)
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Net Flows of Assets Under $ 1 $ (123) $ (122)
Management
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* The table above sets forth the total net flows of assets under management for
the six months ended June 30, 2012, December 31, 2011 and June 30, 2011,
respectively, which include changes in net flows of existing accounts and net
new flows (net contributions to our publicly available funds and flows from new
accounts minus closed accounts). The table excludes total capital appreciation
or depreciation in assets under management with the exception of the amount
attributable to withdrawals and closed accounts.
CONTACT: IRINFO@wpstewart.com
telephone:
888-695-4092 (toll-free within the U.S.)
212-750-8585 (outside the U.S.)
News Source: NASDAQ OMX
19.09.2012 Dissemination of a Corporate News, transmitted by DGAP -
a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.
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Language: English
Company: W.P. Stewart & Co., Ltd.
Bermuda
Phone:
Fax:
E-mail:
Internet:
ISIN: BMG849221061
WKN:
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DGAP-News: W.P. Stewart & Co., Ltd. Reports First Half 2012 Financial Results
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