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Sprott swings to annual profit; shares rise to 3-week high

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Sprott (TSE:SII) rose to the highest in three weeks after the alternative asset manager swung to a profit in the past year, with assets under management largely unchanged from the previous year.

Net income was $19.4 million, or $0.08 per share, for the year ended December 2014, compared with a loss of $81.3 million, $0.39 loss per share, for the year ended December 31, 2013, the Toronto, Ontario-based company said in a statement today.

AUM was $7.0 billion as at December 31, 2014. Average AUM for the year ended December 31, 2014, was $7.5 billion, reflecting a decrease of 6.5 percent, from average AUM levels for the year ended December 31, 2013.

Management fees were $78.4 million on a year ended basis, down 7.4 percent from the year ended December 31, 2013. The decrease was largely due to a decline in overall average AUM year-over-year, the company said.

Commission revenues increased 26 percent to $7.8 million on a year ended basis. The increase was due to increased private placement activity in the ETFs SGRIL and SPW.

Total expenses dropped 52.1 percent to $95.9 million on a year ended basis from the year ended December 31, 2013.

"In many ways, 2014 was a year of transition for Sprott,” chief executive officer Peter Grosskopf said in the statement.

“Although our AUM remained largely unchanged from the end of 2013 at $7.0 billion, there were meaningful shifts within the composition of our AUM.

“These changes are reflective of our overall strategy of growing both our diversified asset management platform in Canada and our global presence as leading resource investors.”

He said that in Canada, for the first time, the company’s diversified asset management business ended the year with the majority of its actively-managed AUM in non-resource strategies.

“This shift was driven by the successful growth of our Enhanced products franchise as well as the expansion of other areas such as our specialty lending products," he added.

Sprott said that it continued to expand its passive product offerings in 2014 with the launch of its first ETF, the Sprott Gold Miners ETF (SGDM).

"We are pleased with the early results of this effort,” said Grosskopf, “as SGDM has grown to approximately $275 million in assets since it was launched in July of 2014.”

The company’s second ETF, the Sprott Junior Gold Miners ETF, is expected to launch during the second quarter of this year.

Also today, the company declared a dividend of $0.03 per common share for the quarter ended December 31, 2014.

Quick facts: Sprott Asset Management

Price: 36.97 CAD

TSX:SII
Market: TSX
Market Cap: $905.76 m
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