TORONTO, March 31, 2019 /PRNewswire/ -- Canaccord Genuity Group Inc. (TSX: CF, "Canaccord Genuity", the "Company") announces that it is implementing a plan to restructure its capital markets business in the UK. The objective of the plan is to enhance the Company's ability to achieve its goal of operating at a level which can generate profits from all its businesses on a sustained basis.
A prolonged period of political and market uncertainty in the UK has impacted capital raising and related activities in the region resulting in unacceptable returns. Accordingly, the Company has determined that it is necessary to implement this plan to rationalize its investment in UK-based capital markets activities. The Company's capital markets business in the UK operates as Canaccord Genuity Limited.
The plan is expected to result in a significant reduction in the Company's London-based capital markets staff level and will primarily affect businesses and related functions that do not align with the core capabilities of Canaccord Genuity's broader global capital markets operations and are most sensitive to changes in the current market environment. The Company anticipates operating a more focused UK Capital markets business, which is capable of delivering excellence for its clients across a smaller group of core focus sectors.
In connection with the restructuring, the Company will record a charge of approximately $12 million in its fourth fiscal quarter ending on March 31, 2019. This amount includes employment-related costs, redundancy costs and an impairment charge in respect of certain of the Company's fixed assets utilized in this business. The restructuring and impairment charge will be recorded as a significant item and excluded for purposes of calculating adjusted net income1. It is also expected that this rationalization of our UK capital markets operations and the reduction in the level of operating activity will create excess capital that was otherwise required to support activity under the existing structure and operating level.
This restructuring does not affect the Company's wealth management operations in the UK and Europe which operate as Canaccord Genuity Wealth Management, nor does it affect any other businesses in the Canaccord Genuity Group of companies.
"The plan we have announced today will allow us to redeploy excess capital from our UK capital markets business, reduce our exposure to the volatility and historical losses that we have experienced with capital raising, advisory and trading activities in the region, and align our UK capital markets business with our broader global capabilities," said Dan Daviau, President & CEO of Canaccord Genuity Group Inc. "We remain deeply committed to growing our wealth management business in the UK & Europe and we are hopeful that the capital raising and advisory environment in the UK for small and mid-cap issuers improves for the benefit of all businesses and industry participants."
ABOUT CANACCORD GENUITY GROUP INC.
Through its principal subsidiaries, Canaccord Genuity Group Inc. (the Company) is a leading independent, full-service financial services firm, with operations in two principal segments of the securities industry: wealth management and capital markets. Since its establishment in 1950, the Company has been driven by an unwavering commitment to building lasting client relationships. We achieve this by generating value for our individual, institutional and corporate clients through comprehensive investment solutions, brokerage services and investment banking services. The Company has wealth management offices located in Canada, the UK, Guernsey, Jersey, and the Isle of Man and Australia. Canaccord Genuity, the international capital markets division, operates in North America, UK & Europe, Asia, Australia and the Middle East.
Canaccord Genuity Group Inc. is publicly traded under the symbol CF on the TSX.
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1 | Figures that exclude significant items are non-IFRS measures. Please refer to the Company's financial statements, |
For further information:
Investor and media relations inquiries: Christina Marinoff, Vice President, Investor Relations & Communications, Canaccord Genuity Corp., 416-687-5507, cmarinoff@cgf.com, www.cgf.com/investor-relations
