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Sprott Says Q1 Net Dives 56%

Date: Friday, May 8, 2009
Author: Anurag Kotoky in Bangalore, ThomsonReuters.com

Canadian money-management firm Sprott Inc. posted a 56% fall in first-quarter profit, hurt in part by lower management fees, but said assets under management rose sequentially.

The company earned C$7.4 million ($6.3 million), or 5 Canadian cents a share, compared with C$16.7 million, or 12 Canadian cents a share, a year earlier.

Analysts on average were looking for a profit of 4 Canadian cents a share, excluding items, according to Reuters Estimates.

Assets under management, a key driver of revenue at money managers, were C$4.7 billion as of March 31, compared with C$4.4 billion as of Dec. 31.

"March was the first positive net sales month since August 2008, reflecting strong performance of our funds, reduced de-leveraging activity from our institutional hedge fund clients and the launch of the Sprott Gold Bullion Fund, which has generated strong early sales," Chief Executive Eric Sprott said.

Mr. Sprott, one of Canada's most successful and high-profile money managers, added that despite net redemptions for the quarter, AUM increased due to market appreciation of the funds' investments.

Management fees for the period was C$22.6 million, compared with C$32.8 million a year ago.

Shares of the company, which went public at C$10 a share in May 2008, closed at C$4.85 Wednesday on the Toronto Stock Exchange.

By Anurag Kotoky in Bangalore