Sprott Announces Year Ended 2024 Results

TORONTO, Feb. 26, 2025 (GLOBE NEWSWIRE) — Sprott Inc. (NYSE/TSX: SII) (“Sprott” or the “Company”) today announced its financial results for the year ended December 31, 2024.

Management commentary

“Sprott’s Assets Under Management (“AUM”) ended the year at $31.5 billion, down 6% from $33.4 billion as at September 30, 2024, but up 10% from $28.7 billion as at December 31, 2023. 2024 was our seventh consecutive year of double-digit AUM growth and, subsequent to year-end, as at February 21, 2025, AUM had further increased to $33.5 billion, up $2 billion, or 6% from December 31, 2024,” said Whitney George, Chief Executive Officer of Sprott. “During the year we benefited from strong precious metals prices as well as $698 million in net sales, primarily in our physical trusts and uranium and critical materials ETFs.”

“The recent turmoil in precious metals markets has highlighted the importance of physical ownership, an area where Sprott offers best-in-class solutions to individual and institutional investors. The realignment of global trade and a focus on energy security will create demand for critical materials produced in “friendly” jurisdictions. We continue to develop new exchange-listed and actively-managed critical materials strategies to capitalize on this powerful long-term trend. We have invested in our sales and marketing capabilities to deliver our clients the highest levels of client service, while building on our position as thought leaders in our core themes. Sprott is well positioned to create value for our clients and shareholders in the months and years ahead,” continued Mr. George.

Key AUM highlights
1

  • AUM ended the year at $31.5 billion as at December 31, 2024, down 6% from $33.4 billion as at September 30, 2024 but was up 10% from $28.7 billion as at December 31, 2023. Although fourth quarter AUM was negatively impacted by market value depreciation across most of our funds and the termination of certain subadvised fund contracts, 2024 was nevertheless our seventh consecutive year of double-digit AUM growth as we benefited from strong market value appreciation in our precious metals physical trusts and net inflows to our exchange listed products.

Key revenue highlights

  • Management fees were $41.4 million for the quarter, up 20% from $34.5 million for the quarter ended December 31, 2023 and $155.3 million on a full-year basis, up 17% from $132.3 million for the year ended December 31, 2023. Carried interest and performance fees were $2.5 million for the quarter, up from $0.5 million for the quarter ended December 31, 2023 and $7.3 million on a full-year basis, up from $0.9 million for the year ended December 31, 2023. Net fees were $38.6 million for the quarter, up 24% from $31 million for the quarter ended December 31, 2023 and $144.6 million on a full-year basis, up 22% from $118.8 million for the year ended December 31, 2023. Our revenue performance in the quarter and on a full-year basis was primarily due to higher average AUM on strong market value appreciation in our precious metals physical trusts and inflows to the majority of our exchange listed products. We also benefited from carried interest and performance fee crystallization in certain funds in our managed equities and private strategies segments.
  • Commission revenues were $0.8 million for the quarter, down 38% from $1.3 million for the quarter ended December 31, 2023 and $5.7 million on a full-year basis, down 31% from $8.3 million for the year ended December 31, 2023. Net commissions were $0.4 million for the quarter, down 47% from $0.7 million for the quarter ended December 31, 2023 and $2.7 million on a full-year basis, down 43% from $4.6 million for the year ended December 31, 2023. Commission revenue was lower in the quarter due to modest ATM activity in our critical materials physical trusts. On a full-year basis, the decline in commission revenue was due to the sale of our former Canadian broker-dealer in the second quarter of last year.
  • Finance income was $1.4 million for the quarter, up 4% from the quarter ended December 31, 2023 and $8.9 million on a full-year basis, up 37% from $6.5 million for the year ended December 31, 2023. The increase in the quarter was due to higher income generation in co-investment positions we hold in our LPs managed in our private strategies segment. The increase on a full-year basis was due to higher income earned on streaming syndication activity in the second quarter.

Key expense highlights

  • Net compensation expense was $17 million for the quarter, up 11% from $15.3 million for the quarter ended December 31, 2023 and $67.3 million on a full-year basis, up 10% from $61.2 million for the year ended December 31, 2023. The increase in the quarter and on a full-year basis was primarily due to increased Annual Incentive Program (“AIP”) accruals on higher net fee generation. Our net compensation ratio was 44% in the quarter (December 31, 2023 – 47%) and 45% on a full-year basis (December 31, 2023 – 49%).
  • SG&A expense was $4.9 million for the quarter, up 25% from $4 million for the quarter ended December 31, 2023 and $18.8 million on a full-year basis, up 13% from $16.6 million for the year ended December 31, 2023. The increase in the quarter and on a full-year basis was due to higher professional services, marketing and technology costs.

Earnings summary

  • Net income for the quarter was $11.7 million ($0.46 per share), up 21% from $9.7 million ($0.38 per share) for the quarter ended December 31, 2023 and was $49.3 million ($1.94 per share) on a full-year basis, up 18% from $41.8 million ($1.66 per share) for the year ended December 31, 2023. Our earnings in the quarter and on a full-year basis benefited from higher average AUM on strong market value appreciation in our precious metals physical trusts and inflows to the majority of our exchange listed products. We also benefited from carried interest and performance fee crystallization in certain funds in our managed equities and private strategies segments.
  • Adjusted base EBITDA was $22.4 million ($0.88 per share) for the quarter, up 19% from $18.8 million ($0.75 per share) for the quarter ended December 31, 2023 and $85.2 million ($3.35 per share) on a full-year basis, up 18% from $71.9 million ($2.85 per share) for the year ended December 31, 2023. Adjusted base EBITDA in the quarter and on a full-year basis benefited from higher average AUM on strong market value appreciation in our precious metals physical trusts and inflows to the majority our exchange listed products

1 See “non-IFRS financial measures” section in this press release and schedule 2 and 3 of “Supplemental financial information”

Subsequent events

  • Subsequent to year-end, as at February 21, 2025, AUM was $33.5 billion, up 6% from $31.5 billion at December 31, 2024.
  • On February 25, 2025, the Sprott Board of Directors announced a quarterly dividend of $0.30 per share.

Supplemental financial information

Please refer to the December 31, 2024 annual financial statements of the Company and the related management discussion and analysis filed earlier this morning for further details into the Company’s financial position as at December 31, 2024 and the Company’s financial performance for the three and twelve months ended December 31, 2024.

Schedule 1 – AUM continuity

3 months results              
               
(In millions $) AUM
Sep. 30, 2024
Net
inflows (1)
Market
value changes
Other
net inflows (1)
AUM
Dec. 31, 2024
  Net management
fee rate (2)
               
Exchange listed products              
– Precious metals physical trusts and ETFs            
– Physical Gold Trust 8,617 35 (44) 8,608   0.35%
– Physical Silver Trust 5,566 83 (422) 5,227   0.45%
– Physical Gold and Silver Trust 5,225 (69) (143) 5,013   0.40%
– Precious Metals ETFs 404 (10) (40) 354   0.33%
– Physical Platinum & Palladium Trust 151 33 (16) 168   0.50%
  19,963 72 (665) 19,370   0.39%
               
– Critical materials physical trusts and ETFs            
– Physical Uranium Trust 5,408 45 (591) 4,862   0.31%
– Critical Materials ETFs 2,307 27 (314) 2,020   0.52%
– Physical Copper Trust 103 (1) (12) 90   0.32%
  7,818 71 (917) 6,972   0.37%
               
Total exchange listed products 27,781 143 (1,582) 26,342   0.39%
               
Managed equities
(3)
(4)
3,276 (55) (221) (127) 2,873   0.90%
               
Private strategies
(4)
2,382 (35) (27) 2,320   0.83%
               
Total AUM
(5)
33,439 53 (1,830) (127) 31,535   0.47%
               
               
12 months
results
             
               
(In millions $) AUM
Dec. 31, 2023
Net
inflows (1)
Market
value changes
Other
net inflows (1)
AUM
Dec. 31, 2024
  Net management
fee rate (2)
               
Exchange listed products              
– Precious metals physical trusts and ETFs            
– Physical Gold Trust 6,532 351 1,725 8,608   0.35%
– Physical Silver Trust 4,070 339 818 5,227   0.45%
– Physical Gold and Silver Trust 4,230 (230) 1,013 5,013   0.40%
– Precious Metals ETFs 339 (24) 39 354   0.33%
– Physical Platinum & Palladium Trust 116 75 (23) 168   0.50%
  15,287 511 3,572 19,370   0.39%
               
– Critical materials physical trusts and ETFs            
– Physical Uranium Trust 5,773 311 (1,222) 4,862   0.31%
– Critical materials ETFs 2,143 321 (444) 2,020   0.52%
– Physical Copper Trust 1 (21) 110 90   0.32%
  7,916 633 (1,687) 110 6,972   0.37%
               
Total exchange listed products 23,203 1,144 1,885 110 26,342   0.39%
               
Managed equities
(3)
(4)
2,874 (222) 348 (127) 2,873   0.90%
               
Private strategies
(4)
2,661 (207) (134) 2,320   0.83%
               
Total AUM
(5)
28,738 715 2,099 (17) 31,535   0.47%
(1)  See “Net inflows” and “Other net inflows” in the key performance indicators and non-IFRS and other financial measures section of the MD&A.
(2)  Net management fee rate represents the weighted average fees for all funds in the category, net of fund expenses.
(3)  Managed equities is made up of primarily precious metal strategies (53%), high net worth managed accounts (38%) and U.S. value strategies (9%).
(4)  Prior period figures have been reclassified to conform with current presentation.
(5)  No performance fees are earned on exchange listed products. Certain managed equities products earn either performance fees based on returns above relevant benchmarks or earn carried interest calculated as a predetermined net profit over a preferred return. Private strategies LPs primarily earn carried interest calculated as a predetermined net profit over a preferred return.

Schedule 2 – Summary financial information

(In thousands $) Q4
2024
Q3
2024
Q2
2024
Q1
2024
Q4
2023
Q3
2023
Q2
2023
Q1
2023
Summary income statement                
Management fees (1) 41,161   38,693   38,065   36,372   34,244   32,867   32,940   31,170  
Fund expenses (2), (3) (2,708 ) (2,385 ) (2,657 ) (2,234 ) (2,200 ) (1,740 ) (1,871 ) (1,795 )
Direct payouts (1,561 ) (1,483 ) (1,408 ) (1,461 ) (1,283 ) (1,472 ) (1,342 ) (1,187 )
Carried interest and performance fees 2,511   4,110   698     503     388    
Carried interest and performance fee payouts – internal (830 )   (251 )   (222 )   (236 )  
Carried interest and performance fee payouts – external (3)                
Net fees 38,573   38,935   34,447   32,677   31,042   29,655   29,879   28,188  
                 
Commissions 819   498   3,332   1,047   1,331   539   1,647   4,784  
Commission expense – internal (146 ) (147 ) (380 ) (217 ) (161 ) (88 ) (494 ) (1,727 )
Commission expense – external (3) (290 ) (103 ) (1,443 ) (312 ) (441 ) (92 ) (27 ) (642 )
Net commissions 383   248   1,509   518   729   359   1,126   2,415  
                 
Finance income (2) 1,441   1,574   4,084   1,810   1,391   1,795   1,650   1,655  
Gain (loss) on investments (3,889 ) 937   1,133   1,809   2,808   (1,441 ) (1,950 ) 1,958  
Co-investment income (2) 296   418   416   274   170   462   1,327   93  
Total net revenues

(2)
36,804   42,112   41,589   37,088   36,140   30,830   32,032   34,309  
                 
Compensation (2) 19,672   18,547   19,225   17,955   17,096   16,939   21,468   19,556  
Direct payouts (1,561 ) (1,483 ) (1,408 ) (1,461 ) (1,283 ) (1,472 ) (1,342 ) (1,187 )
Carried interest and performance fee payouts – internal (830 )   (251 )   (222 )   (236 )  
Commission expense – internal (146 ) (147 ) (380 ) (217 ) (161 ) (88 ) (494 ) (1,727 )
Severance, new hire accruals and other (166 ) (58 )     (179 ) (122 ) (4,067 ) (1,257 )
Net compensation 16,969   16,859   17,186   16,277   15,251   15,257   15,329   15,385  
Net compensation ratio 44 % 46 % 44 % 47 % 47 % 50 % 48 % 52 %
                 
Severance, new hire accruals and other 166   58       179   122   4,067   1,257  
Selling, general and administrative (“SG&A”) (2) 4,949   4,612   5,040   4,173   3,963   3,817   4,752   4,026  
SG&A recoveries from funds (1) (280 ) (275 ) (260 ) (231 ) (241 ) (249 ) (282 ) (264 )
Interest expense 613   933   715   830   844   882   1,087   1,247  
Depreciation and amortization 600   502   568   551   658   731   748   706  
Foreign exchange (gain) loss (2) (2,706 ) 1,028   122   168   1,295   37   1,440   440  
Other (income) and expenses (2)     (580 )   3,368   4,809   (18,890 ) 1,249  
Total expenses 20,311   23,717   22,791   21,768   25,317   25,406   8,251   24,046  
                 
Net income 11,680   12,697   13,360   11,557   9,664   6,773   17,724   7,638  
Net income per share 0.46   0.50   0.53   0.45   0.38   0.27   0.70   0.30  
Adjusted base EBITDA 22,362   20,675   22,375   19,751   18,759   17,854   17,953   17,321  
Adjusted base EBITDA per share 0.88   0.81   0.88   0.78   0.75   0.71   0.71   0.68  
                 
Summary balance sheet                
Total assets 388,798   412,477   406,265   389,784   378,835   375,948   381,519   386,765  
Total liabilities 65,150   82,198   90,442   82,365   73,130   79,705   83,711   108,106  
                 
Total AUM 31,535,062   33,439,221   31,053,136   29,369,191   28,737,742   25,398,159   25,141,561   25,377,189  
Average AUM 33,401,157   31,788,412   31,378,343   29,035,667   27,014,109   25,518,250   25,679,214   23,892,335  
(1)  Previously, management fees within the above summary financial information table included SG&A recoveries from funds consistent with IFRS 15. For management reporting purposes, these recoveries are now shown next to their associated expense as management believes this will enable readers to transparently identify the net economics of these recoveries. However, consistent with IFRS 15, SG&A recoveries from funds are still shown within the “Management fees” line on the consolidated statement of operations. Prior year figures have been reclassified to conform with current presentation.
(2)  Current and prior period figures on the consolidated statements of operations include the following adjustments: (1) trading costs incurred in managed accounts are now included within “Fund expenses” (previously included within “SG&A”); (2) interest income earned on cash deposits are now included within “Finance income” (previously included within “Other income”); (3) co-investment income and income attributable to non-controlling interest are now included as part of “Co-investment income” (previously included within “Other income”); (4) expenses attributable to non-controlling interest is now included within “Co-investment income” (previously included within “Other expenses”); (5) the mark-to-market expense of DSU issuances are now included within “Compensation” (previously included within “Other expenses”); (6) foreign exchange (gain) loss is now shown separately (previously included within “Other expenses”); and (7) shares received on a previously unrecorded contingent asset in Q2 2023 are now included within “Other (income) and expenses” (previously included within “Other income”). Management believes the above changes enable readers to better identify the nature of these revenues and expenses. Prior year figures have been reclassified to conform with current presentation.
(3)  These amounts are included in the “Fund expenses” line on the consolidated statements of operations.

Schedule 3 – EBITDA reconciliation

  3 months ended 12 months ended
         
(In thousands $) Dec. 31, 2024 Dec. 31, 2023 Dec. 31, 2024 Dec. 31, 2023
Net income for the period 11,680   9,664   49,294   41,799  
Net income margin (1) 27 % 24 % 28 % 28 %
Adjustments:        
Interest expense 613   844   3,091   4,060  
Provision for income taxes 4,813   1,159   19,712   8,492  
Depreciation and amortization 600   658   2,221   2,843  
EBITDA 17,706   12,325   74,318   57,194  
Adjustments:        
(Gain) loss on investments (2) 3,889   (2,808 ) 10   (1,375 )
Stock-based compensation (3) 4,988   4,681   18,817   17,128  
Foreign exchange (gain) loss (4) (2,706 ) 1,295   (1,388 ) 3,212  
Severance, new hire accruals and other (4) 166   179   224   5,625  
Revaluation of contingent consideration (4)   2,254   (580 )  
Costs relating to exit of non-core business (4)   155     5,142  
Non-recurring regulatory, professional fees and other (4)   959     3,982  
Shares received on recognition of contingent asset (4)       (18,588 )
Carried interest and performance fees (2,511 ) (503 ) (7,319 ) (891 )
Carried interest and performance fee payouts – internal 830   222   1,081   458  
Carried interest and performance fee payouts – external        
Adjusted base EBITDA 22,362   18,759   85,163   71,887  
Adjusted base EBITDA margin (5) 59 % 56 % 58 % 57 %
(1)  Calculated as IFRS net income divided by IFRS total revenue.
(2)  This adjustment removes the income effects of certain gains or losses on short-term investments, co-investments, and digital gold strategies to ensure the reporting objectives of our EBITDA metric as described below are met.
(3)  In prior years, the mark-to-market expense of DSU issuances were included with “other (income) and expenses”. In the current period, these costs are included as part of “stock based compensation”. Prior year figures have been reclassified to conform with current presentation.
(4)  Foreign exchange (gain) and loss, severance, new hire accruals and other; revaluation of contingent consideration; costs relating to exit of non-core business; non-recurring regulatory, professional fees and other; and shares received on recognition of contingent asset were previously included with “other (income) and expenses” and are now shown separately in the reconciliation of adjusted base EBITDA above. Prior year figures have been reclassified to conform with current presentation.
(5)  Prior year figures have been restated to remove the adjustment of depreciation and amortization.


Conference Call and Webcast

A webcast will be held today, February 26, 2025 at 10:00 am ET to discuss the Company’s financial results.

To listen to the webcast, please register at: https://edge.media-server.com/mmc/p/syh6xw97


Please note, analysts who cover the Company should register at:



https://register.vevent.com/register/BIe9622ad4a1434ee3beff3bfb7224f1ef

This press release includes financial terms (including AUM, net commissions, net fees, expenses, adjusted base EBITDA, adjusted base EBITDA margin and net compensation) that the Company utilizes to assess the financial performance of its business that are not measures recognized under International Financial Reporting Standards (“IFRS”). These non-IFRS measures should not be considered alternatives to performance measures determined in accordance with IFRS and may not be comparable to similar measures presented by other issuers. Non-IFRS financial measures do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers. Our key performance indicators and non-IFRS and other financial measures are discussed below. For quantitative reconciliations of non-IFRS financial measures to their most directly comparable IFRS financial measures please see schedule 2 and schedule 3 of the “Supplemental financial information” section of this press release.

Net fees

Management fees, net of fund expenses and direct payouts, and carried interest and performance fees, net of carried interest and performance fee payouts (internal and external), are key revenue indicators as they represent the net revenue contribution after directly associated costs that we generate from our AUM.

Net commissions

Commissions, net of commission expenses (internal and external), arise primarily from purchases and sales of critical materials in our exchange listed products segment and transaction-based service offerings by our broker dealers.

Net compensation & net compensation ratio

Net compensation excludes commission expenses paid to employees, other direct payouts to employees, carried interest and performance fee payouts to employees, which are all presented net of their related revenues in this MD&A, and severance, new hire accruals and other which are non-recurring. Net compensation ratio is calculated as net compensation divided by net revenues.

EBITDA, adjusted base EBITDA and adjusted base EBITDA margin

EBITDA in its most basic form is defined as earnings before interest expense, income taxes, depreciation and amortization. EBITDA (or adjustments thereto) is a measure commonly used in the investment industry by management, investors and investment analysts in understanding and comparing results by factoring out the impact of different financing methods, capital structures, amortization techniques and income tax rates between companies in the same industry. While other companies, investors or investment analysts may not utilize the same method of calculating EBITDA (or adjustments thereto), the Company believes its adjusted base EBITDA metric results in a better comparison of the Company’s underlying operations against its peers and a better indicator of recurring results from operations as compared to other non-IFRS financial measures. Adjusted base EBITDA margins are a key indicator of a company’s profitability on a per dollar of revenue basis, and as such, is commonly used in the financial services sector by analysts, investors and management.

Forward Looking Statements

Certain statements in this press release contain forward-looking information and forward-looking statements (collectively referred to herein as the “Forward-Looking Statements”) within the meaning of applicable Canadian and U.S. securities laws. The use of any of the words “expect”, “anticipate”, “continue”, “estimate”, “may”, “will”, “project”, “should”, “believe”, “plans”, “intends” and similar expressions are intended to identify Forward-Looking Statements. In particular, but without limiting the forgoing, this press release contains Forward-Looking Statements pertaining to: (i) our ability to capitalize on our constructive outlook in precious metals and critical materials; and (ii) the declaration, payment and designation of dividends and confidence that our business will support the dividend level without impacting our ability to fund future growth initiatives.

Although the Company believes that the Forward-Looking Statements are reasonable, they are not guarantees of future results, performance or achievements. A number of factors or assumptions have been used to develop the Forward-Looking Statements, including: (i) the impact of increasing competition in each business in which the Company operates will not be material; (ii) quality management will be available; (iii) the effects of regulation and tax laws of governmental agencies will be consistent with the current environment; (iv) the impact of public health outbreaks; and (v) those assumptions disclosed under the heading “Critical Accounting Estimates, Judgments and Changes in Accounting Policies” in the Company’s MD&A for the period ended December 31, 2024. Actual results, performance or achievements could vary materially from those expressed or implied by the Forward-Looking Statements should assumptions underlying the Forward-Looking Statements prove incorrect or should one or more risks or other factors materialize, including: (i) difficult market conditions; (ii) poor investment performance; (iii) failure to continue to retain and attract quality staff; (iv) employee errors or misconduct resulting in regulatory sanctions or reputational harm; (v) performance fee fluctuations; (vi) a business segment or another counterparty failing to pay its financial obligation; (vii) failure of the Company to meet its demand for cash or fund obligations as they come due; (viii) changes in the investment management industry; (ix) failure to implement effective information security policies, procedures and capabilities; (x) lack of investment opportunities; (xi) risks related to regulatory compliance; (xii) failure to manage risks appropriately; (xiii) failure to deal appropriately with conflicts of interest; (xiv) competitive pressures; (xv) corporate growth which may be difficult to sustain and may place significant demands on existing administrative, operational and financial resources; (xvi) failure to comply with privacy laws; (xvii) failure to successfully implement succession planning; (xviii) foreign exchange risk relating to the relative value of the U.S. dollar; (xix) litigation risk; (xx) failure to develop effective business resiliency plans; (xxi) failure to obtain or maintain sufficient insurance coverage on favorable economic terms; (xxii) historical financial information being not necessarily indicative of future performance; (xxiii) the market price of common shares of the Company may fluctuate widely and rapidly; (xxiv) risks relating to the Company’s investment products; (xxv) risks relating to the Company’s proprietary investments; (xxvi) risks relating to the Company’s private strategies business; (xxvii) those risks described under the heading “Risk Factors” in the Company’s annual information form dated February 25, 2025; and (xxviii) those risks described under the headings “Managing Financial Risks” and “Managing Non-Financial Risks” in the Company’s MD&A for the period ended December 31, 2024. In addition, the payment of dividends is not guaranteed and the amount and timing of any dividends payable by the Company will be at the discretion of the Board of Directors of the Company and will be established on the basis of the Company’s earnings, the satisfaction of solvency tests imposed by applicable corporate law for the declaration and payment of dividends, and other relevant factors. The Forward-Looking Statements speak only as of the date hereof, unless otherwise specifically noted, and the Company does not assume any obligation to publicly update any Forward-Looking Statements, whether as a result of new information, future events or otherwise, except as may be expressly required by applicable securities laws.

About Sprott

Sprott is a global asset manager focused on precious metals and critical materials investments. We are specialists. We believe our in-depth knowledge, experience and relationships separate us from the generalists. Our investment strategies include Exchange Listed Products, Managed Equities and Private Strategies. Sprott has offices in Toronto, New York, Connecticut and California and the company’s common shares are listed on the New York Stock Exchange and the Toronto Stock Exchange under the symbol (SII). For more information, please visit www.sprott.com.

Investor contact information:

Glen Williams
Managing Partner
Investor and Institutional Client Relations
(416) 943-4394
[email protected]