Canaccord Genuity posts strong Q2 growth with rising revenue and solid M&A pipeline
Canaccord Genuity Group Inc. recorded strong growth in wealth-management and capital-markets divisions for its fiscal second quarter, as reported by BNN Bloomberg.
Revenue for the Canadian firm surged 27 percent from the previous year, reaching $428.6m for the three-month period ending in September.
On an adjusted basis, the company reported a profit of $31.8m, or 20 Canadian cents per share, aligning with the average estimate from three Bloomberg analysts.
Canaccord has strategically expanded its wealth-management sector in recent years by acquiring smaller firms. This approach has helped offset more unpredictable revenue from its trading and investment-banking divisions, which had experienced a prolonged decline.
CEO Daniel Daviau reported record revenue, client assets, and earnings in the wealth-management unit during the quarter.
The unit, now responsible for roughly half of Canaccord’s total revenue, generated $216.5m, marking an increase of nearly 16 percent from the prior year.
“So that plan is working perfectly. And we can predict it,” Daviau stated in an interview.
He noted that the firm’s capital-markets division is also benefitting from an uptick in overall market activity and is “starting to perform well.” Revenue in the capital-markets unit rose by nearly 40 percent, reaching $202.1m for the quarter.
Canaccord's mergers and acquisitions pipeline remains strong, Daviau said.
Although predicting the initial public offering (IPO) landscape presents challenges, he expressed confidence, saying, “we believe we’re going to continue to see a pretty robust new-issue calendar over the next three, six and nine months.”
Daviau explained that Canaccord’s focus on technology, health care, sustainability, and mining sectors makes the firm “more active in the IPO market than a lot of other firms would be.”
