RENN Fund (RCG) 5 Nov 212021 Q3 Earnings call transcript

Good morning, ladies and gentlemen. Welcome to RF Capital Third Quarter Results Conference Call. I would like to turn the meeting over to Mr. Rocco Colella, Managing Director, Investor Relations. Please go ahead, Mr. Colella.

conference morning, Colella, thanks Welcome Head third XXXX Good today. joining to operator. quarter Rocco I'm of earnings you, everyone, for and us our Thank call. Investor Relations.

this If you Relations. contact of can information please end out found the earnings to My at call, be our have Investor reach following questions release.

results get this replay. webcast actual being for subsequent differ call Today's information, started, may could and would forward-looking to like I we is Before remind that contain remarks you materially. available and

Forward-looking subject factors many can CFO, the our and or CEO, at latest documents risks assumptions in are and Wilson, call. This information Tim website These AIF sedar.com. found and information Kish forward-looking are morning, to Kapoor; is our President on uncertainties. available and MD&A. and applied Certain in be on our the our

on Kish will questions which recent the progress open to our from and opening growth call Tim from the will turn over we results. analysts. quarter. finally, the provide will financial First, Kish. in takeaways to remarks, now most call following and with cover closing And will key remarks will XXXX I momentum end then Kish

Two of Thanks, Richardson. morning, we good everyone. first anniversary ago, Rocco, the Richardson and celebrated Patrimoine and Wealth weeks

During considerable and advisors, that growth time, exceptional new our new with from input ambitious Board strategy. our leadership team, mapped an out

a you earlier have a $X.X up month billion $XX.X which $X.X that key this stages read multiyear success we results I At QX in transformation, of financial many AUA early year our $XX.X Wealth, billion. fronts. couldn't to of our of strong in was to-date. made posted ago. or billion AUA increased release have our progress Richardson billion, the XX% ended, our QX since the several metrics. record prouder stated further While considerable we're was on X still week, press on we quarter from may And be another Again,

program client Planning needs; service-related expanded and to Sandy million comprehensive complex Wealth's million Richardson the capabilities in-house practice $X Strategically, events including Richardson featuring country; to enhance an launched included advisor Estate we These this to a results $XX an ago. allow line fee-based new that brand We support ago. industry and growth our success every advisor million, to an On the basis, from our their Our from desk, quarter. digital recurring and Tax in up Richardson more and annualized several for contributed that a and XX% year $XXX advisors, Riley time ever top build campaigns access revenue. experts. day team; the was increase which revenue first training of and under advisor advisors launch top same Hartley exclusive insurance an just share Wealth to virtual efficiently the experience learn initiatives which strong concierge adjusted EBITDA Masterclass, enjoyed Game-Changers, our marketing advisors allowed and action management advisor from of a year and equal strategies called support and across conference our represents to

We will will our next no Fidelity, will year, approximately as only Fidelity. broker. a Fidelity The longer to In our used carrying industry is our and strategic investments begin X,XXX QX step, anticipate May was account of managed quantum clearing categorized transition across and more that by We If assets. over on a Envestnet's advisors Fidelity. towards rollout. is than then game-changing a Richardson also implementation US$X XX relationship and operate digital trade leap Wealth, services custody, providing with forward. tracking and state-of-the-art XXXX big strategic supports made Envestnet settlement through with can that platform employees to of trillion giant, delivering XXX,XXX be relationships ambition we companies to

bold will best-in-class and meet the and service, world-class experience. delivering reputation. We've and more in-house operating also no importantly, scale, global With our to $XX Richardson continuity Fidelity's capacity success. in to Wealth's client We secured Fidelity disruption in custodial a priorities middle platform, billion technological and in their trillion in tailored and manages to access will they ensure grow advisor advisor ongoing to our expertise advisors' office to to Fidelity, retain assets, team client we gain to ambition and in worldwide, under with $XXX custody assets $XX $XX our billion. be innovation Canada. billion growth have commitment

first technology. costs just to the future also We year expect variable under be following of to lift This EBITDA million transition. capital relationship $XX and in largely investments an the in will strategic our realize estimated transform reduce

moves, game-changing single a these first end win. will is is Paul Morson story Wealth: high also announced the to like technology and take her leading team, door. to our built indicators our and about we of this another on and advisor, and to a externally. platform, opportunity X Further, teams be have that, the her that I'd both billion. Maria top-performing that Miletic, Masson $XX are internally none. Conlon history. currently name it Borisoff, O'Brien Bashar our clear to Andrew all-time transform advisors Rick and team. an my Susan we Tim Shortly we after that to also quarter, which Carson. second pipeline, and advisor recruiting Richardson Kamel, playing will Susan the What advisors this is at to new results resonating our It's put decided contributes we stands welcome optimism quarter, in With They powerful following without fundamentally to their This further losing and tomorrow's welcomed we're

won't to course, XX% we everyone is our XX% convert pipeline, reasonable in target. a Of

support in that enable recruit We have attracted advisors. better talent also and our offices will us to corporate

our These to recently example, has Bisset, Jan this our powerful reflect our of welcome all to to across commitment to new would diversity to Richardson over opportunity Clement, appealed gender turn women the diversity and employees For as I'll With particular, that, in inspiring Tim. hires Natalie and, Christina firm. Julie Wealth. and to take Isaacs such our brand promoting Burnham, Sascha Sampson. like I call

Thanks, everyone. morning, outlined the higher for the of the All coming value And laying growth of shareholder quarters Kish quarters. will busy begin level believe a foundations Kish, year. X we're strategy first achievements translate EBITDA a our that for and I by in the greater made and into to good

few our details Before we third items. let highlight noteworthy of turn me a to results, quarter the

previous results in limited highlighted our of calls, commenced last that October. we comparability is As Wealth given consolidating Richardson the consolidated

will, of discuss the And simplicity, last focus unless year, be today against sake all comparisons of such, again, QX the noted remarks on drivers will the today mainly I business Richardson Wealth. As my for of otherwise. at

ongoing pretax adjustments the note of The in discussed adjusting of forward. note $XX going of million of significant journey, We a high so have MD&A. is were in the reflect items, million anticipate transformation decline these to after been that We we that have our undertaken. we or we of the past of transformation which and QX years, tax of number items recorded program. in related midst number XXXX, X $XX.X reporting still are will In nature our that that the items over QX

significant in We periods. will EBITDA to lead future expect that expenses benefits these

in as faster. that million year adjusted expected up cost just growth EBITDA transition. $XX against in our under will XX% transforming of benefit we the to less Wealth our an to Wealth, At a year. took in the fueled us added by that, business. drivers than improved This Kish With benefit allow words, estimated the In will was mentioned the September after will and the growth year-over-year, $XX earlier, QX greater the has scale largely example, million, anticipate achieve key outsourcing Richardson the first base that other payback of partnership carrying turn For charges of operating result period variable, XXXX broker leverage. EBITDA be operations revenue and let's being Richardson to we

up margin adjusted of XX% Our up was in EBITDA XX.X% average last in AUA, QX and gross increase $XX.X margin, XX%. from primary XX.X%, record the Behind year. a driver billion revenue, was the

a growth we added and market past new has appreciation, of the year, impressive an function in Over net recruited been $X.X billion also but assets.

robust issue in new the issues We EBITDA a to of QX industry-wide this activity QX. XX year, XXX In QX, ratio new issue declined XX.X% in new softened half helped to Our Wealth's After year lower commission in growth. versus Richardson XX% declined of participated adjusted Improved revenues due operating expense also XX.X%. operating last points leverage revenue. year. from basis XXX first

management to continue to now disciplined With focus our ambitions. items. balance a growth will few cost as we key sheet that, on turn let's We advance

the from end million capital net the at $XXX increased million working end $XXX Our June. of at of September, up to

to of million we we excess to moment, capital that invest strategy expect holding are on the is draw over million view $XX in at quarters. approximately coming $XX to it our the and working Our

growth finance this aggressive interest low debt upsized capitalize help our renegotiated rate facility on and we to our plans the addition, quarter. In and environment, current

million X-year lender's strong our future our our the the strategy. additional our with subject and approval. flows, expected provides terms $XXX cash at and operating facility new growth has for flexibility excess working with facility revolving to initial Our option an capital, and X-year an credit current funding to term, request ample Combined accelerate and

had promissory and debt drew we recurring ratio initiatives. our notes markets, in subordinated view, in new After sheet, Heading strategic into balance full spending million offset $XX facility increased anticipate draw, to very consolidated recruiting and stable manageable debt our we and on debt fee-based issue million QX, on repay and activity share preferred $XXX X.Xx. equity was EBITDA adjusted success we million QX, and liabilities in bank the $XX.X During net in the revenue payable. million from our higher $XX level. In a to that's on by

As adjusted broad course, QX EBITDA be is, above a slightly which QX market to result, anticipate subject of levels, conditions. we to

to Kish turn remarks. closing for I'll over it Now,

Tim. Thanks,

And that awards Globe Mail's also Advisors. us. Top I Bakish, are industry year. Several excellence days Horwood Advisors week industry. Professional. recognized were Wealth celebrated last achieved of have ambitious multiyear opening in the highlighted wealth named considerable stages demonstrated best months -- we've performances early best we celebrate just Benji posted ahead personal remain the Star I accelerate transformation Miles making growth advisors and Alexandra of growth by ranking execution strategic that driving XX%, to of and we're partnerships is that the short the talent ensure journey As of growth our the attracted our progress of plan, and in our details And picture in our results, and advisors, since leveraged have The a unveiled few Khajadourian, XX% success. our Francis and convinced Sabourin, record in Horwood our that to Ida in the of toward were Canada's won management top big this my plan. business, Joseph of relationships Rosemary X force and remarks,

We and the the right highly the right right above results, growth right right culture, the the their have valued advisors clients. the strategy, leadership, right all, Board, and,

win never thank for to patience and been your Our stronger. motivation has shareholders, you, We ongoing support. our

market And call the along to that, price, now our share updating While We look that to I, on on the I'll too, back the our turn an in to am I will promises, recognize resulted will in strong that and you can way. accomplishments believe continue confidence to forward our I deliver progress. say disappointed performance. inspire our drive increase haven't over results in we Rocco. time, you

questions now from this to concludes Thanks, the formal analysts. That are open Operator, morning. we Kish. ready our call remarks to

Jeff from [Operator from is Instructions] And first Cormark question Fenwick Securities.

around cadence nice a bring your the here, they a once them advisors in-house market provide that of message Kish, firm with and you to little that work their Maybe in advisor up could expectations in. you agree that resonating see how bring to from on to long get typically takes the modeling joining perspective just So, color assets to to platform? it picking

at longer. and September client their almost migrate that's look a -- have in them were But quarter, them within able of over runway XX-day as journey, joined the them, generally, beginning alternatives that I that the to last couple would would some in and come say, across have they a period see. would been us I that did started the of their some for if for started arrived October, that have they X Typically, September, exploring when country. little And of June the of journey a Sure. they that assets in XX% assets,

And about I to also Fidelity then talk your wanted agreements.

quarter the the in that, You took for commentary. in charges Tim some which there to to prepare alluded

September, that next then is So that guess, period once in day charges between now the transition there September taken? And intervening no impact are now to and felt be year, I of cost happens, in effectively other so X? savings

talk I'll let Tim about that.

No. plan, and nothing transition may expect took -- answer next we case, happy between further mean, continuing we between project September. now even moment, I to but Jeff, don't the in so worst At to what to We're this charges any that refine the even magnitude Yes, close that. the the of quarter. change,

the In sharing, savings, cost of EBITDA And little terms of an $XX revenue so cost benefit side. revenue a combination that quote. of actually then bit on some a and it's million the is we give the up savings

about $XX cost bottom in be of line, million will So that immediately. felt by savings, million X. day million offset It sharing, of $X and $XX revenue kicks

where year. the about around the give head where some OpEx you building at guidance helpful the is OpEx investing build sort There color. the the from? out some Are your Okay. was different the office? us That's building in the Or here you're color through business? going of in MD&A end is to in of Maybe or come functions commentary

Yes. functions. building much not It's so out

we tight over think are the is we is I least degree as have at in growth. we reasonable lot themselves. spending -- office be a even we committed of believe grow, programs a head It's more today that to the more infrastructure cost of controls, actual and scalable, investing to going the very

be our investments our website capabilities, that across country. to going -- brand the building enhancing our is digital this digital and So capabilities in marketing

don't to as platform capital the that's Those there's investments piece few need think we of then that I qualify make. it. expenditures. biggest And a investments

we're putting through So OpEx as QX. in them

see here, other. -- one And had I

as your to remaining you're your tap in million, suggested that guess the you $XX comments, on And today, -- of working what capital feeling capacity you into. You about facility million $XX effectively that the -- to I new got excess comfortable well. that's

in the business. opportunity? center and in around I front -- So Is of sort to Or asset remains the for invest it but this available go want amount space? you, you Is the a offer management more the Any recruitment, capital of that [IA] you is commentary fair of can out it know any that? thoughts where there? course, insurance and target to

XX- over doing going next a talking do And the And we're to we're that other that's we're to do time. is, deploy might intending many, do opportunity is to opportunities, if to it doing are which capital $X with in then, XX-month some partnership were in for foremost to mean, I we'll while over at acquisitions, to I our case, that with first our look an over but to extent book recruiting. of with deployed, platform, Fidelity, I of And again. to that of million And able of go for to us Yes. multiple even a book up in obviously, terms very be going that's own $X partnership be going anything, capital to those and is buy that bulk we're or that. to to are to to and of over We spend asset of to except is think excess consider capital priority to recruiting the but over going at management but will not $X.X our of be we -- accretive deploy continue we enhance and underway all lot Envestnet a million, and cash of million that months. for towards And and buying a then well transactions. in capabilities. that, of OpEx, insurance a EBITDA, business the business, several looking building Xx we're -- some If period equity. to there

call no Thank I'll at you. There time. Colella. registered are turn questions this over further the back Mr. to

you, operator, for Thank today. everyone, thank and you, Perfect. joining us

reach to free Relations a weekend. to any feel questions. please if always, further Have you As out great Investor have

you time, for Thank at now and you. this thank ended. has The Please disconnect lines your your participation. conference