CI Financial Q2 2023 Earnings Call Transcript

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Provided by Quartr
August 10, 2023

There are 8 speakers on the call.

Operator

Good morning, and welcome to the CI Financial Second Quarter 2023 Earnings Call. My name is Carla, and I will be the operator of today's call. I would now like to pass the conference over to our host, Curt McAlpine, CEO of CI Financial to begin. Curt, please go ahead when you're ready.

Speaker 1

Good morning, everyone, and welcome to CI Financial's 2nd quarter earnings call. Joining me this morning is our CFO, Amit Muni. Together, we will cover the following: an overview of the highlights of the quarter a review of our financial performance during the quarter A discussion of several strategic actions recently taken, then we will take your questions. Our adjusted EPS of $0.76 a share is up 3% sequentially, reflecting growth in our U. S.

Speaker 1

Wealth business, Disciplined discretionary expense management and the benefits from capital deployed during the quarter, partially offset by pressure from asset mix shift And higher non controlling interest resulting from our minority sale. Adjusted EBITDA per share attributable to shareholders Increased 1% from Q1, while free cash flow per share declined 5%, reflecting the seasonally higher bond coupon payments. It was an active quarter for capital allocation. We paid down $1,000,000,000 of debt and spent $229,000,000 To repurchase 17,000,000 shares. We deployed $212,000,000 towards M and A, including deferred and earn out payments And $33,000,000 towards our dividend, which today we announced plans to increase 11% to $0.20 per quarter.

Speaker 1

Our platform continues to generate net inflows despite the more uncertain economic environment and market outlook. Though modest in Q2, our Canadian Retail segment generated inflows for the 4th straight quarter, Despite the industry continuing to endure outflows. While demand remains high for our high interest savings strategy, A range of our ETFs and our alternative strategies also generated inflows. Our Wealth businesses in both Canada and the U. S.

Speaker 1

Generated consistently positive inflows through the first half of the year. We also continued to execute against our 3 strategic priorities To modernize asset management, expand wealth management and globalize the company. In May, we completed the minority sale in our U. S. Wealth business, which accomplished the goals of our planned IPO.

Speaker 1

This provided us with complete flexibility for the business We also completed the previously announced acquisitions of Avalon Advisors and LaFirla and welcome them into the Coriant Partnership, Which is a new unified brand for our U. S. Wealth business. This morning, we're excited to announce the acquisition of Coriell Capital, A Montreal based, woman owned, ultrahighnetworthwealthmanager. In July, we closed on the acquisition of InterContinental Wealth Advisors, A San Antonio based high net worth and ultra high net worth focused RIA with $2,300,000,000 of client assets.

Speaker 1

I'll now turn the call over to Amit.

Speaker 2

Thank you, Kurt, and good morning, everyone. Turning to Slide 4. Our global assets ended the quarter up 4% to 399,000,000,000 A quarter end record high due to positive flows in our Canadian and U. S. Wealth Management segments as well as from 2 acquisitions during the quarter.

Speaker 2

Compared to this time last year, our AUM is up 20%. Turning to our financial results on the next slide. I'll focus my comments on our adjusted results. Adjusted net income was $136,000,000 or $0.76 per share for the quarter. Net revenues increased to $655,000,000 and adjusted EBITDA was $245,000,000 for the quarter.

Speaker 2

Turning to the next slide, I'll highlight the EBITDA and margins for our 3 segments. Asset Management EBITDA is down slightly due to stock based compensation expense from our grant this quarter that was not in the previous quarter. Canada Wealth EBITDA stayed relatively flat. In the U. S, we experienced strong EBITDA growth of 48% this quarter Compared to the Q2 of last year and 42% growth for the first half of this year as compared to the first half of last year.

Speaker 2

Our margins also improved by 1.4 percentage points to 42.2% this quarter due to a combination of top line revenue growth And synergies from ongoing integration of our U. S. Platform. For purposes of modeling non controlling interests Of our U. S.

Speaker 2

Segment for future quarters, we estimate non controlling interest of 37% of U. S. Adjusted EBITDA When calculating our U. S. Segment adjusted EBITDA.

Speaker 2

For purposes of modeling non controlling interest for our U. S. Segment's contribution to EPS, We estimate non controlling interest of 32% of U. S. Segment adjusted EBITDA.

Speaker 2

Turning to the next slide, I'll walk through the changes in revenue. Revenues were up 2.3 percent to $655,000,000 and about 1% on a comparable basis to Q1. Asset Management revenues were down slightly due to average fee rate declines from mix shift due to flows into lower fee short duration funds. Canada and U. S.

Speaker 2

Wealth revenues were up due to higher asset levels from solid organic growth. Our U. S. Acquisitions added $9,000,000 in revenues for the quarter. Turning to expenses on the next slide.

Speaker 2

Total expenses increased 1.9% and about 1% on a comparable basis. SG and A increased primarily due to higher stock based compensation due to the annual granting of restricted stock awards to our employees, which were done in the 2nd quarter. Interest expense declined due to lower debt levels. Acquisitions added $4,000,000 in expenses in the quarter. Turning to Slide 9.

Speaker 2

At the end of the quarter, our net debt declined to $2,900,000,000 from $4,100,000,000 last quarter, and our net leverage was 2.9 times. Using current market value of our debt, Our net leverage would be approximately 2.1 times. As you can see from the chart on the bottom of this slide, we have an attractive profile for our remaining debt With an average maturity of just over a little over 14 years at a 4% fixed rate, we anticipate Interest expense to be in the range of $37,000,000 to $39,000,000 in the Q3. Turning to the next slide. The aggressive deployment of capital received from the sale of our stake in Congress Wealth Management and the 20% stake we sold of our U.

Speaker 2

S. Business Allowed us to deleverage. We spent $695,000,000 to retire $713,000,000 of par value bonds. We paid down our credit facility balance, which was $298,000,000 at the end of the prior quarter, and we deployed $308,000,000 for share buybacks The results of these actions were several fold: $18,000,000 in savings versus the par value of our bonds $54,000,000 of interest avoidance on those bonds, dollars 23,000,000 reduction in annual credit facility interest And $17,000,000 reduction in our annual dividend obligation as a result of canceling 22,000,000 shares. Most importantly is the ongoing earnings accretion.

Speaker 2

We sold roughly 6% of our consolidated earnings Through the 20% sale of our U. S. Wealth business and bought back 12% of our shares outstanding through the end of July. Thank you. Let me turn the call back to Kurt.

Speaker 1

Thank you, Amit. Yesterday, the Board approved an $0.08 or 11% increase to the dividend, Bringing the annual distribution to $0.80 per share effective for the Q4 dividend, which gets paid in January. Our Board has declared dividends a quarter in advance, which is why the change is effective in Q4, not Q3. The business context is important to understand the drivers of the decision in 2018 and our decision yesterday. Exactly 5 years ago, in August 2018, the Board made the difficult but necessary decision to cut the dividend in half To the current level of $0.72 per share.

Speaker 1

This decision was made given the challenged operating environment and relative positioning of the business at that point in time. In Asset Management, we had the lowest level of net flows and the lowest aggregate investment performance of our peers. Our Canadian wealth business, while at scale, wasn't growing and wasn't contributing to earnings on a standalone basis. The economics of the business were concentrated and isolating for markets were in decline. Virtually 100% of our corporate earnings Came from Canadian Mutual Funds.

Speaker 1

Our shares outstanding were $261,000,000 and our dividend payout ratio was nearly The decision to cut the dividend provided us with the flexibility to invest in the business while reducing our share count. Over the last 5 years, we've worked incredibly hard to transform and reposition the business for sustainable and highly profitable growth. Today, as a result of these initiatives, we stand in a much better position. In Asset Management, we have the strongest net flows in Canadian Retail and have Among the best investment performance improvement of all of our public peers. Our Canadian Wealth Management business is growing rapidly And is now a meaningful contributor to our earnings.

Speaker 1

We initiated our globalization efforts through our U. S. Wealth strategy. In slightly more than 3 years, this business grew from nothing to our largest business line by assets. Collectively, our U.

Speaker 1

S. And Canadian Wealth Management businesses now contribute 35% of our EBITDA, up from 0% in 2019. As we continue to execute, we expect the contributions to continue to grow. Our business is now well diversified across Geographies, business lines and client segments. We have approximately 163,000,000 shares outstanding, Down roughly $100,000,000 Our 2nd quarter dividend payout ratio was 24% of adjusted net income And has declined since then given the strong share buyback activity recently.

Speaker 2

As a result of this collective improvement,

Speaker 1

We have decided to increase our dividend by 11%. Using the current Street consensus, when factoring in our announced dividend increase, Our 2024 dividend payout ratio would be 19.9%. This decision allows us to increase our dividend while providing us With significant future capital flexibility. As I've talked about frequently, Expanding wealth management is one of our 3 corporate strategic priorities. In addition to generating strong organic growth and margin expansion, We aspire to be the preferred acquirer of the industry's best wealth managers.

Speaker 1

Today, we announced an agreement to acquire Coriell, a Montreal based Ultra High Net Worth Wealth Manager. Coriell, a firm founded and led by women, manages $1,300,000,000 in client assets With an average client size of over $90,000,000 Building off of our CI Private Wealth Canada business And our acquisition of Northwood Family Office last year, we believe we are the best positioned firm to serve ultra high net worth clients in Canada. In aggregate, our Canadian wealth management assets have more than doubled since we initiated a new strategy at the end of 2019. As we first discussed on our November call last year, as part of our strategic priority To expand our Wealth Management business, we've been investing in CI Investment Services with plans to significantly scale Our Wealth Management Custody Business. In July, we completed an important milestone with the onboarding of Align Capital's assets, Bringing our custody platform to $24,000,000,000 in assets.

Speaker 1

This conversion is expected to improve the service for aligned advisors and the improved scale should help attract additional independent advisors. Over time, we see a pathway to $100,000,000,000 plus custody business as we onboard Assante, CI Private Wealth Canada, Northwood and further scale our 3rd party assets. From an economic standpoint, this will have a material impact on the profitability of our Canadian Wealth segment. On an annual run rate basis, we anticipate a $15,000,000 EBITDA lift from the Align conversion. The majority of the earnings pickup will come from higher interest revenues that were shared with the prior custodian As well as some administrative and trading fees.

Speaker 1

Moving to our U. S. Business. We've continued to make significant progress On the integration to a single unified business. As you've heard from Amit earlier, we increased our U.

Speaker 1

S. Operating margins by 5.6 percentage Over the past 12 months. What started as a business focused on acquisitions of leading capabilities and creating a foundation for growth Has quickly evolved into the largest integrated RIA business in the U. S. With nearly $200,000,000,000 or $150,000,000,000 in assets.

Speaker 1

In 2020, when Affirm joined us, we acquired the business as is with the integration to follow. Today, when Affirm joins us, on the 1st day, they are fully onboarded to our operating platform. This includes our ADV, Integrated Technology, Cybersecurity, Marketing, Finance, Legal, HR and Compliance Functions. In addition, we are in the process of consolidating and upgrading our real estate in key geographies where we have multiple offices today. Integrating the core business has also allowed us to enhance both the services and capabilities to our clients Beyond what any single legacy RA could offer.

Speaker 1

Examples of this include access to our trust company, robust tax prep and planning services And personal CFO. The integration progress to date has culminated in the rollout of our new brand Coriant this past month. The Coriant name was selected through a rigorous multi step process. We engaged a branding firm to identify names for consideration. More than 70 of our firms participated in partner groups, Who were tasked with narrowing the initial list down to the finalists.

Speaker 1

To select the name, we held a partner vote, where each of our 236 partners Had an equal say in naming the business. Coriant was favored by a wide margin. I mentioned the process because I believe it provides a glimpse How we're taking a fundamentally different approach to wealth management, one I believe is only possible through our private partnership model. The rebranding provides further clarity to clients and to the market of the expertise of our entire business And the expanded services and capabilities they benefit from for being a part of Coriant. That concludes our prepared remarks.

Speaker 1

Now I'd like to open up the call for questions.

Operator

Thank

Speaker 3

you.

Operator

Our first question comes from Kyle Voigt from KBW. Kyle, your line is now open. Please go ahead.

Speaker 3

Hi, good morning. Maybe first kind of maybe multipart question on RIA deals. It looks like there was a little over $200,000,000 of a redeemable share liability that was booked in the quarter related to a deal. Can you just give some more color there? Because I think it did have some impact on the diluted share count in the quarter.

Speaker 3

And then just a follow-up to that or second part of that question. Could you provide a high level update on how some of these newer RIA deals are being structured between in terms of the consideration being structured Cash upfront versus deferred, contingent or whether using a stock or this redeemable share liability is going to be more normal going forward?

Speaker 1

Sure. So on the first one, just quickly that, that note relates to an acquisition that we had completed and it just Aligned around the sequencing of the payments that we'll make over the subsequent couple of quarters. On the second Question you asked as it relates to the structuring of the transactions. We're actually structuring them in a very consistent manner with what we've done in the past. So that would be a combination of cash and stock in guaranteed considerations.

Speaker 1

By stock, I mean, Private partnership units of our Coriant partnership. And then the firm typically would have an earn out Where they would have to grow at a higher rate than what they have historically, which we measure over the subsequent 36 months Post them joining our business. So the structuring of the transactions themselves really haven't changed At all from our starting point.

Speaker 2

Hey, Kyle, it's Amit. Just to add to what Kurt said on the first part of your question. So we did an acquisition in the quarter. Part of that was structured to maximize flexibility to allow us to settle in either shares or stock. Our goal is to settle it in cash.

Speaker 2

And just because of the structure, it requires us to show the convertible shares that could be issued even though there No intention on our part to do that. It's just IFRS requirement.

Speaker 3

Understood. That's really helpful. And then I think just one more and I'll get back in the queue. It's just on the progress on the RIA integration. You noted the technology integration Happened in July, so maybe you could expand upon that a bit.

Speaker 3

And then when that real estate consolidation is expected to be complete this year. And then if you could just translate that into margin. I mean, just frame how much margin upside related to Executing on those integration processes that are going to be complete this year, how much margin upside could we see versus that 2Q level that you just reported?

Speaker 1

Sure. So on the technology front, so we've been in the process of Kind of transforming and integrating technology that was completed this month or is Being finalized this month. So that's effectively everybody in our U. S. Business on unified technology hardware, software systems, servers, cybersecurity.

Speaker 1

So one Fully integrated seamless end to end technology platform. We had for the firms that have already joined us, we have converted are in the final stages of converting them. For any acquisition that we complete going forward, they will be fully onboarded to our technology solution on day 1. So from an kind of involvement of an M and A perspective, the marketing, finance, legal compliance, HR We're day 1 initiatives before with the technology support. Now it's really an end to end integration and technology solution.

Speaker 1

The real estate, Carla, we have a few different offices that we are integrating kind of in parallel. So we're upgrading and integrating in New York. We're doing the same in Boston and Chicago, in addition to Miami. So that'll drag On as we're in the process of the build outs now and the repositioning. So that'll take, I guess a couple to a few quarters to be, call it, fully steady state, just given the timing of build outs and things like that.

Speaker 1

And then on margin, we just don't give go forward guidance on what that will translate to. But there is some initial Upfront costs for all of these things that we're bearing now and then get through the integration and you'll see it in steady state.

Speaker 3

Great. Thank you very much.

Speaker 1

Thanks.

Operator

Thanks, Kyle. Our next question comes from Geoff Kwan from RBC. Geoff, your line is now open. Please go ahead.

Speaker 4

Hi, good morning. Just had a question with the release that you've got on the leverage side, just Wanted to understand how you're thinking about the prior sorry, prioritization on the share buybacks, which you remain active on versus Whether or not it's wealth or other types of acquisitions versus organic investments in the business?

Speaker 1

Sure. So one of the Appealing features of the minority sale that we executed in the quarter was it allowed us to set our Canadian and U. S. Businesses up Under separate clearly separate strategic priorities, but also separate capital allocation priorities. So I'll just start from a U.

Speaker 1

S. Perspective, we intend to use to reinvest in the business as we see inorganic growth opportunities continue to present themselves for the foreseeable future. So From a U. S. Business perspective, that'll be the focus of the cash flow that we generate in that business.

Speaker 1

As it relates to the Canadian business, The way that we had discussed the proceeds, so when we executed the minority sale, 100% of those proceeds Went back to the Canadian business and the Canadian shareholders. We used those proceeds To do the $1,000,000,000 of delevering, so the $713,000,000 plus the facility balance. And then we executed completed our NCIB For last year, and then I've renewed and nearly completed an NCIB for this year. So like always, Jeff, we're going to take a dynamic approach To our capital allocation, I think we feel very good when we look at our debt today, 16 years duration, 4% interest, No financial covenants, interest rates are all fixed. So, we'll continue to monitor it and take advantage, but we do see Our stock at a very attractive price point relative to the underlying fundamentals of the business.

Speaker 1

And as long as that disconnect exists, We're very happy to lean in and buy shares.

Speaker 4

And sorry, I forgot to ask what that first question is. Do you have kind of an upper limit on Where you would be comfortable having the leverage at?

Speaker 1

No. We're comfortable in and around the range That we're at right now.

Speaker 4

Okay. Just my second question is your high interest savings ETF Obviously, it has accumulated a lot of assets over the past year in particular. Do you have visibility In terms of what that makes, in other words, for example, like the advisers that you do business with, Do you get a sense of how much of their clients' assets in aggregate have may have gone into that ETF? Or is it really maybe coming out from, 3rd party retail investors or other types of buyers?

Speaker 1

Yes. I guess, are you saying I think If I'm paraphrasing, Jeff, and correct me if I'm wrong, is are the shorter duration strategies getting us in front of new investors Is it repositioning of existing clients?

Speaker 4

Exactly, yes.

Speaker 1

Yes. No, I'd say, I mean, it's a balance. I would say certainly one of the things that we've noticed as we've executed our retail strategy or our asset management strategy and applied it to the retail channel, which is where we generate those flows, Is that we see whether it's with our HISTAs strategy, whether it's our alternatives products, the stuff we're doing in the private market space, it's getting us in front of new investors, Our ETFs that historically haven't done business with us. So that has been there's certainly some of our existing clients that know and are familiar with us and have great relationships That are pivoting to those products in a risk off environment, but it is also getting us in front of a meaningful amount of new investors.

Speaker 4

Okay. You don't have do you have any sort

Speaker 1

of percentage I don't have the specific break. No, I don't have the specific breakdown to share.

Speaker 4

Okay. All right. Thank you.

Operator

Thanks, Jeff. Our next question comes from Graham Ryding from TD Securities. Graham, your line is now open. Please go ahead.

Speaker 5

Hi. Maybe you just give us sort of what you're thinking here We've been repaying sorry about that. The remaining $300,000,000 in debentures here that you didn't you weren't able to buy back, how does that impact your ability to Sort of pursue acquisitions of the U. S. Going forward, maybe I can start with that.

Speaker 1

Sure. Yes. So it doesn't impact us At all, it would just change the structure by which we, I guess, fund the acquisitions. So we have about $285,000,000 remaining of debt across 3 different tranches that expire in 2024, 2025 and 2017. As you mentioned that we're not tendered back that have a restriction that prevents us from borrowing at the sub company level In a way that's not backed by the parent.

Speaker 1

So as long as that debt remains in place, we can certainly still borrow and fund acquisitions. There would just be a temporary loan that gets provided by the parent company to the U. S. Company that would ultimately be cleaned up Once those bonds are retired. So from a rating agency perspective, when people are thinking about our debt, They're going to consolidate it at least for the time being anyway.

Speaker 1

So our thought was we attempted to buy back Through our tender, as you heard from Amit earlier, had very good profit on the tender and then also the interest avoidance and now we're just monitoring it. So we're not restricted in any way. It's just if we were to do an acquisition and they weren't fully cleaned up, the loan would be Come from Canada, it will be backed by the Canadian business just until the point that they're cleaned up and then that obligation would transfer solely to the U. S. Business.

Speaker 1

It's just a sequencing thing, but no restrictions.

Speaker 5

And do you have A plan for when you would attempt to clean up or redeem the remaining debentures like will you wait to maturity or Would you come back to the market with another offer? What's your plan there?

Speaker 1

Yes. I think we're just we're monitoring the We did a tender. We were able to buy some of those bonds in the open market as well. So We'll continue to monitor it and see if the opportunity exists. As I mentioned, there's not an urgent need to do it because we're not Prevented from pursuing growth in the U.

Speaker 1

S. Business. We just have to tweak have the Canadian entity or the parent entity back the loan just until we've either The bonds mature and retire or until we clean it up proactively.

Speaker 5

Okay. Understood. And maybe just broadly about your the outlook for your free cash flow. Maybe You do have some deferred considerations and some contingent considerations this year. We also have your sort of dividend commitments.

Speaker 5

Do you envision having much in terms of excess free cash flow this year to go towards either paying off debt or Further buybacks or is your free cash flow largely going to be allocated towards those contingent liabilities?

Speaker 2

Hi, Graeme. It's Amit. So as Curt said, we take a dynamic approach to our capital. We're very comfortable with the free cash flows that we're generating and the ability to deploy it to again support the buyback, Continue to support our M and A strategy. So it's dynamic.

Speaker 2

But to answer your question directly, yes, we do feel comfortable With the level of cash flows to continue to deploy on the strategies that we have.

Speaker 5

Okay. That's it for me. I'll re queue. Thanks.

Speaker 6

Thanks.

Operator

Thank you. The next question comes from Tom MacKinnon from BMO Capital. Tom, your line is now open. Please go ahead.

Speaker 6

Yes. Thanks very much. Good morning. Late coming to the call, I don't know if there's any update that you gave on Flows and trends that you've seen with respect and particularly with trends you've seen with respect to July. And then I have a follow-up.

Speaker 6

Thanks.

Speaker 1

Yes. No, we didn't provide disclosure on July 1st. We did provide the 2nd quarter flows across provided the details on the asset management flows. And Tom, I mentioned in the prepared remarks, We were strong had strong positive flows on both our Canadian and our U. S.

Speaker 1

Wealth businesses for the first half of the year as

Speaker 4

well. Yes.

Speaker 6

And then Kurt, with respect to the U. S. Wealth, You've amalgamated so many U. S. RIAs.

Speaker 6

Can you share with us how Your EBITDA growth has been in terms of how it relates to cost saves or synergies, Both like and possibly any kind of revenue synergies that you may have gotten From piecing these togethers. Or are they just sort of a mosaic of various USRAAs and you're just collecting the earnings from them. What have you been able to do? And if you can quantify any of that In terms of making this a getting more synergies out of these pieces?

Speaker 1

Sure. Yes. And I think Tom you must have joined after the prepared remarks. So I'll just quickly recap what I had touched on on the integration slide. So in the past 12 months, Our EBITDA has grown 48% in our U.

Speaker 1

S. Segment. Our margin expansion has been 5 point 6 percentage points. That's through a combination of revenue synergies. We've launched our trust business, our tax Capabilities are well transfer function, our outsourced CFO.

Speaker 1

We have a series of, call them revenue enhancing initiatives, Effectively, services we're now able to provide to clients that previously any one of the firms that we acquired didn't have on a standalone basis. So that's certainly been additive and much appreciated by clients. In parallel to that, we have fully integrated our operating platform. So I did touch on this as well, but when we acquired Affirm in 2020, we would acquire it as is and then work on the synergies Post acquisition, today technology, finance, legal, marketing, operations, compliance, Everything gets fully integrated at the point of the acquisition. So, we're effectively onboarding the businesses Straight on to the new operating model and framework and the combination of those two things is attributable to 5.6 percentage point margin expansion in 12 months in a relatively flat market.

Speaker 1

Okay. So the 5.6 Percentage points is both revenue synergies

Speaker 6

and the back office legal compliance technology That you put on your platform?

Speaker 1

Correct.

Speaker 6

Okay. All right. Thanks. And sorry to have Have you recap that, but appreciate it. Thanks.

Speaker 1

No, no, happy to.

Operator

Thanks, Our next question comes from Nick Priebe from CIBC. Nick, your line is now open. Please go ahead.

Speaker 7

Okay, thanks. Just a pair of questions on capital return. Starting with the dividend increase, Obviously, based on the payout ratio and the free cash flow generation, there's a lot of headroom for further expansion and growth over time. Is the intent to sustain a predictable rate of dividend growth going forward? Just interested to hear a bit more about how your philosophy has changed on that front.

Speaker 1

So yes, the way I would answer it, Nick, is 5 years ago, we were cutting the dividend to reposition the business. As I mentioned in the prepared remarks, fast forward to today, the business is in a very different economic state than what we were at that point in time. So we went from say a firm cutting a dividend to a firm now growing our dividend, but we're not in a position to provide guidance On what future dividend hikes would look like, but I will kind of point people to our payout ratio, right. So we now in 2024 Based upon Street consensus or estimating, we're only paying out 19.9% in a dividend payout ratio, which gives us a lot of future Flexibility if we choose to increase.

Speaker 7

Yes. Okay, fair enough. And then Just with respect to buybacks as well, very active in the quarter as you pointed out, and I think you had reloaded the NCIB Towards the end of the quarter, can you just update us on the remaining capacity for the existing NCIB program?

Speaker 2

Yes. So we're well along the way for this period's NCIB. So I would expect to see based on the you'll see it when we publicly disclose In our next filing, but I'll just say that we're well along our way of completing this period's NCIB.

Speaker 7

Okay. And if you were to exhaust that in short order, would you be inclined to consider something A bit more substantial like an SIB?

Speaker 1

We certainly could. I mean, as we talk about frequently, we do take a dynamic approach Our capital allocation, if we look at the underlying, call it some of the parts value of the different components of our business, The collective growth that we've experienced, the capital flexibility and then the multiple at which we trade at, It certainly creates opportunities for us to do substantial bids as well. As we mentioned, I've said this many times, I do think that there's a fundamental disconnect between how our business is performing and how our stock is trading, Which is why when we see an opportunity to buy earnings back at 4x, 4.5x, we're very, very happy to do that and now people are seeing it flow through to the financial results and the accretion we're able to generate. So if when we complete The normal course issuer bid, if an opportunity presents itself where the stock price is attractively priced, we'd certainly Consider that as an option.

Speaker 7

Okay. That's it for me. Thank you.

Speaker 5

Thanks.

Operator

Thanks, Nick. We have no further questions registered at this time. So with that, I will hand back Kurt McAlpine for final remarks.

Speaker 1

Just wanted to thank everyone for their interest in the company and appreciate your participation in today's call. We look forward to next quarter.

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CI Financial Q2 2023
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