TORONTO, Jan. 13, 2016 - GMP Capital Inc. (GMP or the Company) (TSX: GMP), a leading independent diversified financial services firm, is undertaking a series of fundamental organizational changes in its Capital Markets division to reduce the size of its global footprint, further streamline its fixed cost structure and more importantly sharpen its focus on its core North American operations, which accounted for 93 per cent of total reported 2015 revenue.
Following a thorough strategic review of its business model, GMP will be implementing the following organizational changes:
These changes, together with the restructuring initiatives announced in November 2015, result in a headcount reduction of 97 or 25 per cent over Q3, 2015. Following this announcement, total headcount is 291. Annualized expense reductions from these initiatives are expected to be in excess of $40 million. GMP will record in Q4, 2015 a related after-tax restructuring charge of approximately $15 million.
"Our actions today arise from an exhaustive review of all aspects of our Capital Markets business. They represent a substantive response to both the structural changes in our industry, via technology-driven disintermediation and increased regulation, and the sustained trough in the global commodity cycle. We emerge from this restructuring a leaner and more focused business better able to weather prolonged periods of market and industry turbulence and to successfully compete in our core markets through all aspects of the cycle," said Harris Fricker, Chief Executive Officer of GMP.
In addition, GMP's board of directors has decided to suspend the Company's quarterly common share cash dividend. This decision is consistent with GMP's conservative approach to capital and risk management. "This action is in-line with the measures undertaken today and further enhances our already strong balance sheet. We remain conservatively capitalized with no outstanding debt or covenants of any kind." said Mr. Fricker.
This press release contains "forward-looking information" as defined under applicable Canadian securities laws. This information includes, but is not limited to, statements concerning our objectives, our strategies to achieve those objectives, as well as statements made with respect to management's beliefs, plans, estimates, projections and intentions, and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Specifically, this press release contains forward-looking information concerning GMP's implementation of organizational changes, GMP's expectations regarding changes in headcount, expense reductions and restructuring charge from these changes and restructuring initiatives announced in November 2015, and the impact of the restructuring on GMP, including on its ability to weather prolonged periods of market and industry turbulence and to successfully compete in its core markets through all aspects of the cycle. Forward-looking information generally can be identified by the use of forward-looking terminology such as "outlook", "objective", "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "should", "plans" or "continue", or similar expressions suggesting future outcomes or events. Such forward-looking information reflects management's current beliefs and is based on information currently available to management.
Forward-looking information is not a guarantee of future performance and is subject to numerous risks and uncertainties, including those described in this press release. GMP's primary business activities are both competitive and subject to various risks. These risks include market, credit, liquidity, operational and legal and regulatory risks and other risk factors including, without limitation: variation in the market value of securities, volatility and liquidity of equity and fixed income trading markets, volume of new financings and mergers and acquisitions, dependence on key personnel and sustainability of fees. Other factors, such as general economic conditions, including interest rate and exchange rate fluctuations, may also have an effect on GMP's results of operations. Many of these risks and uncertainties can affect GMP's actual results and could cause its actual results to differ materially from those expressed or implied in any forward-looking information disclosed by management or on its behalf. For a description of additional risks that could cause our actual results to materially differ from our current expectations, see "Risk Management" in the Third Quarter 2015 MD&A and "Risk Factors" in GMP's annual information form available on the SEDAR website at www.sedar.com. These risks and uncertainties are not the only ones facing GMP together with its consolidated operations controlled by it and its predecessors (GMP Group). Additional risks and uncertainties not currently known to us or that we currently consider immaterial may also impair the operations of the GMP Group. Material assumptions or factors underlying the forward-looking information contained in this press release include, but are not limited to, "Business Environment and Outlook", "Third Quarter 2015 Financial Highlights", "Segment Results ", "Liquidity and Capital Resources" sections of the Third Quarter 2015 MD&A available on the SEDAR website at www.sedar.com. Although forward-looking information contained in this press release is based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with this forward-looking information. Certain statements included in this press release may be considered a "financial outlook" for purposes of applicable Canadian securities laws, and as such the financial outlook may not be appropriate for purposes other than this press release. The forward-looking information contained in this press release is as of the date of this press release, and should not be relied upon as representing GMP's views as of any date subsequent to the date of this press release. Except as required by applicable law, management and GMP's board of directors undertake no obligation to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise.
ABOUT GMP CAPITAL INC.
GMP is a leading independent diversified financial services firm headquartered in Toronto, Canada, providing a wide range of financial products and services to a global client base that includes corporate clients, institutional investors and high-net-worth individuals in two integrated reporting segments. The Capital Markets segment provides investment banking, including advisory and underwriting services, institutional sales and trading and research through offices located in Toronto, Montreal, Calgary, New York, Houston, Miami, Dallas, Hong Kong and Beijing. Wealth Management consists of GMP's non-controlling ownership interest in Richardson GMP Limited. Richardson GMP Limited, Canada's largest independent wealth management firm, is focused on providing exclusive and comprehensive wealth management and investment services delivered by an experienced team of investment professionals. GMP is listed on the Toronto Stock Exchange under the symbol "GMP". For further information, please visit our corporate website at gmpcapital.com.
SOURCE GMP Capital Inc.
For further information:
GMP Capital Inc., Rocco Colella, Director, Investor Relations, 145 King Street West, Suite 300, Toronto, Ontario M5H 1J8, Tel: (416) 941-0894; Fax: (416) 943-6175, email@example.com or firstname.lastname@example.org.