Canaccord Genuity Group Inc., Canada’s largest non-bank brokerage, climbed the most in more than five years after reporting fiscal third-quarter profit that beat analysts’ estimates.
Canaccord Genuity surged 13 percent to C$7.79 at 4 p.m. in Toronto, the biggest jump since December 2008. The shares have gained 2.8 percent in the past year, compared with the 7.5 percent advance of the benchmark Standard & Poor’s/TSX Index.
Profit for the period ended Dec. 31 rose 78 percent to C$18.3 million ($16.5 million), or 14 cents a share, from a year earlier, the Toronto-based company said yesterday after markets closed. Excluding some items, the firm said it earned 17 cents a share, beating the 15-cent average estimate of five analysts surveyed by Bloomberg.
“Contributions from Canaccord’s nondomestic platforms were very strong and more than offset weaker-than-expected results from Canaccord’s domestic platform,” said Graham Ryding, a TD Securities analyst who upgraded the stock to buy from hold.
Chief Executive Officer Paul Reynolds said results were driven by record performance in the U.K. and Europe, and record contributions from its Australian business. Canaccord expanded beyond Canada with its 2012 takeover of U.K. stockbroker Collins Stewart Hawkpoint Plc.
“The results of our fiscal third quarter clearly demonstrate the benefits of this acquisition activity and the significantly diversified revenue streams that we have since established,” Reynolds, 50, said yesterday in an investor call.
About 68 percent of revenue came from outside Canada in the third quarter, fueled by a 75 percent increase in global underwriting compared to last year, Reynolds said.
The Collins Stewart Hawkpoint deal “is clearly demonstrating its value and providing an important offset to the lower market activity environment in Canada,” Ryding said in his note.