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17.10.2012 22:05
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Greenhill & Co. Reports Third Quarter Earnings Per Share Of $0.28
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PR Newswire
NEW YORK, Oct. 17, 2012
NEW YORK, Oct. 17, 2012 /PRNewswire/ -- Greenhill & Co., Inc. (NYSE: GHL) today reported revenues of $62.7 million, net income allocable to common stockholders of $8.6 million and diluted earnings per share of $0.28 for the quarter ended September 30, 2012.
The Firm's third quarter revenues compare with revenues of $60.4 million for the third quarter of 2011, up 4%. Advisory revenues for the quarter were $72.7 million compared to $83.2 million in the third quarter of 2011. Investment revenues in the third quarters of 2012 and 2011 were negative $10.0 million and negative $22.8 million, respectively, due primarily to mark-to-market losses from our investment in Iridium Communications Inc. ("Iridium") (IRDM – NASDAQ).
For the nine months ended September 30, 2012, revenues were $192.8 million compared to $199.5 million for the comparable period in 2011, a decline of 3%. Advisory revenues for the nine months ended September 30, 2012 were $191.2 million compared to $217.3 million over the same year-to-date period in 2011, for a decline of 12%. Investment revenues for the nine months ended September 30, 2012 were $1.6 million compared to an investment loss of $17.8 million for the same period in the prior year.
The Firm's third quarter net income allocated to common stockholders of $8.6 million and diluted earnings per share of $0.28 compared to net income allocated to common stockholders of $8.6 million and diluted earnings per share of $0.28 in the third quarter of 2011. On a year-to-date basis, net income allocated to common stockholders was $27.0 million through September 30, 2012 compared to $28.5 million for the comparable period in 2011, which represents a decrease of $1.5 million, or 5%. Diluted earnings per share for the nine months ended September 30, 2012 were $0.88 compared to $0.92 for the same period in 2011.
The Firm's revenues and net income can fluctuate materially depending on the number and size of completed transactions on which it advised, the size of investment gains (or losses), and other factors. Accordingly, the revenues and net income in any particular period may not be indicative of future results.
"Global transaction activity remained weak in the third quarter and for the year to date. While that inevitably affects our performance in absolute terms, we are pleased that we continued to demonstrate an ability to increase our market share in the pool of advisory fees globally. Our year to date 12% decline in advisory revenues versus last year compares favorably to a 26%1 decline in global completed transaction volume and a 18%1 decline in global announced transaction volume. Within our business, the North American region continues to be the strongest performer, with Europe beginning to show some improvement and Australia weaker this year along with general market activity in that region. Meanwhile, our compensation ratio for the year is at 53%, well below that of our closest peers but still above our target level. We continue to expect to bring that ratio lower as and when transaction activity and our resulting revenue productivity return toward historic norms. Non-compensation expenses remain well under control with no change from last year, which suggests we are well positioned for significant margin improvement as transaction activity and revenue productivity rebound," Robert F. Greenhill, Chairman, said.
"Our recent involvement in a large number of significant transactions despite what has been generally a very quiet market demonstrates the kind of inflection point in our activity level that we signaled a few months ago. Clearly we are benefitting from our position as the only major firm entirely focused on client advisory work, free of the conflicts that come from having principal trading activities and/or multiple products and services to sell. We are gratified that clients often chose us for sole or lead advisory roles, but we are also pleased to be increasingly added to a client's advisory team when the initial advisor is found to have real or perceived conflicts. Having achieved our best run of transaction announcements in recent years, the advisory revenue amount we achieve for the full year will naturally now depend on the timing of transaction closings. But however those may fall, it is clear that we are well positioned for a strong finish to the year and are already set to commence next year with a considerably larger backlog than we began the current year with. The growth in our list of pending transactions, combined with a good flow of new early-stage assignments, gave us the confidence to increase our share repurchases this quarter, while also continuing to maintain our strong dividend. Looking ahead, we remain as positive as ever about our business, as the value and desirability of independent, unconflicted advice continues to receive wider recognition," Scott L. Bok, Chief Executive Officer, commented.
Revenues
Revenues by Source
The following provides a breakdown of total revenues by source for the three and nine month periods ended September 30, 2012 and 2011, respectively:
| | For the Three Months Ended | |||
| | September 30, 2012 | September 30, 2011 | ||
| | Amount | % of Total | Amount | % of Total |
| | (in millions, unaudited) | |||
| Advisory revenues | $ 72.7 | 116% | $ 83.2 | 138% |
| Investment revenues | (10.0) | (16)% | (22.8) | (38)% |
| Total revenues | $ 62.7 | 100% | $ 60.4 | 100% |
| | | | | |
| | For the Nine Months Ended | |||
| | September 30, 2012 | September 30, 2011 | ||
| | Amount | % of Total | Amount | % of Total |
| | (in millions, unaudited) | |||
| Advisory revenues | $ 191.2 | 99% | $ 217.3 | 109% |
| Investment revenues | 1.6 | 1% | (17.8) | (9)% |
| Total revenues | $ 192.8 | 100% | $ 199.5 | 100% |
Advisory Revenues
Advisory revenues were $72.7 million in the third quarter of 2012 compared to $83.2 million in the third quarter of 2011, a decrease of 13%. The decrease in advisory revenue in the third quarter of 2012 as compared to the same period in 2011 resulted primarily from a decrease in the fees earned from completed assignments and private capital advisory assignments, offset in part by an increase in announcement and opinion fees as well as retainer revenue from strategic advisory assignments.
For the nine months ended September 30, 2012, advisory revenues were $191.2 million compared to $217.3 million for the comparable period in 2011, representing a decrease of 12%. This decrease principally resulted from a decline in the number and scale of completed assignments, offset in part by an increase in announcement and opinion fees.
During the nine months ended September 30, 2012, we earned advisory revenues from 131 different clients as compared to 134 different clients for the same period in 2011. We earned $1 million or more from 50 clients for the period ended September 30, 2012 as compared to 51 clients for the same period in 2011.
During the nine months ended September 30, 2012, as compared to the same period in the prior year, worldwide completed M&A volume decreased by 26% from $1.899 trillion in 2011 to $1.401 trillion in 20122.
Completed assignments in the third quarter of 2012 included:
- The representation of the Supervisory Board of ASML Holding NV on the establishment of a Customer Co-Investment Program;
- the sale of Daily Mail and General Trust plc's remaining 50 percent interest in DMG Radio Australia to Illyria Pty Ltd.;
- the acquisition by Hancock Timber Resource Group of timberlands from Forest Capital Partners;
- the representation of Inergy, L.P. on the sale of its retail propane assets to Suburban Propane Partners, L.P.;
- the representation of Journal Communications, Inc. on the repurchase of all of the outstanding shares of its Class C common stock;
- the representation of the Special Committee of the board of Kinder Morgan Energy Partners L.P. on the acquisition of Tennessee Gas Pipeline and a 50% interest in El Paso Natural Gas Pipeline;
- the acquisition by Lion Pty Ltd of Little World Beverages Limited;
- the acquisition of Merlin Securities LLC by Wells Fargo & Company; and
- the acquisition by Sykes Enterprises, Inc. of Alpine Access Inc.
During the third quarter of 2012, our Capital Advisory group served as global placement agent on behalf of private equity and real estate funds for two interim closings of the sale of limited partnership interests in such funds.
The Firm announced in the third quarter the recruitment of Jeffrey Wasserstein (formerly a business executive involved in corporate development and commercial operating roles for a series of pharmaceutical companies) as a Managing Director focused on the pharmaceutical sector. Mr. Wasserstein will be based in our New York office.
In addition, the Firm recently announced the recruitment of Rupert Hill (most recently with Bank of America Merrill Lynch where he was Head of Healthcare for EMEA and Asia Pacific) as a Managing Director. Mr. Hill will focus on the healthcare sector in Europe, North America and emerging markets and will be based out of London.
The Firm also announced the addition of two Senior Advisors, Hartmut Ostrowski and Klaus Wubbenhorst. Both Mr. Ostrowski, who is the former Chief Executive Officer of Bertelsmann AG, and Mr. Wubbenhorst, who is the former Chief Executive Officer of GfK SE, will assist in the expansion of the Firm's client relationships in Germany.
Investment Revenues
In 2009, the Firm announced its exit from the merchant banking business, and since then, has been in the process of seeking to realize value from its remaining principal investments.
In the third quarter of 2012, the Firm recorded investment revenues of negative $10.0 million compared to negative $22.8 million in the third quarter of 2011. During the third quarters of 2012 and 2011, the quoted market value of our investment in Iridium declined significantly and resulting investment losses of $10.8 million and $23.6 million were recorded in the third quarter of 2012 and 2011, respectively.
For the nine months ended September 30, 2012, the Firm recorded investment revenues of $1.6 million compared to negative $17.8 million for the nine months ended September 30, 2011. The increase in investment revenues in 2012 resulted primarily from a smaller decline in the market value of our investment in Iridium for the nine months ended September 30, 2012 as compared to the same period in the prior year.
The following table sets forth additional information relating to our investment revenues:
| | For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||
| | 2012 | 2011 | 2012 | 2011 | |
| | (in millions, unaudited) | | |||
| Net realized and unrealized gains on investments in merchant banking funds | $ 0.1 | $ 0.2 | $ 1.3 | $ 0.9 | |
| Deferred gain on sale of certain merchant banking assets | 0.1 | 0.2 | 0.2 | 0.6 | |
| Net realized and unrealized (loss) in Iridium | (10.8) | (23.6) | (1.2) Werbung Mehr Nachrichten zur Greenhill & Co Aktie kostenlos abonnieren
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