Canaccord Genuity Group Inc
TSX:CF
Earnings Call Analysis
Q3-2024 Analysis
Canaccord Genuity Group Inc
In the context of a world grappling with economic growth concerns, our company saw a brighter period as investor confidence grew on the back of a probable end to rate hikes. This renewed optimism, coupled with dipping inflation and robust corporate profits, provided a backdrop for our wealth businesses to demonstrate resilient and expanding earnings. Capital markets also showed signs of revival with a boost in activity, including new issues and mergers and acquisitions. Overall, we're reporting a hearty 15% sequential increase in revenue and a 2% year-over-year rise to $390 million, leading us to a $1.1 billion revenue total for the fiscal year to date. Significantly, our diluted earnings per share reached $0.20 for the quarter, marking a notable 25% year-over-year improvement.
Our wealth management sector was particularly impressive, notching a 12% increase in revenue over last year to $573 million, with client assets amassing to $99.2 billion. The U.K. segment, responsible for over half the earned revenue, is poised to achieve a record full-year revenue. Canadian operations were also stable with a 9% increase over the last quarter, hitting $77 million in revenue. Meanwhile, our Australian wealth business glowed with its best quarterly performance this fiscal year. The overall positive net flows, despite some client withdrawals, resulted in a 4% and 20% rise in the adjusted pretax net income contribution for the 3- and 9-month periods respectively.
We are cautiously mindful of the possible rate cuts over the next year, which could dim our wealth management division's interest revenue—a segment that presently accounts for 20% of the year-to-date revenue. Nonetheless, we anticipate a countervailing uplift from enhanced activity in the new issue space in Canada and Australia.
Capital markets are back in the black this quarter, with all regions contributing positively despite a moderate year-over-year revenue decline of 4%. The leap in sequential revenue growth by 31% is chiefly thanks to our improved performance in the U.S. and Canada. Advisory revenue, interlaced with strong showings in the technology and consumer sectors, held steady against last year but soared by 62% from the previous quarter's low. We expect to see a blossoming M&A contribution from our Australian operations as part of a broader trend toward business health and normalizing markets.
Proudly we've achieved revenue growth paired with efficiency gains. By looking at the quarter's results, our executive confirms the sensation of being on a better track. Our compensation ratios remain constant, and we're poised to increase payment or expand our team in accordance with revenue growth. This shows our confidence in maintaining productivity and hiring capacity should the need emerge.
Finally, our executive highlighted the robust mechanisms for M&A revenue prediction, which are accurate up to three months ahead, offering valuable insight into expected performance. The variable factor in our revenue forecasting here hinges on the timing of deal completions, which can typically cause slight shifts in realized revenues.
Wrapping up, as we look forward to a recovery in both IPO and new issue activities, we are confident in our current position. The synergy between our global teams fortifies us to seize opportunities that lie ahead, maintain a robust market stance, and deliver profitable growth—ultimately enhancing shareholder value.
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Good morning, ladies and gentlemen. Thank you for standing by. I'd like to welcome everyone to the Canaccord Genuity Group Inc. Fiscal 2024 Third Quarter Results Conference Call. [Operator Instructions] I would now like to turn the conference call over to Mr. Dan Daviau, President and CEO. Please go ahead, Mr. Daviau.
Thank you, Operator, and thanks to everyone joining us for today's call. As always, I'm joined by Don MacFayden, our Chief Financial Officer. Today's remarks are complementary to our earnings release, MD&A and supplemental financials, copies of which have been made available for download on SEDAR Plus and on the Investor Relations section of our website at cgf.com.
Within our update, certain reported information has been adjusted to exclude significant items to provide a transparent and comparative view of our operating performance. These adjusted items are non-IFRS financial measures. Please refer to our notice regarding forward-looking statements and the description of non-IFRS financial measures that appear in our Investor Relations presentation and in our MD&A. With that, let's discuss third quarter fiscal 2024 results.
During our third fiscal quarter, the major benchmark indices enjoyed positive performances driven by increased investor confidence that we are nearing the end of the rate hiking cycle. Although global economic growth remains weak, we've been pleased to see headline and core inflation begin to come down and stronger corporate profits are helping to lift stock prices. Against this backdrop, our wealth businesses continued to deliver stable and growing earnings. Our capital markets businesses experienced an uptick in activity levels in both new issues and M&A when compared to the previous fiscal quarter, albeit still significantly muted compared to historical levels.
Firmwide revenue improved by 15% sequentially and by 2% year-over-year to $390 million. This brings our fiscal year-to-date revenue to $1.1 billion, which is 1% lower than the same period last year. Our wealth management and capital markets businesses were both earnings positive in the 3-month period. Excluding significant items, firm-wide pretax net income was $45 million, which translates to diluted earnings per common share of $0.20 for the fiscal quarter, a year-over-year improvement of 25% and our best quarter of this fiscal year.
Compensation expense declined by 7% compared to the same quarter a year ago, partially related to changes in the value of certain stock-based compensation awards. Firmwide compensation ratio was 57%. We continue to manage our balance sheet carefully in this reduced revenue environment as we manage through inflation, increased supplier and system costs, several planned office relocations and additional investments to advance our technology and compliance infrastructure. I will also note that our Board of Directors has approved a quarterly common share dividend of $0.085 reflecting their strong confidence in the stability of our wealth management businesses.
On a consolidated basis, our global wealth management businesses earned revenue of $195 million for the 3-month period. This brings the fiscal year-to-date revenue contribution to $573 million, which is 12% higher than the same period of last year. The value of firm-wide client assets increased by 5% year-over-year to $99.2 billion. While we are still modestly below peak levels, client assets in each of our geographies improved on a year-over-year and sequential basis. We ended the quarter with modestly positive net flows in each of our businesses.
Our organic growth initiatives have helped us drive strong gross inflows, which were unfortunately offset by some outflows as we continue to see clients access their assets for their own cash requirements in the current environment. The adjusted pretax net income contribution from this division for the 3- and 9-month periods increased by 4% and 20%, respectively, bringing the fiscal year-to-date contribution to $106 million.
Our U.K. wealth management business contributed 52% of the revenue and 67% of the adjusted pretax net income earned in this division during the 3-month period. This business is on track to deliver record full year revenue and adjusted net income, reflecting the excellent progress against our efforts to improve synergies and drive organic growth.
Looking ahead, we continue to advance our organic growth initiatives, and we are also looking forward to completing our previously announced acquisition of Intelligent Capital in the current fiscal quarter. Our team is also augmenting our organic growth by pursuing modest strategic opportunities to become an even more holistic wealth manager. In addition, we've also begun to recruit teams to our industry-leading platform with a number of advisers or planners having agreed to join and a reasonable pipeline of additional recruits.
Revenue in our Canadian wealth management business was $77 million, which is in line with the same period of last year and 9% higher than the second fiscal quarter. Transactional revenue in this business remained below historic levels, but we are pleased to see an uptick off the low in our second fiscal quarter. [indiscernible] revenue was 51%. On an adjusted basis, pretax net income of $11 million was the strongest quarterly contribution from this business in the current fiscal year. Recruiting activity in Canada remains on track. We welcomed 2 new teams in the Toronto region, and our recruiting pipeline remains robust in all our branches.
Our Australia wealth business delivered its strongest quarterly results for the current fiscal year with revenue of $16 million, increasing by 5% sequentially on improving commission and new issue revenues. Managed assets in Australia reached a record of $6.1 billion, an increase of 17% year-over-year. The adjusted pretax net income contribution of $1.5 million is below the peak levels achieved in fiscal 2022, but 28% higher year-over-year.
While improving our net income continues to be impacted by continued planned investments that we are making to support growth in this business. We recently welcomed new advisers in Perth, Melbourne and our new office in Brisbane and our recruiting activities in this region are positively contributing to the growth in fee-based assets. These additions will positively add to revenue in the upcoming quarters.
The potential for rate cuts over the coming year may be a headwind to interest revenue, which has accounted for 20% of our year-to-date revenue in our wealth management division. Traditionally, we would expect improving new issue activity in Canada and Australia to provide a substantial offset to any decline in this segment.
Our global capital markets division returned to profitability in the third fiscal quarter, and all geographies contributed positively. Consolidated revenue of $190 million for the 3-month period was down 4% year-over-year but increased 31% sequentially, driven by improved contributions from our U.S. and Canadian businesses. The quarterly revenue mix in this division was similar to the first half of the fiscal year, but we had a notable uptick in advisory completions driven by the stability in the market and improving liquidity.
Revenue from advisory activities was flat compared to the third quarter of last year but improved by 62% from the low in our second fiscal quarter to $75 million, which is the strongest quarterly contribution this fiscal year. 58% of total advisory revenue was contributed by our U.S. business, which continues to perform well in the technology and consumer sectors. Our U.K. business also experienced stronger completion activity during the quarter and contributed $21 million or 28% of total advisory revenue.
We are pleased to see increased contribution from the results team in the U.K., which joined us in 2022 and brings a strong complement to our existing capabilities in the mid-market technology and health care sectors. Our Australian business, which has not historically had a focused M&A practice, is now increasingly targeting advisory mandates and hiring dedicated resources to support this practice. We expect to see an improving M&A contribution from this region as we build out our capabilities.
Consistent with broader industry sentiment, we believe we have passed the trough of activity levels in the advisory segment, but liquidity, market stability and valuation levels will dictate how quickly we return to historic levels. New issue activities have remained below normalized levels, but the revenue contribution from the segment improved by 6% year-over-year to $40 million, which was the strongest quarterly contribution of this fiscal year.
The metals and mining sector continues to be the most active, primarily led by our Australian and Canadian businesses, and we are also seeing excellent coordination across CG geographies for distribution of new issues. Early into this calendar year, we continue to see increasing activity levels in some of our geographies, but it is still too early to predict a return to pre-pandemic levels given the uncertainties impacting the broader capital markets.
And finally, principal trading revenue for the 3-month period decreased by 15% from Q3 of last year but was up 47% from our second quarter, reflecting higher activity levels in our institutional equity group, which tend to increase at the end of the calendar year. As a percentage of revenue, total expenses, excluding significant items for the third quarter decreased by 4.9 percentage points. The previously mentioned changes in the fair value of share-based awards granted in prior periods contributed to a substantially lower compensation ratio in this division, and this was particularly evident in our Canadian business.
You will also recall that we undertook a substantial headcount reduction in this business earlier in the year. which brings me to highlight the improved efficiencies. Fiscal year-to-date revenue per employee in Canadian capital markets has improved by 76% year-over-year. In all, we are encouraged by improving sentiment and activity levels and looking forward to executing on a healthy pipeline of business as we support our clients' success. While I do not believe that we are entering into a normalized operating environment, barring any major surprises in the macro backdrop, I do believe that we are at the beginning of a gradual transition back to normal. Markets are still navigating geopolitical and economic uncertainty, which has implications for the timing and quantity of rate cuts, a long-awaited recovery in IPO and new issue activities and a more accommodating environment for advisory completions.
Looking at how our business and talented professionals in all CG geographies support one another and our broader business strategy through the best and worst environment, I believe we are very well positioned to capitalize on the opportunities and maintain a strong market position while delivering profitable growth and improve value for our shareholders. With that, Don and I will be pleased to take your questions.
Thank you. Ladies and gentlemen, we will now conduct the question-and-answer session. –[Operator Instructions] Our first question comes from Jeff Fenwick from Cormark.
Dan, I appreciate your comments there on Canadian capital markets at the end, and was maybe just hoping for a bit of incremental color there. I mean, it was a pretty significant change you did make in the headcount there. What was the sort of the mix there across those reductions? Was this about operational efficiency in terms of the back office? Was it maybe some reduction in emphasis in certain areas, be it trading, or banking, or anything, any color you can offer up there?
Yes. I mean, the easiest thing to say, Jeff, is we didn't really cut into the bone, I don’t even think we cut into the muscle, so to speak. So obviously, in a vibrant market, you tend to hire into a vibrant market when things are a little slower. I think you can cut around the edges. It was a big thought. At the end of the day, you can see our head count in Canada is down by about 50 people. I'd say it was primarily front-office driven. It wasn't a back-office cut. We did take out certain areas that we didn't feel were productive. So, some of the cuts, for example, in our fixed income group would have been more substantial than some of our other groups. So -- but we really didn't cut any capabilities. I'd say we just, kind of, heavy trimming around the edges, is probably the way I’d define it. Does that answer your question, Jeff?
I think so. And then a follow-on from that then is it -- when I think about compensation as a percent of revenue, should it sort of revert or run around the long-term average then? We're not talking about a change necessarily...
No, no. I don't want to say our compensation ratio is a covenant with our shareholders, but it’s the closest thing you can get to that, absent weird markets. So we don't see a material change in that.
Okay. And then, maybe within Canada, we could shift over to the wealth management. It does sound like you're adding some advisers here and there. You do continue to refer to a desire to shift towards more of the fee-based product that's there and take away some of the volatility. It's always kind of hard to gauge the success because the commission revenue shifts around the percentage -- relative percentages, right? So can you just sort of speak to like, what are you actually doing there to try and evolve that within Canada? Is it changes to the product mix that you're offering the advisers? I know it's not always easy to change their behavior.
Yes, good question. At some point, independent of this, we'll set you up with our wealth management folks, and then we'll walk you through it in more detail. But maybe just as a background, I'll just purposely use broad numbers because we don't disclose all of these numbers. But -- if you think of -- you'll see a couple of things in our public statements. First of all, you'll see that over 1/4 of our assets are discretionarily managed. That's in our supplement. So, obviously those are all fee-based assets. That's a discretionarily managed asset. So that's over $10 billion of our almost $40 billion assets. You can see that. Number two, when you look at our -- and we do disclose that 52% or over 50% is fee-based. But that 52% is 52% of revenue. There are several elements of revenue, and we kind of disclose that as well, that there's fee-based asset revenue, there's commission-based asset revenue. There's interest revenue. There's new issue revenue. So when you start thinking about, absent the new issue revenue and absent the interest revenue, which these days is significant, as you can imagine, when you start looking at what people are paying us to manage their assets, in other words, the commission-based revenue and the fee-based revenue, the fee-based revenue would be the significant majority of it -- of those revenues. Now we don't disclose that in a way to give you that, but perhaps later, I can walk you through the color associated with that. But a huge proportion of our commission and fee-based revenue is really fee-based revenue, not commission-based revenue.
So in terms of what we're doing to do that, I mean, obviously, most of the advisers that we recruit, and we've recruited almost 60 teams of advisers. Most of those advisers are all fee-based advisers, first of all. So there's a natural kind of bias for those numbers to increase. Secondly, we've taken a much stronger approach on financial planning and putting up plans in front of people. That tends to end up more fee-based than commission base. We've done over 1,000 financial plans this year for our clients. And third, we're giving our clients that our advisers the tools to continue to grow their business, and they've been immensely successful at growing their business. We've seen net new assets grow in Canada. We've seen gross new assets grow a lot, but these are difficult times. So people are pulling some money out of their accounts from time to time just to fund their lifestyle. We're not losing the client. So it seems like it's working. And I think in a more vibrant market, Jeff, it even works better. Hopefully, that answered some of your questions.
I appreciate that. That's very good color. Thanks. I'll requeue.
Our next question comes from Rob Goff from Echelon.
Congratulations on both the revenue achievement and the efficiencies on the quarter. I know we were they were hard fought -- won gains...
Feels better.
Yes, it looks better. Just perhaps following up on some of the questions from Jeff there. With respect to where you are currently with the efficiency gains, in the scenario you painted with a gradual transition to more normalized activity levels, would you be -- have sufficient resources on hand, i.e., a bit of extra capacity to handle that? Or do you foresee needing to add resources?
Yes. I'll take a step back and then I'll answer your question, Rob. But the -- our comp -- Jeff asked about comp ratio, obviously, and that won't change. It won't change materially. So if we have more resources, then if we have more revenue because the environment is better, either we'll pay our people more or we'll hire more people, but that ratio won't change. And I think we're in an environment, and I appreciate you know this, we've got a pretty good reputation here. If we needed to hire people, we can hire people. Like I'm not worried about that. I don't think that will be a constraint. So, one way or another, either people will work harder and make more or we'll hire more people. I'm not worried about it either way.
Very good. And you've talked in the past about the countercyclical nature of advisory business versus underwriting business. Could you -- and we saw it in the quarter, could you talk to your outlook in terms of both underwriting pipelines and advisory pipelines?
Yes. Great question. One of which I can answer, one of which I can't -- we've got a pretty -- obviously, we've got a pretty sophisticated CRM and, like any good investment bank, we would track our M&A revenue pretty closely, and there's -- I'm not saying you can track it perfectly 12 months in advance, but 3 months in advance, you can, and 6 months a little less. So, we understand where our M&A revenue is, absent major changes in the market. The problem with M&A revenue, and why we exceed or miss in a particular order, is because something gets delayed by a week or 2 weeks. Like, it's not because it vanishes or blows up. So -- and that will be the problem in this upcoming quarter. I could tell you that the dollar, what we've closed within a month of quarter end, but I can't tell you right at quarter end. So we've got a pretty good perspective. And the pipeline is very similar to where it was this quarter, maybe with some upside surprises depending on timing of closing of certain transactions. The broader pipeline, as I look forward for the year, continues to be robust, continues to be strong from where we are today and an uptick from where we are today. But again, really hard to nail it down to a day, which is the day of a quarter end, and whether a particular transaction closes then or the other day. But over the course of a rolling average, generally moving up to the right. So we feel pretty good about that. Now that assumes no major sociopolitical economic changes. It assumes liquidity stays open in the market because it is pretty open, as you know, right now. So in the current environment, we feel pretty strong on that.
The new issue pipeline and the underwriting activity, you have as good a perspective on that as likely as we would. We have a robust pipeline of people who want to raise money, no doubt. And, I think, as we see the smaller and mid-cap stocks start to perform better, because even though the market is at record highs, it's really weighted to very, very large cap stocks. As you know, the mid- and small-cap stocks are kind of relatively substantially underperformed. But as those stock prices come up and as the market does better, we'll see more new issuance.
So, the uranium sector is a good example. I mean lots and lots of demand out there. The companies didn't like their stock price. -- uranium stocks went up a couple of weeks ago and all of a sudden, you see a bunch of uranium deals. That's not rocket science. That's kind of obvious. So I think we'll continue to see a pretty robust pipeline of new issue activity. It's just impossible to predict. So it's really hard for me to sit here today and tell you our underwriting revenue is going up, and it's going to be great next year. It’s really a function of where the market is. And if I have to draw a line and make it go up or go down, I'd make it go up, but I'd be guessing a little bit.
Very good. May rate cuts be your friends.
May rate cuts be all our friends.
Our next question comes from Stephen Boland from Raymond James.
First, I appreciate your comments on advisory in general. Maybe you can just talk about the pipeline in the U.K. You mentioned some -- a couple of things in your comments. But the pipeline there, is this a pent-up demand quarter? Or is that particular segment in the U.K.? Is this level sustainable because it was a marked improvement?
Yes. The M&A pipeline, in particular, you're asking?
Yes, in the U.K.
Yes. I mean, again, our U.K. business is our smallest of our capital markets business. This is an important business. It's critical to our global franchise. We are interacting there globally, both on the tech and the mining and health care side. It's really part of our business. So when you look at it and say, is that particular geography going to do better one quarter over another when it's kind of broadly integrated in our broader business, it's really hard to predict. It was a robust quarter in Q3. Will we do the exact same revenue in Q4? I'd like to think so, but that could be a stretch. But we continue to have a bunch of activity.
The good news about the U.K. is you know that we bought this team over a year ago called Results, and they're well integrated in the firm. They're well integrated into our U.S. M&A practice as well, and they're starting to deliver. I mean we bought them at a time when M&A was kind of becoming more difficult, and we're finally starting to see the benefits of that and those results. But again, and I'm sorry to do this, really hard to predict quarter-over-quarter. -- again, if you're asking them to draw a line, it's not going up to the right for a quarter, but over a year, probably is. That's the best I can do at this stage.
Okay. And maybe just on the U.K. wealth management business, one of the big things you've seen over the past few quarters is definitely the interest costs in the MD&A, I mentioned some of the loans that you've taken out for acquisitions, I guess. Is that -- where is that in terms of priority of getting those costs down with this interest rate environment? Is that a focus on your capital allocation?
Not really. I mean, we've got a GBP 200 million loan, a little bit less than that outstanding, but we also have a lot of cash in that business. So our net debt, Don will give you the exact number in a second. I don't want to misquote it. So our net debt number is lower, because we do have a pretty robust balance sheet over in our U.K. wealth business. But we're using that money to buy little things like intelligent capital and other things. So that money does get deployed. We're not -- the leverage in that business is negligible when you look at our net debt relative to our EBITDA. So we're not worried about it. The cost of debt, although increasing because it's floating is not really material relative to the size of our EBITDA in the business. And you know that our interest income has also gone up a lot. So there's a natural hedge in that business, which is why we left the floating in the first place when we did it, because we do earn a lot of interest income that offsets that. So we're not really looking at taking that down in any material way. In fact, we've renewed our bank facility there recently. And the business continues to perform pretty strongly. Don, our net debt number in the U.K.?
Yes. If we just look at the loan balance versus excess cash where there's certainly sub GBP 150 million on that front, probably closer to GBP 140 million. But it's a regular traditional commercial bank loan type debt, fairly standard in form and certainly has a place in the capital structure for that particular unit.
Okay. And just my final question, Dan, and you may guess what it is. Certainly, the -- well, the foreign jurisdiction and the regulatory issue that was announced, -- has there been any update or any change in that?
No, I wish I could report something to you, but I can't. No material changes. People operate under their own timeline.
Our next question comes from Graham Ryding from TD Securities.
The comp ratio, I just noticed that it seemed to be much lower, sort of, across your wealth platforms relative to sort of that historical range. Have there been any deliberate actions on your part to bring that wealth comp ratio down? Or is this entirely the fair market value adjustment from stock-based comp that we're seeing in the quarter, and also year-to-date?
Graham, it’s Don. The – there's been no changes in our comp structure and our payout models and so forth. They've been consistent this year, consistent with prior years. I think -- and as we've talked about before, you have to kind of -- it's difficult to sort of isolate a particular quarter, and there's going to be some natural noise in any particular quarter's comp ratio. So you kind of have to extend it over a period of time. But the uptick in interest revenue makes that comp ratio look a little lower than it would be otherwise just because there's obviously different structure around the interest revenue versus regular fee-based type commission revenue.
That makes sense. Can you give us an idea of what the comp ratio would have been this quarter year-to-date if we didn't have the noise around the stock-based comp adjustments?
Well, we don't really get into that detail. I think just generally, there is -- there is a portion of the stock-based compensation that is tied to market. So there is some component of that. It wasn't so much this particular quarter. It would be, sort of, more over the year-to-date 9-month period.
Is there any potential true upcoming in Q4 on the comp ratio side? Or should we sort of been thinking 60%, 61% is your, sort of?
I would continue to think in that we've always settled out in -- by the time we get to the end of the year, we've always settled out into that 60%, 61% type range. So I would continue to think along those terms. There's not -- yes, I would continue to think along those terms.
So somesort of catch up in fiscal Q4 then. Is that the right... ?
We may see that. Yes, it will obviously depends on a number of factors. But... Yes.
Okay. Just jumping to your interest income on the wealth side. It seemed to be like on a relative basis, you're getting more of a benefit here in your U.K. platform from higher interest income, more so than we're seeing in Canada. Is there something structurally different here between the 2 platforms, and the sort of degree of interest income that they would earn -- and then I guess, how should we think about it?
Well, the difference -- in Canada, we self-clear, right? Clients cash, we have that cash, we access that cash. Our interest income in Canada is primarily a function of the margin we make available to our clients. So, as our margin balances go up, our interest income goes up. As our margin balances go down, our interest income comes down. So it's really a function of how much our wealth clients are drawing down on their margin. That's the biggest thing. So you see our interest income not going up as much is because people just don't have as much margin in their accounts because they don't want to have as much margin because interest rates are higher. So that's the difference. The U.K. is different, right? The U.K., we take a spread effectively on the cash that's in people's accounts. We pay them a certain interest rate. We use that cash to make a certain interest rate. So that's much more linear, a much more linear calculation.
Yes, that's right. We don't do margin lending in the U.K. versus Canada. So that is quite a different structural difference between the 2 units.
Okay. That's the piece that makes sense. And my last question, if I could. Just you made some commentary around you're seeing some outflows on your wealth platform, I think, more so in Canada because it did look like the Canadian wealth growth was softer than I expected quarter-over-quarter year-over-year. Anything you can quantify there in terms of percentage of AUA that you're seeing from net outflows in your wealth platform?
No, there's actually net inflows in Canada. We've seen net inflows. What I was referring to on the outflow was gross outflow. So our gross inflows minus our gross outflows results in net inflows. Our inflows are very strong, and our outflows are stronger than I would like. So it was kind of a hidden positive comment that if outflows slowed down because people stop needing their money to pay down their mortgage or do other things, then there's an opportunity for even better net inflows in all of our markets, Canada, Australia and the U.K., we've seen net inflows this year.
There are no further questions. I will turn the conference back to Mr. Daviau.
Okay. Well, that concludes our third quarter call. Really appreciate everyone having looked through this and joining us today. Our next update is going to be in June. That's our fourth quarter. We report a little later, as you know, because it's our fiscal year-end results. And as always, Don and I are available for follow-up questions. So operator, thank you, and you can feel free to close the lines.