Canaccord Genuity Group Inc. will take a C$10 million restructuring charge in the current quarter after laying off about 7% of its US and Canadian staff because of a slowdown in mergers, initial public offerings and equity issues.
The investment bank reported revenue of C$343 million ($257 million) and earned 7 cents per share, excluding special items, for the fiscal first quarter ended June 30. Both numbers trailed analysts’ estimates.
The staff reductions, which amounted to about 100 jobs, fell almost entirely on the firm’s capital markets units, with few changes in its wealth management division.
“We’re in the worst new-issue market — the longest, worst new-issue market that I’ve ever seen,” Chief Executive Officer Dan Daviau said in an interview. “This has gone on now five, six quarters.”
“But, little hint, companies need money. So when it comes back, it’ll come back very strongly.”
During the quarter, Canaccord booked C$15.3 million in “development costs” – mostly expenses related to an aborted bid by senior management to take the company private. The proposal, which valued the firm at about C$1.1 billion, expired in June after the management group said it had no chance of getting timely approval from regulators.
