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VANCOUVER, B.C. - Canaccord Capital Inc. (TSX:CCI) reinstated its dividend Thursday after the financial services company reported a solid profit and higher revenues for its latest quarter and said its business is picking up strongly.
The Vancouver-based investment firm said it will reinstate its quarterly dividend, a year after it was suspended to protect its capital during harsh market conditions driven by the recession and capital industry crisis.
Shareholders will get a five cent a share payment starting next month.
"The board's confidence in our financial strength in highly competitive, challenging market conditions, was the key factor in the decision to reinstate Canaccord's quarterly dividend," Canaccord president and chief executive Paul Reynolds said.
In its earnings report, Canaccord cited higher revenues and aggressive cost control for helping to turn a year-ago loss into a profit during the quarter ended Sept. 30.
"It was a good three months for us," Reynolds told investors during a conference call Thursday.
He said Canaccord saw a "strong pickup in activity" in its capital market operation in September and believes that growth is "real and sustainable" until at least the end of the calendar year.
Canaccord reported a profit of $6.7 million or 12 cents per share for the fiscal second quarter of 2010, compared to a net loss of $5.4 million or 11 cents per share for the same time last year.
Revenues rose 11.6 per cent to $123.7 million.
Analysts surveyed by Thomson Reuters were looking for revenue of $121 million and earnings of 12 cents per share.
Canaccord, one of Canada's largest independent investment dealers, said aggressive cost containment helped revenues grow, with expenses at a flat $116 million year-over-year.
Its return on equity was 6.9 per cent for the quarter, below its target of 20 per cent, but a significant improvement from negative five per cent a year ago.
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