Canaccord to take restructuring charge after North American job cuts
Canaccord Genuity Group Inc. will take a restructuring charge after it let go of seven per cent of its North American staff, a response to its worst period in years for deal revenue.
The Canadian investment bank and wealth manager reported revenue of $343 million and earned seven cents per share, excluding special items, for the fiscal first quarter ended June 30. Both numbers trailed analysts’ estimates.
Revenue in Canaccord’s U.S. capital markets division tumbled 41 per cent to $73.5 million, the lowest level since before the COVID pandemic, as initial public offerings, new equity sales and mergers were slow in the small- and mid-cap markets the firm serves.
“We’re in the worst new-issue market — the longest, worst new-issue market that I’ve ever seen,” chief executive 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,” he said. Canadian capital markets revenue saw an uptick from a year earlier, and the fundraising environment for resource companies appears to be improving, Daviau said.
Canaccord’s wealth management unit continued to be a bright spot, with revenue rising 18 per cent over the year-earlier period. That was due to growth in the U.K. and Europe, which now represent more than half of the revenue of that business.
The division, which also provides financial advice and money management for clients in Canada, Australia and the U.S., is still recruiting new financial advisers. “Our wealth business is incredibly resilient,” Daviau said.
The staff reductions, which amounted to about 100 jobs in the U.S. and Canada, fell almost entirely on the firm’s investment bank, with few changes in the
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