AGF Management Ltd. today reported strong revenue and net income growth in the first quarter ended February 29, even as volatile markets curbed fund sales.

AGF said revenue increased 9.8% and earnings before interest, taxes, depreciation and amortization (EBITDA) increased 11.3% compared to the first quarter of 2007.

Consolidated revenue from continuing operations rose to $194.3 million during the quarter compared with $177 million in the first quarter of the prior year, with both operating segments reporting year-over-year increases.

EBITDA from continuing operations were $89.5 million for the three months ended Feb. 29, 2008, compared with $80.4 million for the three months ended Feb. 28, 2007. However, continued market volatility resulted in net redemptions of mutual funds for the quarter, with $221 million of net redemptions of long-term funds during the first quarter of fiscal 2008.

Income from continuing operations before taxes for the quarter was up 15.8% to $56.5 million, compared with $48.8 million for the year ago period.

Net income from continuing operations for the quarter was up 64.6% to $62.7 million, 70¢ a share, compared with $38.1 million, or 42¢ a share, for the three months ended Feb. 28, 2007. Included in net income is a reduction in future income tax of $19.5 million related to the reduction in the federal income tax rate to 15% from 18.5% by January 1, 2012. Excluding the impact of this change, net income from continuing operations was up 13.4% to $43.2 million, or 48¢ a share.

Total assets under management decreased by 4.7% to $49.3 billion at the end of the first quarter from $51.7 billion as at Feb. 28, 2007. Over the same period, mutual fund assets declined by 3.8%, primarily as a result of market depreciation, however, average mutual fund assets increased 2.0% year over year.

Institutional and high-net-worth client assets declined 5.9% because of market volatility as well as client rebalancing and redemptions, which were non-performance related, AGF said.

The AGF Trust Operations segment continued to grow significantly with total loan assets rising 47.3% year over year.

“Continued market volatility impacted sales in the first quarter as investors remained cautious,” said Blake C. Goldring, chairman and CEO. “Despite this, our financial results remained strong, with revenue up 9.8% and income from continuing operations before taxes increasing by 15.8%. Enhancing our relationships and world-class investment management expertise are the cornerstone of our business platform, and we will continue to focus on these areas to realize the potential of our key growth initiatives.”