GMP Capital Corp. today reported net earnings of $8.7 million for its third quarter ended October 31. Earnings per share were 31¢ compared with pro forma earnings per share of 51¢in the same period last year.

GMP is the parent company of brokerage firm GMP Securities Ltd.

Revenue was $37.7 million compared with $45.0 million in the same period last year.

Annualized return on equity was 23.0% for the third quarter of fiscal 2005 and 30.8% for the nine months ended October 31, 2004.

“We are pleased with the firm’s results for the third quarter despite the challenging market conditions faced by the industry,” said Kevin Sullivan, CEO. “In a tough market, GMP made year-over-year gains across all its businesses in terms of industry ranking.”

Investment banking revenue was $18.9 million in the quarter, versus $24.3 million year over year and $29.3 million quarter over quarter. However, GMP said it improved to third position among investment dealers in Canada from fourth position in the same period last year in value of common equity underwriting transactions for the third quarter of calendar 2004.

GMP ranked second in M&A activity by number of successful transactions for the third quarter of this year compared to fifth position in the same period last year.

Sales and trading revenue increased 6.1% to $15.6 million from $14.7 million in the same period last year and 17.0% from $13.3 million in the previous quarter.

“Our solid financial results in the third quarter and for the nine months have put us in the position of having excess capital on our balance sheet and, as a result, the board of directors has declared a special dividend of 75¢ per common share in addition to a regular quarterly dividend of 10¢ per common share,” said Sullivan.

In the conference call, which followed the earnings announcement, Sullivan suggested the firm be soon be announcing its first retail hirings.

Sullivan said that the firm has finished building a retail technology platform which he believes is “best of breed”, and it is now ready to start bringing advisors on board. He indicated that the firm is in advanced discussions about the timing of its first retail advisor’s move to the firm.

Along with the new platform, Sullivan cited the opportunity for equity ownership in the firm as a key selling point for both retail and institutional talent.

In response to questions from analysts, Sullivan indicated that it is contemplating purely organic growth in GMP’s retail sales force. It is not considering any acquisitions on that side of the business.

He declined to provide quantitative targets for the building of the firm’s private client business, saying that GMP remains focused on finding the right sort of advisors, rather than in establishing any deadlines or body count targets. Ultimately, over the next five years, GMP aims to build a force of about 100 advisors with approximately $15 billion under administration, he suggested.