GMP Capital Trust announced today it is raising its monthly distributions by 20% after posting a record $38.6 million first-quarter profit.

The company net earnings of 65¢ per unit diluted, compared with a profit of $21.1 million, or 37¢ per share, in the year-earlier period before it converted to an income trust.

Accounting for a two-for-one exchange of shares into units at the time of the December conversion, GMP Capital said its 2005 first-quarter earnings would have come in at $30.3 million, or 53¢ per unit.

The company also reported record revenue of $96.9 million in the first quarter of 2006, up 32% from $73.4 million in the year-earlier period.


GMP’s monthly payout was raised to 12.5¢ per unit, or $1.50 per year, beginning with its May distribution.

“These results were a reflection of the continued strength in the Canadian equity markets and were driven by strong market share gains from our investment banking and institutional equities businesses,” said Kevin Sullivan, CEO, in a news release.

“Our growing revenue and profitability convince us that we continue to be on the right track in terms of our business model and our positioning in the Canadian capital markets.”

In its first quarter conference call with analysts, GMP indicated that it expects to see its retail brokerage business accelerate its expansion.

In today’s conference call, Kevin Sullivan, CEO of GMP, suggested he expects the retail brokerage build out to gain momentum. Sullivan attributes that expectation to the fact that the firm now has a significant retail business, which is starting to attract the attention of quality brokers who may have been hesitant to join it as a startup.

Currently, the firm has 22 brokers working in 19 teams in Calgary, Toronto and Vancouver, and about $2.5 billion in assets under administration. It is targeting advisors with an average book size of $100 million.

“There is a now a substantial business there,” he pointed out. “There are a number of IAs out there who I would describe as not-early adopters, but people who wanted to see how the success of GMP Private Client would roll out. They’re now getting a good sense of that, so it’s attracting a next generation of IAs to the platform.”

GMP Private Client reported revenue of $5.3 million in the first quarter. The division did not report revenue in the first quarter of 2005, as it was not fully operational during that period.

On the acquisition front, Sullivan said that it continues to look for opportunities in the private equity/alternative asset management area; and that it is still weighing the wisdom of buying something versus trying to build it.

As to whether GMP could itself be a takeover target, Sullivan said that it is certainly not looking to sell the business, and there are no active talks underway for anything like that. He did allow that it is always in discussions with other firms that it could partner or align itself with to help bolster its business. “So, no current truth to the rumours, although we do continue to attract significant interest and attention from around the globe,” he said.