GHL - Earnings call transcript Q3 2019

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Operator

Good afternoon and welcome to the Greenhill Third Quarter Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, today’s event is being recorded.

I would now like to turn the conference over to Mr. Investor of Head Suehnholz, Relations. Patrick sir. Please go ahead,

Patrick Suehnholz

of all Thank today us conference call I Greenhill’s today you on Bok, joining XXXX Chief you. afternoon, and call. Executive Head Suehnholz, Patrick Chairman Good is for am Relations. for the results And me joining financial thank Investor our Greenhill’s and Scott quarter third Officer.

firm’s statements. events control materially, in those on indicated our outside regarding future forward-looking that, Today’s known their risks, based of are and call results differ, is current uncertainties, The and are financial the may subject to and possibly statements. These statements condition may what include firm’s are by forward-looking and nature, unknown from expectations actual assumptions.

and future Securities Report the current factors that For Form on discussion our Commission, quarterly a could reports X-K. results, with XX-Q the see Form risks firm’s our and filings Exchange Form XX-K, Annual including and of some on the on please affect reports of

assumes we of any Neither nor forward-looking responsibility other of for these any or statements. completeness accuracy the person

events. rely not future predictions of statements as should upon forward-looking You

We on are made. they to under these any which were the after no forward-looking statements of duty date update

call like would turn I to the to Bok. Scott now over

Scott Bok

third reported you, Patrick. $XX net million and of revenue Thank We $X.XX quarter of income share. per

year for quarter year. was the to of $XXX.X to $X.XX revenue The of million had last the date, For revenue of almost we share. and a a loss that identical

revenue was half. date, XX% to first of year the slow a For down as result our

fourth European our a this by Australia, we improved third performances decline in Canada, reduce of strength date significantly and Latin and Throughout activity revenue M&A. results low level we year, year globally, a offset the to performance the in business continued advisory and from it in U.S. capital America, very respectable in to benefitted Our M&A, expect in further have quarter reduced quarter.

environment have year, favorable complement is slow the a most see we of or advisory our given places measures and capital as activity. M&A reasonably good substantial last markets, to in from most about down businesses. business the continue and same goal activity for activity While we true Restructuring M&A transaction to the XX% operate for succeeding have activity we advisory capital but been in restructuring of our building much are relatively more credit global

resulting recently, team restructuring ratio well the expanded for a of our for Our fee seen compensation retainer XX%. With cost, to XX% ratio in increase which years. and both assignment year-to-date big coming quarters new compensation in a has revenue and completion respect was quarter bodes

compensation ratio We expect the move to quarter. in historic its our toward full-year of further fourth significantly range

to operating in earnout expenses, excluding XXXX very related cogent to those accounting acquisition non-compensation of Our last the were year. adjustments our similar

Our margin was quarter for pre-tax operating XX%. the

of and improved reflects rates. refinancing has it continue for terms our recent and Our to the quarter will interest expense in benefit interest from the recent declines

Our was XX% going year-to-date, and and for continue XX% for range expect rate effective to mid-XX% forward. rate a we quarter, in the tax the the

open through the average returns, shares of during equivalence withholding price $XX.XX restricted share invested In via on third terms Together stock X.XX quarter, quarter. purchased and purchases per repurchases market capital $XX.X million during we share million. an at these and totaling were of tax the

$X.XX of We also declared dividend per share.

vesting And we refinancing our XX, addition via withholding the open $XX.XX $XX shares recent During the per as average market October tax million. of had share at of $XX.X share of repurchase million RSUs. authority repurchased totaling common in of ongoing terms purchases in of October, we to additional XXX,XXX remaining an equivalents on an stock share of under price

for authority. share million, a cash of reflecting We payment we to with should and ended repayment be share for price the use and current of grow how schedule year-end. share is payments debt attractive term financing, prepayment our that of beyond. the Under principal We the continue $XXX.X repurchase to highly of our $XXX.X million our authority see will and repurchase the year of loan principal next opportunistic as quarter scheduled terms

we at Our we million share net even quarter our debt end count. $XXX.X and was continue going to aim forward reduce further deleveraging as

increasingly believe stream, for confident made revenue. Looking both well we that Longer ahead, we as as have we personnel business greater the a and are we terms will to to strong finish a in the are profitability. revenue moves of diversified well-positioned with revenue aggregate year lead term,

diversified the of significantly acquisition specialist four revenue advisory base. capital partners our Cogent years ago, Our more than

to restructuring year advisory meaningfully. activity level future coincides restructuring weaker resulting improv in years substantially two important in Last Latin of revenue the team hires revenue A year, M&A diversity. performance have Australia, our seen important provide should advisory expanded Canada, an few restructuring and a our greater three years defaults. and credit terms ago, offset or increased is Following business this America we activity advisory periods larger in with during

additional scale directors. is of have key revenue the eight into sectors into energy and insurance of year-to-date investments diversification our our recent the the revenue soon should recruitment and Madrid, offices and sub Paris base, enhance into further and sources expansion announced Singapore, and diversity industrials and advisory of shareholder and we managing to over the More to in time. in of new Recruiting

and our our foregoing from our cultivating between objective generating share XX approach all resulting of returns to cost going stable and margin the count. balanced goal our initiatives, the forward discipline in directors our succeed continue revenue amplified internally. reduced talent result still be sinking resulting significantly and of more new accretion should expansion talent is a We shareholders homegrown it’s both currently recruiting If our EPS externally to greater client have from we by and pacing managing and

is why multiples firm excited the that clear historical trading to it’s as our the group opportunity well are well Add creation fact lies below that ahead. peer valuation value that and we our about as

incentive value advantage full value firm of economic our has and of of through to stock the a take stock, restricted that owns XX% creation Our team and collectively opportunity. powerful therefore

Now, to I'm take questions. happy any

Operator

Thank question with ahead. Brown you. comes first Today's [Operator from KBW. Instructions] go Michael Please

Michael Brown

good evening guys. Hi,

Scott Bok

Hello.

Michael Brown

a are is wondering we into are to the the in of month quarter? give know bit fourth just you you quarter, it Thank be so, more expecting shape you. little you up, I a how for possible Scott, guess the kind sequentially to up could So, revenues quarter us as color if the to fourth

Scott Bok

of give forecast down when You sort know, for it’s lay year this quarterly you possible one the to quarter not really it’s me appropriate or and time always of less.

to that. difficult do it’s So,

both a the means but I just think As going said, do of and feel in the year revenue profitability terms, and cents, I will to terms we to strong we certainly wait finish finish dollars what and to to that strong have we year. and a we're have in expect exactly like see,

Michael Brown

where then information Okay, little the of about more a of kind to sounds ratio, around the bounced bit will you're maybe ratio range consisting And obviously bit. kind a great. you it full-year of I it’s comp appreciate but comp prior like on give at, a ratio little come more targeting color of you the could the kind know there, in years,

think for looking about kind that the are So, to the something is way right of you low it? XXs, in

Scott Bok

revenue what recent of we the when a range normally a a You know, a like we’re I we ratio level obviously trying in you going half, we had in be improved low to significantly what than that had compensation where just lower to I of is had that mid-to-high quarter not was would more comes an function saw mean, the and work ratio revenue possible. looks compensation which we’ve out. obviously first it when revenue simply towards do, say, we is like becomes is had years, XXs the this

we an sort have got of to – of bonuses right compensation same direction and to lower fixed it thing moved the we than to in but by and normal At having point QX. pay, amount do in you et a some in expect you’ve ratio the a we level – cetera QX

You revenue last in really depends year. the just comes the where of move it on simply know, we far out how this quarter can

Michael Brown

of just you trajectory here? just there the did clarify, could I the was say more kind XX Okay, pace buybacks then from if left million Thanks. on the one you on color and any of could,

Scott Bok

million less. to just opportunistic. continue going to be know XX be you That’s Sure. we're And

note have the what with. we – could rules lot a and judicious hurried have last is we there a our around shares to market we’re you’re like faster attractive are just real of and there limited do sure I'm about it. would some Also, dislocations some very corporate think continue missed in liquidity stock how frankly repurchases think are prices of couple I going could that over get familiar lot I months we and the did to we be where we

going have shares can to do can we where fast how to we use to to to, try locked. that do we the even limit a have we're but most the we want there’s we So, it funds if discretion, for get

Michael Brown

Okay. for questions. my Thank you taking

Scott Bok

Sure. Thank you

Operator

And next question Sachs. of Richard ahead. go Please comes Ramsden today our Goldman from

James Yaro

Thanks. This is in James Richard. filling for

of is have to about able this quarter, attrition The first the been you talked would changes net still there in you environment XX% any one think by, really be saw that MDs you the MD a grow past, expect question do just, to I in hiring you highlight?

Scott Bok

talent said, objective. of are have as margin so around course aggressively our certainly also of internally well. as to and develop continue is looking going MDs obviously recruiting the to going we're We're XX% net in always some terms in have to fairly movement I we growth

every to not year. single that do We’re going

years less. say going good. environment do Some to years we're more, recruiting do the to I be going would continues pretty to we're some

the of been all but right got with first pipeline clear. more year a at say of right not at announcements we're time talking of not compensation the at of it’s the people of to I’d recent pleased kind a that most various are we’ve or spending of certain. once we’ve to now. year-end announce we’re now quarter paid possible, for We’ll XXXX We before time this all our firms. likely couple has is made; year More building over, so others

James Yaro

And team much year. of then a industry versus a you second expanding for is, one this helpful. outlook That’s it. restructuring environment? discussed stronger the Got from next is strong How

Scott Bok

think team. from starting substantially to expanding larger mostly ago XX New We build York. a it’s really a out significant the a lot months about I made in team, move

some are months, there somewhat better financial cetera. sectors I think pressure, retail, more the where has is environment energy, XX there that over clearly et gotten

we think you, the now and of recession restructuring the benefits, when So, I is lot a don't there see under sometimes goes seeing but we're right someday economy will activity.

team larger firms I What restructuring field seeing increase and And may recently on what as just we're our share. in which significantly is, out very think flat market described really what about pleased I other environment is here getting we pretty more that’s business have a a seem seen think winds. have clearly the most that’s an relatively grow

James Yaro

a lot. Thanks Great.

Scott Bok

Thank you. last I think Okay. And our that’s question.

So, we we’ll if in quarter, in sooner. dialing you thank speak everybody to and for again a not

Operator

for has today's and conference thank Today's attending we now you. Thank you concluded presentation. all

You may lines have now disconnect wonderful your day. a and

Greenhill & Co (GHL) 6 Nov 192019 Q3 Earnings call transcript