Spheria Emerging Cos. Ltd. · ASX:SEC
Spheria Emerging Cos — FY2019 Earnings Presentation
16 slides from Spheria Emerging Cos's earnings presentation, Aug 29, 2019
Slide 1: Conference call reminder and presentation on full year results
Spheria Emerging Companies Limited Level 35, 60 Margaret Street Sydney NSW 2000 Telephone: 1300 010 311 Email: invest@pinnacleinvestment.com ACN 621 402 588 For personal use only 29 August 2019 Company Announcements ASX Limited Exchange Centre 20 Bridge Street Sydney NSW 2000 Dear Shareholder, Confe
Slide 2: FY2019 Results and Portfolio Update
For personal use only Spheria Emerging Companies Limited ASX : SEC FY2019 Results and Portfolio Update
Slide 3: Agenda
2 For personal use only Agenda 1. SEC Company update 2. Portfolio update 3. Questions
Slide 4: Full year results FY2019
3 Spheria Emerging Companies (ASX: SEC) Full year results FY2019 For personal use only FY19 profit Portfolio performance1 Company performance2 $3.2m 1.8% 0.1% Interim Dividend Final Dividend Full Year Dividend Annualised yield* Cash 2.0c 4.0c 6.0c 3.4% Grossed-up 2.9c 5.7c (100% franking) 8.6c 4.9%
Slide 5: NTA breakdown for FY19
4 NTA breakdown for FY19 For personal use only $2.20 + $0.039 - $0.032 $2.15 - $0.006 Pre-Tax NTA per SEC share $2.102 - $0.060 $2.10 $2.043 $2.05 $2.00 $1.95 $1.90 Pre-tax NTA 1 Jul Portfolio Tax provided or Company Dividends paid Pre-tax NTA 30 2018 performance paid expenses June 2019 Source: Sphe
Slide 6: Performance History
5 Performance History For personal use only SEC Portfolio performance Net Portfolio Performance as at 30th Jun 2019 Since Inception Period 1 month 3 month 6 month 1 year Inception Date (pa) SEC Mandate -1.9% 1.7% 14.3% 1.8% 6.0% 30/11/2017 Small Ordinaries Accumulation Index 0.9% 3.7% 16.8% 1.9% 6.1
Slide 7: SEC portfolio performance
6 SEC portfolio performance For personal use only 20.0% Net performance since Inception Spheria Index 15.0% Relative Performance 10.0% 5.0% 0.0% -5.0% -10.0% -15.0% Nov-17 Feb-18 Mar-18 Jul-18 Mar-19 Jan-18 Aug-18 Nov-18 Feb-19 Oct-18 Jan-19 Dec-17 Apr-18 May-18 Jun-18 Sep-18 Dec-18 Apr-19 May-19 Ju
Slide 8: Investment philosophy
7 Investment philosophy For personal use only Sirtex – Cash Flow Dynamics Mesoblast – Cash Flow Dynamics 80 0 70 -20 60 -40 50 -60 A$m -80 A$m 40 30 -100 20 -120 10 -140 0 -160 FY11A FY13A FY18A FY08A FY12A FY16A FY17A FY09A FY10A FY07A FY14A FY15A FY12A FY13A FY14A FY15A FY16A FY17A FY18A Free Cash
Slide 9: The great re-rating
8 The great re-rating For personal use only PE re-rating by PE quintiles over last year 400% • Highest rated PE stocks one Quintile 1 Quintile 2 year ago, have had a huge Quintile 3 300% re-rating during the year Quintile 4 Quintile 5 • Unjustified by growth in 200% earnings, likely driven by growth
Slide 10: Relative valuations – WAAAX vs Spheria Basket
9 Relative valuations – WAAAX* vs Spheria Basket For personal use only Aggregate Market Valuations (A$bn) 180x A select basket of five 160x Spheria stocks is valued at Aggregate Profit (EBIT) Multiple 140x only 12% of the WAAAX 120x WAAAX* complex and yet has a $30bn 100x similar level of profitabil
Slide 11: Microcaps continue to lag
10 Microcaps continue to lag For personal use only Small Cap Index vs Microcap Index 10% 5% 0% -5% -10% -15% XSOAI Acc. Index -20% XECAI Acc. Index -25% Apr-18 Jan-18 Mar-18 Sep-18 Nov-18 Jul-18 Jan-19 Mar-19 Feb-18 May-18 Aug-18 Dec-18 Jun-18 Oct-18 Feb-19 Source: IRESS
Slide 12: Company Positions
11 Company Positions For personal use only Spheria Emerging Companies Limited – June 2019 Ticker Name % Portfolio PTM PLATINUM ASSET MANAGEMENT 4.8% HT1 HT&E LTD 4.5% BGA BEGA CHEESE LTD 4.5% HLS HEALIUS LTD 4.4% FBU FLETCHER BUILDING LTD 4.3% BKL BLACKMORES LTD 3.9% SGM SIMS METAL MANAGEMENT LTD 3.
Slide 13: Outlook
12 Outlook For personal use only • Valuations inexpensive towards micro end of the smallcap market • SEC beneficiary of M&A activity • cash flow generative businesses; • balance sheets strong; and • most importantly valuations attractive • Economically sensitive stocks starting to offer good relativ
Slide 14: Initiatives to close the discount to NTA
13 Initiatives to close the discount to NTA For personal use only • Investor communication – more regular insights and video updates, Pinnacle listed products investor relations team Shareholder engagement • Investor events - Pinnacle Listed Investments Summit, manager roadshow, industry events • Tr
Slide 15: Questions
For personal use only Questions 14
Slide 16: LIC Disclaimer
15 LIC Disclaimer For personal use only Spheria Emerging Companies Limited ACN 621 402 588 (SEC) Spheria Asset Management Pty Ltd (ABN 42 611 081 326, Corporate Authorised Representative No. 1240979) (‘Spheria’) is the investment manager of Spheria Emerging Companies Limited ABN 84 621 402 588 (‘SEC
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