NGE Capital Ltd · ASX:NGE
NGE Capital — Shareholder Meeting (May 2022)
27 slides from NGE Capital's shareholder meeting presentation, May 26, 2022
Slide 1: NGE Capital Limited AGM Presentation
For personal use only NGE Capital Limited ASX : NGE AGM Presentation 26 May 2022
Slide 2: Disclaimer
Disclaimer For personal use only The information in this presentation is in summary form Past performance is not a reliable indicator of future This presentation is provided for informational purposes and should not be relied upon as a complete and performance. only and is subject to change without
Slide 3: Company snapshot
Company snapshot For personal use only • NGE Capital Limited (NGE or Company) is a Listed Investment Company (LIC) which offers investors exposure to an actively managed, concentrated portfolio of high conviction investments. • Broad investment mandate, not restricted by geography, asset class, or s
Slide 4: Company snapshot (cont.)
Company snapshot (cont.) For personal use only Summary as at 30 April 2022 Top shareholders1 Board of directors Ticker NGE David Lamm 11.11% David Lamm Chief Investment Officer Share price $0.890 Raphael Lamm 8.81% Adam Saunders Portfolio Manager Shares outstanding 36.0m Kuridale Nominees Pty Ltd 5.
Slide 5: Investment philosophy
Investment philosophy For personal use only 1 Target investments that can generate strong returns with an adequate margin of safety • Individual securities can and do significantly deviate away from their fair value. • Potential to generate strong risk-adjusted returns by investing in select securit
Slide 6: Investment process
Investment process For personal use only Idea Proprietary Assessment Investment Monitor & generation research decision exit • Screening • Rigorous • Qualify against • Buy, hold, sell, • Update fundamental investment wait, do nothing assessment for • Identify mispricing analysis philosophy new inform
Slide 7: A top performing LIC
A top performing LIC For personal use only Growth in NTA per share 2 2022 Since incep tio n Tax efficient investment vehicle Net returns 1 2017 2018 2019 2020 2021 Y TD (p .a.) (cum.) • NGE has recognised a ~$2.3m NGE reports its (~$0.064 per share) deferred tax returns after all 26.8% 21.4% 11.2% -
Slide 8: Performance
Performance For personal use only Share price performance since inception1 Since incep tio n (p .a.) (cum.) 100 ¢ NGE 16.5% 128.2% ASX 200 Accum. 10.1% 68.6% 90 ¢ MSCI Wo rld Accum. 11.4% 79.4% 80 ¢ 70 ¢ 60 ¢ 50 ¢ 40 ¢ 30 ¢ NGE close price (¢) ASX 200 Accum. (rebased) MSCI World Accum. (rebased) 1 F
Slide 9: Share buybacks
Share buybacks For personal use only • NGE has bought back and cancelled ~6.33m NGE buybacks since 2015 shares at an average price per share of ~$0.456 since 2015. • This equates to ~14.9% of the shares ~$0.456 ~6.33m ~14.9% Average price Number of of shares outstanding at outstanding since the star
Slide 10: Portfolio composition as at April 2022
Portfolio summary For personal use only Portfolio composition as at 30 April 2022 Co mp any Ticker % NTA Investment thesis in b rief Yellow Cake plc LSE : YCA 16.5% U3 O8 price too low to incentivise new primary production, supply deficit forecast Metals X ASX : MLX 12.3% Sale of troublesome copper
Slide 11: Uranium
Portfolio holding – Uranium For personal use only Description Valuation • Yellow Cake plc (LSE:YCA) and Sprott Physical Uranium Trust Ye llow C a ke SPUT SPUT (TSX:U.UN) are listed investment entities whose strategy is to Ticker LSE:YCA TSX:U.UN TSX:U.U buy physical uranium in the form of U3O8 and h
Slide 12: Uranium (cont.)
Portfolio holding – Uranium (cont.) For personal use only Assessment U308 supply-demand balance • Spot price is still below the price necessary to incentivise (mmlbs) increased primary production: some market commentators 250 estimate a price of US$80/lb or higher may be required. • Supply deficit (
Slide 13: Metals X
Portfolio holding – Metals X For personal use only Description Snapshot • Tin producer with a 50% interest in the Renison Tin Ticker ASX : MLX Operation, Tasmania. Price (30 Ap r 22) $ 0.740 • Renison FY22E production guidance of ~8,500-9,000t of tin in concentrate (100% basis). Market cap $m 671 1
Slide 14: Metals X (cont.)
Portfolio holding – Metals X (cont.) For personal use only Tin uses Share price performance vs tin price (A$) 10% Solder $0.90 5% Chemicals 7% $0.80 Tinplate 49% 13% Lead batteries $0.70 Tin copper alloys NGE $0.60 16% Other initial $0.50 investment • Annual tin demand in 2021 of ~350kt forecast to
Slide 15: Wood Group
Portfolio holding – Wood Group Description Snapshot For personal use only GBP USD • Provider of engineering, consulting, project management and asset optimisation services. Ticker LSE : WG. FX rate USD:GBP 0.7953 • Serves two broad end markets: Energy (oil & gas, process & Price (30 Apr 22) $ 2.234
Slide 16: Wood Group (cont.)
Portfolio holding – Wood Group (cont.) Built Environment valuation RemainCo1 For personal use only (FYE 31 December) Low B a se H igh (FYE 31 December) Low B a se H igh FY21 Revenue US$m 1,188 1,188 1,188 FY21 Revenue US$m 5,238 5,238 5,238 1 2 Growth % 15% 15% 15% Growth % 6% 6% 6% FY22E Revenue US
Slide 17: Capricorn Energy
Portfolio holding – Capricorn Energy Description Capital structure For personal use only GB P USD • Oil and gas producer and explorer that is perhaps better known Ticker LSE : CNE by its former name Cairn Energy. FX rate USD:GBP 0.7953 • Key assets are its significant cash balance, onshore producing
Slide 18: Capricorn (cont.)
Portfolio holding – Capricorn (cont.) For personal use only Assessment Sum-of-the-parts Low H igh • Capricorn looks cheap on a sum-of-the-parts basis: by our assessment of Capricorn’s “hard asset” value, we believe the Pr odu cing a sse ts market is ascribing zero value to the Egypt production asset
Slide 19: Jupiter Mines
Portfolio holding – Jupiter Mines For personal use only Description Snapshot • Manganese ore producer whose sole asset is a 49.9% (FYE 28 February) interest in the Tshipi Borwa mine in South Africa. Ticker ASX : JMS • Manganese is a critical element in carbon steel production Price (30 Apr 22) A$ 0.
Slide 20: Jupiter Mines
Portfolio holding – Jupiter Mines For personal use only Assessment Valuation LT Mn Benchm ark Price (US$/ dm t u) • Under a long-term Mn price of US$4.00/dmtu we value JMS $3 . 0 0 $3 . 5 0 $4 . 0 0 $4 . 5 0 $5 . 0 0 at ~A$0.45 per share at an assumed production rate of DCF p er ~3.40Mtpa (FY22A: ~3
Slide 21: Evolve Education
Portfolio holding – Evolve Education For personal use only Description Snapshot • Provider of Early Childhood Education, operating 109 NZD AUD childcare centres in New Zealand and 23 in Australia Ticker ASX : EVO FX rate AUD:NZD 1.0937 1.0000 Situation Price (30 Apr 22) $ 0.710 0.650 • Covid-19 lock
Slide 22: Evolve (cont.)
Portfolio holding – Evolve (cont.) For personal use only Assessment Valuation • Assuming no Covid impacts, Evolve trades at an undemanding Lo w High ~4.3x EV/FY22E EBITDA. FY22E EBITDA A$m 21 23 • Main catalyst to a re-rating would be a sale of Evolve’s NZ Comparable transaction multiples operations
Slide 23: Embecta
Portfolio holding – Embecta For personal use only Description Capital structure • Number one producer globally of diabetes injection devices. Share price (30-Apr-22) $ $30.43 • Manufactures and sells insulin syringes, pen needles and other Shares out. m 57.8 products related to the treatment and man
Slide 24: Embecta (cont.)
Portfolio holding – Embecta (cont.) For personal use only Assessment Historical revenue – by product • Historically has been a low growth, high margin cash cow. (FYE 30 September; US$m) • Looks cheap even accounting for management guidance of $1,165 $1,188 $23 Manufacturing and Supply $1,109 $1,086
Slide 25: Allegiance Coal
Portfolio holding – Allegiance Coal For personal use only Description Snapshot • Coking coal producer whose key assets are the 100% owned and Ticker ASX : AHQ operated New Elk mine in Colorado and the Black Warrior Mine in Alabama. Price (30 Apr 22) A$ 0.560 • Also owns a 90% interest in the promisi
Slide 26: Board & management
Board & management For personal use only David Lamm Adam Saunders Ilan Rimer Leslie Smith Executive Chairman & Executive Director & Non-Executive Director Chief Financial Officer & Chief Investment Officer Portfolio Manager Company Secretary • Responsible for the origination of • Responsible for the
Slide 27: Investment proposals
Investment proposals Submit an investment opportunity for us to consider to: investments@ngecapital.com.au For personal use only ACN: 112 618 238 Phone: +61 3 9648 2290 Email: office @ ngecapital.com.au Web: www.ngecapital.com.au