BKI Investment Co. Ltd. · ASX:BKI
BKI Investment — H1 2014 Earnings Presentation
30 slides from BKI Investment's earnings presentation, Jan 30, 2014
Slide 1: BKI Investment Company Limited
BKI INVESTMENT COMPANY LIMITED
Slide 2: Half Year Result Presentation - Disclaimer
For personal use only Half Year Result Presentation 6 months to 31 December 2013 Disclaimer This material has been prepared by BKI Investment Company Limited. The information within this document is not intended to provide advice to investors or take into account an individual’s financial circumstan
Slide 3: Result Highlights
For personal use only Result Highlights 3
Slide 4: BKI Result Highlights
BKI Result Highlights For personal use only 1H 2014 1H 2013 Growth Ordinary Dividend Income $18.2m $15.6m 17.1% Net Operating Result* $18.0m $15.4m 16.8% Earnings Per Share (excluding Special Dividends) 3.72cps 3.56cps 5.0% Total Dividends Per Share 3.45cps 3.25cps 6.2% MER 0.17% 0.18% -6.3% Portfol
Slide 5: First Half Net Operating Results 1H2005 – 1H2014
First Half Net Operating Results For personal use only 1H2005 – 1H2014 20 18 16 14 12 $ Millions 10 8 6 4 2 0 1H 05 1H 06 1H 07 1H 08 1H 09 1H 10 1H 11 1H 12 1H 13 1H 14 Net Operating Result 5
Slide 6: Dividends Paid 2004 – 2014
Dividends Paid For personal use only 2004 – 2014 4.0 3.5 1 0.5 3.0 1 0.5 0.5 2.5 Cents per Share 2.0 3.4 3.45 3.2 3.2 3.25 1.5 3 3 3 3 2.5 2.75 3 3 2.6 2.7 2.5 2.5 2.1 2.2 1.0 2 0.5 0.0 Ordinary Dividends Special Dividends 6
Slide 7: Portfolio Valuation
Portfolio Valuation For personal use only As at 31 December 2013 900 800 700 600 $ Millions 500 400 300 200 100 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2013 Dec Investment Portfolio Cash 7
Slide 8: Management Expense Ratio
Management Expense Ratio For personal use only 0.80% 0.71% 0.69% 0.70% 0.60% 0.56% 0.50% 0.46% 0.46% 0.40% BKI Internally Managed 0.31% 0.30% 0.19% 0.18% 0.18% 0.19% 0.20% 0.17% 0.10% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2013 Dec 8
Slide 9: Performance
For personal use only Performance 9
Slide 10: BKI Performance
BKI Performance For personal use only As at 31 December 2013 BKI Performance 1 Year 3 Yrs 5 Yrs 7 Yrs 10 Yrs as at 31 December 2013 (pa) (pa) (pa) (pa) S&P/ASX 300 ACC INDEX (XKOAI) 19.7% 8.5% 12.3% 3.5% 9.5% BKI Portfolio Returns are BKI Total Shareholder Returns 19.7% 13.6% 16.4% 5.6% 9.9% measure
Slide 11: Total Shareholder Returns
Total Shareholder Returns For personal use only As at 31 December 2013 Total Shareholder Returns exclude the benefit of franking credits being passed on from BKI to Shareholders. Source: BKI Investment Company Limited, IRESS. Total Shareholder Returns include reinvestment of dividends. Past performa
Slide 12: Yield for all Seasons
Yield for all Seasons Dividends + Franking Credits received from a $10,000 investment in BKI at inception V’s For personal use only Bank Quarterly Interest. Highlights the opportunity of receiving a fully franked dividend in a falling interest rate environment. 1,600 1,400 $ Australian Dollars 1,200
Slide 13: Year Review
For personal use only 10 Year Review 13
Slide 14: Year Review: Liquidity, Size, Dividend History
10 Year Review For personal use only Liquidity BKI’s shareholder base has grown from 7,832 in 2003 to 12,824 in 2014. Size BKI’s Portfolio Valuation has increased from $171m upon listing in 2003 to $851m in 2014. Dividend History Interim Ordinary Dividends have grown by 64% from 2.10cps in 1H2005 to
Slide 15: Year Review: Cost and Structure, Performance
10 Year Review For personal use only Cost and Structure Internalised Management. MER reduced from 0.69% in 2003 to 0.17% in 2014. Company Awareness and Profile Lifted the company awareness and profile of BKI to Advisors, Brokers and SMSF’s. Won the 2011 LIC of the Year Award. Performance Delivered s
Slide 16: BKI Portfolio
For personal use only BKI Portfolio 16
Slide 17: Top 25 Shareholdings
Code Company Name % of Portfolio Index 1 NAB National Australia Bank 9.5% 5.6% 2 CBA Commonwealth Bank 9.2% 8.6% For personal use only 3 WBC Westpac Banking Corp 7.7% 7.0% Top 25 Shareholdings 4 5 BHP NHC BHP Billiton Limited New Hope Corporation 6.1% 5.7% 8.4% 0.0% As at 31 December 2013 6 TLS Tels
Slide 18: Portfolio Movements - Major Investments
Portfolio Movements For personal use only Major Investments FY14 Forecast FY14 Forecast FY14 Forecast Dividend Yield Franking EPS Growth PE Multiple ANZ Banking Corporation 5.4% 100% 6.0% 13.0X Westpac Banking Corp 5.9% 100% 1.0% 13.7X APA Group 6.0% 0% 1.0% 26.0X Insurance Australia Group 5.3% 100%
Slide 19: Portfolio Movements - Major Divestments
Portfolio Movements For personal use only Major Divestments FY14 Forecast FY14 Forecast FY14 Forecast Dividend Yield Franking EPS Growth PE Multiple QBE Insurance Group 3.1% 100% -31.0% 15.3X Tabcorp Holdings Limited 4.5% 100% -61.0% 17.0X S&P/ASX 300 Index 4.5% 7.5% 15.0X Source: BKI Investment Com
Slide 20: Investing for the Future
Investing for the Future For personal use only BKI is a research driven, active equities manager investing for the long term in profitable, high yielding, well managed companies. Stock selection is bottom up, focusing on the merits of individual companies rather than market and economic trends. BKI
Slide 21: Investing for the Future: TPG Telecom Limited
Investing for the Future For personal use only TPG Telecom Limited Income - Dividend Yield of 1.7%, DPS expected to grow ~20%pa. 14cps Dividend Per Share 13 12cps 11 10cps 9 8cps 8 6cps 6 4 5 4cps 2cps 0cps 2010 2011 2012 2013 2014 2015 2016 Principle Activity – TPG Telecom Limited wholesales bandwi
Slide 22: Investing for the Future: TPG Telecom Limited
Investing for the Future For personal use only TPG Telecom Limited Debt Levels - Net Debt/Equity -15%, Interest Cover of 23.9X 80% Net Debt-to-Equity 69% 60% 42% 40% 40% 22% 23% 20% 11% 2% 0% 2010 2011 2012 2013 2014 2015 2016 Management and Board - ~40% ownership. 100% Board Attendance Earnings and
Slide 23: Investing for the Future: Primary Healthcare Limited
Investing for the Future For personal use only Primary Healthcare Limited Income - Dividend Yield of 4.0%, FY14 DPS expected to grow 14% and a further 12% in FY15. 30cps 25 Dividend Per Share 24 25cps 22 20 20cps 18 15cps 11 10cps 8 5cps 0cps 2010 2011 2012 2013 2014 2015 2016 Principle Activity – P
Slide 24: Investing for the Future: Primary Healthcare Limited
Investing for the Future For personal use only Primary Healthcare Limited Debt Levels - Net Debt/Equity 33%, Interest Cover of 4.4X Management and Board – Share ownership of $129m. 97% Board Attendance Earnings and Valuation – Given gearing of 33% and intangibles of $3.3bln, a conservative 10% disco
Slide 25: Sector Performance
25 Sector Performance For personal use only 12 Months to 31 December 2013 (BKI.ASX V’s S&P/ASX300 Accumulation Indexes) 45% 40% 35% 30% BKI Investment Company 25% (BKI.ASX) 20% S&P/ASX 15% 300AI 10% 5% 0% -5% 25
Slide 26: Sector Performance
26 Sector Performance For personal use only 12 Months to 31 December 2013 (BKI Top 20 V’s S&P/ASX300 Accumulation Indexes) 100% TPG 80% BOQ 60% NAB BEN 40% BKI Investment WBC ANZ TLS Company IVC IAG CBA (BKI.ASX) WES WPL 20% WOW APA ARP S&P/ASX 300AI BHP AGK 0% CCL ALQ NHC -20% 26
Slide 27: Appendix
For personal use only Appendix 27
Slide 28: Experienced Investment Team
Experienced Investment Team For personal use only Investment Tenure Equity Team Member Qualifications Position Experience With BKI Ownership 1 Robert Millner FAICD Chairman 30 yrs 10 yrs 7,944,166 Investment Committee David Hall, AM FCA, FAICD Non Executive Director 34 yrs 10 yrs 268,906 Chairman Au
Slide 29: BKI Fact Sheet
29 BKI Fact Sheet For personal use only www.bkilimited.com.au ASX Code BKI.ASX Research Coverage Morningstar Listing Date December 2003 Morgan Stanley Mandate Aust Listed Equities Bell Potter Investment Sectors Diversified Evans and Partners S&P/ASX 300 Baillieu/Holst Benchmark Acc Index Approved Pr
Slide 30: For more information: www.bkilimited.com.au
For more information: www.bkilimited.com.au For personal use only 30
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