AMCIL Limited · ASX:AMH
AMCIL — Investor Presentation (March 2019)
30 slides from AMCIL's investor presentation, Mar 18, 2019
Slide 1: AMCIL Information Meetings Presentation
18 March 2019 For personal use only The Manager ASX Market Announcements Australian Securities Exchange Exchange Centre Level 4 20 Bridge Street Sydney NSW 2000 Electronic Lodgement AMCIL Limited Information Meetings Presentation Dear Sir / Madam Please find attached the presentation to be given at
Slide 2: Shareholder Meetings March 2019
For personal use only Shareholder Meetings March 2019
Slide 3: Disclaimer
For personal use only Disclaimer AMCIL Limited and Australian Investment Company Services Limited (AFSL: 303209) and each of their respective directors, officers and agents (together the Disclosers) have prepared the information contained in these materials in good faith. However, no warranty (expre
Slide 4: Financial Results
For personal use only Financial Results Shareholder Meetings March 2019
Slide 5: Half-year summary – to December 2018
For personal use only Half-year summary – to 31 December 2018 Shareholder Meetings March 2019
Slide 6: Payment of an interim and special dividend
For personal use only Payment of an interim and special dividend Normal policy is to only pay a dividend at financial year end. However, the Board felt it was prudent to pay an interim dividend given the policy uncertainty surrounding the future refundability of franking credits. 2 cent per sh
Slide 7: Ending refundability of franking credits – we continue to act
For personal use only Ending refundability of franking credits – we continue to act on shareholders behalf AMCIL has provided a template letter on its website for shareholders to write to their parliamentary representatives. We have engaged through various industry groups to lobby on your behalf
Slide 8: Shareholder survey refundability of franking credits – your response
For personal use only Shareholder survey refundability of franking credits – your response 227 replies received. 91% of respondents negatively impacted and dependent on franking credit refunds. 90% retired or approaching retirement. Shareholder Meetings March 2019
Slide 9: The Investment Approach
For personal use only The Investment Approach Shareholder Meetings March 2019
Slide 10: AMCIL's approach
For personal use only AMCIL’s approach Focused portfolio covering large and small companies. Our size means small companies can have an equally important impact on portfolio returns as large ones. Use of the buy and write option strategies and small trading portfolio to generate additional fully fra
Slide 11: Profile of the portfolio by value – as at February
For personal use only Profile of the portfolio by value – as at 28 February 2019 Shareholder Meetings March 2019
Slide 12: Large companies outperformed small and mid caps
For personal use only Large companies outperformed small and mid caps – year to 28 February 2019 Shareholder Meetings March 2019
Slide 13: Portfolio performance per annum returns, including benefit of franking credits
For personal use only Portfolio performance per annum returns, including benefit of franking credits* – to 28 February 2019 After tax and expenses. Ignores benefits of LIC tax credits. * Assumes an investor can take full advantage of the franking credits. Shareholder Meetings March 2019
Slide 14: Dividends are a significant component of shareholder returns
For personal use only Dividends are a significant component of shareholder returns – 10 years to 28 February 2019 Franking credit return Share price return * Assumes an investor can take full advantage of franking credits. Shareholder Meetings March 2019
Slide 15: Share price relative to net asset backing
For personal use only Share price relative to net asset backing Shareholder Meetings March 2019
Slide 16: How AMCIL invests – what we look for in companies
For personal use only How AMCIL invests – what we look for in companies Board and management, financial position, as well as some key financial metrics – the level of gearing and cash flow. Ability of companies to grow earnings over time, which ultimately should produce good dividend and capital gro
Slide 17: Core portfolio key attributes
For personal use only The core part of the portfolio is positioned around the following key attributes Large companies with strong structural positions. Shareholder Meetings March 2019
Slide 18: Core portfolio key attributes continued
For personal use only The core part of the portfolio is positioned around the following key attributes continued Businesses with long-term growth opportunities, many of which are outside top 20 ASX. Shareholder Meetings March 2019
Slide 19: Banks offering opportunities to generate additional income using options
For personal use only The banks recently have offered good opportunities relative to other sectors to generate additional income, including use of options – for example Buy at $74.75, call Buy at $26.70, call Buy at $24.95, call exercise price $79 exercise price of $28 exercise price of $26 Standsti
Slide 20: Some recent adjustments to the portfolio
For personal use only Some recent adjustments to the portfolio (excluding share buy backs) Purchases Complete Sales Shareholder Meetings March 2019
Slide 21: Market volatility providing opportunities
For personal use only Market volatility providing opportunities Share price performance of a basket of high quality stocks that AMCIL has been buying $25m invested this financial year in: • Sydney Airport • Ramsay Healthcare % • James Hardie • National Australia Bank • Brickworks • ARB Corporation •
Slide 22: Featured holding – EQT Holdings
For personal use only Featured holding – EQT Holdings What we like: Strength of position in Trustee Services. Strong brand. Annuity style revenue streams. Revitalised management. Source: FactSet Shareholder Meetings March 2019
Slide 23: New holding – Sydney Airport
For personal use only New holding – Sydney Airport What we like: Quality long-term assets. Monopoly infrastructure: Long haul & domestic Long term growth drivers: Affordable travel Proximity to Asia Tourism, education Solid and growing dividend yield. Source: FactSet Shareholder Meet
Slide 24: Top investments as at February 2019
For personal use only Top 20 investments as at 28 February 2019 Focused Portfolio Rank Company % of Portfolio – 42 holdings in total 1 CSL Limited 5.8% 2 BHP Group* 5.5% 3 Mainfreight 4.3% 4 Westpac Banking Corporation* 4.2% 5 Macquarie Group 4.0% 6 National Australia Bank* 4.0% 7 Commonwealth Bank
Slide 25: Top investments as at February 2019 continued
For personal use only Top 20 investments as at 28 February 2019 continued Focused Portfolio Rank Company % of Portfolio – 42 holdings in total 11 James Hardie Industries 3.1% 12 Qube Holdings 2.8% 13 Carsales.com 2.7% 14 EQT Holdings 2.7% 15 Breville Group 2.4% 16 Brickworks 2.3% 17 Reliance Worldwi
Slide 26: The Market and Closing Comments
For personal use only The Market and Closing Comments Shareholder Meetings March 2019
Slide 27: Very highly rated growth stocks are fully priced
For personal use only Very highly rated growth stocks are fully priced – these are trading on valuations 39% above the 15 year average These stocks can be subject to sudden changes in sentiment as was experienced Times recently in December Source: FactSet, Goldman Sachs Global Investment Research. S
Slide 28: How we are repositioning the portfolio
For personal use only How we are repositioning the portfolio • High prices for many ‘growth stocks’. • We are extra vigilant in our process – quality, before growth and value. • Currently in an investment environment where returns are likely to be more subdued – buy and write call option strategies
Slide 29: Issues to consider
For personal use only Issues to consider • China, including trade tariffs and commodity prices. • The direction of US interest rates and the impact on global equities, including Australia. • Financial Services enquiry and potential impacts. • Domestic economy, including impact of falling house price
Slide 30: For personal use only
For personal use only