Pacific Current Group Ltd · ASX:PAC
Pacific Current — Shareholder Meeting (November 2018)
24 slides from Pacific Current's shareholder meeting presentation, Nov 30, 2018
Slide 1: Annual General Meeting
ANNUAL GENERAL MEETING November 30, 2018 Firm Overview
Slide 2: Disclaimer
Disclaimer The information in this presentation is general information about Pacific Current Group (‘Pacific Current’ or ‘PAC’) and is current only at the date of this presentation. In particular, this presentation: ❯ is not an offer or recommendation to purchase or subscribe for securities in Pacif
Slide 3: Agenda
Agenda Welcome to the FY18 Annual General Meeting of Pacific Current Group (PAC) ❯ Chairman’s Overview - Tony Robinson ❯ Business Overview - Paul Greenwood, Managing Director, CEO & CIO ❯ FY18 Financial Results - Joe Ferragina, CFO ❯ Questions & Answers ❯ Consideration of Reports ❯ Resolutions ❯ Pol
Slide 4: Chairman's Remarks
CHAIRMAN’S REMARKS Tony Robinson, Chairman
Slide 5: Introduction to the AGM
Introduction to the AGM PACIFIC CURRENT GROUP
Slide 6: Chairman's Overview: Change in asset mix
Chairman’s Overview Change in asset mix Asset Mix Movement ('A$m) 450.0 400.0 350.0 300.0 250.0 200.0 150.0 100.0 50.0 0.0 30/06/2017 30/06/2018 30/09/2018 30 Sept 2018* 5 Oct 2018 Post Sale of Aperio/RARE/Celeste^ Carrying Values Cash * The 30 September 2018 values are unaudited and adjusted to ref
Slide 7: Chairman's Overview: Cash and carrying values per share
Chairman’s Overview 5 Oct 2018 Post Sale of Adjusted Aperio/RARE/ $m 30/06/2017 30/06/2018 30/09/2018 30/09/2018 Celeste Carrying Values of Investments 259.4 245.0 347.8 415.8 290.8 Cash on balance sheet 23.2 122.2 19.1 19.1 140.7 Total 282.6 367.3 366.8 434.8 431.5 Number of shares (in millions) 47
Slide 8: Business Overview
BUSINESS OVERVIEW Paul Greenwood, CEO & CIO
Slide 9: Business Overview
Business Overview FTY18 saw strong progress in underlying portfolio ❯ Financial Strength • Underlying net profit after tax of A$17.8m compared to A$16.6m in FY17 • Statutory profit of A$90.8m compared to a loss of A$66.0m in FY17 • Dividend of A$0.22 per share, which compares to A$0.18 per share in
Slide 10: FY18 Portfolio Company Highlights
FY18 Portfolio Company Highlights 11 out of 12 portfolio companies managing assets grew FUM during the year ❯ FY18 was a strong year of growth with FUM increasing 45%. • GQG Partners - GQG continued its fast growth, increasing assets under management from US$7.3B to US$15.7B during FY2018. • EAM Inv
Slide 11: Portfolio: FUM June 2017 vs. June 2018
Portfolio Company Update FUM 30 June 2017 vs. 30 June 2018 (in each manager’s home currency) Core Boutiques Growth Boutiques Other Boutiques 30 16 1.5 +33% 14 +127% 25 30-Jun-17 30-Jun-17 30-Jun-17 1.2 30-Jun-18 30-Jun-18 30-Jun-18 12 20 10 0.9 15 8 +122% +32% +6% +21% 0.6 6 10 +15% 4 0.3 5 -4.4% 2
Slide 12: Portfolio Activity
Portfolio Activity PAC took advantage of numerous opportunities to reshape its portfolio ❯ Portfolio Management • PAC sold its 40% stake in Investors Mutual Limited (IML) for nearly A$120m • PAC increased its equity stake in EAM Global Investors from 15% to 18.75% to facilitate management’s repurcha
Slide 13: Investment Strategy
Investment Strategy PAC is continuing to enhance earnings resilience through greater diversification ❯ New Investments • PAC’s pipeline is at record levels • A number of opportunities are well advanced ❯ Diversification • PAC continues to focus on finding investments that provide strong diversificat
Slide 14: Increased Diversification
Increased Diversification PAC earnings have become less sensitive to equity market fluctuations Boutique Earnings Contributions 120% 100% 0% 0% 15% 22% 26% 25% 80% 60% 100% 100% 85% 40% 78% 74% 75% 20% 0% FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 Public Equity Non Public Equity // 14
Slide 15: FUM Update - As at 30-Sep-18
FUM Update* - As at 30-Sep-18 A new format to better describe the nature of PAC boutiques’ FUM 30-Jun-18 FX Impact 30-Sep-18 Net Flows Other (1) Closing FUM (2) Closing FUM Open End1 Tier 1 57,158 5,216 1,607 1,507 65,487 Tier 2 10,432 89 (208) 99 10,412 Closed End2 Tier 1 5,974 (75) (162) 135 5,873
Slide 16: Capital Management Plan
Capital Management Plan We plan to use the proceeds from our recent dispositions to enhance our diversification ❯ We have a strong balance sheet with more than A$120m in deployable capital, as of Nov. 30, 2018. ❯ Mid year dividend decision will be assessed in the context of current investment opport
Slide 17: FY18 Financial Results
FY18 FINANCIAL RESULTS Joe Ferragina, CFO
Slide 18: Underlying Financial Results of PAC
Underlying Financial Results of PAC Pro forma PAC P&L on a ‘look-through’ basis adjusted for one-off/non-cash items PAC ❯ Excludes non-recurring and/or non-cash items P&L Highlights (A$m) Pro Forma* FY18 to show underlying business performance Revenue 7.8 ❯ Aether, Seizert and Strategic Capital Inve
Slide 19: PAC – Underlying P&L
PAC – Underlying P&L Underlying P&L (A$m) FY18 ❯ Impairment of investment relates to NLAA Statutory Net Profit After Tax 90.8 Impairment of investments 4.9 ❯ Gain on sale of investment Loss on revaluation of investment held at FVTPL 1.2 reflects sale of IML and Goodhart Amortisation of identifiable
Slide 20: PAC – Balance Sheet
PAC – Balance Sheet ❯ Reflects consolidation of Aether, Seizert, Balance Sheet – PAC (A$m) As at 30 June 18 Midco and its subsidiaries Current Assets 150.4 Non-Current Assets ❯ Carrying values have been tested and/or adjusted for impairment Other financial assets 75.1 Investments in associates 46.0
Slide 21: Gearing – reduction in gearing of the business
Gearing – reduction in gearing of the business Debt-to-Equity Ratio 0.40 ❯ Debt-to-Equity Ratio shows data as of 30 0.35 June 0.30 0.25 ❯ Over the past three years there has been a focus on reducing financial risk 0.20 ❯ Moving forward the balance sheet will 0.15 0.10 reflect an ongoing conservative
Slide 22: Geographical source of Earnings and FUM
Geographical source of Earnings and FUM Earnings Contribution by region ❯ Earnings contribution shows PAC share of 100% earnings from the respective boutiques 80% 60% ❯ FY2015 and FY2016 share of earnings show earnings on look-through basis 40% 20% ❯ The Group continues to evolve into a global 0% FY
Slide 23: Simplification of the structure
Simplification of the structure ❯ Group has gone from having two businesses contributing over 90% of earnings to five ❯ Earnings sourced from greater asset class diversification/increased exposure to alternatives ❯ Diversified geographic reach ❯ Distribution capability beyond Australian jurisdiction
Slide 24: Questions
QUESTIONS
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