Plato Income Maximiser Ltd. · ASX:PL8
Plato Income Maximiser — FY2020 Earnings Presentation
27 slides from Plato Income Maximiser's earnings presentation, Sep 7, 2020
Slide 1: Amendment to shareholder presentation
Plato Income Maximiser Limited Level 35, 60 Margaret Street Sydney NSW 2000 T: 1300 010 311 E: invest@plato.com.au For personal use only ABN 63 616 746 215 7 September 2020 By Electronic Lodgement Market Announcements Office ASX Ltd 20 Bridge Street SYDNEY NSW 2000 Dear Sir/Madam, Amendment to share
Slide 2: Company FY2020 Results
COMPANY FY2020 RESULTS PLATO INCOME MAXIMISER LIMITED ASX: PL8 For personal use only 1
Slide 3: Disclaimer
Disclaimer For personal use only Note: Past performance is not a reliable indicator of future performance. This communication has been prepared by Plato Income Maximiser Limited ABN 63 616 746 215 (PL8). Nothing contained in this communication constitutes investment, legal, business, taxation or oth
Slide 4: Agenda
Agenda For personal use only 01 PL8 investment strategy and performance 02 Market update 03 Questions 3
Slide 5: PL8 investment strategy and performance
For personal use only PL8 investment strategy and performance 4
Slide 6: FY 2020 Negatively Impacted by COVID-19
FY 2020 Negatively Impacted by COVID-19 COMPARED TO FY2019’S DIVIDEND BONANZA For personal use only • Investment income fell by 33% to $25.8m, reflecting lower market dividends – FY19 dividends boosted by large buy-backs (BHP, RIO, Woolworths, Caltex) and extraordinary special dividends sparked by f
Slide 7: PL8 investment portfolio performance
PL8 investment portfolio performance PERFORMANCE TO 30 JUNE 2020 AFTER FEES AND COSTS* For personal use only Since Half-Year 12 Months Inception p.a.** Including Franking (28/4/2017) Portfolio -8.5% -5.8% 5.8% S&P/ASX200 Tax -10.0% -6.6% 5.5% Exempt Active +1.5% +0.8% +0.3% 6 *Inclusive of the net i
Slide 8: Longer term performance
Longer term performance PLATO AUSTRALIAN SHARES INCOME FUND PERFORMANCE TO 30 JUNE 2020 AFTER FEES For personal use only 3.30 Plato Aust. Shares Income Fund v S&P/ ASX200 Accumulation Series (incl. Franking Credits) 2.80 2.30 1.80 1.30 0.80 Sep-2011 Sep-2012 Sep-2013 Sep-2014 Sep-2015 Sep-2016 Sep-2
Slide 9: PL8 delivering high income
PL8 delivering high income 12 month realised yield For personal use only 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% RBA Cash Rate S&P/ASX 200 Fund CASH 0.6 3.5 5.2 FRANKING 0.0 1.2 2.2 Source: Plato, IRESS. Past performance is not a reliable indicator of future performance. 8
Slide 10: Delivering consistent monthly income
Delivering consistent monthly income PLUS 3 CENT SPECIAL DIVIDEND PAID MAY 2019 For personal use only MONTHLY DIVIDENDS PAID 0.6c 0.5c 0.4c 0.3c 0.2c 0.1c 0.0c Only Australian LIC paying monthly fully franked dividends 9 Source: Plato. While monthly income has been consistent since April 2018, this
Slide 11: PL8 NTA performance breakdown for FY2020
PL8 NTA performance breakdown for FY2020 PRE-TAX NTA PER PL8 SHARE* For personal use only $1.15 $1.106 - $0.088 $1.10 $1.05 - $0.002 - $0.057 $1.00 $0.959 $0.95 $0.90 $0.85 Pre-tax NTA Portfolio Company Dividends paid Pre-tax NTA 1 Jul 2019 performance expenses 30 Jun 2020 10 Source: Plato. *Exclude
Slide 12: Price has closely tracked NTA
Price has closely tracked NTA PL8 PRICE VERSUS NTA SINCE LISTING For personal use only $1.30 $1.20 $1.10 $1.00 $0.90 $0.80 May-17 Aug-17 Nov-17 Feb-18 May-18 Aug-18 Nov-18 Feb-19 May-19 Aug-19 Nov-19 Feb-20 May-20 Share Price Net Tangible Assets (NTA) 11 Source: Plato, IRESS. Past performance is ill
Slide 13: Market Update
12 For personal use only Market Update
Slide 14: RBA cut rates by 25bp on March
RBA cut rates by 25bp on 19 March OFFICIAL RBA CASH RATE EXPECTATIONS – EVEN LOWER FOR LONGER For personal use only “It is reasonable to expect that an extended period of low interest rates will be required in Australia ...” Philip Lowe, RBA Governor: Monetary Policy Decision 3 September 2019. Sourc
Slide 15: Safe assets lose you money
14 For personal use only $- -$60,000 -$40,000 -$20,000 $100,000 $120,000 $140,000 $20,000 $40,000 $60,000 $80,000 Dec-81 Sep-82 Jun-83 Mar-84 Dec-84 Sep-85 Jun-86 Mar-87 Source : Plato, RBA updated to 30/4/2020 Dec-87 Sep-88 Jun-89 Mar-90 NEGATIVE REAL RATES OF RETURN Dec-90 Sep-91 Jun-92 Mar-93 Dec
Slide 16: Yields on all asset classes are falling
15 For personal use only 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% Sep-2012 Dec-2012 Mar-2013 Jun-2013 Sep-2013 Dec-2013 Mar-2014 Jun-2014 Sep-2014 Dec-2014 Plato Aussie Income Fund (gross normalised) Mar-2015 Jun-2015 Sep-2015 Dec-2015 Mar-2016 S&P200 Gross Jun-2016 Source: Plato, RBA, Bloomberg
Slide 17: Tax effective buy-backs are very advantageous
Tax effective buy-backs are very advantageous QANTAS BUYBACK – WORTH 12% AFTER TAX FOR ZERO TAX INVESTORS For personal use only • A$443M OFF MARKET BUYBACK – 5.1% OF SHARES ON ISSUE • WORTH 12% FOR PENSIONERS, 85% SCALE BACK, 5.2BPS AFTER TAX AT PORTFOLIO LEVEL Highlights value of franking credits 1
Slide 18: Big Aussie income stocks doing it tough
Big Aussie income stocks doing it tough! 6 STOCKS ACCOUNT FOR NEARLY HALF OF ALL DIVIDENDS For personal use only % of Gross Dividend Income 2019 Price Performance 1.3000 1.2000 1.1000 1.0000 0.9000 0.8000 0.7000 0.6000 0.5000 0.4000 Jun-17 Jun-18 Jun-19 Jun-20 Apr-17 Apr-19 Aug-17 Dec-17 Apr-18 Aug-
Slide 19: Largest Contributors to Income
Largest Contributors to Income YEAR TO 30 JUNE 2020 For personal use only Top 10 Contributors to Excess Income Investment Reasoning (Last 12mths) Excess Income Return Capital Income Stock Yield Run up Value Momentum Reasoning (%) (%) (%) (%) NAB 0.24 -25.8 -31.8 6.0 P P P Bank Rotation Commonwealth
Slide 20: Largest Contributors to Active Performance
Largest Contributors to Active Performance YEAR TO 30 JUNE 2020 For personal use only Top 10 Contributors To Active Performance (Last 12mths) Investment Reasoning Active Return Capital Income Stock Performance Yield Run up Value Momentum Reasoning (%) (%) (%) (%) Good business momentum and price sen
Slide 21: Dividend Traps
Dividend Traps YEAR TO 30 JUNE 2020 For personal use only Dividend Traps Investment Reasoning Div’d Cut Return Stock Date of Divd Yield Runup Value Momentum Reasoning (%) (%) Poor business momentum, suffering after royal AMP Aug-19 -100% -20.7 O O commission troubles. Poor business momentum, sufferi
Slide 22: Winning by not losing - avoiding dividend traps
Winning by not losing - avoiding dividend traps AMP UP TO 15% GROSS DIVIDEND YIELD For personal use only 6.00 16.00% 14.00% 5.00 12.00% 4.00 10.00% Historical Yield (%) Price 3.00 8.00% 6.00% 2.00 4.00% 1.00 2.00% 0.00 0.00% Price (LHS) Historical Gross Yield (RHS) 21
Slide 23: Update on results season August 2020 - Dividends
Update on results season August 2020 - Dividends COVID = DIVIDENDS CUT BUT… STRONG INCOME IF YOU KNOW WHERE TO LOOK For personal use only • Strong dividend increases: – JB Hi Fi, Wesfarmers in retail CHANGE IN DIVIDENDS PCP – Evolution and Northern Star in gold Average Median* Mkt Cap Weighted Avera
Slide 24: Dividend Outcome
Dividend Outcome LARGEST 20 DIVIDEND PAYERS For personal use only GOOD BAD UGLY 23 Source: Plato, Iress, S&P200
Slide 25: Asset Class Outlook for Income
Asset Class Outlook for Income FORECAST 12 MONTH INCOME AS AT 28/8/2020 For personal use only 4.50% 4.00% 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% Official Overnight Cash 10 Year Aust Bonds Term Deposits* Company BBB Credit MSCI World ex Aust REITs Aust Equities (Gross) Source: Plato, Bloombe
Slide 26: Outlook
Outlook For personal use only • Interest rates to be even lower for longer – All asset classes will deliver lower income – Equity income actually looks relatively more attractive • Plenty of income if you know where to look: – Our expectation is for 30% cut in dividends on average, but some stocks u
Slide 27: Thank You - Questions
26 For personal use only THANK YOU Questions
Plato Income Maximiser — FY2020 Earnings Presentation on 6ix