Slide 1: Half Year Results – 31 December 2011
Wednesday, 22 February 2012 TREASURY GROUP LIMITED HALF YEAR RESULTS – 31 DECEMBER 2011 Overview Treasury Group (ASX:TRG) today announced a consolidated profit after tax of $4.2 million for the six months ended 31 December 2011. Normalised net profit after tax was $5.2 million, which was flat relati
Slide 2: FUM by TRG Boutiques
The result reflects diversification across three main businesses namely Investors Mutual Limited (IML), Orion Asset Management (Orion) and RARE Infrastructure (RARE). Over the last six months RARE has continued to win fund inflows both locally and internationally. The investment performance of all I
Slide 3: Half Yearly Net New Funds Flow 2007 - 2011
Fund flows were positive overall for the six months. The first half saw net out flows at IML, Orion and GVI while RARE, TAAM and Trilogy were the main sources of net inflows. Half Yearly Net New Funds Flow 2007 - 2011 1,500 1,000 $mil 500 - -500 As indicated in the June 2011 results, the composition
Slide 4: Ownership interests and further information
Notes: Treasury Group equity accounts all the fund management businesses except Aubrey. The ownership interest in the asset managers is as follows: Investors Mutual Limited 47.50% Orion Asset Management 41.99% Treasury Asia Asset Management 40.00% 1 Global Value Investors 72.50% RARE Infrastructure
Slide 5: Detailed Financial Analysis: Normalised Earnings
Detailed Financial Analysis Normalised Earnings The underlying performance of Treasury Group’s business can only be understood after consideration of earnings normalised for abnormal and non recurring items. The Company’s results in 1H12 were impacted by two restructures of businesses in the last tw
Slide 6: Dividend and Detailed Disclosure of Business Profit and Loss
Treasury Group also has $4.6 million in loans outstanding to group boutiques. These will be repaid according to agreed schedules over the loan periods. Another important component of the balance sheet is the investment in the respective boutique asset management businesses. The carrying amount of $3
Slide 7: Treasury Group Income Statement
The boutique asset managers do not have any external borrowings. Some managers do have loans from TRG that are issued to assist with working capital requirements during the start up phase and the loans are structured to meet Australian Financial Services Licensing (AFSL) requirements. These loans ar
Slide 8: Funds Under Management (FUM)
Funds Under Management (FUM) The proportion of Group FUM within International Equities and Alternatives increased during the year while the proportion in Domestic Equities decreased. Asset Class Dec 2011 % June 2011 % Dec 2010 % Australian 7,248,954,948 46.04 8,180,996,267 48.81 8,139,438,203 52.47
Slide 9: Review of Operations
Review of Operations Investors Mutual Limited (IML) - (47.50% owned at 31 December 2011) The investment performance of all IML’s funds during the six months ended 31 December 2011 was strong. IML was reviewed by some of the major institutional consultants which has resulted in the company being shor
Slide 10: Review of Operations (GVI, TAAM)
Global Value Investors (GVI) - (72.50% owned at 31 December 2011) Following a period of sustained poor investment returns and declining FUM, the Board of GVI took the difficult decision to restructure the company and appoint Aubrey Capital Management as the sub - manager of the GVI funds. These acti
Slide 11: Review of Operations (AR Capital, Celeste, Aubrey)
AR Capital Management - (30% owned at 31 December 2011) AR Capital has recently been restructured following key man events amongst investment staff. The board of AR capital appointed Evergreen Capital managed by Tim Hannon, to manage the Ascot fund. The operation and overhead cost of the company hav
Slide 12: Results Presentation December 2011
Results Presentation 31 December 2011
Slide 13: Agenda
Agenda 1. Summary 2. FUM & Performance 3. Financial Results 4. GVI & AR Capital 5. Outlook & Summary 2
Slide 14: 1. Summary
1. Summary • Total Funds Under Management (FUM) at 31 December 2011 - $15.75 billion, up $0.24 billion on the previous corresponding half year period (or 1.5%) but down $0.95 billion (or 5.7%) versus 30 June 2011 • Normalised NPAT was flat from the previous corresponding period • Restructuring of Gl
Slide 15: Summary – Growth in FUM at boutiques and flat normalised NPAT
1. Summary – Growth in FUM at boutiques and flat normalised NPAT % Change $ vs PCP 31 December 2011 FUM ($bn) 15.8 +1.5 • Growth in FUM achieved in difficult Average FUM ($bn) 15.9 +5.2 market conditions Aggregate Boutique Mgmt Fees ($m) 35.7 -1.2 • FUM over the last six months impacted by market vo
Slide 16: Summary – Influences of key profit drivers were mixed during 2011
1. Summary – Influences of key profit drivers were mixed during 2011 Dec 2011 • Net new funds flow was strong during the Drivers of Treasury Group NPAT Impact half year Primary • Institutional flows strong, particularly at RARE FUM • Outflows following GVI restructuring Investor/Product mix & Aver
Slide 17: FUM & Performance - new funds inflow achieved in difficult market
2. FUM & Performance - new funds inflow achieved in spite of difficult market conditions $15.75bn FUM as at 31 December 2011 • TRG continues to diversify assets across managers IML 4% 14% • Net fund inflows of $316m over the Orion 20% period (incl. Trilogy). Net outflows of $190m for TRG boutiques,
Slide 18: Diversification away from Australian Equities continues
2. FUM and Performance – Diversification away from Australian Equities continues. Concentration to Institutional investors is increasing Dec June June June June June FUM by Asset Class 2011 2011 2010 2009 2008 2007 Australian Equities 46% 49% 56% 64% 74% 86% International Equities 26% 25% 26% 27% 20
Slide 19: Aggregated Profit & Loss of our Boutique Managers
3. Financial Results – Aggregated Profit & Loss of our Boutique Managers Dec Dec % Aggregate P&L of Boutiques ($m) 2011 2010 Change Average FUM ($bn) 15.9 15.1 +5.3 • Average FUM higher due primarily to net flows at RARE Base Management Fees 35.7 36.2 -1.2 and Trilogy Other Income 1.2 1.8 -31.1 • Ma
Slide 20: Financial Results – Normalised Profit Flat
3. Financial Results – Normalised Profit Flat Dec Dec Treasury Group P&L ($m) % Change 2011 2010 Revenue 2.182 2.234 -2.3 Expenses 3.885 4.299 -9.6 • Lower Expenses due to Gains/(losses) on investments 0.086 - - reduced staff costs Equity share of associates NPAT 5.794 7.302 -20.6 Profit Before Tax
Slide 21: Financial Results – Dividend
3. Financial Results – Dividend • Interim fully franked dividend of 70 Dividend History 14cps 60 • Interim dividend payout ratio of 50 77% of NPAT 40 cps 30 • Payout ratio in future years will depend on capital requirements for 20 growth opportunities 10 0 2006 2007 2008 2009 2010 2011 2012 Interim
Slide 22: GVI & AR Capital
4. GVI & AR Capital • GVI • Poor investment performance led to declining FUM • Treasury Group agrees with actions taken by board of GVI to improve outcomes for investors and shareholders • GVI funds ongoing, sub-advisory agreement with Aubrey • AR Capital • Key man events • Evergreen appointed to ma
Slide 23: Outlook & Summary
5. Outlook & Summary • Strong momentum in IML, RARE, Aubrey and Celeste • 14 cps interim dividend • Investor confidence remains fragile, equity market conditions volatile • Significant strategic opportunities available – strong balance sheet positions Treasury Group well 12