Bentley Capital Ltd. · ASX:BEL
Bentley Capital — Shareholder Meeting (November 2010)
30 slides from Bentley Capital's shareholder meeting presentation, Nov 19, 2010
Slide 1: Market Announcement: Presentation at Annual General Meeting
Friday, 19 November 2010 MARKET ANNOUNCEMENT Presentation at Annual General Meeting The Company encloses a copy of a presentation to be delivered by Mr Ronni Chalmers of FSP Equities Management Limited (FSP), investment manager of the FSP Equities Leaders Fund (FSP Fund), at today’s Annual General M
Slide 2: FSP Equities Management Presentation to Bentley Capital AGM
FSP Equities Management Presentation To Bentley Capital AGM 19th November 2010 Presented by Ronni Chalmers ABN 12 098 327 809 AFSL 246 790 rchalmers@fspgroup.com.au 1
Slide 3: Latest and OECD projections
Latest and OECD projections Source OECD November January 2009 March 2009 July 2009 October April October 2008 projections average of projections 2009 2010 2010 projections OECD IMG and IMF projections OECD OECD IMF 2009 2010 2009 2010 2009 2010 2010 2010 2010 2010 World 2.2 3.8 0.5 3 ‐0.8 2 2.5 3.1
Slide 4: PE US
Source uss * 30 PE US 4 FSP Equities Management $&P500 P/E multiple 25 20 15 10 a eed oo thee P oo eee eee Average 18.0 S&P500 P/E multiple
Slide 5: PE Australia
PE Australia 20 year average 14.5 current 12.2 4 Source UBS
Slide 6: Australian Banks 5 year CDS
Australian Banks 5 year CDS 5 Source Bloomberg
Slide 7: US Equity Volatility is falling
US Equity Volatility is falling 6
Slide 8: Australian Equity Volatility is falling
Australian Equity Volatility is falling 7 Source ASX
Slide 9: Dow Jones Daily Volatility
Dow Jones Daily Volatility Trading Days in Days over 2% moves Month % of Days Jan‐08 3 23 13 Feb‐08 2 21 10 Mar‐08 4 21 19 Apr‐08 3 22 14 May‐08 0 22 0 Jun‐08 2 21 10 Jul‐08 5 23 22 Aug‐08 3 21 14 Sep‐08 10 22 46 Oct‐08 16 23 70 Nov‐08 13 20 65 Dec‐08 11 23 48 Jan‐09 7 20 33 Feb‐09 5 20 25 Mar‐09 9
Slide 10: ASX 200 Daily Volatility
ASX 200 Daily Volatility Trading Days in Days over 2% moves Month % of Days 2008 68 262 26 2009 33 255 13 2010 13 215 6 Jan‐08 8 23 35 Feb‐08 6 21 29 Mar‐08 8 21 38 Apr‐08 2 22 9 May‐08 1 22 5 Jun‐08 2 21 10 Jul‐08 3 23 13 Aug‐08 3 21 14 Sep‐08 6 22 27 Oct‐08 13 23 57 Nov‐08 12 20 60 Dec‐08 4 23 17
Slide 11: Top 20
Top 20 FSP Weight Market Weight 1 BHP Billiton 8.7% 11.8% 2 Westpac Bank 7.4% 5.7% 3 Commonwealth Bank 7.0% 6.3% 4 Cash 5.4% ‐ 5 SMS Management and Technology 4.8% 0.1% 6 Flight Centre 4.7% 0.2% 7 Rio Tinto 4.4% 3.0% 8 Mineral Resources 4.2% 0.1% 9 Oil Search 2.5% 0.7% 10 Atlas Iron 2.4% 0.1% 11 UGL
Slide 12: BHP: A uniquely diversified portfolio
Source: BHP A uniquely diversified portfolio Underlying EBIT®) (FY10, US$ billion) 215 Ea Metallurgical Coal 18 7 [Manganese 15 5 Iron Ore 12 + mB a@ ssM = = D&sP 94 Base Metals 6 4 a == ss Aluminium GEE Energy Coal 3-4 Petroleum 0 4 (a) Excludes third party trading. Preliminary Results, 25 A Ferrou
Slide 13: BHP: A strong balance sheet creates opportunities
Source: BHP 4 FSP Equities Management BHP A strong balance sheet creates opportunities anole resourcing the future 1 ) Return on capital and EBIT margin 2 ) Net operating cash flow (US$ billion) (US$ billion) CAGR: 21% 50 =e Retum on capital 205 "H1 ——EBIT margin 25 i) FY02 FY03 FY04 FY05 FY06 FYO7
Slide 14: BHP: Maintenance of a deep, diversified inventory of growth options
Source: BHP 4 FSP Equities Management BHP Maintenance of a deep, diversified inventory FS | of growth options bhpbilliton Future Options) Feasibility Execution Kipper } ce Daunia NWS Nit =) Rankin | As at 19 August 2010 Proposed capital expenditure csG @ Petroleum ©) D&sP @ Manganese {stor} @Auminiu
Slide 15: BHP: Key net profit sensitivities
4 FSP Equities Management BHP eal Key net profit sensitivities bhpbilliton US$1/t on iron ore price 85 US$1/bbI on oil price 40 US$1/t on metallurgical coal price 20 US¢1/Ib on aluminium price 20 US¢1/Ib on copper price 20 US$1/t on energy coal price 20 US¢1/Ib on nickel price 2 AUD (US¢1/A$) operat
Slide 16: Source: London Evening Standard 1937
15 Source: London Evening Standard 1937
Slide 17: Achieving Our Goals to Deliver Robust Returns
Achieving Our Goals to Deliver Robust Returns • Employing a multi-faceted investment strategy • Using detailed quantitative and qualitative filters overlaid with a stock scoring system • Predominantly bottom up stock pickers but consideration is given to macro economic conditions 16
Slide 18: Investment Philosophy
Investment Philosophy • Aim to find undervalued stocks through fundamental analysis, that have robust business models and quality management • Style neutral • Benchmark unaware, but takes into account weightings of all positions relative to index weight • Typically fund aims for investment time hori
Slide 19: Primary Investment Screens
Primary Investment Screens • Identify undervalued stocks with: – Above average forecast EPS growth – Below average price/earnings multiples – Below average price/cash flow multiples – Increasing return on capital – EV/EBIT and EV/EBITDA also considered 18
Slide 20: Secondary Screens
Secondary Screens • Strength and viability of business model • Quality and integrity of management • Growth prospects for industry sector • Barriers to entry • Free cash flow generation • Debt position and interest cover 19
Slide 21: Investment Process
Investment Process • FSP considers company’s industry prospects over next 2-3 years • Does not target sector weightings • Risk management based on intensive regular monitoring of each stock in the fund • Weekly review of sector against index weightings 20
Slide 22: Stock selection process (2)
Stock selection process (2) • Detailed analysis – Meet with company management, competitors, industry contacts, brokers etc – Read relevant material to assist analytical process • Research report and recommendation – Analyst prepares research report and recommendation with 12-month price target – In
Slide 23: Stock selection process (3)
Stock selection process (3) • Analyst must sell investment merits of the stock to the team • Report is discussed among investment committee • Decision made • Typically stock purchased if FSP target price exceeds current stock price by at least 20% 22
Slide 24: Sector Weighting (31 October 2010)
Sector Weighting (31 October 2010) Sector Fund weight (%) Consumer staples 1.5 Cash 5.4 Industrials 14.9 Utilities 0.0 Consumer Discretionary 11.9 Telecommunications 0.3 Information Technology 6.4 Healthcare 0.6 Resources (ex gold) 32.7 Energy 3.4 Financials 19.1 A-REIT 0.0 Gold 3.6 Total 100.0 Stoc
Slide 25: Net Performance to 31 October 2010
Net Performance to 31 October 2010 FSP% S&P/ASX 200 Value Add Accm% 1 Month 1.9 1.8 0.1 3 Months 8.0 5.3 2.7 6 Months -0.4 -1.0 0.6 1 Year 8.4 4.6 3.8 2 Years (annualised) 19.1 12.7 6.4 4 Years (annualised) -0.3 0.7 -1.0 Since Inception 10.9 8.4 2.5 (annualised April 2002) Total Since Inception 142.
Slide 26: Thoughts on the market
Thoughts on the market • Broadly the fund is positioned for an economic recovery. Whilst cognisant of northern hemisphere economic and fiscal problems, we believe this is more than reflected in valuations on a medium term basis • In addition, economic fundamentals for Australia and Asia are positive
Slide 27: FSP Equities Management Conclusion
FSP Equities Management Conclusion • Number one performing Australian Equity Fund in recent 12 month Morningstar Survey • Proven track record of above benchmark performance (both retail and wholesale funds) • Highly motivated and incentivised team of four professionals • Disciplined investment proce
Slide 28: The nature of this presentation
The nature of this presentation This presentation has been prepared and issued by FSP Equities Management Limited (Trustee). Each offer or issue of units in FSP Equities Leaders’ Fund (Fund) does not require a product disclosure statement under the Corporations Act. The information in this presentat
Slide 29: The nature of this presentation (Qualified Accountant)
The nature of this presentation Qualified Accountant The accountant’s certificate must be provided by a qualified accountant within the meaning of section 88B of the Corporations Act, being a member of one of the following bodies: a) the Australian Society of Certified Practising Accountants (ASCPA)
Slide 30: Disclaimer
Disclaimer “Performance is influenced by market volatility over time. Past performance is not necessarily indicative of future performance. Neither FSP Equities Management Limited or any related corporation guarantee the repayment of capital or the performance of the FSP Equities Leaders Fund. The c
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