BKI Investment Co. Ltd. · ASX:BKI
BKI Investment — Shareholder Meeting (October 2018)
41 slides from BKI Investment's shareholder meeting presentation, Oct 9, 2018
Slide 1: BKI Investment Company Limited 2018 Annual General Meeting
BKI INVESTMENT COMPANY LIMITED For personal use only 2018 ANNUAL GENERAL MEETING BKI is managed by Contact Asset Management AFSL 494045
Slide 2: Chairman's Address
CHAIRMAN’S ADDRESS For personal use only 2018 ANNUAL GENERAL MEETING BKI is managed by Contact Asset Management AFSL 494045
Slide 3: Disclaimer
DISCLAIMER For personal use only This material has been prepared by Contact Asset Management on behalf of BKI Investment Company Limited. The information within this document is not intended to provide advice to investors or take into account an individual’s financial circumstances or investment obj
Slide 4: Non Executive Directors
NON EXECUTIVE DIRECTORS For personal use only Robert Millner Chairman of the Board Chairman of the Investment Committee Member of the Remuneration Committee David Hall AM Independent Non-Executive Director Chairman of the Audit Committee Member of the Remuneration and Nomination Committee’s Alex Pay
Slide 5: Investment Manager
INVESTMENT MANAGER For personal use only Tom Millner Portfolio Manager – Contact Asset Management Member of the Investment Committee Will Culbert Portfolio Manager – Contact Asset Management Member of the Investment Committee Rahul Tamilarasan Investment Analyst – Contact Asset Management Jovana Gag
Slide 6: Company Secretaries and Company Auditor
COMPANY SECRETARIES For personal use only Jaime Pinto Company Secretary – Corporate Administration Services Larina Tcherkezian Company Secretary (Alternate) – Corporate Administration Services COMPANY AUDITOR Clayton Lawrence Company Auditor – MGI Sydney Assurance Services 6
Slide 7: FY2018 Result Highlights
FY2018 RESULT HIGHLIGHTS For personal use only Income from Operating Activities Net Operating Result Earnings Per Share* $48.1m $44.2m 7.10 cents 8% 6% 3% from FY2017 from FY2017 from FY2017 Management Expense Ratio Total Ordinary Dividend Total Assets 0.16% 7.325cps $1.2b 65% 1% 11% from FY2008 fro
Slide 8: FY2018 Result Highlights
FY2018 RESULT HIGHLIGHTS For personal use only 2018 2017 Growth Income from Operating Activities* $48.1m $44.5m 8% Net Operating Result* $44.2m $41.8m 6% Earnings Per Share* 7.10cps 6.93cps 3% Total Ordinary Dividend Per Share 7.325cps 7.30cps 1% 8 * Before Special Investment Revenue
Slide 9: BKI Dividends Paid to Shareholders
BKI DIVIDENDS PAID TO SHAREHOLDERS For personal use only BKI has paid out over $500m in Dividends and Cents Per Share Franking Credits to Shareholders since listing in 2003 9
Slide 10: Entitlement Offer & Shortfall Offer
ENTITLEMENT OFFER & SHORTFALL OFFER For personal use only 1:15 non-renounceable pro-rata Entitlement Offer to eligible shareholders at an offer price of $1.50 per share. There was strong support with the Entitlement Offer and BKI Shortfall Offer raising approximately $50 million. GENERAL OFFER Gener
Slide 11: Investment Manager's Address
INVESTMENT MANAGER’S ADDRESS For personal use only 2018 ANNUAL GENERAL MEETING BKI is managed by Contact Asset Management AFSL 494045
Slide 12: Benefits of Investing with BKI
BENEFITS OF INVESTING WITH BKI For personal use only Fully Franked Dividends 6.9% Grossed up dividend yield#. ASX Listed Investment Company A simple, transparent investment vehicle that is readily realisable. 14 year track record. Dividend Yield# Management Fee Low Fee Structure 6.9% 0.10% Managed f
Slide 13: Net Operating Results
NET OPERATING RESULTS For personal use only Net Operating Result before special investment revenue increased from $41.8m to $44.2m, $50m while the Net Profit Attributable to Shareholders $45m decreased 1% to $45.0m. $40m $35m Full Year results were mainly driven by higher $30m dividends received fro
Slide 14: Long Term Dividend Income
LONG TERM DIVIDEND INCOME Dividends + Franking Credits received from a $10,000 investment in BKI at IPO versus Bank Quarterly Interest. For personal use only $2,250 $2,000 $1,957 $1,750 $1,500 $1,250 $1,000 $750 $500 $273 $250 $0 Interest Total Dividend Income (including Franking Credits) Highlights
Slide 15: Tracking the BKI Share Price
TRACKING THE BKI SHARE PRICE For personal use only 2. The Royal Commission into Misconduct in the Banking, $1.80 Superannuation and Financial Services Industry was established 1. 3.70cps BKI Final Dividend $1.75 2 3. 3.625cps $1.70 1 BKI Interim Dividend 3 $1.65 $1.60 4 4. ALP’s New Franking $1.55 5
Slide 16: Premium/Discount to NTA
PREMIUM/DISCOUNT TO NTA In a market that is proving difficult to find value, BKI currently represents a good opportunity for For personal use only investors to acquire assets at a discount to the Pre-Tax NTA. $1.90 $1.80 40% $1.70 $1.60 30% $1.50 $1.40 20% $1.30 $1.20 10% $1.10 $1.00 0% $0.90 $0.80
Slide 17: BKI Performance Since Listing
BKI PERFORMANCE SINCE LISTING For personal use only Cumulative Value (Total Shareholder Returns) $4.50 $4.00 $4.03 $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 17 Source: BKI, Bloomberg. Cumulative Value assumes reinvestment of BKI dividends and franking credits
Slide 18: Portfolio Positioning
PORTFOLIO POSITIONING Investing for the long term in dividend yield, dividend growth and earnings growth. For personal use only Investment Portfolio Purchases 1. Pendal Group 2. Tabcorp Holdings 3. Macquarie Group 4. BHP Limited 5. Ramsay HealthCare 6. Amcor Limited 7. APA Group 8. Transurban New Po
Slide 19: Population Growth
POPULATION GROWTH Australia’s population is now expected to grow to 40 million people by 2048 For personal use only 19 Source: Macrobusiness, ABS
Slide 20: Infrastructure Growth
INFRASTRUCTURE GROWTH For personal use only Infrastructure spend is currently at levels never seen before and will continue for many years. 20 Source: Macromonitor, Australian Construction Outlook, Value of Work Done by Year.
Slide 21: Funds Growth
FUNDS GROWTH For personal use only The growth in superannuation assets in Australia out to the year 2035, is also going to be substantial. 21 Source: APRA and Deloitte Actuaries & Consultants, 2015
Slide 22: 1Q FY2019 Update
1Q FY2019 UPDATE For personal use only 2018 ANNUAL GENERAL MEETING BKI is managed by Contact Asset Management AFSL 494045
Slide 23: Portfolio Positioning
PORTFOLIO POSITIONING For personal use only Main Investment Portfolio Purchases (FY19 to date) • BHP Limited • Woodside Petroleum • Platinum Asset Management • Transurban Group • Magellan Financial Group • Commonwealth Bank • Ramsay Healthcare • Woolworths Limited 23
Slide 24: Woodside Petroleum Limited (WPL.ASX)
WOODSIDE PETROLEUM LIMITED (WPL.ASX) For personal use only BKI Criteria Investment Attributes Income WPL offers a growing income stream and an attractive grossed up dividend yield of 8.5%. Payout ratio is c. 80%. Principal Activity WPL explores for and produces oil and gas from offshore and onshore
Slide 25: Woodside Petroleum Limited (WPL.ASX)
WOODSIDE PETROLEUM LIMITED (WPL.ASX) For personal use only WPL: Share Price vs Crude Oil Price WPL: Dividend History & Outlook USD 110 $47.50 3.00 USD 100 2.52 $42.50 2.50 USD 90 2.00 1.84 $37.50 1.64 USD 80 1.32 1.29 1.37 1.50 1.09 1.08 USD 70 $32.50 0.86 0.94 1.04 0.97 1.00 0.82 USD 60 $27.50 0.50
Slide 26: Portfolio Positioning
PORTFOLIO POSITIONING As at 30 September 2018 For personal use only Stock % of Total Stock % of Total Portfolio Portfolio 1 National Australia Bank 6.5% 14 Telstra Corporation 2.5% 2 Commonwealth Bank 6.0% 15 Sydney Airport 2.5% 3 Westpac Banking Corp 5.5% 16 AGL Energy Limited 2.4% 4 New Hope Corpo
Slide 27: Portfolio Positioning
PORTFOLIO POSITIONING As at 30 September 2018 For personal use only Financials 14% Industrials Banks 9% 22% Bank Hybrids 1% Consumer Staples Real Estate 8% 2% Health Care 5% Energy 8% Consumer Discretionary 5% Materials Cash 6% 8% Telecommunication Utilities Services 27 7% 6%
Slide 28: BKI Portfolio Performance
BKI Portfolio Performance For personal use only 10.0% 8.6% BKI’s Portfolio Performance for the year 8.3% to 30 September 2018 was 8.6%. 7.1% 7.5% 6.5% BKI’s 14 year Portfolio Performance was 4.8% 7.5% per annum as at 30 September 5.0% 2018. BKI’s Total Shareholder Return including franking credits f
Slide 29: FY2019 Update
FY2019 Update For personal use only The unaudited Income from Operating Company Capital Management Initiatives Announced or Activities and Operating Result after Tax Expected (Before Special Investment Revenue) for APA Group Additional distribution (4cps/month) if scheme FY2019 is expected to be hig
Slide 30: BKI Investment Company Limited 2018 Annual General Meeting
BKI INVESTMENT COMPANY LIMITED For personal use only 2018 ANNUAL GENERAL MEETING BKI is managed by Contact Asset Management AFSL 494045
Slide 31: Proxies
PROXIES For personal use only Valid proxies representing approximately 118 million shares or 19% of the Company’s issued capital have been received. 31
Slide 32: 1. Annual Report
1. ANNUAL REPORT For personal use only Item 1 To receive and consider the Annual Financial Report and the reports of the Directors and of the Auditor for the financial year ended 30 June 2018. This item does not require voting by shareholders. It is intended to provide an opportunity for shareholder
Slide 33: 2. Remuneration Report
2. REMUNERATION REPORT For personal use only Resolution 1 To adopt the Remuneration Report for the year ended 30 June 2018. Note: Pursuant to section 250R(3) of the Corporations Act the vote on this Resolution is advisory only and does not bind the Directors or the Company. However, certain provisio
Slide 34: 2. Remuneration Report
2. REMUNERATION REPORT For personal use only Resolution 1 To adopt the Remuneration Report for the year ended 30 June 2018. Proxies received and accepted for Resolution 1 appearing on the Notice of Meeting To adopt the Remuneration Report for the For Against Open Abstain year ended 30 June 2018 Vote
Slide 35: 3. Re-election of Director
3. RE-ELECTION OF DIRECTOR For personal use only Resolution 2 To re-elect by ordinary resolution as a Director, Mr RD Millner; who ceases to hold office in accordance with the Company's Constitution Rule 6.3(c) and, being eligible, offers himself for re-election. 35
Slide 36: 3. Re-election of Director
3. RE-ELECTION OF DIRECTOR For personal use only Resolution 2 To re-elect by ordinary resolution as a Director, Mr RD Millner; who ceases to hold office in accordance with the Company's Constitution Rule 6.3(c) and, being eligible, offers himself for re-election. Re-Election of Director For Against
Slide 37: 4. Re-election of Director
4. RE-ELECTION OF DIRECTOR For personal use only Resolution 3 To re-elect by ordinary resolution as a Director, Mr IT Huntley; who ceases to hold office in accordance with the Company's Constitution Rule 6.3(c) and, being eligible, offers himself for re-election. 37
Slide 38: 4. Re-election of Director
4. RE-ELECTION OF DIRECTOR For personal use only Resolution 3 To re-elect by ordinary resolution as a Director, Mr IT Huntley; who ceases to hold office in accordance with the Company's Constitution Rule 6.3(c) and, being eligible, offers himself for re-election. Re-Election of Director For Against
Slide 39: 5. Approval to Refresh the Company's 15% Placement Capacity
5. APPROVAL TO REFRESH THE COMPANY’S For personal use only 15% PLACEMENT CAPACITY Resolution 4 That the issue of 69,751,983 fully paid ordinary shares by the Company under the General Offer announced on 9 May 2018, on the terms and conditions summarised in the Explanatory Notes to this Notice of Mee
Slide 40: 5. Approval to Refresh the Company's 15% Placement Capacity
5. APPROVAL TO REFRESH THE COMPANY’S For personal use only 15% PLACEMENT CAPACITY Resolution 4 That the issue of 69,751,983 fully paid ordinary shares by the Company under the General Offer announced on 9 May 2018, on the terms and conditions summarised in the Explanatory Notes to this Notice of Mee
Slide 41: 6. Other Matters
6. OTHER MATTERS For personal use only To consider any other matters that may be brought before the meeting in conformity with the Company’s Constitution. CONCLUSION OF THE MEETING I now move to the final part of the meeting and there being no other business of which due notice has been given, I wou
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