Glennon Small Companies Ltd · ASX:GC1
Glennon Small Companies — Corporate Update (October 2020)
22 slides from Glennon Small Companies's corporate update, Oct 14, 2020
Slide 1: Glennon Capital – Quarterly Webinar (ASX cover letter)
For personal use only Wednesday, 14 October 2020 Company Announcements Australian Securities Exchange Level 4, 20 Bridge Street Sydney NSW 2000 Glennon Capital – Quarterly Webinar Please find attached a copy of the Company’s Quarterly Webinar Presentation that Michael Glennon, Chief Investment Offic
Slide 2: Glennon Capital Quarterly Webinar October 2020
For personal use only Glennon Capital Quarterly Webinar October 2020 1
Slide 3: Important Information
IMPORTANT INFORMATION For personal use only This presentation is prepared by Glennon Capital Pty Ltd (AFSL 338567, ABN 84 137 219 866) Nothing in this presentation is or is to be taken to be a solicitation, offer, invitation or other (Glennon Capital) for general information purposes only and has be
Slide 4: Agenda
AGENDA For personal use only 1. GC1 Overview 2. Portfolio Overview 3. Stock Overview 4. Questions 3
Slide 5: GC1 Overview
GC1 OVERVIEW For personal use only 1. GC1 Share Price Discount 2. Deferred Tax Assets 3. GC1 Growth Plan 4
Slide 6: GC1 Share Price Discount
GC1 SHARE PRICE DISCOUNT For personal use only • Average discount to NTA: 17% • Sectoral issue • Discount is reducing GC1 Share Price vs NTA $1.30 $1.20 $1.10 $1.00 $0.90 $0.80 17% Discount $0.70 $0.60 $0.50 $0.40 Sep 2015 Mar 2016 Sep 2016 Mar 2017 Sep 2017 Mar 2018 Sep 2018 Mar 2019 Sep 2019 Mar 2
Slide 7: Deferred Tax Asset
DEFERRED TAX ASSET For personal use only • 6 cents per share • Became an issue when the market was sold off • Compliant with ASX listing rules 6
Slide 8: GC1 Growth Plan
GC1 GROWTH PLAN For personal use only • Underwrote the DRP • Options are close to being in the money • Increased shareholder engagement • Aimed at outperformance 7
Slide 9: Portfolio Overview
PORTFOLIO OVERVIEW For personal use only 1. GC1 Portfolio Characteristics 2. GC1 Performance 3. What We Did Last Quarter 8
Slide 10: GC1 Portfolio Characteristics
GC1 PORTFOLIO CHARACTERISTICS For personal use only Portfolio Characteristics As at 30/09/2020 Number of stocks 44 Top 3 positions 1. Nextdc 2. OptiComm 3. Service Stream Cash weight 7.53% Median Market Cap $643 mil Microcap weight 12% 9
Slide 11: GC1 Performance
GC1 PERFORMANCE For personal use only July August September Quarter GC1 +5.77% +10.10% -3.16% +12.77% ASX Small Ords +1.39% +7.24% -2.82% +5.67% Outperformance +4.38% +2.86% -0.34% +7.10% As on 30/09/2020 10
Slide 12: Contribution to Return for the Quarter
CONTRIBUTION TO RETURN FOR THE QUARTER For personal use only PointsBet Holdings Ltd. Redbubble Ltd. Sequoia Financial Group Ltd. Resimac Group Limited HUB24 Limited RPMGlobal Holdings Ltd BWX Ltd. Baby Bunting Group Ltd. Uniti Group Ltd. Reject Shop Limited -1.0% -0.5% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5%
Slide 13: What We Did Last Quarter
WHAT WE DID LAST QUARTER For personal use only 1. Reduced gold exposure 2. Reduced cash weightings 12
Slide 14: Gold Exposure
GOLD EXPOSURE For personal use only • Reduced gold exposure: Down from 14.1% to 8.3% • Underweight on gold: 8.3% in GC1 vs 8.9% in Small Ordinaries 13
Slide 15: GC1 Cash Weighting
GC1 CASH WEIGHTING For personal use only • Reduced Cash Weighting: 7.53% (Including 1.97% withholding for dividend) • Favourable Market Opportunity: Interest rates will be supportive of equities and markets for a long time 60% 50% 40% 30% 20% 10% 0% Sep 2015 Mar 2016 Sep 2016 Mar 2017 Sep 2017 Mar 2
Slide 16: Stock Overview
STOCK OVERVIEW For personal use only 1. PointsBet (PBH) 2. Redbubble (RBL) 3. Sequoia Financial Group (SEQ) 15
Slide 17: PointsBet
PointsBet (M.Cap: $1,956 m) For personal use only • Large total addressable market (TAM): USA legalised sports betting in 2018. TAM will reach $8 billion by 2025 • First mover: One of the few companies offering online sports betting in the USA. PBH takes 4% of market share in New Jersey • Partnershi
Slide 18: Redbubble
Redbubble (M.Cap: $1,246 m) For personal use only • Strong growth in COVID: Strong demand in face mask supports RBL’s 31% growth in customers • Strong demand from artists and customers: Solve artists’ inventory risk and provide an efficient platform to customers • Operating leverage: Improved margin
Slide 19: Redbubble share price
Redbubble (M.Cap: $1,246 m) For personal use only Redbubble 5.00 4.50 4.00 3.50 3.00 2.50 2.00 Initial Purchase 1.50 1.00 0.50 0.00 Sep 2019 Dec 2019 Mar 2020 Jun 2020 Sep 2020 18
Slide 20: Sequoia Financial Group
Sequoia Financial Group (M.Cap: $48 m) For personal use only • Successful turnaround: Investment in Morrisons Securities provided a strong return • Margin expansion: Head office cost reduced by 45% • Acquisitions funded by internal generated cash flow: Made four acquisitions in FY20 and first quarte
Slide 21: Sequoia Financial Group share price
Sequoia Financial Group (M.Cap: $48 m) For personal use only Sequoia Financial Group 0.40 0.35 0.30 0.25 Initial Purchase 0.20 0.15 Position Increased 0.10 0.05 0.00 Jan 2018 May 2018 Sep 2018 Jan 2019 May 2019 Sep 2019 Jan 2020 May 2020 Sep 2020 20
Slide 22: Questions
For personal use only QUESTIONS 21
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