Australian Foundation Investment Co. Ltd. · ASX:AFI
Australian Foundation Investment — Investor Presentation (March 2015)
31 slides from Australian Foundation Investment's investor presentation, Mar 16, 2015
Slide 1: ASX cover letter: Information Meetings Presentation
For personal use only 16 March 2015 The Manager ASX Market Announcements Australian Securities Exchange Exchange Centre Level 4 20 Bridge Street Sydney NSW 2000 Electronic Lodgement Australian Foundation Investment Company Limited Information Meetings – Presentation Dear Sir / Madam Please find atta
Slide 2: Shareholder Meeting March 2015
For personal use only SHAREHOLDER MEETING MARCH 2015
Slide 3: Disclaimer
DISCLAIMER For personal use only Australian Foundation Investment Company Limited and its subsidiary AICS (AFSL 303209), their related entities and each of their respective directors, officers and agents (together the Disclosers) have prepared the information contained in these materials in good fai
Slide 4: 1. The Market
For personal use only 1. THE MARKET SHAREHOLDER MEETING MARCH 2015
Slide 5: The market has recently enjoyed a strong run
For personal use only THE MARKET HAS RECENTLY ENJOYED A STRONG RUN SHAREHOLDER MEETING MARCH 2015
Slide 6: Low interest rates continue to drive market valuations (price earnings ratio)
LOW INTEREST RATES CONTINUE TO DRIVE MARKET VALUATIONS (PRICE EARNINGS RATIO) For personal use only Source: FactSet. SHAREHOLDER MEETING MARCH 2015
Slide 7: Market trading at robust valuation levels relative to earnings
MARKET TRADING AT ROBUST VALUATION LEVELS RELATIVE TO EARNINGS For personal use only times SHAREHOLDER MEETING MARCH 2015
Slide 8: Commodity prices have fallen
COMMODITY PRICES HAVE FALLEN For personal use only $US Source: FactSet. SHAREHOLDER MEETING MARCH 2015
Slide 9: Energy and materials have lagged
ENERGY AND MATERIALS HAVE LAGGED For personal use only Source: FactSet. SHAREHOLDER MEETING MARCH 2015
Slide 10: 2. Results & Shareholder Returns
For personal use only 2. RESULTS & SHAREHOLDER RETURNS SHAREHOLDER MEETING MARCH 2015
Slide 11: Half-year financial summary
HALF-YEAR FINANCIAL SUMMARY For personal use only SHAREHOLDER MEETING MARCH 2015
Slide 12: Share price has recently moved to a slight discount to net asset backing
SHARE PRICE HAS RECENTLY MOVED TO A SLIGHT DISCOUNT TO NET ASSET BACKING For personal use only SHAREHOLDER MEETING MARCH 2015
Slide 13: Share price performance – per annum return to February
SHARE PRICE PERFORMANCE – PER ANNUM RETURN TO 28 FEBRUARY 2015 For personal use only SHAREHOLDER MEETING MARCH 2015
Slide 14: 3. Portfolio Highlights
For personal use only 3. PORTFOLIO HIGHLIGHTS SHAREHOLDER MEETING MARCH 2015
Slide 15: Portfolio performance – per annum return to February 2015
PORTFOLIO PERFORMANCE – PER ANNUM RETURN TO 28 FEBRUARY 2015 For personal use only After tax and expenses. Ignores benefits of franking and LIC tax credits. SHAREHOLDER MEETING MARCH 2015
Slide 16: Year to date: top contributors and detractors to portfolio return
YEAR TO DATE: TOP CONTRIBUTORS AND DETRACTORS TO PORTFOLIO RETURN BY VALUE (INCLUDING DIVIDENDS) For personal use only ✓ Commonwealth Bank ✗ Santos ✓ Westpac ✗ Oil Search ✓ Telstra ✗ Woolworths ✓ National Australia Bank ✗ BHP Billiton ✓ Amcor ✗ Senex Energy SHAREHOLDER MEETING MARCH 2015
Slide 17: Portfolio at February 2015 – top holdings
PORTFOLIO AT 28 FEBRUARY 2015 – TOP 10 HOLDINGS REPRESENT 55.8% OF THE PORTFOLIO For personal use only * Indicates that options were outstanding against part the holding. SHAREHOLDER MEETING MARCH 2015
Slide 18: Portfolio at February 2015 – next represent 17.1% of the portfolio
PORTFOLIO AT 28 FEBRUARY 2015 – NEXT 10 REPRESENT 17.1% OF THE PORTFOLIO For personal use only * Indicates that options were outstanding against part the holding. SHAREHOLDER MEETING MARCH 2015
Slide 19: Banks – portfolio at February
BANKS – PORTFOLIO AT 28 FEBRUARY 2015 For personal use only SHAREHOLDER MEETING MARCH 2015
Slide 20: Energy – portfolio at February
ENERGY – PORTFOLIO AT 28 FEBRUARY 2015 For personal use only SHAREHOLDER MEETING MARCH 2015
Slide 21: Healthcare – portfolio at February
HEALTHCARE – PORTFOLIO AT 28 FEBRUARY 2015 For personal use only SHAREHOLDER MEETING MARCH 2015
Slide 22: Real estate – portfolio at February
REAL ESTATE – PORTFOLIO AT 28 FEBRUARY 2015 For personal use only SHAREHOLDER MEETING MARCH 2015
Slide 23: Increasing the nursery
INCREASING THE NURSERY For personal use only SHAREHOLDER MEETING MARCH 2015
Slide 24: Major adjustments since January 2015
MAJOR ADJUSTMENTS SINCE 1 JANUARY 2015 For personal use only Purchased for buy and write portfolio Partial sale as under takeover Reduced exposure Reduced exposure Options exercised in buy and write portfolio SHAREHOLDER MEETING MARCH 2015
Slide 25: Larger holdings with major overseas operations – 28% of the portfolio
LARGER HOLDINGS WITH MAJOR OVERSEAS OPERATIONS – 28% OF THE PORTFOLIO For personal use only • ALS • Incitec Pivot • Amcor • James Hardie Industries • Ansell • Oil Search • BHP Billiton • QBE Insurance • Boral • Ramsay Healthcare • Brambles • Rio Tinto • Computershare • Seek • CSL • Sonic Healthcare
Slide 26: 4. Looking Ahead
For personal use only 4. LOOKING AHEAD SHAREHOLDER MEETING MARCH 2015
Slide 27: Recent company reporting season
RECENT COMPANY REPORTING SEASON • Overall earnings met expectations For personal use only • Dividends generally better than expected • However top line revenue growth mixed • Cost efficiency generally driving earnings improvement • Company balance sheets are strong • Good companies generally doing w
Slide 28: Issues for the Australian market
ISSUES FOR THE AUSTRALIAN MARKET For personal use only SHAREHOLDER MEETING MARCH 2015
Slide 29: Long term relative sector returns (includes dividends)
LONG TERM RELATIVE SECTOR RETURNS (INCLUDES DIVIDENDS) For personal use only SHAREHOLDER MEETING MARCH 2015
Slide 30: Impact of fees on returns
IMPACT OF FEES ON RETURNS – REDUCED BY (IN RED) For personal use only Fees 0.17% 0.5% 1.0% 10 years 2% 5% 10% 20 years 3% 10% 18% 30 years 5% 14% 26% SHAREHOLDER MEETING MARCH 2015
Slide 31: Australian Foundation Investment Company
AUSTRALIAN FOUNDATION INVESTMENT COMPANY
Australian Foundation Investment Company — Investor Presentation (March 2015) on 6ix