Slide 1: Treasury Group Limited Full Year Results
Wednesday, 26 August 2009 TREASURY GROUP LIMITED FULL YEAR RESULTS 30 JUNE 2009 Outline: Overview Comments on Current Market Conditions Review of Operations Strategy Ahead Detailed financial analysis Overview Treasury Group (ASX:TRG) today announced a normalised profit of $7.515 million fo
Slide 2: Funds under management and dividend
Whilst the investing environment has been difficult, we are pleased with the strong performance of our investment managers during this difficult period. Managers such as Treasury Asia Asset Management (TAAM) and RARE Infrastructure (RARE) have also enjoyed positive inflows and support from local and
Slide 3: Chairman comments and current market conditions
Treasury Group Chairman, Mike Fitzpatrick said: “The past twelve months have been the toughest in financial markets for 80 years. TRG’s earnings are driven by funds under management and the mix of retail and institutional clients, and the fall in the market has had a dramatic effect on profitability
Slide 4: Review of Operations
Review of Operations Treasury Group Investment Services (TIS) - (100% owned at 30 June 2009) Treasury Group through TIS provides its managers with risk and compliance services as well as a Responsible Entity function. TIS also acts as investment manager for a listed investment company, Premium Inves
Slide 5: RARE Infrastructure, Cannae and Strategy Ahead
RARE Infrastructure (RARE) - (40% owned at 30 June 2009) RARE has had a successful twelve months culminating in winning mandates from large international clients as well as further establishing itself in the retail market. There is growing interest in the unique product that RARE offers clients, par
Slide 6: Notes
Notes Treasury Group equity accounts all the fund management businesses. The ownership interest in the asset managers is as follows: Investors Mutual Limited (IML)1 47.50% Orion Asset Management (OAM) 42.00% Treasury Asia Asset Management (TAAM) 40.00% Global Value Investors 2 (GVI) 54.00% RARE Infr
Slide 7: Detailed Financial Analysis
Detailed Financial Analysis: Below we offer more detail on our financial results including: Calculation methodology of normalised earnings Comments on revaluation of investments Component of impairment of loan Share of net profit from equity accounted investments Cash Flow Dividend Det
Slide 8: Comments on revaluation of investments
Comments on revaluation of investments The accounting standards require that any effects of downward impairment of financial assets are taken up in the profit and loss. Such losses on revaluations were taken up on December half year result. Further losses as at 30 June 09 were recognised again in th
Slide 9: Detailed disclosure of business profit and loss
Detailed disclosure of business profit and loss Analysis of aggregated boutique earnings and Treasury Group Income Statement In response to requests for further information on the operations of business, we show more detail below : . a. Aggregated profit and loss of our boutique managers: This table
Slide 10: Treasury Group Income Statement
b. Treasury Group Income Statement This is the statutory income statement for Treasury Group. Note that the Equity share of associates is reflected in the table above. 12 months to 30 June $000 2009 2008 % Change Revenue 5,986 6,983 (14%) Gains/(losses) on investments 1 (1,818) 163 (1,215%) Employee
Slide 11: Consolidated profit and loss
Consolidated profit and loss – on a comparative basis to previous year release: The underlying philosophy of the business is that TRG is a partner as opposed to a parent entity in its dealings with the boutique asset management businesses. TRG typically holds an equity stake of between 40% and 50%.
Slide 12: Financial results and business update
Financial results and business update Year end June 2009
Slide 13: P & L Summary
Global Value Investors P & L Summary 12 months to 30 June 2009 $000 2009 2008 % Change Net profit after tax 4,953 17,050 (71%) NORMALISED NET PROFIT 7,515 17,330 (57%) Basic earnings per share 21.43 75.29 (72%) Dividend per share (fully franked) 20.00 60.00 (69%)
Slide 14: Summary of Financial Results
Global Value Investors Summary of Financial Results Results were effected by the continued deterioration in global financials markets Decline in equity markets reduce revenues in the second half Retail fund outflows earlier in the period offset by institutional growth Normalised profit after tax
Slide 15: Other key features of the financial year
Global Value Investors Other key features of the financial year Investment performance against benchmarks strong Performance against benchmarks was solid across managers Net funds flow positive Continued growth in institutional clients Growth in both Australia and offshore Dublin UCIT III fu
Slide 16: Normalised earnings
Global Value Investors Normalised earnings NPAT $4.953 million Add back: Marked to market losses $0.441 million Impairment of Cannae Convertible note $0.148 million Impairment of Cannae Loans $0.348 million Prior period losses on available for sale investments transferred to profit and loss upon imp
Slide 17: Adding resources during market weakness
Adding resources during market weakness Number of Investment Professionals within the group Our managers took the opportunity to add key investment staff as talent became available 60 55 50 50 40 Costs were controlled as 40 variable compensation was 30 30 managed 23 18 20 12 10 The investment
Slide 18: Funds under management – by manager
Global Value Investors Funds under management – by manager FUNDS UNDER MANAGEMENT ($M) FUNDS UNDER MANAGEMENT ($M) March 2005 to July 2009 TAAM, RARE, GVI, CANNAE $7,000 IML March 2005 to July 2009 $6,500 Orion $3,500 $6,000 $3,012 $3,000 $5,500 $5,000 $2,500 $4,500 $2,000 $4,190 $4,000 $1,500 $3,50
Slide 19: Funds under management – by manager
Global Value Investors Funds under management – by manager FUNDS UNDER MANAGEMENT - BY MANAGER July 2009 FUM has diversified between CANNAE managers 0% TRILOGY 10% IML Australian and international RARE 27% assets 9% TAAM 12% Significant scope of growth GVI 5% Mix between Australian and Orion g
Slide 20: Developing distribution
Developing distribution European corporate, fund of funds, private Major corporate bank assets and government Corporate and retail Funds of funds and corporate pension Government Highest quality, corporate, industry funds Strong retail Developing client base presence Established client base Establis
Slide 21: Boutique Overview
Boutique Overview
Slide 22: Products
Products Manufacturing Distribution Product Aus Retail Institutional Offshore clients Australian equities – value 95% 5% Global equities – value 93% 7% Asia pacific equities 10% 90% Australian equities – growth 10% 90% Global listed infrastructure 15% 85% Australian equities – value 0% 100%
Slide 23: Business update – Australian equity managers
Global Value Investors Business update – Australian equity managers IML’s significantly outperformed benchmark over the year as IML’s focus on quality companies delivered results IML ratings were upgraded. Fund outflow has stabilised Distribution team – promoted internal leadership Investment
Slide 24: Business update – Australian equity managers
Global Value Investors Business update – Australian equity managers Another strong year of investment performance against benchmark confirms Orion as one of Australia’s leading boutique fund managers Orion had net funds inflow during the year Orion’s distribution relationship with Trilogy Advi
Slide 25: Business update – International equity managers
Global Value Investors Business update – International equity managers Global Value Investors is well established in the retail market with good support during the year despite the market turmoil Investment returns positive against benchmark GVI is now focusing on growing institutional clients
Slide 26: Business update – International equity managers
Global Value Investors Business update – International equity managers Treasury Asia Asset Management performed well against benchmark over the year TAAM saw strong fund inflow with growth in Australian and offshore clients TAAM gained representation on a number of leading retail platforms. Th
Slide 27: Business update – International equity managers
Global Value Investors Business update – International equity managers RARE had a successful 12 months, outperforming major competitors during the market downturn A number of major mandates were won during the year including clients in Europe and two US corporate pension plans RARE is seeing fu
Slide 28: Outlook
Outlook
Slide 29: Outlook for the funds management industry
Global Value Investors Outlook for the funds management industry Clients confidence has returned In the last quarter of the financial year, we have begun to see confidence return as clients begin reassessing their strategic allocations Growth assets remain attractive, but balanced against focus
Slide 30: Treasury Group’s focus
Global Value Investors Treasury Group’s focus We have assessed a large number of opportunities We remain focused on the highest quality investment management talent With the market downturn, investment talent has become available Previously overpriced sectors are now offering better value We e
Slide 31: Conclusion
Global Value Investors Conclusion 1. Normalised earnings of $7.515m , down 57% from previous corresponding period 2. Final dividend of 10 cents per share, taking full year to 20 cents Key Themes Earnings were impacted by the market decline during the year. Due to revenue calculated on average FUM,
Slide 32: Disclaimer
Global Value Investors Disclaimer While the information contained in this presentation has been prepared with all reasonable care, Treasury Group Limited accepts no responsibility or liability for any errors, omissions or misstatements however caused. This information is not personal advice. This in