Whitefield Industrials Limited · ASX:WHF
Whitefield Industrials — Shareholder Meeting (August 2019)
20 slides from Whitefield Industrials's shareholder meeting presentation, Aug 6, 2019
Slide 1: AGM Whitefield Limited 6 August 2019
For personal use only AGM WHITEFIELD LIMITED 6 AUGUST 2019 0
Slide 2: Important Information
IMPORTANT INFORMATION For personal use only General, Limited Commentary: This presentation contains information about Whitefield and the markets in which it operates. The presentation is limited in scope and accordingly may not contain all the information necessary for an investor to make an investm
Slide 3: Director Changes: A Year of Transition
DIRECTOR CHANGES A YEAR OF TRANSITION For personal use only 2019 saw further renewal of the Board During the year Martin Fowler (Director) and David Iliffe (Chairman) retired after many years of service to Whitefield Martin had served as a Board member for 10 years Retirement David had been a
Slide 4: 2019 Outcomes: Earnings
2019 OUTCOMES EARNINGS For personal use only Earnings per share (before gain) 18.5 cps Dividends and distributions were maintained or grown across approximately 75% of our investment holdings (Prior yr 80%) Highest growth in distributions from Flight Centre, QBE, Pendal, Magellan, IAG, Revenue:
Slide 5: 2019 Outcomes: Earnings (Costs)
2019 OUTCOMES EARNINGS For personal use only Investment operations costs held flat Costs: Some growth in regulatory and overhead costs Some cost savings from WHFPB reset and conversion, with full benefit in 2020 Finance & Preference Gain on Reset / Conversion represents the net write-back of
Slide 6: An Efficient Structure: Cost / Return / Service Balance
AN EFFICIENT STRUCTURE COST / RETURN / SERVICE BALANCE For personal use only WHITEFIELD AIMS TO OFFER AN EFFICIENT BALANCE BETWEEN COST, RETURN AND SERVICE Whitefield’s Operating Expense ratio (OER) was 0.42% in 2019. Efficient At this level it continues to provide retail investors with one of t
Slide 7: 2019 Outcomes: Net Asset Backing
2019 OUTCOMES NET ASSET BACKING For personal use only Mar 2019 Asset Pre Deferred Tax $4.92 (Prior Year $4.79) Backing Post Deferred Tax $4.57 (Prior Year $4.47) Investment Gross revaluation of $14,326,875 (16 cents per share) Revaluation 6
Slide 8: Long Term Outcomes: Earnings & Asset Backing
LONG TERM OUTCOMES EARNINGS & ASSET BACKING For personal use only EPS in 2019 set a new record exceeding the prior 2008 high 2019 Asset backing is chasing the earnings and has continued to rise post year end 7
Slide 9: 2019 Outcomes: Dividends
2019 OUTCOMES DIVIDENDS For personal use only ORD dividend increased to 19.75 (from 17.75 cents) per ordinary share, fully franked This represents the company’s 29th consecutive year of maintaining or increasing its ORD dividend ORD The June 19 dividend also provided a LIC Disc CGT deduction to
Slide 10: Price and NTA
PRICE AND NTA For personal use only Post-election market is seeing WHF trading between pre and post tax asset backing Pre-election jitters saw the LIC sector trade abnormally cheaply, before reverting post-election WHF share price increasingly trading between pre-deferred tax and post-deferred t
Slide 11: WHFPB November 2018 Reset
WHFPB NOVEMBER 2018 RESET For personal use only The November 2018 Reset of WHFPBs: • Satisfactorily met the needs of both WHFPB and ORD shareholders • Provides a good ongoing yield and stable capital for WHFPB holders • Improves the residual investment income yield for ORD shareholders We were ple
Slide 12: A Final Word on Franking Credit Refunds
A FINAL WORD ON FRANKING CREDIT REFUNDS THE ISSUE THAT CHARACTERISED 2019 For personal use only Franking Credit Refunds make the imputation system work fairly for low rate taxpayers. We were extremely pleased to see the proposed prohibition of franking credit refunds be strongly opposed by voters
Slide 13: Outlook: Conditions Are Fair, But Caution Abounds
OUTLOOK CONDITIONS ARE FAIR, BUT CAUTION ABOUNDS For personal use only The majority of economic indicators suggest that economic conditions are currently fair. The economy is not surging, nor is it collapsing. Government activity, health services, financial markets activity, industrial activity,
Slide 14: Outlook: Interest Rates Are a Problem
OUTLOOK INTEREST RATES ARE A PROBLEM For personal use only Lowering interest rates well below normalised levels hurts (not benefits) the economy. Why? Ultra-low rates reduce retiree incomes and consumption to undesirable levels Ultra-low rates excessively inflate house and asset prices. This req
Slide 15: Long Term Outcomes: Investment Returns
LONG TERM OUTCOMES INVESTMENT RETURNS For personal use only 14
Slide 16: Industrial Shares: The Last Years Have Tended to Favour Industrials
INDUSTRIAL SHARES THE LAST 40 YEARS HAS TENDED TO FAVOUR For personal use only INDUSTRIALS 14,000 12,000 Industrials Accum. (rebased) 10,000 Resources Accum. (rebased) 8,000 6,000 4,000 2,000 0 '79 '81 '83 '85 '87 '89 '91 '93 '95 '97 '99 '01 '03 '05 '07 '09 '11 '13 '15 '17 Source: Whitefield estimat
Slide 17: Industrial Shares: Attractive Long Term Outlook
INDUSTRIAL SHARES ATTRACTIVE LONG TERM OUTLOOK For personal use only The domestic economy is likely to benefit from strong population growth in upcoming decades, with little impact on global demand for commodities. Strong Australian High fertility and net overseas migration of productive people, cou
Slide 18: Industrials/Resources Differential: Ebbs and Flows
INDUSTRIAL SHARES THE INDUSTRIALS/RESOURCES DIFFERENTIAL For personal use only EBBS AND FLOWS 100% 75% 50% Historically ranked 3 Yr 25% spread between Industrials and Resources 0% '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 Source: Whitefield estimates; S&P Dow Jones
Slide 19: Strategy: Positioned Defensively Coming into 2020
STRATEGY POSITIONED DEFENSIVELY COMING INTO 2020 For personal use only Insurance Strategy ConsumerStaple The Whitefield strategy looks to emphasise the underlying attributes of the Industrials segment of the market, while allocating a small portion Technology of the portfolio towards generating high
Slide 20: Performance: Underlying Improvements
PERFORMANCE UNDERLYING IMPROVEMENTS For personal use only Performance to 31st March 2019 Whitefield (WHF) 1yr 3yr p.a. 5yr p.a. For the year the portfolio delivered a 7.89% total return, which was a solid result considering it was Portfolio Return 7.89% 7.78% 7.19% a relatively turbulent period in m
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