Praemium Ltd · ASX:PPS
Praemium — FY2008 Earnings Presentation
31 slides from Praemium's earnings presentation, Aug 29, 2008
Slide 1: Preliminary Final Results
For personal use only Preliminary Final Results 29 August 2008 Praemium Ltd’s Preliminary Final Results (Appendix 4E) have been submitted in accordance with the requirements of the Corporations Act 2001 and the Listing Rules. Praemium’s Managing Director, Mr Arthur Naoumidis, will comment on the res
Slide 2: 2007-2008 Annual Results
For personal use only 2007- 2007-2008 ANNUAL RESULTS Arthur Naoumidis 29 August 2008 1 / 30
Slide 3: Agenda
Agenda For personal use only 07-08 Strategic Execution Group Financial Summary Australia V-Wrap p-Desktop SMA United Kingdom Outlook for 08-09 2 / 30
Slide 4: 07-08 Strategic Execution: Australia
07-08 Strategic Execution For personal use only Australia Increased the penetration of V-Wrap Increased our footprint in the SMSF market Cemented the delivery of advanced portfolio services in the institutional space Deployed p-Desktop as extended value-add Expanded our product line to attract more
Slide 5: 07-08 Strategic Execution: United Kingdom
07-08 Strategic Execution For personal use only United Kingdom Established key partnerships in the UK Cofunds Capita Old Broad Street Research Secure regulatory approval for SMARTfund launch Approval as Fund Manager Approval of ‘proof of concept’ SMARTfund prospectus Lodgement & approval of first co
Slide 6: Group Financial Summary
Group Financial Summary For personal use only EBITDA for Full Year 30 June 2008 = ($12.16 million) All UK establishment costs are expensed Præmium has no debt Operational revenue for: Full Year 30 Jun 2008 = $6.79 million Full Year 30 Jun 2007= $4.43 million Cash at 30 Jun 2008 = $13.09 million Grow
Slide 7: Group Financial Summary: Operating Performance
Group Financial Summary Operating Performance For personal use only Corporate EBITDA Net of Revenue Costs EBITDA Costs Corporate Costs ($ '000) ($ '000) ($ '000) ($ '000) ($ '000) Australia V-Wrap 5,996 3,405 2,591 1,957 634 SMA 226 976 -750 561 -1,311 p-Desktop 40 542 -502 312 -814 Subtotal 6,262 4
Slide 8: Key Financial Details: Operating Performance
Key Financial Details Operating Performance (cont.) For personal use only Praemium Australia Praemium Australia Full Year Full Year Jun 2007 Jun 2008 Revenue EBITDA Revenue EBITDA ($ ‘000) ($ ‘000) ($ ‘000) ($ ‘000) V-Wrap 4,241 795 5,996 2,591 SMA 27 (188) 226 (750) p-Desktop 0 (50) 40 (502) Total
Slide 9: Australia Employee Headcount
Key Financial Details Operating Performance (cont.) For personal use only Australia June June June Employee 2006 2007 2008 Headcount Operations/ 6 10 16 Client Services Sales & 3 7 8 Marketing Executives 2 2 3 R&D/IT Services 7 16 20 Finance, 4 6 6 compliance & Legal Total Australia 22 41 53 8 / 30
Slide 10: UK Employee Headcount
Key Financial Details Operating Performance (cont.) For personal use only UK Employee June June June Headcount 2006 2007 2008 Operations/ 1 5 8 Client Services Executives 1 1 2 R&D/IT Services 0 5 8 Sales & Marketing 0 2 1 Finance, 0 2 3 Compliance & Legal Total UK 2 15 22 Total Praemium 24 56 75 Gr
Slide 11: Key Financial Details: Funds and Services Growth
Key Financial Details Operating Performance (cont.) For personal use only June 2007 June 2008 % change V-Wrap Committed Portfolios 22,860 37,040 ↑ 62% Funds under Administration $24.1 billion $29.2 billion ↑ 21% Number of Wholesale Clients 346 462 ↑ 34% SMA Funds under Administration $193 million $3
Slide 12: Gross margin per V-Wrap portfolio
Key Financial Details Operating Performance (cont.) For personal use only Jun-07 Jun-08 19% 57% 43% 81% Gross margin per portfolio Cost per portfolio 11 / 30 127% increase in gross margin per V-Wrap portfolio
Slide 13: V-Wrap revenue and costs
Key Financial Details Operating Performance (cont.) For personal use only V-Wrap FY ’06 FY ’08 Committed Portfolios 15,831 37,040 (‘000) (‘000) Revenue $2,502 $5,996 140% Direct costs $2,513 $3,405 increase in V-Wrap revenue since Less Expanded Market Data -$364 30 June 2006 Operating Costs $2,513 $
Slide 14: 2007/2008 highlights
For personal use only 2007/2008 highlights Macquarie Equities July 07 UBS Nov 07 Evans & Partners Nov 07 Asgard Phase II live Nov 07 3% market share of SMSFs Feb 07 Merrill Lynch Equities Aust. Jun 08 University of Sydney Jun 08 13 / 30 Keep winning the big ones 13
Slide 15: Committed Portfolios
Committed Portfolios For personal use only 500 40,000 450 35,000 Committed Portfolios 400 Committed Services 30,000 350 25,000 300 250 20,000 200 15,000 150 10,000 100 5,000 50 0 - Number of Services Number of Portfolios 14 / 30 Consistent growth 14
Slide 16: V-Wrap: Looking forward
For personal use only Looking forward Increase market penetration Expand footprint in SMSF market Expand institutional opportunities Launch multi-currency/multi-exchange Add functionality to attract fund manager operations 15 / 30 Strong opportunity to grow market share & target market
Slide 17: p-Desktop 2007/2008 highlights
For personal use only 2007/2008 highlights Launch Jun 07 Evans & Partners Nov 07 Order Management launched May 08 As at 30 Jun 08: Deployed by 159 services 27 deploy streaming data One service routing execution orders to ASX 16 / 30 Primed for growth
Slide 18: p-Desktop: Looking forward
For personal use only Looking forward Increase penetration into broker market Continue deployment of trading capability Add functionality to attract fund manager operations 17 / 30 Range of revenue opportunities available from p-Desktop
Slide 19: SMA key measures and growth
SMA Key measures For personal use only As at Jun 2008: 143 wholesale signups (up from 57 in Jun 07) $338m funds under management SMA Growth 400 AUD $ (millions) 350 300 250 200 150 100 50 0 Nov-06 Feb-07 Nov-07 Feb-08 Jan-07 Jan-08 Oct-06 Mar-07 Jun-07 Oct-07 Mar-08 Jun-08 Dec-06 Apr-07 May-07 Dec-0
Slide 20: SMA market research
SMA Market research* For personal use only BlackRock/Præmium SMA named top SMA product Strongest online functionality Full online account set up, maintenance and inspecie transfers Flexible rebalancing routines and customisations Includes uploading tax lot information Largest investment choice White
Slide 21: SMA high brand awareness
SMA High brand awareness For personal use only Which SMA providers can you name off the top of your head? Praemium * Source: Investment Trends Pty Limited. 2007 SMA Report (n=322) 20 / 30 Praemium thought-leadership recognised via brand
Slide 22: SMA: Looking forward
SMA Looking forward For personal use only BlackRock exclusivity period ends 8 Nov 08 Appetite and demand for SMAs still growing Intentions post exclusivity: Secure relatively small number of licences with key distributors Material minimums will apply Strong position to maximise post-exclusivity oppo
Slide 23: United Kingdom achievements to date
United Kingdom Achievements to date For personal use only Establishment of offices & data centres System localisation Capital gains tax changes Multi-exchange & currency Fully functional operations team Establishment of distribution partners Regulatory approvals in place 22 / 30 22
Slide 24: UK revenue model
Revenue model For personal use only Flagship offering in the UK market Our role is the UK equivalent of Operator 50 basis points entry fee 25 basis points ongoing £100 – 200 per portfolio Operating Very scalable offerings Costs Current costs (approx $7-8m pa) indicative of future 23 / 30 23
Slide 25: SMARTfund regulatory authorisations
For personal use only Regulatory authorisations received: Fund Manager Aug 07 ‘Proof of Concept’ SMARTfund authorised Apr 08 First SMARTfund commercial prospectus Aug 08 HSBC appointed Trustee First offering to be launched: World-first unitised version of the SMA Risk-based multi-manager portfolios
Slide 26: Distribution partnerships: Cofunds
Distribution partnerships For personal use only One of the two largest platform providers in the UK 19% market share with $14.1bn AUA (Feb 08) AUA grew 35% in 2007 Signed contract on 12 March 2008 First UK fee received - $180k (minimum per annum) Deployed CGT calculator in March In discussions to di
Slide 27: Distribution partnerships: Old Broad Street Research
Distribution partnerships For personal use only Leading investment research and product analysis company Supplies qualitative and quantitative information leading to fund ratings and product panels Constructs model portfolios for many Independent Financial Advisers Will be the Investment Manager for
Slide 28: Distribution partnerships: Capita
Distribution partnerships For personal use only Capita FTSE100 company, > £4bn market capitalisation Largest provider of fund administration services to investment managers LOI signed in 2007 Discussions continuing for deployment of SMARTfund Provides access to institutional distribution 27 / 30 27
Slide 29: Distribution partnerships: Argenta
Distribution partnerships For personal use only Argenta – Lloyd’s Adviser One of only two licensed Lloyd's adviser and members' agent Approx £1bn underwriting capacity Seeking to add value in management of funds held as security LOI signed in 2006 Conducting internal review of member needs Provides
Slide 30: Outlook for 08-09
Outlook for 08-09 For personal use only Australia 20% price increase for V-Wrap effective 1 Nov 08 Market volatility focuses attention on low-cost solutions SMA exclusivity period ends 8 Nov 08 United Kingdom SMARTfund to launch imminently 29 / 30 This will be the pivotal year 29
Slide 31: Praemium Ltd contact details
For personal use only 2007- 2007-2008 ANNUAL RESULTS Praemium Ltd Level 1 406 Collins Street Melbourne Victoria 3000 Arthur Naoumidis Australia 30 / 30 29 August 2008 www.praemium.com.au