Glennon Small Companies Ltd · ASX:GC1
Glennon Small Companies — Shareholder Meeting (October 2016)
35 slides from Glennon Small Companies's shareholder meeting presentation, Oct 27, 2016
Slide 1: Glennon Small Companies Limited Annual General Meeting 2016
For personal use only GLENNON SMALL COMPANIES LIMITED (ASX:GC1) ANNUAL GENERAL MEETING 2016 27 October 2016
Slide 2: Disclaimer
Disclaimer For personal use only The information provided in this presentation has been prepared by Glennon Capital (ABN 84 137 219 866, AFSL 338567). The information herein is provided for information purposes and should not be construed as an offer for sale. Whilst Glennon Capital has taken all re
Slide 3: Formal Business
For personal use only Formal Business 3
Slide 4: Proxy results
Proxy results For personal use only Proxy Votes Resolution For Against Discretion Abstain Resolution 1 Adopt the Remuneration Report 1,066,135 92,005 150,626 0 for period ended 30 June 2016 Resolution 2 Re-election of John 1,118,140 30,000 150,626 10,000 Larsen as a director Resolution 3 Appointment
Slide 5: Agenda
Agenda For personal use only 1) About Glennon Capital 2) Market overview 3) Investment Case Studies 4) Performance and portfolio 5) Investor Communication 6) Questions 5
Slide 6: About Glennon Capital
For personal use only About Glennon Capital 6
Slide 7: Our values
Our values For personal use only We want our We want to We want to add investment to grow be aligned absolute value with our clients with our clients investments We want to communicate We want to We want to with our clients so they have think creatively be long term confidence in our capability, and
Slide 8: Investment philosophy
Investment philosophy For personal use only We believe the market shows varying degrees of inefficiency We add value by concentrating our research efforts in areas where inefficiencies exist We have found that larger companies tend to have better information flows, and as a result their prices tends
Slide 9: Investment team
Investment team For personal use only Michael Glennon Alex Shevelev MD & Portfolio Manager Portfolio Manager 20+ years’ experience in financial markets 10 years’ experience in financial markets 17+ years’ as a specialist small cap 10 years’ focused on small cap manager companies Analyst and portfoli
Slide 10: GC1 Directors
GC1 Directors For personal use only John Larsen Garry Crole Director GC1 Director GC1 FMR – Head of Equities ING MD - InterPrac FMR – Head of Deutsche Bank Head of Equities Founder of DKN financial Mercantile Mutual (now services (now part of ING) IOOF) Head of investment Founder of InterPrac and ba
Slide 11: Support team
Support team For personal use only Cheng Ge Amy Adamson Sherwin A Analyst Financial controller Research Assistant Part-time Part-time (Philippines) Compiles financial research summaries Qualified Chartered Files all daily research Accountant Preliminary company Updates electronic research 15 years’
Slide 12: Investment process
Investment process For personal use only 01 02 03 04 Idea Research Meeting Primary Analysis Generation Agenda Prioritisation & Visit Preparation 08 07 06 05 Weekly Buy, Hold or Detailed Company Portfolio Sell Decision Analysis Visit Review 12
Slide 13: What we look for
What we look for For personal use only Superior management Growth prospects track record of success industry or market share skin in the game revenue or margins Sustainable businesses Industry with barriers to entry Undervalued without excessive debt reduces competition potential flexi
Slide 14: Market overview
For personal use only Market overview 14
Slide 15: Small caps vs large caps
Small caps vs large caps For personal use only 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% -5.00% -10.00% -15.00% S&P/ASX 100 Accumulation S&P/ASX Small Ords Accumulation Small caps have outperformed large caps by 12% in the past year 15
Slide 16: Small caps vs large caps
Small caps vs large caps For personal use only Earnings growth is substantially faster for small caps 16
Slide 17: Resources vs industrials
Resources vs industrials For personal use only 60% 50% 40% 30% 20% 10% 0% -10% -20% -30% S&P/ASX Small Resources Accumulation S&P/ASX Small Industrials Accumulation Small resources have outperformed small industrials by 25% in the past year 17
Slide 18: Resources recovery driven by gold
Resources recovery driven by gold For personal use only 120% 100% 80% 60% 40% 20% 0% -20% -40% S&P/ASX Small Resources Accumulation S&P/ASX All Ordinaries Gold Gold equities have driven resources …while the exploration outlook has performance… improved 18
Slide 19: Market valuation
Market valuation For personal use only Market earnings multiples are …while dividend yield is in line with elevated... historical average 19
Slide 20: Seeking yield
Seeking yield For personal use only Australian yield remains high… …but growth has slowed 20
Slide 21: The big threat to yield stocks
The big threat to yield stocks For personal use only A rise in yields globally could threaten yield stocks 21
Slide 22: Stock selection in small caps
Stock selection in small caps For personal use only BEST 10 STOCKS FROM WORST 10 STOCKS FROM SMALL ORDINARIES SMALL ORDINARIES SMALL ORDINARIES INDEX RETURN +228% -53% 17.1% BEST 10 STOCKS WORST 10 STOCKS ASX 100 FROM ASX 100 FROM ASX 100 INDEX RETURN +68% -23% 4.9% Small caps offer more opportuniti
Slide 23: Investment Case Studies
For personal use only Investment Case Studies 23
Slide 24: Silver Chef Limited
Silver Chef Limited (ASX:SIV) For personal use only Provider of finance to small and medium businesses. The business historically provided asset financing to the Overview food industry for stainless steel kitchen fittings. The company has now expanded into other finance offerings, predominantly for
Slide 25: National Veterinary Care Limited
National Veterinary Care Limited (ASX:NVL) For personal use only Operator of vet clinics across most states in Australia. Currently has 32 clinics. Attractive industry characteristic where the largest competitor only has 5.6% market share. Management are both ex- Overview Greencross. The business ha
Slide 26: BigAir Limited
BigAir Limited (ASX:BGL) For personal use only Provider of network infrastructure, cloud services and community broadband solutions. The business provides Overview connectivity via a fixed wireless network and offers solutions in the cloud and managed services space. • Listed in April 2006 Backgroun
Slide 27: Performance and portfolio
For personal use only Performance and portfolio 27
Slide 28: GC1 performance
For personal use only GC1 performance 28
Slide 29: Portfolio characteristics
Portfolio characteristics For personal use only Top Five Holdings at 30 Sep 2016 Characteristics at 30 Sep 2016 RCR RCR Tomlinson 4.4% Number of Equity Holdings 35 MYX Mayne Pharma 4.3% Cash Balance 37% ALU Altium 4.0% Median Market Capitalisation $278 RFG Retail Food Group 3.9% SIV Silver Chef 3.6%
Slide 30: Dividends
Dividends For personal use only 2016 Interim 2016 Full Year 0.75 cents 3 cents Gross Yield 5.4% Dividend Policy The Board is committed to paying a growing stream of fully franked dividends to shareholders over the long term, provided the Company has sufficient profit reserves and franking credits, i
Slide 31: Investor Communication
For personal use only Investor Communication 31
Slide 32: Investor Communication
Investor Communication For personal use only Weekly newsletter Stay in touch GlennonCap /glennon-capital /glennoncapital glennon.com.au glennon.com.au 32
Slide 33: Research
Research For personal use only Ord Minnett Baillieu Holst Wilson HTM Independent Investment Research 33
Slide 34: Contact us
For personal use only Contact us Level 11, 179 Elizabeth Street Sydney, NSW, 2000 E info@glennon.com.au T 02 8060 9519 W www.glennon.com.au 34
Slide 35: Questions
For personal use only Questions 35
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