Eqt Holdings Ltd. · ASX:EQT
Eqt — Equity Trustees — H1 FY2009 Earnings Presentation
23 slides from Eqt's earnings presentation, February 2009
Slide 1: Equity Trustees Limited Half Year Results to 31 December 2008
1 Equity Trustees Limited Half Year Results to 31 December 2008
Slide 2: Equity Trustees
Equity Trustees An independent Australian based financial services firm that is increasing its market presence. Trusted since 1888 2
Slide 3: Overview
Overview • Year on year profit decline due to investment markets • Small decline (< 3%) in operating revenue – business units continue to perform well • Strong growth in Superannuation – driven by acquisition • Discretionary expenses contained responsibly • Continued investment for the future – peop
Slide 4: Overview – group results
Overview – group results 6 months to 6 months to 31/12/2008 31/12/2007 Operating revenue $18.1m $18.6m (2.6%) Operating expenses ($12.0m) ($11.6m) + 3.5% Operating profit (pre-tax) $6.1m $7.0m (13.4%) Income tax expense ($1.9m) ($2.2m) Operating profit (after-tax) $4.2m $4.8m (13.5%) Non operating i
Slide 5: Operating results
Operating results Operating revenue down 2.6% to $18.1m Operating expenses up 3.9% to $12.0m Investment income ($m) $18.6m $18.1m Depreciation ($m) 0.6 0.6 Operating overheads ($m) $12.0m Business unit revenue ($m) $15.8m $11.6m $10.6m 0.6 0.5 0.5 $9.0m 0.3 Overheads $11.6m 0.2 up 3.1%. $7.5m 0.7 $7
Slide 6: Operating revenue & expense variance
Operating revenue & expense variance Strategic decision to maintain investment in people, process and systems while maintaining a responsible approach to discretionary expenditure. +36.9% Growth in operating revenue Æ Near term impact on year-on-year operating profit Growth in operating expenses Æ L
Slide 7: Operating revenue - composition
Operating revenue - composition Group revenue down 2.6% to $18.1m $18.6m $18.1m Investment income ($m) 0.6 0.6 Business units ($m) $15.8m 0.5 Business unit revenue down 2.6% to $17.5m ($0.7m) ($0.5m) +$0.9m ($0.2m) $11.6m 0.7 $9.4m Private Clients down $0.7m (-15.0%) $8.4m 0.4 18.0 17.5 18.0 Funds M
Slide 8: Profitability
Profitability Operating profit before tax Net profit after tax down 13.4% to $6.1m down 19.1% to $4.1m 7.3 2nd half 2nd half 1st half 1st half 5.9 5.5 4.5 4.0 7.0 3.3 2.3 6.1 5.2 1.7 5.1 1.9 1.4 4.1 3.6 2.6 1.9 1.4 1.7 1.9 1.2 2004 2005 2006 2007 2008 2009 2004 2005 2006 2007 2008 2009 Trusted since
Slide 9: Earnings per share
Earnings per share Earnings per share down 21.1% to 50.86¢ per share 133.35 Weighted average shares on issue (‘000) 105.18 8,085 8000 7,880 7,710 7500 69.94 64.48 7000 7,089 52.98 A capital raising in late 50.86 45.52 47.35 2005 increased the number 6500 of shares on issue by 14.8% 6,373 6,110 26.73
Slide 10: Returns to shareholders
Returns to shareholders Interim, fully-franked dividend maintained at 50¢ per share Board has maintained dividend level in reflection of: • Confidence in longer term prospects • Ongoing strong cash flow generation 50 50 of business • Strong balance sheet – nil debt 30 • High level of franking credit
Slide 11: Balance sheet
Balance sheet Net asset base of $51.9m – remains strong Minimal mark to market impact on 52.0 51.9 investment portfolio 44.4 36.4 21.6 16.5 '30/06/2004 '30/06/2005 '30/06/2006 '30/06/2007 '30/06/2008 '31/12/2008 Trusted since 1888 11
Slide 12: Total shareholder return
Total shareholder return 800,000 Between 1 July 2003 and 31 December 2008 EQT’s Total Shareholder Return1 exceeded the growth of the S&P/ASX 700,000 200 Accumulation Index by 107%. 600,000 500,000 EQT S&P/ASX200 Accumulation Index 400,000 300,000 200,000 100,000 1 Assumes all dividends are reinveste
Slide 13: Four business units – sources of revenue
Four business units – sources of revenue Corporate superannuation: Sales & marketing + product management for • Wealthpac EQT co-branded funds • Templetons managed by external • www.super.com.au specialists • Freedom of Super Funds Choice -annuation Management 25% 27% Fund Services Private Clients 2
Slide 14: Private Clients
Private Clients Operating revenue down 15.0% to $4.0m AUM down 26.3% to $1,091m Strong growth in client base has insulated revenue from AUM decline 1,406.6 1,479.3 4.9 4.7 1,260.1 4.0 1,093.1 1,090.5 994.5 2.8 2.9 2.9 2004 2005 2006 2007 2008 2009 2004 2005 2006 2007 2008 2009 • Exposed to market co
Slide 15: In-house asset management capability
In-house asset management capability EQT Flagship Fund EQT Charitable Balanced Fund ¾ Australian equities team incubated in ¾ In-house fund of funds model for tax- 2003. exempt investors ¾ Concentrated large cap fund generating a ¾ Invests predominantly in EQT co- tax effective income stream branded
Slide 16: Funds Management
Funds Management Operating revenue down 9.4% to $4.7m FUM down 20.5% to $1,945m 2,446.6 5.2 4.7 4.3 1,620.3 1,944.7 3.6 3.0 3.1 1,179.7 863.1 659.1 2004 2005 2006 2007 2008 2009 2004 2005 2006 2007 2008 2009 Positive net FUM inflows • Positive net inflows for ½ year +35.7 • #6 on Morningstar tables
Slide 17: Fund Services
Fund Services Operating revenue down 4.8% to $4.4m FUA down 27.8% to $11,210m 15,527.1 4.6 4.4 12,802.0 3.5 11,210.3 2.4 8,015.4 5,350.8 1.4 3,298.4 0.9 2004 2005 2006 2007 2008 2009 2004 2005 2006 2007 2008 2009 • Exposure to markets affecting FUA but revenue holding up well – flow on from work don
Slide 18: Superannuation
Superannuation Operating revenue up 27.2% to $4.4m FUM down 14.8% to $537m 4.4 630.4 537.1 3.5 434.0 2.6 375.0 2.0 1.4 1.6 132.2 161.7 2004 2005 2006 2007 2008 2009 2004 2005 2006 2007 2008 2009 Revenue growth driven by acquisition and by • Acquisitions performing well – underlying business revenue
Slide 19: Revenue & FUM comparison
Revenue & FUM comparison Business unit operating revenue Funds under management $20.1b $18.0m $17.5m Despite contraction, revenue & FUM are $15.3m holding well vs prior corresponding periods $16.3b Superannuation $14.8b Fund Services Funds Management Private Clients $10.9m Superannuation $10.8b $9.0
Slide 20: Information technology upgrade
Information technology upgrade • Upgrade to Garradin system proceeding as planned • Further integrates key services – asset management, unit registry, fiduciary accounting and tax • Builds on provision for specialised trust & estate requirements • Improvement to on-line component for clients • Will
Slide 21: Outlook
Outlook Company base is solid: • Business units established and performing well • Good relationships with key clients • Active sales & marketing culture • Investment in people and systems • Strong cash flow and no debt Outlook for 2nd half of 2009: • Performance will continue to be impacted by marke
Slide 22: Summary
Summary • 1st half revenue held up well in market environment • Responsible approach to discretionary cost containment • Net asset base remains strong • Maintaining investment in people, processes and systems • Systems upgrade proceeding to plan • Business remains on solid platform but markets will
Slide 23: Equity Trustees Limited ABN 46 004 031 298 disclaimer
23 Equity Trustees Limited ABN 46 004 031 298, Australian Financial Services Licence No 240975. This document was prepared by Equity Trustees Limited and is only provided for information purposes. It is not intended to take the place of professional advice and you should not take action on specific