Slide 1: Higher full year NPAT, dividend increased
ASX announcement Wednesday 21 August 2013 Higher full year NPAT, dividend increased • NPAT up 54% (on FY2012) to $10.4 million • Strong growth in underlying NPAT, up 32% (on FY2012) to $10.6 million • Total FUM of $17.1 billion, up 5% on FY2012 • FUM uplift driven by leading boutiques, RARE, IML and
Slide 2: Dividend declared and summary profit and loss
Due to the higher full year financial results, the Board has declared a fully franked final dividend of $0.23 (23 cents) per share – up 15% on the final dividend issued for FY2012 of $0.20 (20 cents) per share. The increase in dividend reflects the Board’s confidence in the Company’s strong financia
Slide 3: Treasury Group Ltd Full Year Results presentation
Treasury Group Ltd Full Year Results presentation 30 June 2013
Slide 4: Agenda
Agenda 1. Overview 2. Financial Highlights 3. FUM & Performance 4. Strategy & Opportunities 5. Outlook 2
Slide 5: 1. Overview – improved market conditions and momentum from key boutiques
1. Overview – improved market conditions and momentum from key boutiques driving improved outcomes Financial • Normalised NPAT up 31.6% to $10.6m • Statutory NPAT up 53.9% to $10.4m • FY2013 dividend up 17.6% to 40.0cps • Basic eps up 53.6% to 45.0cps Operational • Excellent momentum at RARE, IML an
Slide 6: 1. Overview – operational highlights at Boutiques
1. Overview – operational highlights at Boutiques • Excellent momentum at RARE, IML and Celeste driving underlying growth in TRG earnings • Strong performance across boutiques (multiple Fund Manager of the Year nominations/awards), particularly RARE, IML and Celeste • Positive initial ratings for Au
Slide 7: 1. Overview – operational highlights at Treasury Group
1. Overview – operational highlights at Treasury Group • Continuation of pro-active approach to management of boutique investments and other TRG interests • Exit from PRV arrangements completed for net gain • Dublin-based UCIT vehicle (Treasury Group Investment Funds plc) restructured and sold to RA
Slide 8: 2. Financial Highlights – underlying profit growth, significant activity levels
2. Financial Highlights – underlying profit growth, significant activity levels • NPAT up 54% to $10.4 million • Strong growth in underlying profit – up 32% on FY2012 • Improved efficiency and lower costs at TRG, following 2012 restructure • Significant positive and negative abnormal items incurred
Slide 9: 2. Financial Highlights – growth in FUM; Underlying NPAT up 32%
2. Financial Highlights – growth in FUM ; Underlying NPAT up 32% P&L Highlights ($m) FY2013 FY2012 % Change • Aggregate retail net funds inflow to RARE, Year end FUM ($bn) 17.1 16.4 4.6 IML and Celeste of $488m Aggregate Boutique Mgmt Fees ($m) 83.0 71.0 16.9 • Strong increase in mgmt fee revenue as
Slide 10: 2. Financial Highlights – abnormals reflect pro-active approach by management
2. Financial Highlights –abnormals reflect pro-active approach by management Treasury Group P&L ($000) FY 2013 FY 2012 % Change Profit After Tax 10,391 6,752 53.9 • $396k net gain from disposal of Net (gain)/loss on disposal of investments (396) 85 investments (PRV, Sirius and TAAM) Net gain from PR
Slide 11: 2. Financial Highlights – operating leverage: aggregate fees up 5%, NPAT up 22%
2. Financial Highlights – operating leverage: aggregate fees up 5%, NPAT up 22% % Aggregate P&L for Boutiques ($m) FY 2013 FY 2012 change • Average net margin higher due to improved Year end FUM ($bn) 17.1 16.4 4.6 client mix (increased retail FUM) Average Net Margin (%) 0.55% 0.51% 7.8 • Growth rat
Slide 12: 2. Financial Highlights – RARE drove significant profit growth during year
2. Financial Highlights – RARE drove significant profit growth during year Contribution to FY13 NPAT by Business Segment 12.0 0.714 10.391 10.0 3.217 8.0 0.406 (0.698) 6.752 $m 6.0 4.0 2.0 0.0 FY12 Australian International Alternative Overhead, FY13 Equities Equities Equities Outsourcing, RE Service
Slide 13: 3. Financial Highlights – dividend up
3. Financial Highlights – dividend up Dividend History 45 40 35 • Final dividend 23 cps, fully franked 30 cps • Total dividend for FY2013 up 18% 25 to 40 cps 20 15 • Balance sheet liquid and ungeared 10 • Implied payout ratio of 89% 5 0 • Dividend yield of 5.3% fully franked 2009 2010 2011 2012 2013
Slide 14: 3. FUM & Performance – shift in FUM mix towards RARE & IML
3. FUM & Performance – shift in FUM mix towards RARE & IML $17.1 billion FUM as at 30 June 2013 Evergreen & AR Capital, 0.7% Other, 2.0% Aubrey & Global Value Investors Mutual Investors, 2.7% Orion Investors Mutual, 25.1% Trilogy, 20.1% RARE Infrastructure Celeste Orion, 4.2% Trilogy Celeste, 3.8% A
Slide 15: 3. FUM & Performance – average margin higher for 2nd successive year
3. FUM & Performance – average margin higher for 2nd successive year Composition of FUM vs Average Margin 18 80 16 70 Trilogy 14 Evergreen & AR Capital 60 12 Celeste 50 TAAM 10 Avg Margin Aubrey & Global Value Investors FUM 40 (bps) $bn at year end RARE Infrastructure 8 30 Orion 6 Investors Mutual 2
Slide 16: 3. FUM & Performance – mix of Retail and Alternatives increasing
3. FUM & Performance – mix of Retail and Alternatives increasing FUM by Investor Type FUM by Investor Location FUM by Product Type 18 $bn 18 $bn 16 100% 16 14 14 80% 12 12 10 10 60% 8 8 40% 6 6 4 4 20% 2 2 - - 0% Jun-12 Jun-13 Alternatives International Source Institutional International Equities Do
Slide 17: 3. FUM & Performance – TRG FUM underpinned by strong performance
3. FUM & Performance – TRG FUM underpinned by strong performance relative to competing offerings ~86% of FUM Ranked 1st or 2nd Quartile as at 30 June 2013 1st & 2nd Quartile 3rd & 4th Quartile 5 Years 90% 10% 3 Years 85% 15% 1 Year 89% 11%
Slide 18: 3. FUM & Performance – strong long term performance and ratings
3. FUM & Performance – TRG FUM underpinned by strong long term performance and ratings Performance Relative to Comparative Indices (%pa) – Net of Fees to end June 2013 1 Year 3 Year 5 Year Since Inception Excess Excess Excess Sample Ratings Inception Date Returns Returns Returns Aubrey Global Convic
Slide 19: 3. FUM & Performance – net outflows at some boutiques during 2013
3. FUM & Performance – net outflows at some boutiques during 2013 • Chart shows gross flows, not change in FUM • Large net outflows at Orion, Trilogy and TAAM • Net inflows at RARE, IML, Celeste and Aubrey 17
Slide 20: 4. Strategy & Opportunities
4. Strategy & Opportunities • Expand and diversify portfolio of boutiques • Proactive management of investments and interests • Improve capacity to provide seed funding • Invest in Distribution and Marketing capabilities • Pursue efficiency from support services • Pursue M&A opportunities at corpora
Slide 21: 5. Outlook – market environment evolving
5. Outlook – market environment evolving • Australian Market trends • Introduction of MySuper: increased focus on cost will drive demand for ‘value for money’ strategies • Growing post retirement market: ageing population and the SMSF market require more strategies aligned with the objectives of the
Slide 22: 5. Outlook – TRG well positioned
5. Outlook – TRG well positioned • TRG business model leveraged to markets • All Ords started FY2014 a higher level than average for FY2013 • Several TRG boutiques expected to continue to benefit from current market trends • Momentum at RARE, IML and Celeste expected to continue • Retail net inflows
Slide 23: Partnering with outstanding investment professionals to deliver superior investment performance
Partnering with outstanding investment professionals to deliver superior investment performance to clients Superior alignment of investment team incentives to client outcomes Equity ownership delivers greater team stability Treasury Group value add: • Distribution and marketing capability • Efficien