BKI Investment Co. Ltd. · ASX:BKI

BKI Investment — Investor Presentation (November 2012)

28 slides from BKI Investment's investor presentation, Nov 19, 2012

  1. Slide 1: Presentation to Shareholders November 2012

    For personal use only Presentation to Shareholders November 2012 1

  2. Slide 2: Disclaimer

    For personal use only Disclaimer This material has been prepared by BKI Investment Company Limited. The information within this document is not intended to provide advice to investors or take into account an individual’s financial circumstances or investment objectives. This is general investment ad

  3. Slide 3: Agenda

    Agenda For personal use only Equity Market Commentary: Current Investor Sentiment Long Term Opportunity BKI Investment Company Limited: FY 2012 Highlights 1st Quarter FY 2013 Review Asset Allocation - Including LIC’s: Why and Where do LIC’s fit in 3

  4. Slide 4: Equity Market Commentary: What is driving investor sentiment?

    Equity Market Commentary What is driving investor sentiment? For personal use only  Global Central Banks Low confidence Low discretionary spending Weak economic data High level of debt  Economic Growth Rates Developed Countries Emerging Markets  Government Uncertainty Election Campaigns Leadershi

  5. Slide 5: Equity Market Commentary: What is driving investor sentiment?

    Equity Market Commentary What is driving investor sentiment? For personal use only  Energy/Materials High Australian Dollar Softer demand, softer pricing High marginal cost of production  Consumer Confidence Cost of living pressures Job security concerns Federal Government policies  Safety / Prot

  6. Slide 6: Equity Market Commentary: What is the long term opportunity?

    Equity Market Commentary What is the long term opportunity? For personal use only  Low Interest Rates ultimately lead to:  Reduced levels of debt  Recovery in confidence, discretionary spending, job security  Improved economic data  Growth Rates of Emerging Markets V’s Developed Countries Oppo

  7. Slide 7: Equity Market Commentary: What is the long term opportunity?

    Equity Market Commentary What is the long term opportunity? For personal use only  Energy/Materials are cyclical; lower margins lead to:  Closure of some producing mines and exploration projects  Mining techniques and technologies improve  Availability of workforce and equipment improves  Lower

  8. Slide 8: Equity Market Commentary: What is the long term opportunity?

    Equity Market Commentary What is the long term opportunity? For personal use only Opportunity Equities Safety Interest –Tax Defensive Reaction V’s Security of Cash Dividends + Franking Fixed Cash Interest Protect Preserve / Defend Wealth 8

  9. Slide 9: Grossed up Dividend Yield

    Grossed up Dividend Yield* For personal use only 10.0% 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% BKI Grossed Up Dividend Yield 90 Day Bank Bill * Grossed up Dividend Yield is based on a tax rate of 30%. Includes 2H2012 Fully Franked Final Ordinary Dividend of 3.2cps and pre announced 1H2013 Fully Fran

  10. Slide 10: Agenda

    Agenda For personal use only Equity Market Commentary: Current Investor Sentiment Long Term Opportunity BKI Investment Company Limited: FY 2012 Highlights 1st Quarter FY 2013 Review Asset Allocation - Including LIC’s: Why and Where do LIC’s fit in 10

  11. Slide 11: BKI Result Highlights

    BKI Result Highlights For personal use only FY 2012 FY2011 Growth Ordinary Dividend Income $29.8m $27.6m 8.0% Net Operating Result* $27.7m $25.3m 9.4% Earnings Per Share* 6.51cps 6.02cps 8.2% Ordinary Dividend Per Share 6.40cps 6.00cps 6.7%  Management Expense Ratio (MER) maintained at 0.18%  12 m

  12. Slide 12: Net Operating Result

    Net operating Result $ Millions use only 30 25 For personal 20 15 10 5 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 12

  13. Slide 13: Management Expense Ratio

    Management Expense Ratio For personal use only 0.80% 0.70% 0.69% 0.71% 0.56% 0.60% 0.46% 0.46% 0.50% 0.40% BKI Internally Managed 0.31% 0.30% 0.19% 0.18% 0.18% 0.20% 0.10% 2004 2005 2006 2007 2008 2009 2010 2011 2012 13

  14. Slide 14: Sector Performance Months to June 2012

    14 Sector Performance 12 Months to 30 June 2012 For personal use only (BKI Top 20 V’s S&P/ASX300 Accumulation Indexes) 40% 30% 20% BKI Investment 10% Company (BKI.ASX) 0% -10% S&P/ASX 300 Acc Index -20% -30% Telco Financials Consumer Industrials Consumer XKOAI Energy Materials Services Staples Disc.

  15. Slide 15: Sector Performance Months to June 2012

    15 Sector Performance 12 Months to 30 June 2012 For personal use only (BKI Top 20 V’s S&P/ASX300 Accumulation Indexes) 40% TLS 30% CCL ALS ARP 20% BKI Investment Company 10% CBA ANZ (BKI.ASX) TPM IVC AGK ASX MLT WOW 0% WBC WES NAB -10% S&P/ASX MTS QBE 300 Acc Index NHC -20% WPL BHP -30% Telco Financ

  16. Slide 16: Sector Weightings

    Sector Weightings 16 As at 30 June 2012 For personal use only Sector Portfolio Weight Portfolio Weight Change FY2012 FY2011 Financials 35.7% 34.4% 1.3% Energy 13.3% 15.9% -2.6% Consumer Staples 11.6% 10.4% 1.2% Materials 9.2% 11.9% -2.7% Industrials 7.9% 7.3% 0.6% Telecommunications 6.2% 4.6% 1.6% C

  17. Slide 17: Portfolio Movements Months to June 2012

    Portfolio Movements 12 Months to 30 June 2012 For personal use only Major Investments: Westpac Banking Corporation National Australia Bank Limited Commonwealth Bank of Australia Wesfarmers Limited Fleetwood Corporation Major Divestments: Bluescope Steel Echo Entertainment Transfield Services Suncorp

  18. Slide 18: 1st Quarter FY2013 Review

    September 2012 1st Quarter FY2013 Review* For personal use only  Investment Portfolio Revenue# is up approx 5% on 1st Quarter FY2012.  Net Operating Result# is up approx 5% on 1st Quarter FY2012.  BKI is expected to receive $3.0m in Special Dividend Income in 1H FY2013 from New Hope Corporation,

  19. Slide 19: Portfolio Valuation

    Portfolio Valuation as at 31st October use only 600 500 For personal 400 $ Millions 300 200 100 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 Oct-12 Investment Portfolio Cash 19

  20. Slide 20: BKI Performance

    BKI Performance as at 31 October 2012 For personal use only BKI Performance 1 Year 3 Years 5 Years 7 Years as at 31 October 2012 (pa) (pa) (pa) S&P/ASX 300 ACC INDEX (XKOAI) 9.9% 3.4% -3.6% 4.6% BKI Portfolio Returns are BKI Total Shareholder Returns 10.6% 5.6% 2.3% 5.9% measured after BKI Share Pri

  21. Slide 21: Total Shareholder Returns

    Total Shareholder Returns as at 31 October 2012 For personal use only 12.0% 10.6% 9.9% 10.0% 8.0% 5.6% 5.9% 6.0% 4.6% 4.0% 3.4% 2.3% 2.0% 0.0% -2.0% -4.0% -3.6% -6.0% 1 Year 3 Years 5 Years 7 Years BKI Total Shareholder Returns S&P/ASX 300 ACC INDEX (XKOAI) Source: BKI Investment Company Limited, IR

  22. Slide 22: Dividends Paid by BKI

    Dividends Paid by BKI use only 4.0 3.5 1 0.5 3.0 1 0.5 0.5 2.5 For personal Cents per Share 2.0 3.2 3.2 3.2 1.5 3 3 3 3 2.75 3 3 2.6 2.7 2.5 2.5 2.5 2.1 2.2 1.0 2 0.5 0.0 Ordinary Dividends Special Dividends 22 1H13 Interim FY2013 Ordinary Dividend of “at least “3.2cps fully franked and Interim FY20

  23. Slide 23: Agenda

    Agenda For personal use only Equity Market Commentary: Current Investor Sentiment Long Term Opportunity BKI Investment Company Limited: FY 2012 Highlights 1st Quarter FY 2013 Review Asset Allocation - Including LIC’s: Why and Where do LIC’s fit in 23

  24. Slide 24: Asset Allocation: Why do LIC's fit in?

    Asset Allocation Why do LIC’s fit in? For personal use only  Dividends Growing income stream Reliable dividend payment dates (Interim / Final) DRP – Ideal for investing for Children / Grandchildren  Franking Credits 30% tax rate already paid on dividend income Tax credits passed directly to shareh

  25. Slide 25: Asset Allocation: Why do LIC's fit in?

    Asset Allocation Why do LIC’s fit in? For personal use only  Low Costs Management Expense Ratio (MER) of 0.18% Structure LIC’s are Companies Closed end investment structure Not forced sellers in tough markets  Listed on the ASX High levels of transparency and compliance Continuous Disclosure, ASX

  26. Slide 26: Asset Allocation: Where do LIC's fit in?

    Asset Allocation Where do LIC’s fit in? For personal use only Cash Property Infrastructure Alternatives Fixed Interest International Equities Australian Equities Income Australian Equities Growth Typical Balanced Asset Allocation 26

  27. Slide 27: Asset Allocation: Where do LIC's fit in?

    Asset Allocation Where do LIC’s fit in? For personal use only Property Cash Infrastructure LIC’s Fixed Interest Alternatives LIC’s International Equities LIC’s Australian Equities LIC’s Income Australian Equities Growth Typical Balanced Asset Allocation - Incorporating LIC's 27

  28. Slide 28: For personal use only

    * Dividends For personal use only * Franking Credits * Diversification Office Level 2, 160 Pitt Street Sydney NSW 2000 Telephone +61 2 9210 7000 Fax +61 2 9210 7099 * Management Web www.bkilimited.com.au ABN 23 106 719 868 * Low Cost * Company Structure * Transparency - BKI.ASX * Long Term Performan

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