Eqt Holdings Ltd. · ASX:EQT
Eqt — Equity Trustees — FY2006 Earnings Presentation
22 slides from Eqt's earnings presentation, 2006
Slide 1: Equity Trustees Limited Full Year Results to 30 June 2006
1 Equity Trustees Limited Full Year Results to 30 June 2006
Slide 2: Themes
2 Themes • Record revenue and profitability • Operating profit (post-tax) up 75% Trusted since 1888 • Operating revenue up 25% • Operating margin up to 26.8% • Increased returns to shareholders • Growth in all four business units • Wealthpac master-trust integration • Positioned for continued growth
Slide 3: In summary
3 In summary Op. Revenue* $24.8m Ï 25.0% Trusted since 1888 Op. Profit* (pre-tax) $6.6m Ï 57.9% Op. Profit* (post-tax) $4.7m Ï 74.9% Net Profit (post-tax) $5.2m Ï 51.5% EPS (basic) 69.94¢ vs 52.98¢ DPS (fully franked) 50¢ vs 40¢ * Excluding gains from the sale of investments All figures are calculat
Slide 4: Operating Revenue
4 Operating Revenue 26.0 $m $24.8m 24.0 +25% Trusted since 1888 2004 2005 2006 22.0 vs vs vs 2003 2004 2005 20.0 $19.8m +17% +18% +25% 18.0 16.0 $16.8m • Key operational focus • Growth across all business units 14.0 $14.3m • Budgeting for continued growth 12.0 • Excludes gains from investments 10.0
Slide 5: Profitability
5 Profitability 2005 & 2006 results are calculated in accordance with A-IFRS policies 8.0 $m 8.0 $m Operating Profit (pre-tax) Net Profit after Tax $6.624m 6.0 +58% 6.0 $5.156m +52% Trusted since 1888 4.0 4.0 $4.195m $3.403m $3.078m $2.811m 2.0 2.0 Excludes gains from the sale of investments 0.0 0.0
Slide 6: Earnings per share
6 Earnings per share cps • Growth in EPS is post impact 69.94 +32% of capital raising conducted Trusted since 1888 65 in late 2005 52.98 45 45.52 • Capital raising increased the weighted average numbers 25 of shares on issue by 14.8% Represents basic earnings per share calculation 5 2003 2004 2005 2
Slide 7: Returns to shareholders
7 Returns to shareholders Dividends per share (¢) • Dividends remain fully Trusted since 1888 cps 50 50 franked @ 30% tax rate 40 40 • Dividend payout ratio is 30 at the upper end of the 30 stated target range – 30 20 20 25 being 60-80% of Operating Profit after Tax 0 10 20 0 15 DPS (Total) 10 0 DPS
Slide 8: Operating margin
8 Operating margin 2005 vs 2006 vs 2004 2005 2006 2004 2005 Operating Trusted since 1888 $16.8m $19.8m $24.8m +18% +25% revenue Operating $13.7m $15.6m $18.2m +14% +16% expenses Operating +36% +58% $3.1m $4.2m $6.6m profit Operating 18.4% 21.2% 26.8% margin • Margin growth derived mainly from revenu
Slide 9: Sources of operating revenue
9 Sources of operating revenue Trusts & Estates Wealth Philanthropy Mgmt Trusted since 1888 Approved Private Corporate Trustee Trusts Clients Master Super- Fund Responsible Trust annuation Services Entity Funds Approved DIY Management Trustee Client Product Services EQT Mgmt Funds
Slide 10: Share of operating revenue
10 Share of operating revenue 2005 2005 18% 34% 2006 Trusted since 1888 2004 2004 19% 19% 37% Superannuation 32% Funds Management 23% Fund Services 26% 2005 Private Clients 2005 17% 31% 2004 2004 12% 32%
Slide 11: Revenue by business unit
11 Revenue Business Unit Revenue vs 2005 Comments • Significant FUM inflow Funds $7.5m +17.4% • Targeted distribution strategy Trusted since 1888 Management • Strong funds performance • Estates income down (cyclical) Private Clients $6.1m +2.1% • “New” income sources strong • Stronger 2nd half & sta
Slide 12: Funds Management
12 Funds Management • Strong net FUM inflow • Focus on gaining access to platforms Trusted since 1888 • Continued relationships with leading managers • NSW BDM appointed FUM • Improved market presence $1,414m $989m +43% $669m +48% 30-Jun-04 30-Jun-05 30-Jun-06
Slide 13: Private Clients
13 Private Clients • Strong asset growth – managed by in-house investment management team Trusted since 1888 • Increase in “new” sources of revenue – specifically wealth management services • Cyclical decline in FUM “traditional” revenue $1,347m – eg: estate $1,128m $998m management +19% +13% • Stro
Slide 14: Fund Services
14 Fund Services • Growth through strong increase in Responsible Entity (RE) appointments – specialist skill set Trusted since 1888 • Now 20+ managers as RE clients • Focus also on approved trustee role – FUM RSE licence obtained $11,086m $7,691m +44% $4,616m +67% 30-Jun-04 30-Jun-05 30-Jun-06
Slide 15: Superannuation
15 Superannuation • Acquisition of Wealthpac superannuation master trust completed in February Trusted since 1888 • Solid FUM growth based on distribution focus • New Managing Director appointed in June • Founder of business FUM $400m becomes Chairman $319m • RSE licence gained +25% • Relaunch of DI
Slide 16: Support services
16 Support services • Continued people focus – attracting and retaining the right staff Trusted since 1888 • Development of executive and management teams – identification and use of talent • Full IT systems integration across business • Marketing focus – increasing brand presence • Process improvem
Slide 17: Positioning
17 Positioning Well positioned for growth • 9% mandated Superannuation Trusted since 1888 • Favourable tax changes guarantee • Master-trust & RSE exposure • Focus on wealth management Ageing population • Need for trusted advisors • Increasing complexity of estates • Spread of asset classes Funds man
Slide 18: Balance Sheet
18 Balance Sheet • Shareholders funds up $14.7m to $36.4m • Acquisition cost of Wealthpac reflected as Trusted since 1888 intangible asset • Investment portfolio reflects unrealised gains of $3.4m (vs $2.9m at Jun 05) – included in investment revaluation reserve • Reserve requirements more than adeq
Slide 19: Share price
19 Share price $20.00 $18.50 $18.00 $16.00 Trusted since 1888 2006 results $16.00 update $14.00 2005 annual results $13.50 $12.50 $12.00 2006 HY Results Share $10.00 2004 HY 2005 HY placement Results $8.50 Results New CEO Merger with ANZET Settlement $8.00 Appointed $7.50 called off with Land Merger
Slide 20: Strategy update
20 Strategy update • Company looking to grow through merger and / or acquisition opportunities Trusted since 1888 • Capital / free cash balance remains strong • Internal resources devoted to identifying growth opportunities • Focus on right opportunity – will not pursue unless benefit is anticipated
Slide 21: Summary
21 Summary • Very good all-round performance in 2006 • Strong growth in Responsible Entity business – Trusted since 1888 and ongoing inquiry • Funds Management FUM inflow resulting from sustained distribution focus • Some cyclical weakness in Private Client area but business is on a solid platform w
Slide 22: ‘[rustees
EO ‘[rustees Trusted since 1888