Clime Investment Management Ltd · ASX:CIW
Clime Investment Management — Investor Presentation (June 2020)
27 slides from Clime Investment Management's investor presentation, Jun 3, 2020
Slide 1: Investor Presentation and Institutional Placement
Investor Presentation and Institutional Placement 3 June 2020
Slide 2: Important Notice and Disclaimer
Important Notice and Disclaimer NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES The following notice and disclaimer applies to this investor presentation (Presentation) and you are therefore advised to read this carefully before reading or making any other use of this Presentation or any inform
Slide 3: Agenda
Agenda 01 02 03 04 Summary Business update Proposed Acquisition of Institutional Madison Financial Group Placement
Slide 4: Summary
Summary
Slide 5: Company Overview
Company Overview Clime Investment Management Limited (ASX: CIW) • Diversified financial services business • Investment Management • Private Wealth Advice • Self Directed Investor Platform • National footprint • Sydney (head office), Melbourne and Brisbane
Slide 6: Clime Earnings
Clime Earnings Clime has three sources of earnings • Operating Earnings • Investment management fees • Advice and client service fees • Software subscriptions • Balance sheet investment returns • Dividends and capital movements • Performance Fees
Slide 7: Market Update and Placement
Market Update and Placement All segments performing well prior to COVID-19 − Impact cushioned through lowering variable expenses − Clime will be entitled to government support: evaluation of impact in progress − All staff successfully working from home since early March −Strong liquid balance sheet
Slide 8: Business Update
Business Update
Slide 9: Recap of H1 FY 20
Recap of H1 FY 20* • Financial metrics • Revenue up 40% on prior corresponding period (PCP) to $7.23M • Operating Earnings up 178% on PCP to $1.59M • NPAT up 303% on PCP to $0.8M • Interim dividend 1 cent per share fully franked • FUM up 10.3% on June 2019 to $1.019Bn • Non-Financial metrics • Emplo
Slide 10: H1 FY Summary
H1 FY 20 Summary* 31-Dec-19 31-Dec-18 Change Item % Change ($’000) ($’000) ($’000) Revenue 7,228 5,154 2,074 40% Net realised and unrealised gains on financial assets 70 34 Occupancy expenses (112) (160) Administrative expenses (5,593) (4,473) Share of profit from joint venture - 17 Operating Earnin
Slide 11: Track Record of Growth
Track Record of Growth EBITDA ('000) Basic Earnings Per Share (cps)* 3,000 2,586 3.0 2.6 2,500 1.9 2,000 1,970 2.0 1.3 1.6 1,287 1,593 1,500 1.0 1,000 - 500 2017 2018 2019 2020 - -1.0 2017 2018 2019 2020 H1 H2 H1 H2 NPAT ('000)* 2,000 1,461 1,500 1,064 620 863 1,000 500 - 2017 2018 2019 2020 -500 *
Slide 12: Update – to 29 May 2020
Update – to 29 May 2020 • COVID-19 impact − Gross FUM decline from $1,097m (14 Feb 20) to $874m at lowest point: $969m as at 29 May 20 − Reduced variable expenses in response to market correction − All staff working from home successfully since early March • Ordinary Operating Result* and Net Group
Slide 13: Investment Solutions
Investment Solutions Investment type Product Suitable for… • All Cap Australian Equity IMA • High Conviction Australian Equity IMA Individually Managed Accounts (IMAs) Wholesale investors only • Income IMA • Balanced Ethical Income IMA • Clime Balanced Portfolio • Clime Growth Portfolio Separately M
Slide 14: Clime Group Gross FUM ($M)
Clime Group Gross FUM ($M) 1200 1000 # 800 * 600 400 200 0 *Acquisition of CBG Asset Management # New Clime CEO start date. Commencement of Private Wealth and third party distribution strategies
Slide 15: Proposed acquisition of Madison Financial Group
Proposed acquisition of Madison Financial Group
Slide 16: Rationale for proposed acquisition
Rationale for proposed acquisition • Clime has signed a Share Sale Deed to acquire 100% of the shares in the entities comprising the Madison Financial Group (MFG) • MFG provides licensing, compliance, technology and support to approx. 100 financial advisory firms licensed under its Australian Financ
Slide 17: Proposed acquisition – key terms
Proposed acquisition – key terms • Transaction description • Clime to acquire all of the issued shares in the entities comprising MFG, being Madison Financial Group Pty Ltd (Madison), AdviceNet Pty Ltd (AdviceNet), ProActive Portfolios Pty Ltd and WealthPortal Pty Ltd • Consideration payable • $4.4
Slide 18: Institutional Placement
Institutional Placement
Slide 19: Institutional Placement Details
Institutional Placement Details* • An underwritten institutional placement to professional and sophisticated investors to raise approximately $4.5 Offer structure million and size • $0.46 per share • 8.2% premium to last close of $0.425 per share Offer price • 17.7% premium to average CIW share pric
Slide 20: Use of Offer Proceeds
Use of Offer Proceeds Sources A$m Uses A$m Institutional Placement $4.5 Acquisition of Madison Financial Group $4.4* Capital raising costs $0.1 Total Sources $4.5 Total Uses $4.5 *Subject to post-completion adjustment for working capital as at the completion date
Slide 21: Estimated transaction impact
Estimated transaction impact* Pre-acquisition Clime FY 21 operating earnings (estimate) $553,000 Number of CIW shares on issue 55,924,896 Including Madison Financial Group MFG FY21 operating earnings (estimate) pre-synergies $500,000 Group FY21 operating earnings (including MFG) $1,053,000 Increment
Slide 22: Timetable
Timetable* Event Date 1 Trading Halt Announcement Monday 1 June 2020 Firm and irrevocable bids due Monday 1 June 2020 Trading resumes on ASX Wednesday 3 June 2020 Institutional Placement Settlement Date Tuesday 9 June 2020 Institutional Placement Allotment Date Wednesday 10 June 2020 Quotation of Ne
Slide 23: Key Risks
Key Risks The success or otherwise of the Company is highly dependent on its skill in carrying out its investment management services and, in combination with market forces outside the Company’s control, the performance of the entities and funds which it manages and / or invests into (Funds) as a wh
Slide 24: Key Risks (cont’d)
Key Risks (cont’d) The funds management industry is highly competitive, with a significant number of existing investment professionals and new entrants regularly developing new products and establishing funds management businesses. Actions of current or future competitors may result in loss of FUM,
Slide 25: Key Risks (cont’d)
Key Risks (cont’d) Completion of The acquisition of the Madison Financial Group s expected to be completed in June 2020, but there can be no guarantee that this will occur. Due to circumstances beyond the control of acquisition of Madison Company, its directors and management team, it is possible th
Slide 26: Key Risks (cont’d)
Key Risks (cont’d) a) Default risk Investment in shares and financial instruments generally involves third parties as custodial and counterparties to contracts. Use of third parties carries risk of default and failure to secure custody, which could adversely affect the value of the portfolios manage
Slide 27: Key Risks (cont’d)
Key Risks (cont’d) The Company conducts its business in a highly regulated industry and must comply with the requirements of its Australian Financial Services Licence, the Corporations Act, ASIC, ASX and other regulators. The Company’s performance would be adversely impacted if licences issued by th
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