Polar Capital Technology Trust PLC · LSE:PCT
Polar Capital Technology Trust — Shareholder Meeting (September 2012)
29 slides from Polar Capital Technology Trust's shareholder meeting presentation, Sep 4, 2012
Slide 1: AGM Presentation
Polar Capital Technology Trust plc AGM Presentation 4 September 2012 This presentation is for one-on-one use with non-US professional investors only www.polarcapital.co.uk
Slide 2: Results As At 30 April 2012
Results As At 30 April 2012 Year ended Year ended Change 30/4/11 30/4/12 (y/y) Net assets £468,716,000 £503,292,000 +7.4% NAV per ordinary share 368.74p 392.56p +6.5% Price per ordinary share 373.50p 387.00p +3.6% Price per subscription share 25.75p 12.75p -50.5% Benchmark change1 +8.3% Ordinary sha
Slide 3: PCT As At 31 August 2012
PCT As At 31 August 2012 Year ended Year ended Change As at Change 30/4/11 30/4/12 (y/y) 31/8/12 (y/y) Net assets £468,716,000 £503,292,000 +7.4% £500,470,770 +21.3% NAV per ordinary share 368.74p 392.56p +6.5% 390.35p +20.5% Price per ordinary share 373.50p 387.00p +3.6% 391.30p +21.2% Price per su
Slide 4: Full Year Review
Full Year Review DJ World Technology vs. FTSE World since FY111 • A more challenging year for global equities (-2.6% in DJ World Technology Index £ terms) as systemic risk resurfaces / growth slows • Technology stocks comfortably outpace the broader market (+8.3%) due to passive (US / US dollar) and
Slide 5: Technology Performance
Technology Performance Select technology performance: 30 April 2011 – present1 US large-cap technology MLO US small-cap technology Source: Bloomberg, as at 2/8/11 1. Source: Bloomberg, as at 30 August 2012. 5 For non-US investor use only. Please refer to the Important Information at the end of this
Slide 6: PCT Performance
PCT Performance 10 year PCT performance: April 2002 – April 2012 250 225 200 175 150 125 100 75 50 25 Dow Jones World Technology Index PCTT Ordinary Share Price Source: Bloomberg, as at 2/8/11 PCTT NAV per Share Source: HSBC Securities Services and Polar Capital LLP. Performance is shown on a total
Slide 7: Undemanding Valuations
Undemanding Valuations Forward absolute PE: 1992 – present Source: Ned Davis, as at 10 August 2012. For non-US investor use only. Please refer to the Important Information at the end of this presentation. 7
Slide 8: Undemanding Valuations
Undemanding Valuations Forward relative PE: 1992 – present Source: Ned Davis, as at 10 August 2012. For non-US investor use only. Please refer to the Important Information at the end of this presentation. 8
Slide 9: Muted Overall IT Spending
Muted Overall IT Spending IT capital spending as % GDP: 1947 – present Source: Ned Davis, as at 30 June 2012. For non-US investor use only. Please refer to the Important Information at the end of this presentation. 9
Slide 10: Muted Overall IT Spending
Muted Overall IT Spending IT spending: unlikely to resemble the 1990s Source: Goldman Sachs, January 2012. For non-US investor use only. Please refer to the Important Information at the end of this presentation. 10
Slide 11: Limited Budget Growth = Shift In IT Priorities
Limited Budget Growth = Shift In IT Priorities Top IT priorities according to CIOs Ranking 2012 2011 2010 2009 2008 Analytics and BI 1 5 5 1 1 Mobile technologies 2 3 6 12 12 Cloud comp (SaaS, IaaS, PaaS) 3 1 2 16 - Collaboration technologies 4 8 11 5 8 Virtualization 5 2 1 3 3 Legacy modernisation
Slide 12: 2010: Harnessing The Potential Of The New Cycle
2010: Harnessing The Potential Of The New Cycle “The battle between local and distributed forms of computing has already been played out in the world of electricity generation at the end of the 19th century. Once it became economically possible to distribute power over long distances, incumbent tech
Slide 13: 2011: Public Clouds And The Mass Production Of IT
2011: Public Clouds And The Mass Production Of IT “The shift to cloud computing represents nothing less than the industry transitioning to a mass production model. Standardisation is making it possible to deliver a more monolithic, easily automated form of IT… Just as the skyscraper changed the skyl
Slide 14: 2012: The Internet And The Mass Adoption Of IT
2012: The Internet And The Mass Adoption Of IT “Cheap and plentiful bandwidth, aided by the proliferation of smartphones and tablets has enabled the Internet to become truly ubiquitous. This process bears close resemblance to the post-war experience of the aviation industry which was transformed by
Slide 15: 2012: The Internet And The Mass Adoption Of IT
2012: The Internet And The Mass Adoption Of IT technology + new entrants = mass adoption + new applications improvement For non-US investor use only. Please refer to the Important Information at the end of this presentation. 15
Slide 16: Mass Adoption
Mass Adoption • Smartphone penetration in the „sweet spot‟, driven by new devices, flat pricing and new applications • Apple iPad created a new „tablet‟ category, rapid adoption already proving highly disruptive for PC industry • Smartphones + wireless broadband = akin to „hub and spoke‟ • Metcalfe‟
Slide 17: New Applications
New Applications • The Internet is driving a plethora of new applications including online advertising, e-commerce and SaaS • Software as a service (SaaS) targets an $150bn opportunity, c.12% penetrated today1 • Additional „as a Service‟ offerings include „infrastructure‟, „platform‟, „desktop‟, „st
Slide 18: New Cycles Challenge The Value Of Incumbency
New Cycles Challenge The Value Of Incumbency Inflation adjusted UK holiday expenditure: 1951-1996 overseas domestic 1. Source: www.seasidehistory.co.uk. For non-US investor use only. Please refer to the Important Information at the end of this presentation. 18
Slide 19: New Cycles Challenge The Value Of Incumbency
New Cycles Challenge The Value Of Incumbency Source: Bloomberg Source: Bloomberg Source: Bloomberg Source: Bloomberg. It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document. A list of all recommendations made withi
Slide 20: New Cycles Challenge The Value Of Incumbency
New Cycles Challenge The Value Of Incumbency “The Innovator‟s Dilemma” How low-end disruption occurs over time “This…is about the failure of companies to stay atop their industries when they confront certain types of market and technological change. It's not about the Performance failure of simply a
Slide 21: New Cycles Challenge The Value Of Incumbency
New Cycles Challenge The Value Of Incumbency Global Technology M&A avg. premiums: 1995 – 20111 Select M&A activity2 Date Target Acquirer Premium Value $m Apr-11 National Semiconductor Texas Insts 76% 6,071 May-11 Varian Semiconductor Applied Mats 55% 4,751 Aug-11 Motorola Mobility Google 63% 11,878
Slide 22: New Cycles Challenge The Value Of Incumbency
New Cycles Challenge The Value Of Incumbency US Technology: equally weighted Source: Piper Jaffray. For non-US investor use only. Please refer to the Important Information at the end of this presentation. 22
Slide 23: 2011/2: A Time Out?
2011/2: A Time Out? 1. Source: http://ycharts.com, as at 30 August 2012. 2. Source: Bloomberg, as at August 2012. 3. Source: Bloomberg, as at 2 December 2011. 4. Source: Bloomberg, as at 20 June 2012. For non-US investor use only. Please refer to the Important Information at the end of this presenta
Slide 24: PCT Positioning As At 31 July 2012
PCT Positioning As At 31 July 2012 Sector and geographic exposure (%) Market cap exposure (%) Software 23.9% Semiconductors & Semiconductor Equipment 21.2% Large (greater than US$10bn) 66.3% Computers & Peripherals 19.2% Medium (US$1bn to 10bn) 23.1% Communications Equipment 12.9% Internet Software
Slide 25: PCT Positioning As At 31 July 2012
PCT Positioning As At 31 July 2012 Largest overweights Largest underweights Market cap exposure versus benchmark Acme Packet Analog Devices Amazon.com Apple Check Point Software Tech Applied Materials Citrix Systems Canon Concur Technologies Cerner eBay Cisco Systems Fusion-io Cognizant Tech Solutio
Slide 26: Apple
Apple • The stock has continued to materially outperform primarily due to earnings progress, not multiple expansion • Our largest holding at c. 13% of NAV but also our largest underweight position versus the benchmark • Positives: product pipeline, ecosystem, IP position, valuation / balance sheet /
Slide 27: Outlook
Outlook • Productivity likely to remain a corporate focus given muted recovery • We remain constructive on markets, although elevated volatility is likely to persist - aligned interests / undemanding valuations / strong balance sheets / seasonality • Our conviction in a new technology cycle continue
Slide 28: Important Information
Important Information Polar Capital 4 Matthew Parker Street London SW1H 9NP House View This document has been produced based on Polar Capital research and analysis and represents our house view. All sources are Polar Capital unless otherwise stated. Important Information The information provided in
Slide 29: Important Information Cont.
Important Information Cont. Polar Capital 4 Matthew Parker Street London SW1H 9NP Regulatory Status This document is Issued in the UK by Polar Capital. Polar Capital LLP is a limited liability partnership number OC314700. It is authorised and regulated by the UK Financial Services Authority (”FSA”)
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