BKI Investment Co. Ltd. · ASX:BKI
BKI Investment — Shareholder Meeting (October 2020)
36 slides from BKI Investment's shareholder meeting presentation, Oct 13, 2020
Slide 1: BKI Investment Company Limited 2020 Annual General Meeting
BKI INVESTMENT COMPANY LIMITED For personal use only 2020 ANNUAL GENERAL MEETING BKI is managed by Contact Asset Management AFSL 494045
Slide 2: Chairman's Address
CHAIRMAN’S ADDRESS For personal use only 2020 ANNUAL GENERAL MEETING BKI is managed by Contact Asset Management AFSL 494045
Slide 3: Disclaimer
DISCLAIMER For personal use only This material has been prepared by Contact Asset Management on behalf of 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 obj
Slide 4: Non-Executive Directors
NON-EXECUTIVE DIRECTORS For personal use only Robert Millner Chairman of the Board Chairman of the Investment Committee Member of the Remuneration and Nomination Committee David Hall AM Independent Non-Executive Director Chairman of the Audit Committee Member of the Remuneration and Nomination Commi
Slide 5: Investment Manager, Company Secretary and Auditor
INVESTMENT MANAGER For personal use only Contact Asset Management Tom Millner Portfolio Manager - Member of the Investment Committee Will Culbert Portfolio Manager - Member of the Investment Committee COMPANY SECRETARY Corporate Administration Services Jaime Pinto Company Secretary COMPANY AUDITOR M
Slide 6: Result Summary
RESULT SUMMARY For the full year ended 30 June 2020 For personal use only Result excluding special investment revenue 2020 2019 Movement 2018 Revenue from operating activities $46.7m $54.3m -14% $48.1m Net operating profit after tax $41.6m $49.2m -15% $44.2m Earnings per share 5.67c 6.75c -16% 7.10c
Slide 7: Lower Dividends Received
LOWER DIVIDENDS RECEIVED For personal use only Dividend Cuts Special Dividends Dividend Cancellations 7 Source: BKI, Contact Asset Management, Factset.
Slide 8: Dividend History of BKI
DIVIDEND HISTORY OF BKI For personal use only During the 2020 Financial Year BKI paid out the following fully franked dividends to shareholders: BKI Dividends Paid to Shareholders • Interim Dividend 3.625cps 5.00 • Final Dividend 2.320cps • Final Special Divided 1.000cps … 4.00 Total 6.945cps Cents
Slide 9: Investment Manager's Address
INVESTMENT MANAGER’S ADDRESS For personal use only 2020 ANNUAL GENERAL MEETING BKI is managed by Contact Asset Management AFSL 494045
Slide 10: Contact Asset Management
CONTACT ASSET MANAGEMENT For personal use only Tom Millner Will Culbert Rodney Forrest Jared Tilley Jovana Gagic Charlie Kingston Rob Horne Portfolio Manager Portfolio Manager Senior Investment Investment Analyst Investment Analyst Investment Analyst Investment Analyst B.Des (Industrial), B.Bus, MCo
Slide 11: Long Term Performance and Income
LONG TERM PERFORMANCE AND INCOME As at 30 June 2020 Long Term Dividend Income For personal use only Since listing in 2003, BKI’s investment strategy has been, and $2,500 $2,061 will continue to be, focused on research driven, active equities $2,000 management, investing for the long term, in profita
Slide 12: BKI Investment Process
BKI INVESTMENT PROCESS BKI is focused on investing in stocks using the 5 fundamentals below as part of the stock selection process: For personal use only 1 Income Dividend Yields, Franking Credits, Pay Out Ratios 2 Principal Activity Sustainable Business Model, Competitive Advantage, Barriers to Ent
Slide 13: Portfolio Positioning: Investment Portfolio Increases
PORTFOLIO POSITIONING For the year to 30 June 2020 For personal use only Investment Portfolio Increases 1. BHP Group 2. Macquarie Group 3. Amcor 4. APA Group 5. TPG Telecom 6. Treasury Wine Estates 7. Harvey Norman Holdings 8. Orora Limited 9. Transurban Group 10. New Hope Corporation 13
Slide 14: Portfolio Positioning: Investment Portfolio Reduced
PORTFOLIO POSITIONING For the year to 30 June 2020 For personal use only Investment Portfolio Reduced 1. AGL Energy Limited 2. IAG Group 3. NAB Limited 4. Suncorp Group 5. Telstra Corporation 6. Westpac Banking Group 14
Slide 15: Portfolio Positioning: Investment Portfolio Sales
PORTFOLIO POSITIONING For the year to 30 June 2020 For personal use only Investment Portfolio Sales 1. Boral Limited 2. ANZ Banking Corporation 3. Caltex Australia (now Ampol Limited) 4. Challenger Limited 5. CIMIC Group 15
Slide 16: 1Q FY2021 Update
1Q FY2021 UPDATE For personal use only 2020 ANNUAL GENERAL MEETING BKI is managed by Contact Asset Management AFSL 494045
Slide 17: Disconnect Between Valuations and Earnings
DISCONNECT BETWEEN VALUATIONS AND EARNINGS For personal use only Reflections on the August 2020 Reporting Season • Earnings and Dividends were awful, but it could have been worse. • Negative operating leverage bites. • Resilient top line growth often undermined by margin compression. • Investors are
Slide 18: Australia's Equity Yield Is Attractive
AUSTRALIA’S EQUITY YIELD IS ATTRACTIVE We expect to see a continued flight of global capital to Australia For personal use only 18 Source: Contact Asset Management, Factset, Eaton Vance July 2020.
Slide 19: Infrastructure Growth
INFRASTRUCTURE GROWTH Infrastructure spend is currently at levels never seen before and will continue for many years. For personal use only Governments are now set to bring forward further major infrastructure projects to boost the economy. $23 billion $3 billion 19 Source: Macromonitor, Australian
Slide 20: Retail, E-Commerce and Logistics
RETAIL, E-COMMERCE AND LOGISTICS Pre COVID-19, Australia had a relatively undeveloped online retail offering. For personal use only Many companies have benefited from the changes to behaviour in the COVID-19 world with the trends driving the demand for high quality, well located logistics assets acc
Slide 21: Funds Growth
FUNDS GROWTH Growth in superannuation assets in Australia is continuing, with contributions over the medium term to be For personal use only substantial. Australian Superannuation System Forecasts ($bn) $7.2 trillion $2.6 trillion 21 Source: Macromonitor, Australian Construction Outlook, Value of Wo
Slide 22: Portfolio Positioning: Increases, Quarter to September 2020
PORTFOLIO POSITIONING For the quarter to 30 September 2020 For personal use only Investment Portfolio Increases 1. Equity Trustees 2. Commonwealth Bank 3. BHP Group 4. Harvey Norman Holdings 5. Evans Dixon 22 Figures referred to in the FY2020 Update are unaudited.
Slide 23: Portfolio Positioning: New Positions
PORTFOLIO POSITIONING For the quarter to 30 September 2020 For personal use only New Investment Portfolio Positions 1. NAB Convertible Notes 2. Rio Tinto Limited 3. Fortescue Metals Group 4. IPH Limited 23 Figures referred to in the FY2020 Update are unaudited.
Slide 24: Portfolio Positioning: Sales
PORTFOLIO POSITIONING For the quarter to 30 September 2020 For personal use only Investment Portfolio Sales 1. Westpac Banking Corp 2. Sydney Airports 3. IAG Limited 4. SEEK Limited 24 Figures referred to in the FY2020 Update are unaudited.
Slide 25: Portfolio Positioning: Top Holdings as at September 2020
PORTFOLIO POSITIONING As at 30 September 2020 For personal use only Stock % of Total Stock % of Total Portfolio Portfolio 1 Macquarie Group 7.5% 14 Telstra Corporation 2.3% 2 BHP Limited 7.0% 15 New Hope Corporation 2.2% 3 Commonwealth Bank 6.7% 16 Magellan Financial Group 2.1% 4 APA Group 5.7% 17 H
Slide 26: BKI Performance
BKI PERFORMANCE As at 30 September 2020 For personal use only 20.0% 14.9% 15.0% BKI’s Total Shareholder Return including franking credits for the 6 months to 30 10.0% 8.4% 7.9% September 2020 was 14.9%. 5.0% 3.7% BKI’s Total Shareholder Return including 0.0% franking credits for the year to 30 6 mth
Slide 27: FY2021 Update
FY2021 UPDATE For personal use only Several companies have significantly reduced their dividends paid in the August/September period due to the uncertainty surrounding the COVID-19 pandemic. Unfortunately, the outlook for dividends paid in the upcoming February/March period is uncertain. As a result
Slide 28: Questions
QUESTIONS For personal use only 2020 ANNUAL GENERAL MEETING BKI is managed by Contact Asset Management AFSL 494045
Slide 29: BKI Investment Company Limited 2020 Annual General Meeting
BKI INVESTMENT COMPANY LIMITED For personal use only 2020 ANNUAL GENERAL MEETING BKI is managed by Contact Asset Management AFSL 494045
Slide 30: Proxies
PROXIES For personal use only Valid proxies representing approximately 112 million shares or 15% of the Company’s issued capital have been received. 30
Slide 31: Annual Report
Item 1 ANNUAL REPORT For personal use only Receive and consider the Annual Financial Report and the reports of the Directors and of the Auditor for the financial year ended 30 June 2020. This item does not require voting by shareholders. It is intended to provide an opportunity for shareholders as a
Slide 32: Remuneration Report
Item 2 REMUNERATION REPORT For personal use only Resolution 1 To consider and, if thought fit, pass the following resolution as a non- binding ordinary resolution: “That the Remuneration Report for the year ended 30 June 2020 be adopted.” Note: Pursuant to section 250R(3) of the Corporations Act the
Slide 33: Remuneration Report: Proxy Votes
Item 2 REMUNERATION REPORT For personal use only Resolution 1 Adopt the Remuneration Report for the year ended 30 June 2020. Proxies received and accepted for Resolution 1 appearing on the Notice of Meeting Remuneration Report For Against Open Abstain Votes % of Valid Available Votes 86.3% 5.8% 7.9%
Slide 34: Re-election of Director
Item 3 RE-ELECTION OF DIRECTOR For personal use only Resolution 2 To consider and, if thought fit, pass the following resolution as an ordinary resolution: “That Mr DC Hall AM, who retires in accordance with the Company’s Constitution Rule 6.3(c) and, being eligible, offers himself for re-election,
Slide 35: Re-election of Director: Proxy Votes
Item 3 RE-ELECTION OF DIRECTOR For personal use only Resolution 2 Re-election of a Director Proxies received and accepted for Resolution 2 appearing on the Notice of Meeting Re-Election of Director For Against Open Abstain Mr DC Hall AM Votes % of Valid Available Votes 91.6% 1.1% 7.2% N/A 35
Slide 36: Other Matters and Conclusion of the Meeting
Item 4 OTHER MATTERS For personal use only To consider any other matters that may be brought before the meeting in conformity with the Company’s Constitution. CONCLUSION OF THE MEETING I now move to the final part of the meeting and there being no other business of which due notice has been given, I
BKI Investment Company — Shareholder Meeting (October 2020) on 6ix