BKI Investment Co. Ltd. · ASX:BKI
BKI Investment — H1 2018 Earnings Presentation
23 slides from BKI Investment's earnings presentation, Jan 17, 2018
Slide 1: BKI Investment Company Limited 1H 2018 Results Presentation
BKI INVESTMENT COMPANY LIMITED For personal use only 1H 2018 RESULTS PRESENTATION BKI is managed by Contact Asset Management AFSL 494045
Slide 2: 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 3: 1H 2018 Result Highlights
1H 2018 RESULT HIGHLIGHTS For personal use only 1H 2018 1H 2017 Growth Ordinary Investment Income $24.6m $22.1m 11% Net Operating Result* $22.7m $21.2m 7% Special Dividend Income $0.4m $3.9m -90% Net Profit Attributable to Shareholders $23.1m $25.0m -8% Earnings Per Share* 3.66cps 3.52cps 4% Earning
Slide 4: Net Operating Profits
NET OPERATING PROFITS For personal use only Net Operating Result before special investment $25m revenue increased from $21.2m to $22.7m, while the Net Profit Attributable to Shareholders $20m decreased 8% to $23.1m. $15m 1H18 results were mainly driven by higher dividends received from New Hope Grou
Slide 5: Total Shareholder Returns
TOTAL SHAREHOLDER RETURNS For personal use only BKI’s Total Shareholder Return including 15.0% 13.7% 13.6% franking credits for the year to 31 December 11.5% 11.8% 11.2% 2017 was 13.7%, compared to the S&P/ASX 300 10.7% Accumulation Index, which returned 13.6%. 10.0% 9.4% BKI’s 14 year Total Shareho
Slide 6: Dividend History of BKI
DIVIDEND HISTORY OF BKI For personal use only A fully franked Interim Ordinary Dividend of 4.50 3.625cps was declared, representing a 99% pay- 4.00 out ratio on BKI’s EPS (excluding Special Dividends). 3.50 3.00 As at 31 December 2017, BKI’s fully franked Cents Per Share 2.50 dividend yield was 4.2%
Slide 7: Interim Dividend Key Dates
INTERIM DIVIDEND KEY DATES For personal use only The last trading date to be eligible for the Interim Ordinary Dividend is Friday 9th February 2018. Key dates for the Dividend are as follows: Ex‐Dividend Date Monday 12th February 2018 Record Date Tuesday 13th February 2018 DRP Nomination* Wednesday
Slide 8: Income Generation
INCOME GENERATION For personal use only Dividends + Franking Credits received from a $2,000 $10,000 investment in BKI at inception versus $1,800 $1,886 Bank Quarterly Interest. $1,600 $1,400 An investor who spent the equivalent of $1,200 $10,000 to purchase BKI shares upon listing in $1,000 December
Slide 9: Positioning BKI for the Future
POSITIONING BKI FOR THE FUTURE For personal use only INCREASING THE PROFILE & BEING RELEVANT ACTIVELY MANAGED PORTFOLIO FOR A LOW FEE BKI is managed by Contact Asset Management AFSL 494045
Slide 10: Increasing the BKI Profile
INCREASING THE BKI PROFILE For personal use only Research and Ratings Broker/Advisor Network • Lonsec RECOMMENDED • Bell Potter • IIR RECOMMENDED PLUS • Baillieu Holst • Morningstar NEUTRAL • Evans & Partners • ThreeSixty APPROVED • Patersons Securities 10
Slide 11: Out of Active & Into Passive
OUT OF ACTIVE & INTO PASSIVE For personal use only The global flight from investors into passive Flight to passive funds driven by fees equity funds and out of actively managed funds has continued. The flows out of active funds and into passive funds have been significant (the numbers are trillions)
Slide 12: The Biggest Driver of the Trend... Fees
THE BIGGEST DRIVER OF THE TREND . . . FEES For personal use only Contact’s management fee to BKI is only 0.10%. Focused on keeping costs low 2.00% Directors and Portfolio Managers are 1.75% shareholders in BKI. We focus on dividend 1.50% payments – not generating excessive fees. 1.25% 1.00% BKI does
Slide 13: BKI - The Best of Both Worlds
BKI - THE BEST OF BOTH WORLDS For personal use only Active management is something we believe in Active portfolio management for a Passive fee wholeheartedly. The BKI Investment Committee has 190 years of collective industry experience (average of 27 years). Board of Directors Investment We take an
Slide 14: Positioning the Portfolio
POSITIONING THE PORTFOLIO For personal use only ALWAYS LOOKING FOR OPPORTUNITIES BKI is managed by Contact Asset Management AFSL 494045
Slide 15: Portfolio Positioning - Financials
PORTFOLIO POSITIONING - FINANCIALS For personal use only Banking stocks continue to form a very Banks Weighting of BKI Income Received from Banks important segment of the BKI Investment Portfolio. They provide good long term value Banks as well as a very attractive and sustainable Financials Health
Slide 16: Portfolio Positioning - Infrastructure
PORTFOLIO POSITIONING - INFRASTRUCTURE For personal use only Australia is undergoing a significant transformation thanks to federal and state government spending on major infrastructure projects. The benefits of this spending will be captured by companies who have made long term infrastructure inves
Slide 17: Portfolio Positioning - Retail
PORTFOLIO POSITIONING - RETAIL For personal use only The impending arrival of Amazon.com into the Australian marketplace has sent shock waves through the retail sector. Especially those associated with our relatively undeveloped online retail market. Market Capitalisation of Amazon.com is over A$785
Slide 18: BKI Portfolio in Detail
POSITIONING THE PORTFOLIO For personal use only BKI PORTFOLIO IN DETAIL BKI is managed by Contact Asset Management AFSL 494045
Slide 19: Portfolio Positioning - Investment Portfolio Purchases
PORTFOLIO POSITIONING For personal use only Investment Portfolio Purchases 1. Tabcorp Holdings 2. Goodman Group 3. Ramsay HealthCare 4. Harvey Norman Holdings 5. Amcor Limited 6. Sydney Airports 7. Westpac Banking Corp 8. Invocare Limited 9. National Australia Bank 10. Macquarie Group 19
Slide 20: Portfolio Positioning - Top Holdings
PORTFOLIO POSITIONING As at 31 December 2017 For personal use only Stock % of Total Stock % of Total Portfolio Portfolio 1 National Australia Bank 7.9% 14 Macquarie Group 2.4% 2 Commonwealth Bank 7.2% 15 Invocare Limited 2.3% 3 Westpac Banking Corp 7.0% 16 Ramsay Healthcare 2.3% 4 Wesfarmers Limited
Slide 21: Portfolio Positioning - Sector Allocation
PORTFOLIO POSITIONING As at 31 December 2017 For personal use only Bank Hybrids , 1% Real Estate, 1% Energy, 2% Health Care, 5% Banks, 28% Materials, 5% Telcos 6% Cash, 6% Utilities, 6% Financials, 15% Consumer Discretionary, 7% Consumer Staples, 8% 21 Industrials, 10%
Slide 22: Upcoming Reporting Season
UPCOMING REPORTING SEASON For personal use only Main topics of interest: • Dividend Yield A company’s ability to deliver a sustainable and growing dividend stream. • Franking Credits Current balance and impact of offshore earnings. • Reduced Costs Management’s ongoing ability to control costs. • Bal
Slide 23: BKI Fact Sheet
BKI Fact Sheet For personal use only ASX Code BKI.ASX Investment Manager Listing Date December 2003 Contact Asset Management Mandate Australian Listed Equities Level 1 Investment Sectors Diversified 160 Pitt Street Mall Benchmark S&P/ASX 300 Accumulation Index Sydney NSW 2000 Market Cap $1,076m Rese
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