Glennon Small Companies Ltd · ASX:GC1
Glennon Small Companies — H1 2017 Earnings Presentation
32 slides from Glennon Small Companies's earnings presentation, May 25, 2017
Slide 1: Half Yearly Update – Glennon Small Companies Ltd
For personal use only HALF YEARLY UPDATE GLENNON SMALL COMPANIES LTD May 2017
Slide 2: Disclaimer
DISCLAIMER For personal use only The information provided in this presentation has been prepared by Glennon Capital (ABN 84 137 219 866, AFSL 338567). The information herein is provided for information purposes and should not be construed as an offer for sale. Whilst Glennon Capital has taken all re
Slide 3: Today's Agenda
Market Update What is happening in small caps? For personal use only What opportunities are we seeing? Portfolio Insights TODAY’S Tourism Retail AGENDA GC1 Performance, dividends and communication Case Studies 3
Slide 4: Market Update: What Is Happening in Small Caps?
For personal use only MARKET UPDATE WHAT IS HAPPENING IN SMALL CAPS? 4
Slide 5: Small Caps vs Large Caps
SMALL CAPS VS LARGE CAPS For personal use only 120 115 110 105 100 95 90 S&P/ASX Small Ords Accumulation S&P/ASX 100 Accumulation 5
Slide 6: Reporting Season Carnage
REPORTING SEASON CARNAGE For personal use only - Large cap funds have been selling. These are not traditional owners of small cap stocks - Quality small caps were overvalued and valuations broadly were stretched - Good businesses have suffered extreme volatility as valuations were pushed to their up
Slide 7: Reporting Season Carnage
REPORTING SEASON CARNAGE For personal use only 7
Slide 8: Post Reporting Season Carnage
POST REPORTING SEASON CARNAGE For personal use only - Downgrades have continued after reporting season - Many companies are downgrading multiple times as they struggle to gauge the risks to earnings 8
Slide 9: What Does That Mean?
WHAT DOES THAT MEAN? For personal use only - This is the time to be looking at investing - Small caps have been revalued downwards - Small caps were getting expensive last year - There is more value in the market now Buy when there's blood in the streets, even if the blood is your own. Baron Rothsch
Slide 10: Market Update: What Opportunities Are We Seeing?
For personal use only MARKET UPDATE WHAT OPPORTUNITIES ARE WE SEEING? 10
Slide 11: Small Caps vs Large Caps
SMALL CAPS VS LARGE CAPS For personal use only Number of Market Stocks Capitalisation Top 100 Small Ords Microcaps Top 100 Small Ords Microcaps 11
Slide 12: Small Caps vs Large Caps
SMALL CAPS VS LARGE CAPS For personal use only Microcaps Opportunity Small Ordinaries ASX 100 No of companies 12
Slide 13: Investment Categories
INVESTMENT CATEGORIES For personal use only 13
Slide 14: Portfolio Insights: Tourism Sector
For personal use only PORTFOLIO INSIGHTS TOURISM SECTOR 14
Slide 15: Tourism: Short Term Arrivals
TOURISM For personal use only Short Term Arrivals Chinese Short Term Arrivals vs Total Arrivals 800000 350 10 years to 2011 – 700000 10 years to 2001 – 1.6% annual growth 300 8.3% annual - Japanese tourism growth almost halves 600000 250 - 9/11 impacts global travel 500000 200 400000 3 years to 2017
Slide 16: Tourism: Short Term Arrivals By Country
TOURISM For personal use only Short Term Arrivals By Country Chinese International Visitor Arrivals 30.0% 3 500 25.0% 3 000 2 500 20.0% 2 000 15.0% 1 500 10.0% 1 000 500 5.0% 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-
Slide 17: Tourism Current Exposure
TOURISM CURRENT EXPOSURE For personal use only Skydive the Beach (ASX:SKB) Apollo Tourism & Leisure (ASX:ATL) - Largest tandem skydiving provider in - Recreational vehicle rental fleet operator and Australia and New Zealand with recent retailer in Australia, NZ, the USA, and Canada expansion into ad
Slide 18: Portfolio Insights: Retail Sector
For personal use only PORTFOLIO INSIGHTS RETAIL SECTOR 18
Slide 19: Wage Growth Constrained
WAGE GROWTH CONSTRAINED For personal use only Indebted households are becoming more sensitive to subdued income growth… 19
Slide 20: Retail Sales Falling
RETAIL SALES FALLING For personal use only …and are more likely to pay down debt, resulting in lower retail sales 20
Slide 21: Online Retail Is Growing
ONLINE RETAIL IS GROWING For personal use only Meanwhile online retailing is growing… …and Amazon is clearly a threat 21
Slide 22: Retail Exposure
RETAIL EXPOSURE - No current exposure to brick and mortar retail For personal use only - Profit pool for local retailers is shrinking - Highly leveraged retail business models are now under pressure from both poor retail sales and online competition - Many retail businesses falling into administrati
Slide 23: GC1 Performance, Dividends and Communication
For personal use only GC1 PERFORMANCE, DIVIDENDS AND COMMUNICATION 23
Slide 24: About GC1: Fund Overview
Fund Overview For personal use only Glennon Small Companies Ltd is an ASX listed investment company. The Company invests in a concentrated portfolio of high ABOUT quality small cap and microcap companies outside the S&P/ASX 100. GC1 Portfolio Characteristics Number of Equity Holdings 39 Median Marke
Slide 25: GC1 Dividends
GC1 DIVIDENDS For personal use only 4.50 4.00 3.50 3.00 2.50 DIVIDENDS 2.00 1.50 3.00 1.00 0.50 0.75 1.00 0.00 Interim 2016 Final 2016 Interim 2017 Dividend Franking DIVIDEND POLICY The Board is committed to paying a growing stream of fully franked dividends to shareholders over the long term, provi
Slide 26: Long Term Performance
LONG TERM PERFORMANCE For personal use only 400 350 300 Glennon Capital Representative Portfolio Performance S&P/ASX Small Ordinaries Accum Index 250 200 150 100 50 Since 30-Apr-17 1 Year 3 years 5 Years Inception Glennon Small Companies Portfolio 9.5% 44.8% 120.6% 215.0% S&P / ASX Small Ordinaries
Slide 27: Investor Communication
INVESTOR COMMUNICATION For personal use only WEEKLY NEWSLETTER STAY IN TOUCH GlennonCap /glennon-capital /glennoncapital glennon.com.au glennon.com.au 27
Slide 28: Case Studies
For personal use only CASE STUDIES 28
Slide 29: National Vet Care
NATIONAL VET CARE (ASX:NVL) For personal use only - veterinary services provider in Australia and New Zealand, which has 54 vet services businesses - industry characteristics are favourable and barriers to entry are high while management is experienced and driven to succeed - business has an acquisi
Slide 30: ZipMoney
ZIPMONEY For personal use only (ASX:ZML) - digital wallet offering point-of-sale credit online and offline - attracting retail partners by offering increased conversion and increased order value while customers get to purchase interest free - sharp growth in customer numbers, loan book and revenue o
Slide 31: Contact
CONTACT For personal use only Email: info@glennon.com.au Phone: (02) 8027 1000 Address: Level 17 25 Bligh Street Sydney NSW 2001 PO Box: PO Box R281 Royal Exchange NSW 1225 31
Slide 32: Half Yearly Update – Glennon Small Companies Ltd
For personal use only HALF YEARLY UPDATE GLENNON SMALL COMPANIES LTD
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