Odyssean Investment Trust PLC · LSE:OIT
Odyssean Investment Trust — Q3 2024 Earnings Presentation
37 slides from Odyssean Investment Trust's earnings presentation, 2024
Slide 1: Odyssean Investment Trust PLC Q3 2024 Update
Odyssean Investment Trust PLC Q3 2024 Update
Slide 2: Important Information
Important Information • The information contained in this presentation is for the use of Professional and Institutional Investors only • Past performance is not a reliable indicator of future performance and investors may not get back the value of their original investment • The value of Odyssean In
Slide 3: Executive Summary – Q3 2024
Executive Summary – Q3 2024 NAV underperformance in a volatile quarter • NAV per share fell 0.6%1,2 in the period. DNSC +AIM ex IC index (“Comparator”) rose 2.5% 2,3 • Significant relative NAV volatility – with 25% of trading days performance variance of >75bps to the market • Key portfolio news: –
Slide 4: Performance update
Performance update NAV per share fell marginally in Q3, lagging the wider market which rose 2.5% Performance % Annualised Inception Since Q3-24 YTD 24 CY23 CY22 CY21 CY20 CY19 since to Dec-18 inception inception NAV Total Return Per Share1 -0.6% +9.8% -10.4% +5.5% +25.0% +13.1% +22.0% -3.7% +72.3% +
Slide 5: Our investment strategy has delivered strong long term returns
Our investment strategy has delivered strong long term returns Attractive absolute and relative performance, without any gearing Strategy NAV per share performance since inception1,2,3 CAGR CAGR 30 June 2009 – 30 September 2024 Over 15.3 years Whilst invested 1000 900 800 Strategy 14.9% 16.3% out of
Slide 6: Performance drivers in Q3 2024
Performance drivers in Q3 2024 Key stock contributors Largest positive contributors Largest negative contributors • Positive update on trading through summer • H1 trading update ‘in-line’ confirmed 2024 will be a – small upgrades vs. expectations. Non-core tough year with legacy ceramic printing mar
Slide 7: Portfolio
Portfolio High conviction portfolio Top portfolio holdings¹ NCC • Top 10 holdings account for 79% of NAV – strong performance of NCC led it to account for c.15% XP Power of NAV despite some top slicing 1.3% Elementis • No new positions initiated during the period. 15.3% Genus Material follow on inve
Slide 8: Portfolio: core sectors and market cap range
Portfolio Focused on our core sectors and core market cap range Holding by sector 1 Holding by market cap 1 Industrials 1.3% 1.3% 7.7% Sub £100m 10.3% TMT 16.0% £100m-£500m 16.5% Healthcare & Life Sciences £500m-£1bn 49.4% Business Services 39.1% Over £1bn 35.9% 22.4% Net cash Cash + Other • Industr
Slide 9: Case study – Genus – fallen star
Case study – Genus – fallen star Global market leader in animal genetics. Recent investment – now a top 5 holding Share price vs rebased index Equity market perception 1st purchase • Recent serial disappointer 5000 • Recent downgrades • >1.5x net debt/EBITDA 4000 Our views • Niche global market lead
Slide 10: Case study - NCC
Case study - NCC Adding value by managing weighting, and conviction through market volatility • NCC is a global provider of cyber security and software escrow NCC share price development vs OIT holding services 350 20.0 • Share price has been volatile driven by company performance, NCC end market va
Slide 11: The portfolio has considerable exposure to B2B electronics
The portfolio has considerable exposure to B2B electronics Closed ended fund structure enables taking a long-term approach in less liquid holdings 10 year average Company EV/Sales EV/Sales Comments/engagement • Supported balance sheet repair 1.6x 2.8x • Publicly opposed opportunistic takeover 0.9x 2
Slide 12: UK Smaller Companies can provide global exposure
UK Smaller Companies can provide global exposure OIT’s portfolio is more international currently than the FTSE 100 Revenue exposure by geography1, 2, 3 • Portfolio revenue generation is balanced by 100% geographic area, which we believe spreads political ROW and economic risk 90% 80% • Few companies
Slide 13: Top holdings summary
Top 10 holdings summary Niche market leaders, often with international operations and self-help Holding Market position Self-help/engagement opportunities UK and US market leader in software Escrow services. Leading Medium term separation/sale of Escode; build out Assurance independent cyber securit
Slide 14: Special situations across the portfolio
Special situations across the portfolio Lots of ways for companies to create/unlock value Material cost Market share Margin Undervalued/ SOTP¹ Geographic Holding synergies for a growth/ Other improvement hidden growth discount arbitrage trade buyer recovery ✓ ✓ ✓✓ ✓ ✓ ✓ Scarcity value Manufacturing
Slide 15: Portfolio trading significantly below long run averages
Portfolio trading significantly below long run averages Significant value exists in the portfolio on any reversion to long run average valuations NTM EV / Sales - current and LR average • Lower margin 3.5 3.2 divisions exited • Remaining 3.0 2.8 business should 2.4 make high teens 2.5 2.3 EBITA marg
Slide 16: Portfolio takeover activity validates valuation discipline
Portfolio takeover activity validates valuation discipline Average completed day 1 bid premium of c.48%. Typically overseas trade buyers Announced/completed take over offer premia 2019 2020 2021 2022 2023 2024 70% 65% 60% 59% 60% Average premia 52% 53% all bids 50% 48% 50% 48% 39% 41% 40% Average tr
Slide 17: Take out interest across OIT portfolio since IPO
Take out interest across OIT portfolio since IPO Activity across completed and lapsed bids demonstrates value in the portfolio Company Sector Bid date Premium Bidder Buyer type Buyer geog Completed bids Consort Medical Healthcare Nov-19 39.1% Recipharm SE Trade Sweden Huntsworth Media/Healthcare ear
Slide 18: UK equities have de-rated materially since OIT's IPO
UK equities have de-rated materially since OIT’s IPO UK Small companies appear significantly undervalued compared with history Aggregate Market Value (Discount)/Premium to Default Quest ® fair value 75% 65% 50% 41% 39% 41% 35% 29%26% 27% 25% 25% 17% 18%19% 16% 19% 8% 10% 3% 0% -3% -25% -15% -24% -28
Slide 19: Generic investment types - illustrative
Generic investment types - illustrative Flexible on how we seek to make returns Solid line indicates share price movement. Dashed line indicates potential intrinsic value ‘Self-help’ ‘Fallen Star’ ‘GARP’ • Can a low growth • Even if the prospects are • Relatively light touch underperformer improve d
Slide 20: The investment cycle
The investment cycle Looking for signs of improving fundamentals in UK Equities? Market phase Bear Market Bottom Early Stage Mid-Stage Bull Peak of Bull Market Recovery Market General vertical direction (but not horizonal direction) of asset price movements Investment style Balance sheet Value Growt
Slide 21: Outlook - update
Outlook - update We remain optimistic for the medium term Overall market conditions • Market sentiment has deteriorated since the general election – budget uncertainty • Considerable uncertainty on treatment of business relief for AIM stocks -> main impact Gooch & Housego • Liquidity remains poor •
Slide 22: Supporting Portfolio & Market Data
Supporting Portfolio & Market Data
Slide 23: Portfolio sector exposure overtime
Portfolio sector exposure overtime Industry exposure shifts driven by where we believe there are opportunities Sectoral split over time 100.0% 80.0% 60.0% 40.0% 20.0% 0.0% TMT Industrials Healthcare Business Services Consumer Other Equity Net Cash / Other • Focus on our 4 core sectors – Industrials,
Slide 24: Portfolio company voting record over Q3 2024
Portfolio company voting record over Q3 2024 Continued to follow our consistent guidelines and raise our concerns where appropriate Number of meetings 11 Number of resolutions 17 Number voted 17 Voted with management 15 Voted against management 2 Abstained 0 A quiet period for meetings over the summ
Slide 25: Investment strategy recap – neither growth nor value
Investment strategy recap – neither growth nor value Based on 3 pillars: Valuation, Quality and Engagement, with Sector focus Target Zone Valuation • Invest at a significant discount to owner’s valuation • Look for businesses with multiple drivers of equity value growth (sales; margin; rating; free
Slide 26: Sectors we focus on
Sectors we focus on We focus on four key sectors we know well • We believe the best investment decisions are made from a Odyssean: view of main sectors base of knowledge and experience High Low Sector B2B focus ROCE/cash • We focus on sectors where the team has expertise and where cyclicality expert
Slide 27: Corporate engagement
Corporate engagement Goal to augment returns from stock selection • We use engagement to create, defend or recover value • Operational efficiency • Fixed assets and to deliver differentiated returns • R&D allocation • • IP maximisation Capex allocation Asset • The investment team has more than 23 ye
Slide 28: Spectrum of our engagements
Spectrum of our engagements Level of engagement • Exec • Chairman • Chairman & • Seek Board meetings meeting NED seat or • Proactive • Broker meetings change board voting engagement • Writing members • Other formal letter • Propose shareholder to Board resolutions at discussions • Specific either AG
Slide 29: Portfolio construction
Portfolio construction Our strategy is more similar to Private Equity than other Public Equity funds Typical Long Only Odyssean Strategy Typical Private Equity Number of positions 50-100 Up to 25 10-15 Typical position size 1% 3-8% at cost, max 20% 10% Typical holding period Variable 3-5 years 3-5 y
Slide 30: Odyssean Investment Trust - key company facts
Odyssean Investment Trust - key company facts NAV £221m1 Shares in issue 130,419,2121 Domicile UK Full listing, London Stock Exchange Board Fully independent. Owns c.1% of issued share capital. Will use all fees, post tax, to buy shares Internally managed, small registered UK AIFM. Portfolio Managem
Slide 31: Further performance data
Further performance data As at 30th September 2024 Performance % 1 year 3 year 5 year NAV Total Return Per Share1 +8.5% +7.2% +64.2% Share price return2 +9.4% +4.9% +69.3% DNSC + AIM ex IC Total Return2 +14.1% -13.9% +22.0% Source: 1Link Asset Services, Bloomberg, Odyssean Capital; Deutsche Numis Sm
Slide 32: OIT shareholder base
OIT shareholder base As at 30th September 2024 Shareholder base by investor type Shareholders >3% Harwood Capital 1.0% 1.4% Cazenove Capital 2.2% 0.3% Wealth Manager Close Bros Connected Parties 12.9% Ian Armitage 10.0% RBC Brewin Retail Investors 7.3% 33.8% Raymond James Institutions 16.1% 6.6% Cha
Slide 33: Disclaimer
Disclaimer The sole purpose of this document is to provide information on Odyssean Investment Trust Plc (“OIT”) and its underlying investment strategy. The information contained in this document is strictly confidential and is intended for the named recipient only. The unauthorised use, disclosure,
Slide 34: Disclaimer
Disclaimer No representation or warranty, either expressed or implied, is or will be made or given and no responsibility or liability is or will be accepted by Odyssean Capital LLP or by any of their respective directors, officers, employees, members, agents or advisers in relation to the accuracy o
Slide 35: Quest Disclaimer
Quest Disclaimer Appendix: Important Disclosures Quest® is at this stage registered in the UK and in the USA, and common law trademark rights are asserted in other jurisdictions. For the purposes of UK regulation Canaccord Genuity Limited (“CGL”) produces non-independent research which is a marketin
Slide 36: Quest Disclaimer
Quest Disclaimer objectives, and investors should make their own independent decisions regarding any securities or strategies discussed herein. Please contact your salesperson for more information regarding Canaccord Genuity’s research. General Disclaimers See “Required Company-Specific Disclosures”
Slide 37: Contact details
Contact details Portfolio Manager Odyssean Capital LLP 6 Stratton Street London W1J 8LD www.odysseancapital.com Stuart Widdowson Tel: +44 (0)7710 031620 Email: info@odysseancapital.com Odyssean Capital LLP is incorporated as a limited liability partnership in England and Wales under Partnership No.
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