BKI Investment Co. Ltd. · ASX:BKI
BKI Investment — Investor Presentation (April 2009)
31 slides from BKI Investment's investor presentation, Apr 9, 2009
Slide 1: Cover letter: Presentation to shareholder
For personal use only 9 April 2009 The Manager Company Announcements Australian Stock Exchange Limited Exchange Centre 20 Bridge Street Sydney NSW 2000 Dear Sirs Re: Presentation to shareholder Please find attached a copy of a presentation being delivered to a major shareholder of BKI today. Yours f
Slide 2: Presentation to Shareholders, 8 April 2009
For personal use only DIXON ADVISORY Presentation Presentation to to Shareholders Shareholders 88th th April April 2009 2009 Robert Robert Millner Millner -- Chairman Chairman Tom Tom Millner Millner –– CEO CEO
Slide 3: Disclaimer
For personal use only Disclaimer This material has been prepared by Brickworks Investment Company Limited. The information within this document is not intended to provide advice to investors or take into account an individuals financial circumstances or investment objectives. This is general investm
Slide 4: Group Profile
For personal use only Group Profile • Brickworks Investment Company (BKI) was formed on the 17th October 2003 to take over the investment portfolio of Brickworks Limited. • BKI’s investment portfolio has been built on a philosophy of long term investment with a focus on Australian equities. It prima
Slide 5: Group Profile
For personal use only Group Profile • BKI does not charge an entry or exit fee when shareholders acquire or dispose of stock. Any transaction costs will be generated through the shareholders advisor or stockbroker. • BKI does not charge any management fees nor does BKI charge any performance fees. •
Slide 6: BKI Milestones
For personal use only BKI Milestones 24th October 2003 – BKI was formed to acquire the $157.2m investment portfolio of Brickworks Limited that had been established over the previous 15 years. 12th December 2003 - BKI was created through an initial public offering of the investment portfolio held by
Slide 7: BKI Milestones
For personal use only BKI Milestones 27th August 2007 – BKI announces a $49.3m placement at $1.45 to clients of Dixon Advisory. 12th June 2008 – BKI announces that the management of the Listed Investment Portfolio will be brought in house on the 1st December 2008. 17th September 2008 – BKI announces
Slide 8: BKI Milestones
For personal use only BKI Milestones 17th February 2009 - Brickworks Limited (ASX : BKW) announces divestment of its entire shareholding in BKI. Washington H. Soul Pattinson & Company Limited (ASX : SOL), an experienced and long term investor in listed investment vehicles, acquired 60% of Brickworks
Slide 9: 1H09 Performance Highlights
For personal use only 1H09 Performance Highlights • Operating revenue up 5.4% to $11.1m. • Operating Profit After Tax but before special investment revenue, other gains and realised gains on investment portfolio increased by 8.0% to $9.9m. • Net Profit After Tax has increased by 6.2% to $14.2m. • In
Slide 10: Dividend Reinvestment Plan (DRP)
For personal use only Dividend Reinvestment Plan (DRP) • As announced at the 1H09 results, the DRP has been maintained, offering shareholders the opportunity to acquire further ordinary shares in BKI at a discount to the market price without paying brokerage or other charges. • BKI’s DRP price is a
Slide 11: Net Tangible Assets (NTA)
For personal use only Net Tangible Assets (NTA) • BKI’s NTA as at 31st March 2009 10.0 was $1.093. 5.0 0.0 Mar‐04 Sep‐04 Mar‐05 Sep‐05 Mar‐06 Sep‐06 Mar‐07 Sep‐07 Mar‐08 Sep‐08 Mar‐09 ‐5.0 • As at the 31st March 2009, BKI was ‐10.0 trading at an 11.3% discount to the ‐15.0 NTA. ‐20.0 ‐25.0 • This is
Slide 12: Management Expense Ratio (MER)
For personal use only Management Expense Ratio (MER) • BKI’s MER is calculated using total expenses for the financial year, expressed as a percentage of the average total assets for the financial year. • The BKI MER has decreased from 0.46% as at 30th June 2008 to 0.42% as at 31st December 2008. • F
Slide 13: Management Expense Ratio (MER)
For personal use only Management Expense Ratio (MER) • The Management and Board of BKI 0.80% 0.69% 0.71% are focused on keeping a tight control 0.70% 0.56% over administration and management 0.60% 0.46% 0.46% 0.50% costs. 0.40% 0.30% 0.20% • This cost focus has had a positive 0.10% impact on reducin
Slide 14: Historical Dividend Yield - Comparable to Australian LICs
For personal use only Historical Dividend Yield - Comparable to Australian LIC’s • BKI’s key objective is to generate 8.0% an increasing income stream for 7.0% distribution to its shareholders in the 6.0% 5.0% form of fully franked dividends. 4.0% 3.0% 2.0% • BKI’s Historical Dividend Yield as at 1.
Slide 15: Total Shareholder Returns – BKI Outperformance
For personal use only Total Shareholder Returns – BKI Outperformance • For the 12 months to 31st March 20.0% 18.6% 2009 the Total Shareholder Return 18.0% 16.0% of the S&P/ASX 300 Accumulation 12.5% 14.0% 12.0% Index declined 29.8% compared to 10.0% 6.6% BKI’s negative 11.2%, an 8.0% 6.0% 1.7% outpe
Slide 16: Portfolio Returns – BKI Outperformance
For personal use only Portfolio Returns – BKI Outperformance • BKI’s Outperformance of the 13.6% 14.0% S&P/ASX 300 Accumulation Index 12.0% for the 12 months ending 31st 10.0% 6.6% March 2009 can be attributed to 8.0% 6.0% contributions from BKI’s top 5 4.0% 3.1% 0.9% holdings and strong cash positi
Slide 17: Top Investments
For personal use only Top 20 Investments (as (as at at 31 31stst March March 2009) 2009) 1. New Hope Corporation Limited 11. QBE Insurance Group Limited 2. BHP Billiton Limited 12. Metcash Limited 3. National Australia Bank Limited 13. Coca Cola Amatil Limited 4. Westpac Banking Corporation 14. ASX
Slide 18: New Hope Corporation Limited (NHC)
For personal use only New Hope Corporation Limited (NHC) Portfolio Portfolio Weight Weight 13.0% 13.0% NHC produces thermal coal for the international and domestic markets from 3 mines based in Queensland. NHC also owns coal shipping port operator QBH and interests in coal seam gas producer Arrow En
Slide 19: BHP Billiton Limited (BHP)
For personal use only BHP Billiton Limited (BHP) Portfolio Portfolio Weight Weight 10.1% 10.1% BHP is the worlds largest diversified resources group. Their first class asset portfolio produces iron ore, coal, copper, silver, lead, zinc, nickel, gold, uranium ,minerals, manganese ore, crude oil, LNG,
Slide 20: National Australia Bank Limited (NAB)
For personal use only National Australia Bank Limited (NAB) Portfolio Portfolio Weight Weight 8.2% 8.2% NAB is an international financial services company focused on Banking (business, institutional, private and retail), Wealth Management and international capital markets. Brands include NAB and MLC
Slide 21: Westpac Banking Corporation (WBC)
For personal use only Westpac Banking Corporation (WBC) Portfolio Portfolio Weight Weight 7.7% 7.7% WBC is Australia's first bank having commenced operations as the Bank of New South Wales in 1817. WBC’s business consists of Banking (Westpac Retail, Westpac Business, Institutional, Westpac New Zeala
Slide 22: Commonwealth Bank of Australia (CBA)
For personal use only Commonwealth Bank of Australia (CBA) Portfolio Portfolio Weight Weight 6.4% 6.4% CBA commenced operations in 1912 and are today Australia’s largest retail bank. CBA offer a full range of banking services (Retail, Business, and Institutional), Investment and Superannuation (Comm
Slide 23: Reporting Season Update
For personal use only Reporting Season Update From BKI’s Investment Portfolio perspective, there were two major themes that emerged from this reporting season: •Balance Sheets: Companies with a high level of gearing and inadequate interest coverage have generally been sold down. However Companies wi
Slide 24: Reporting Season Update: Balance Sheets
For personal use only Reporting Season Update Balance Sheets • The tightening of the global financial crisis saw many Australian companies being caught out with high levels of gearing and inadequate interest cover. A worsening economic climate will only exacerbate this further and could force compan
Slide 25: Reporting Season Update: Dividends
For personal use only Reporting Season Update Dividends • Despite the negativity concerning the condition of many company balance sheets in the market place, the BKI Portfolio fared reasonably well in regard to dividends received during the recent reporting season. • Of the companies within the BKI
Slide 26: Reporting Season Update: Dividends
For personal use only Reporting Season Update Dividends • It should be highlighted that A the previous corresponding period during this reporting season compares the peak (A) and trough (B) of the current cycle. B • This represents a 42% downward shift in the Source: IRESS S&P/ASX 300 Index from Dec
Slide 27: Cyclical, Defensive or Cash: Cyclical
For personal use only Cyclical, Defensive or Cash Cyclical • With a long term investment horizon, cyclical companies are able to be added to the portfolio at very attractive valuations. Opportunities to acquire cyclical stocks at the lower end of the cycle are ample. However what is concerning is ju
Slide 28: Cyclical, Defensive or Cash: Defensive
For personal use only Cyclical, Defensive or Cash Defensive • It continues to be a very difficult investment environment. As a long term investor, BKI will continue to hold defensive companies within the portfolio. There continue to be many well managed, profitable businesses with strong balance she
Slide 29: Cyclical, Defensive or Cash: Cash
For personal use only Cyclical, Defensive or Cash Cash • As the cash rate reduces, portfolio’s with a view to the long term must continue to invest sensibly into the market taking advantage of some very attractive dividend yields. • The biggest issue is sustainability of dividend payments. GSJBWere
Slide 30: BKI Stock Selection Criteria
For personal use only BKI Stock Selection Criteria • Income - Dividend Yields, Franking levels, POR. • Debt Levels - Gearing Ratios, Net Interest Coverage. • Earnings and Valuations - Earnings profiles, PE Multiples, EV/EBITDA Multiples. • Management and Board – Ownership, Board Meeting Attendance,
Slide 31: Questions
For personal use only QUESTIONS
BKI Investment Company — Investor Presentation (April 2009) on 6ix