BKI Investment Co. Ltd. · ASX:BKI
BKI Investment — Investor Presentation (September 2013)
32 slides from BKI Investment's investor presentation, Sep 5, 2013
Slide 1: Placement and Non-Renounceable Rights Issue
For personal use only Placement and Non-Renounceable Rights Issue 5 September 2013
Slide 2: Contents
Contents For personal use only ► August 2013 Update 3 ► Details of Capital Raise 6 ► Why Wh iinvestt iin BKI IInvestment t t Company C 10 ► About BKI Investment Company p y 21 ► Risk Factors 25 ► International Offer Restrictions 29 2
Slide 3: August 2013 Update
For personal use only August 2013 Update 3
Slide 4: August Update
August Update For personal use only As at 31 August 2013 Net Tangible Asset Backing (NTA) - The consolidated unaudited pre tax NTA at 31 August 2013 was $1.59 $1 59 per share, up 2.8% on 31 July after adjusting for the $0.034 dividend paid in August. Dividend Yield - BKI’s historical fullyy franked
Slide 5: BKI - Top Investments
BKI - Top 25 Investments % of Total Portfolio Index Weight 1 CBA Commonwealth Bank 10.3% 8.4% 2 NAB N ti l A National Australia t li BBankk 9 8% 9.8% 5 5% 5.5% For personal use only 3 NHC New Hope Corporation 8.8% 0.0% 4 WBC Westpac Banking Corp 7.6% 7.0% 5 BHP BHP Billiton Limited 6.9% 8.2% 6 TLS T
Slide 6: Details of Capital Raise
For personal use only Details of Capital Raise 6
Slide 7: Placement and Rights Issue
Pl Placement t For personal use only ► Successful Placement to sophisticated and professional investors raising approximately $59 million. ► Issue Price of $1.48 per New Share. ► Represents a 6.9% discount to 31 August 2013 pre-tax NTA of $1.59 and 3.9% discount to closing share price on 2 September
Slide 8: Objectives of Capital Raising
Objectives of Capital Raising For personal use only ► Offer existing shareholders the chance to increase their investment in BKI without paying brokerage and other charges. ► Introduce new shareholders to the BKI shareholder register. ► Increase liquidity in BKI shares. ► Reduce BKI’s Management Exp
Slide 9: Timetable
Timetable For personal use only Event Date Announcement of Placement and Entitlement Offer 5 September 2013 L t day Last d for f shareholders h h ld tto purchase h shares h cum rights i ht 10 September S t b 2013 Ex-date 11 September 2013 Placement shares trade on the ASX 12 September 2013 Record da
Slide 10: Why invest in BKI Investment Company?
For personal use only Why invest in BKI Investment Company? 10
Slide 11: Philosophy, Style, Process
Phil Philosophy, h Style, S l Process P For personal use only Objective Obj ti - OurO aim i isi to t create t wealth lth for f allll BKI shareholders, h h ld th through h an increasing fully franked dividend and capital growth. Investment Strategy - Research driven, active equities manager investing
Slide 12: History of Performance
History of Performance For personal use only as at 31 August 2013 BKI Performance 1 Year 3 Yrs 5 Yrs 7 Yrs 9 Yrs as at 31 August 2013 (pa) (pa) (pa) (pa) S&P/ASX 300 ACC INDEX (XKOAI) 23.6% 9.8% 4.5% 4.4% 8.7% BKI Portfolio Returns are BKI Total Shareholder Returns 34.5% 15.9% 8.9% 7.5% 10.6% measur
Slide 13: Portfolio Valuation as at August 2013
P f li Valuation Portfolio V l i as at 31 A August 2013 For personal use only 800 700 600 500 $ Millions s 400 300 200 100 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 AUG 2013 Investment Portfolio Cash 13
Slide 14: Consistency in Dividends Paid
Consistency in Dividends Paid For personal use only (2H’04 – 2H’13) 4.0 3.5 1 0.5 3.0 1 0.5 0.5 2.5 are s per Sha 2.0 3.25 3.4 3.2 3.2 1.5 3 3 3 3 2.5 2.75 3 3 Cents 26 2.6 2.7 25 2.5 25 2.5 2.1 2.2 1.0 2 0.5 0.0 Ordinary Dividends Special Dividends 14
Slide 15: Yield for all Seasons
Yield for all Seasons Dividends + Franking Credits received from a $10,000 investment in BKI at inception vs For personal use only Bank Quarterly Interest. Highlights the opportunity of receiving a fully franked dividend in a falling interest rate environment. 1,400 1,200 Australian Dollars 1,000 80
Slide 16: Historical Grossed up Yield
Historical Grossed up Yield1 For personal use only 10.0% 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% BKI Grossed Up Dividend Yield 90 Day Bank Bill Source: BKI Investment Company Limited; IRESS. Based on a closing share price of $1.54 on 31 August 2013, BKI’s fully franked dividend yield was 4.6% (Inclu
Slide 17: Low Management Expense Ratio
Low Management Expense Ratio For personal use only 0.80% 0.71% 0.69% 0.70% 0.60% 0.56% 0.50% 0.46% 0.46% BKI Internally Managed 0.40% 0.31% 0.30% 0 19% 0.18% 0.19% 0 18% 0.18% 0 18% 0.19% 0 19% 0.20% 0.10% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 17
Slide 18: Experienced Investment Team
Experienced Investment Team For personal use only Investment Tenure Equity Team Member Qualifications Position Experience With BKI Ownership (Years) (Years) (Shares)1 R b t Millner Robert Mill FAICD Chairman Ch i 29 9.5 7,647,354 Investment Committee David Hall FCA, FAICD Non Executive Director 33 9
Slide 19: Benefits of Investing in BKI.ASX
Benefits of Investing in BKI.ASX BKI ASX For personal use only In 8 years BKI has increased Ordinary Predictable and growing fully franked Dividends income stream dividends paid to shareholders by 55% BKI has also paid 5 Special Dividends 30% tax rate already paid on dividend All Dividends
Slide 20: Benefits of Investing in BKI.ASX
Benefits of Investing in BKI.ASX BKI ASX For personal use only Diversified market exposure Administration Easy monitoring of one shareholding All through BKI.ASX Simplicity p y Two dividend statements per annum BKI is a closed end LIC (Company), (Company) unlike an open ended fund manager
Slide 21: About BKI Investment Company
For personal use only About BKI Investment Company 21
Slide 22: Investment Process
Investment Process For personal use only BKI is a research driven, active equities q manager g investingg for the longg term in pprofitable, high g yyielding, g well managed companies. Stock selection is bottom up, focusing on the merits of individual companies rather than market and economic trends
Slide 23: BKI Result Highlights
BKI Result R l Highlights Hi hli h For personal use only FY 2013 FY2012 G th Growth Ordinary Dividend Income $32.0m $29.8m 7.4% Net Operating Result* $29.9m $27.7m 8.0% Net Operating Profit $33.6m $30.0m 12.1% Earnings Per Share (excluding Special Dividends) 6.81cps 6.51cps 4.7% Earnings Per Share (
Slide 24: Strong Growth in Net Operating Result
Strong Growth in Net Operating Result For personal use only (FY2004 – FY2013) 35 29.9 30 27.7 25.3 25 22.4 20 7 20.7 $ Millions 20 18.3 15 12 5 12.5 10.3 10.1 10 5 3.5 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 24
Slide 25: Risk Factors
For personal use only Risk Factors 25
Slide 26: Key Risks
Key Risks For personal use only The operations and financial performance and prospects of listed investment companies such as BKI are driven by a number of factors, including, but not limited to, to domestic and international economic growth, growth the performance of domestic and international fina
Slide 27: General Investment Risks
General Investment Risks For personal use only Legal and regulatory environment As a listed investment company, changes in laws, regulations and government policy may affect the Company and the attractiveness of an investment in the Company positively or negatively. The Company cannot predict the im
Slide 28: Risks relating to the Offer
Risks relating to the Offer For personal use only Investment risk Some of the entities in which BKI may invest may have a limited trading history or small capital base. Investment in these entities involves risks that are greater than investment in larger capitalised entities or entities in other ma
Slide 29: International Offer Restrictions
For personal use only International Offer Restrictions 29
Slide 30: International Offer Restrictions
International Offer Restrictions For personal use only The laws of some countries prohibit or make impracticable participation in the Entitlement Offer by certain overseas BKI shareholders. Shareholders who h are nott resident id t iin A Australia t li or New N Zealand Z l d will ill nott be b able
Slide 31: BKI Fact Sheet
31 BKI Fact Sheet For personal use only www.bkilimited.com.au ASX Code BKI.ASX Research Coverage g Morningstar g Listing Date December 2003 Morgan Stanley Mandate Aust Listed Equities Bell Potter Investment Sectors Diversified Evans and Partners S&P/ASX 300 Baillieu/Holst Benchmark Acc Index Approve
Slide 32: Disclaimer
For personal use only Disclaimer This material has been prepared by 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 objectives. This is general investment ad
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