Polar Capital Technology Trust PLC · LSE:PCT
Polar Capital Technology Trust — Shareholder Meeting (August 2011)
32 slides from Polar Capital Technology Trust's shareholder meeting presentation, Aug 4, 2011
Slide 1: AGM Presentation
Polar Capital Technology Trust plc AGM Presentation 4th August 2011 POLAR CAPITAL This presentation is for non US investors only
Slide 2: Results as at 30 April 2011
Results as at 30 April 2011 Financial highlights Net assets per ordinary share Price per ordinary share Total net assets 368.74p 373.50p £468,716,000 2010: 315.13p 2010: 306.80p 2010: £398.627,000 +17.0% +21.7% +17.6% Benchmark over the year to 30 April 2011 TechMARK Technology (Dow Jones World Tech
Slide 3: PCT as at 30 June 2011
PCT as at 30 June 2011 Financial highlights Net assets per ordinary share Price per ordinary share Total net assets 364.19p 357.70p £464,021,000 Year over year return: Year over year return: Year over year return: +27.4% +23.4% +28.3% Benchmark over the year to 30 June 2011 (Dow Jones World Technolo
Slide 4: Full year review
Full year review • Continued earnings recovery drives stocks higher • US Dollar weakness reduced Sterling based returns • Technology sector trailed as new cycle impacts incumbents • small caps / un-weighted indices continue to lead • New cycle thesis well supported by CIO surveys / M&A activity • Su
Slide 5: Post FY end weakness
Post FY end weakness Equity market performance post FY11 DJ World Tech FTSE World US small cap technology Source: Bloomberg, as at 2/8/11 5 POLAR CAPITAL Please refer to the important information at the end of this presentation
Slide 6: Post FY end weakness
Post FY end weakness Equity market performance post FY10 US small cap technology US unweighted technology US large cap technology Source: Bloomberg, as at 2/8/11 6 POLAR CAPITAL Please refer to the important information at the end of this presentation
Slide 7: Post FY end weakness
Post FY end weakness Select large-cap stock performance since 30/4/11 Source: Bloomberg, as at 2/8/11 7 POLAR CAPITAL Please refer to the important information at the end of this presentation
Slide 8: Capital spending recovery underway
Capital spending recovery underway IT capital spending as % GDP: strong recent rebound from recessionary levels Source: Ned Davis, as at 1Q11 8 POLAR CAPITAL Please refer to the important information at the end of this presentation
Slide 9: Capital spending recovery underway
Capital spending recovery underway ISM vs. IT expenditure: capital spending trends closely tied to economic conditions Source: Ned Davis, as at 31/3/11 9 POLAR CAPITAL Please refer to the important information at the end of this presentation
Slide 10: Undemanding valuations
Undemanding valuations Forward absolute PE: multiple contraction leaves sector at low end of post-bubble range Source: Ned Davis, as at 22/7/11 10 POLAR CAPITAL Please refer to the important information at the end of this presentation
Slide 11: Undemanding valuations
Undemanding valuations Forward relative P/E: at / around a market multiple before balance sheets considered Source: Ned Davis, as at 22/7/11 11 POLAR CAPITAL Please refer to the important information at the end of this presentation
Slide 12: A new technology cycle is under way
A new technology cycle is under way IT spending: the present cycle is unlikely to resemble that of the 1990s Source: Goldman Sachs, as at January 2011 12 POLAR CAPITAL Please refer to the important information at the end of this presentation
Slide 13: A new technology cycle is under way
A new technology cycle is under way IT spending: limited budget growth driving a profound shift in IT spending priorities Source: Gartner, December 2010 Source: Gartner, December 2010 13 POLAR CAPITAL Please refer to the important information at the end of this presentation
Slide 14: Cloud computing: mass production of IT
Cloud computing: mass production of IT • Budget pressure proves the welcome catalyst for an architectural rethink from the 80/20 „rule‟ • Datacentre consolidation driven by power-related savings, enabled by virtualisation / Internet • Private clouds de-risk the concept but „public clouds‟ significan
Slide 15: Cloud computing: mass production of IT
Cloud computing: mass production of IT • Budget pressure proves the welcome catalyst for an architectural rethink from the 80/20 „rule‟ • Datacentre consolidation driven by power-related savings, enabled by virtualisation / Internet • Private clouds de-risk the concept but „public clouds‟ significan
Slide 16: Broadband applications: expanding the market
Broadband applications: expanding the market • The Internet has led to new applications incl. online advertising, e-commerce and SAAS. • Software as a service (SAAS) targets an $150bn opportunity, c.10% penetrated today* • Legacy software vendors‟ maintenance streams at risk as SAAS gains further tr
Slide 17: Broadband applications: expanding the market
Broadband applications: expanding the market • The Internet has led to new applications incl. online advertising, e-commerce and SAAS. • Software as a service (SAAS) targets an $150bn opportunity, c.10% penetrated today* • Legacy software vendors‟ maintenance streams at risk as SAAS gains further tr
Slide 18: Ubiquitous computing: driving mobile data
Ubiquitous computing: driving mobile data • Smartphone penetration in the „sweet spot‟, driven by new devices, flat pricing and new apps • New entrants and their own eco-systems have captured a disproportionate share of profits • Gartner forecast tablet market reaching 54m units in 2011; complement
Slide 19: Ubiquitous computing: driving mobile data
Ubiquitous computing: driving mobile data • Smartphone penetration in the „sweet spot‟, driven by new devices, flat pricing and new apps • New entrants and their own eco-systems have captured a disproportionate share of profits • Gartner forecast tablet market reaching 54m units in 2011; complement
Slide 20: Emerging market exposure. Finally.
Emerging market exposure. Finally. • Consumption a key driver in China growth story which should ensure tech sector participation • Household disposable income growth commensurate with „big ticket‟ items = huge opportunity • Macroeconomic risk relating to wage inflation should result in a greater fo
Slide 21: Emerging market exposure. Finally.
Emerging market exposure. Finally. • Consumption a key driver in China growth story which should ensure tech sector participation • Household disposable income growth commensurate with „big ticket‟ items = huge opportunity • Macroeconomic risk relating to wage inflation should result in a greater fo
Slide 22: New cycles challenge the value of incumbency
New cycles challenge the value of incumbency Source: Bloomberg Source: Bloomberg Source: Bloomberg Source: Bloomberg 22 POLAR CAPITAL Please refer to the important information at the end of this presentation
Slide 23: New cycles challenge the value of incumbency
New cycles challenge the value of incumbency “The Innovator‟s Dilemma” “This…is about the failure of companies to stay atop their industries when they confront certain types of market and technological change. It's not about the failure of simply any company, but of good companies - the kinds that m
Slide 24: New cycles challenge the value of incumbency
New cycles challenge the value of incumbency US technology sector (weighted): 1969 - Present US technology sector (un-weighted): 1969 - Present Source: Piper Jaffray Source: Piper Jaffray 24 POLAR CAPITAL Please refer to the important information at the end of this presentation
Slide 25: New cycles challenge the value of incumbency
New cycles challenge the value of incumbency US Technology: equally weighted Source: Piper Jaffray 25 POLAR CAPITAL Please refer to the important information at the end of this presentation
Slide 26: New cycles challenge the value of incumbency
New cycles challenge the value of incumbency US Technology: market-cap weighted Source: Piper Jaffray 26 POLAR CAPITAL Please refer to the important information at the end of this presentation
Slide 27: Portfolio Summary
Portfolio Summary (as at 30/6/11) Source: Polar Capital, as at 30/6/11 Source: Polar Capital, as at 30/6/11 27 POLAR CAPITAL Please refer to the important information at the end of this presentation
Slide 28: Portfolio Summary
Portfolio Summary Largest overweights Largest underweights Amazon.com Alcatel-Lucent ARM Holdings Apple AsiaInfo-Linkage Applied Materials Market Cap exposure versus benchmark ASM Pacific Tech Canon Citrix Systems Cisco Systems Concur Technologies Dell Fujitsu Hewlett-Packard Hon Hai Precision HTC I
Slide 29: Outlook
Outlook • Productivity focus likely to persist given muted recovery • A new technology cycle has commenced - unlikely to resemble the 1990s / profound shift in IT priorities • Elevated volatility likely due to myriad „top-down‟ challenges - evidenced by a more challenging Q2 earnings season • We rem
Slide 30: Important Information
Polar Capital Four Matthew Parker Street London SW1H 9NP House View This document has been produced based on Polar Capital research and analysis and represents our house view. All sources are Polar Capital unless otherwise stated. Important Information The information provided in this presentation i
Slide 31: Regulatory Status
Polar Capital Four Matthew Parker Street London SW1H 9NP Regulatory Status This document is Issued in the UK by Polar Capital. Polar Capital LLP is a limited liability partnership number OC314700. It is authorised and regulated by the Financial Services Authority. A list of members is open to inspec
Slide 32: 2011 AGM Proxy Votes
2011 AGM PROXY VOTES Resolution FOR DISCRETIONARY AGAINST WITHHELD Number No. of Votes No. of Votes No. of Votes No. of Votes 1 37,611,378 49,409 1,326 27,783 2 37,272,094 47,839 284,116 85,847 3 37,013,627 60,084 433,765 182,420 4 36,951,211 54,084 346,934 337,667 5 37,479,980 54,084 110,109 45,723
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