EQT Holdings Ltd. · ASX:EQT
EQT — Equity Trustees — FY2008 Earnings Presentation
30 slides from EQT's earnings presentation, 2008
Slide 1: Equity Trustees Limited Full Year Results to 30 June 2008
1 Equity Trustees Limited Full Year Results to 30 June 2008
Slide 2: Equity Trustees
Equity Trustees An independent Australian based financial services firm that is increasing its market presence and generating improved returns. Trusted since 1888 2
Slide 3: Agenda
Agenda • Overview • Financial results • Business unit performance • Outlook Trusted since 1888 3
Slide 4: Agenda – Overview
Agenda Overview • Financial results • Business unit performance • Outlook Trusted since 1888 4
Slide 5: Overview
Overview • A record annual result • Contribution from all business units • Revenue growth • Focus on operational efficiency • Acquired businesses adding value • Market conditions significantly tougher in ‘08 and into ‘09 • Cautious on markets going forward Trusted since 1888 5
Slide 6: Overview – group results
Overview – group results 2008 2007 Operating revenue $39.2m $32.4m + 21.2% Operating expenses $24.9m $21.3m + 17.2% Operating profit (pre-tax) $14.3m $11.1m + 28.8% Profit from sale of investments (pre-tax) $0.5m $0.7m Net profit before tax $14.8m $11.8m + 25.0% Income tax expense ($4.2m) ($3.7m) In
Slide 7: Overview – operating results
Overview – operating results 2008 2007 Operating revenue $39.2m $32.4m + 21.2% Operating expenses $24.9m $21.3m + 17.2% Operating profit (pre-tax) $14.3m $11.1m + 28.8% Income tax expense (relating to operating activities) ($4.0m) ($3.5m) Operating profit (after-tax) $10.3m $7.6m + 35.4% (pre-tax, e
Slide 8: Agenda – Financial results
Agenda • Overview Financial results • Business unit performance • Outlook Trusted since 1888 8
Slide 9: Operating results
Operating results Operating revenue up 21.2% to $39.2m Operating expenses up 17.2% to $24.9m $39.2m Depreciation ($m) $24.9m Investment income ($m) 1.2 Business unit revenue ($m) Operating overheads ($m) $21.3m 0.9 $32.4m 1.1 $18.2m 0.8 Overheads $15.6m 0.3 $24.8m Business unit up 17.5%. $13.7m 0.2
Slide 10: Revenue
Revenue Group revenue up 19.9% to $39.7m Operating revenue up 21.2% to $39.2m +0.1 $39.7m +6.7 0.5 Gain on sale of investments ($m) 1.2 Small Investment income ($m) Business increase Business units ($m) $33.1m unit in inv. 0.7 revenue income 1.1 up $6.7m 39.2 32.4 (+21.5%) $25.3m 0.6 1.2 $20.6m 0.8
Slide 11: Profitability
Profitability Operating profit before tax Net profit after tax up 28.8% to $14.3m up 29.7% to $10.6m CAGR since 2004 = 46.5% CAGR since 2004 = 38.9% 14.3 11.1 10.6 8.1 6.6 5.2 4.2 3.1 3.4 2.8 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 Trusted since 1888 11
Slide 12: Net assets
Net assets Net assets up 17.0% to $52.0m CAGR since 2004 = 33.2% 52.0 44.4 36.4 21.6 16.5 2004 2005 2006 2007 2008 Trusted since 1888 12
Slide 13: Earnings per share
Earnings per share Earnings per share up 26.8% to 133.35¢ per share Weighted average shares on issue (‘000) CAGR since 2004 7,923 = 30.8% 7,742 7,372 A capital raising in late 133.35 2005 increased the number of shares on issue by 14.8% 105.18 6,423 69.94 6,176 52.98 2004 2005 2006 2007 2008 45.52 2
Slide 14: Returns to shareholders
Returns to shareholders Full-year, fully-franked dividend Dividend payout ratio is within the range of 70-90% of operating profit after tax up 46.7% to 110¢ per share 110¢ (including gains on the sale of investments). Final Interim Franking credit balance ($’000) 75¢ 60 7,402 CAGR since 2004 = 38.4%
Slide 15: Total shareholder return
Total shareholder return 800,000 $100,000 invested in EQT shares on 1 July 2003 would have 700,000 been worth approx $450,0001 on 30 June 2008. This is 111% above the growth of the S&P/ASX 200 Accumulation Index over the same period. 600,000 500,000 EQT S&P/ASX200 Accumulation Index 400,000 300,000
Slide 16: Agenda – Business unit performance
Agenda • Overview • Financial results Business unit performance • Outlook Trusted since 1888 16
Slide 17: Four business units – sources of revenue
Four business units – sources of revenue Corporate superannuation: Sales & marketing + product management for • Wealthpac EQT co-branded funds • Templetons managed by external • www.super.com.au Super specialists • Freedom of -annuation 21% Funds Choice Management 26% Fund Services 25% Private Clien
Slide 18: Business unit summary
Business unit summary A good spread of operating revenue $38.0m 21% Superannuation $31.3m Revenue growth from all business units Fund Services Funds Management 17% Revenue FUM Private Clients 2008 vs 2007 2008 vs 2007 $23.5m 25% Private Clients +12.0% (10.5%) 25% 19% Funds Mgt +11.6% +18.2% $18.8m F
Slide 19: Private Clients
Private Clients Operating revenue up 12.0% to $10.4m AUM down 10.5% to $1,333m (10.9) (146.1) CAGR since 2004 = 19.3% 0.7% AUM decrease in 1H of 2008. 9.9% decrease in 2H 1,490.2 10.4 1,302.8 1,333.2 9.3 1,127.9 997.6 5.9 6.1 CAGR since 2004 = 5.2 7.5% 2004 2005 2006 2007 2008 2004 2005 2006 2007 1H
Slide 20: In-house asset management capability
In-house asset management capability EQT Flagship Fund EQT Charitable Balanced Fund ¾ Australian equities team incubated in ¾ In-house fund of funds model for tax- 2003. exempt investors ¾ Concentrated large cap fund generating a ¾ Invests predominantly in EQT co- tax effective income stream branded
Slide 21: Funds Management
Funds Management Operating revenue up 11.6% to $10.0m FUM up 18.2% to $2,367m (79.8) +445.1 CAGR since 2004 = 14.1% 22.2% FUM increase in 1H of 2008. 3.3% decrease in 2H 2,366.8 2,366.8 10.0 2,001.5 2,001.5 9.0 7.5 6.4 1,414.2 CAGR since 2004 = 5.9 989.1 39.9% 618.0 2004 2005 2006 2007 2008 2004 200
Slide 22: Funds Management - FUM
Funds Management - FUM Increasing share from platform (IDPS) source Diversity of managers $2,366.8m $2,366.8m Retail (external) 11.0% 11.8% Retail (internal) $2,001.5m Refers to a multiple $2,001.5m IDPS 12.4% number of managers 21.1% 11.8% 17.4% 10.2% Eight $1,414.2m 25.9% $1,414.2m 13.3% managers
Slide 23: Fund Services
Fund Services Operating revenue up 24.6% to $9.6m FUA up 1.5% to $14,046m +1,682 (1,481) CAGR since 2004 = 46.2% 12.1% FUA increase in 1H of 2008. 9.5% decrease in 2H 13,845 14,046 9.6 11,130 7.7 5.6 7,211 CAGR since 2004 = 35.8% 3.1 4,130 2.1 2004 2005 2006 2007 2008 2004 2005 2006 2007 1H08 2H08 2
Slide 24: Superannuation
Superannuation Operating revenue up 50.6% to $7.9m Existing & acquired businesses CAGR since 2004 = 29.2% Acquired Business Addition of Freedom of Choice, MBC & TSM 2.0 Existing Business 11.3% 7.9 revenue growth 5.9 5.3 5.3 from 4.4 4.4 existing 2.9 3.4 2.9 3.4 business 2004 2005 2006 2007 2008 2004
Slide 25: Agenda – Outlook
Agenda • Overview • Financial results • Business unit performance Outlook Trusted since 1888 25
Slide 26: Information technology upgrade
Information technology upgrade • Contract signed to upgrade to Garradin system • Further integrates key services – asset management, unit registry, fiduciary accounting and tax • Builds on provision for specialised trust & estate requirements • Improvement to on-line component for clients • Expected
Slide 27: Acquisitions update
Acquisitions update • Recent acquisitions all successfully integrated • Exploratory merger discussions with Trust Company ceased in May 2008. • EQT remains open to opportunities that are in the best interests of shareholders • Continuing to seek bolt-on acquisitions – focus on fit with superannuatio
Slide 28: Outlook
Outlook Company base is solid: • Business units established and performing well • Good relationships with key clients • Active sales & marketing culture • Investment in people and systems • Strong cash reserves and no debt Outlook for 2009: • Performance will be impacted by market volatility but EQT
Slide 29: Summary
Summary • Record profitability achieved in 2008 • Contribution from all business units • Ongoing improvement in efficiency may slow • Will continue to assess acquisitions / strategic opportunities • Impact of market volatility evident in 2H and into 2009 • Business on solid platform - cautious about
Slide 30: ‘[rustees
EO ‘[rustees Trusted since 1888