Slide 1: Equity Trustees confirms record result
28 August 2008 For personal use only Equity Trustees confirms record result Equity Trustees Limited (ASX: EQT) today confirmed its full year financial results, which are in line with the company’s previous guidance. Net profit after tax increased 29.7% based on a 35.4% increase in after-tax operatin
Slide 2: Acquisition strategy, outlook and board appointment
For personal use only “Holdfast Fund Services, which was acquired as part of our Funds Management business unit also contributed to our result in the last quarter of the year.” “Importantly all acquisitions have been integrated into our structure very effectively and will continue to be a positive f
Slide 3: Full Year Results to 30 June 2008
1 For personal use only Equity Trustees Limited Full Year Results to 30 June 2008
Slide 4: Equity Trustees
Equity Trustees For personal use only An independent Australian based financial services firm that is increasing its market presence and generating improved returns. Trusted since 1888 2
Slide 5: Agenda
Agenda For personal use only • Overview • Financial results • Business unit performance • Outlook Trusted since 1888 3
Slide 6: Agenda: Overview
Agenda For personal use only Overview • Financial results • Business unit performance • Outlook Trusted since 1888 4
Slide 7: Overview
Overview For personal use only • 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 8: Overview – group results
Overview – group results For personal use only 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 expe
Slide 9: Overview – operating results
Overview – operating results For personal use only 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.
Slide 10: Agenda: Financial results
Agenda For personal use only • Overview Financial results • Business unit performance • Outlook Trusted since 1888 8
Slide 11: Operating results
Operating results For personal use only 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
Slide 12: Revenue
Revenue For personal use only 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.
Slide 13: Profitability
Profitability For personal use only 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 14: Net assets
Net assets For personal use only Net assets up 17.0% to $52.0m CAGR since 2004 = 33.2% 52.0 44.4 36.4 21.6 16.5 2004 2005 2006 2007 2008 Trusted since 1888 12
Slide 15: Earnings per share
Earnings per share For personal use only Earnings per share up 26.8% to 133.35¢ per share Weighted average shares on issue (‘000) CAGR since 2004 7,923 = 30.8% 7,742 7,372 A capital raising in late 133.35 2005 increased the number of shares on issue by 14.8% 105.18 6,423 69.94 6,176 52.98 2004 2005
Slide 16: Returns to shareholders
Returns to shareholders For personal use only Full-year, fully-franked dividend Dividend payout ratio is within the range of 70-90% of operating profit after tax up 46.7% to 110¢ per share 110¢ (including gains on the sale of investments). Final Interim Franking credit balance ($’000) 75¢ 60 7,402 C
Slide 17: Total shareholder return
Total shareholder return 800,000 For personal use only $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
Slide 18: Agenda: Business unit performance
Agenda For personal use only • Overview • Financial results Business unit performance • Outlook Trusted since 1888 16
Slide 19: Four business units – sources of revenue
Four business units – sources of revenue Sales & marketing + For personal use only Corporate superannuation: 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 Serv
Slide 20: Business unit summary
Business unit summary For personal use only 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
Slide 21: Private Clients
Private Clients For personal use only 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
Slide 22: In-house asset management capability
In-house asset management capability For personal use only 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
Slide 23: Funds Management
Funds Management For personal use only 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 2
Slide 24: Funds Management - FUM
Funds Management - FUM For personal use only 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,
Slide 25: Fund Services
Fund Services For personal use only 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
Slide 26: Superannuation
Superannuation For personal use only 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 20
Slide 27: Agenda: Outlook
Agenda For personal use only • Overview • Financial results • Business unit performance Outlook Trusted since 1888 25
Slide 28: Information technology upgrade
Information technology upgrade For personal use only • 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
Slide 29: Acquisitions update
Acquisitions update For personal use only • 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
Slide 30: Outlook
Outlook For personal use only 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 mar
Slide 31: Summary
Summary For personal use only • 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 pla
Slide 32: For personal use only
EO ‘[rustees Trusted since 1888