Whitefield Industrials Limited · ASX:WHF
Whitefield Industrials — Whitefield — Shareholder Meeting (June 2004)
17 slides from Whitefield Industrials's shareholder meeting presentation, Jun 24, 2004
Slide 1: Whitefield Ltd AGM June 2004
WHITEFIELD LTD AGM June 2004
Slide 2: WHF Overview
WHF OVERVIEW WHITEFIELD (WHF) Founded 1923 Ausiralian Shares ~45 stockholdings $140m market cap Style-neutral, Earnings-based strategy Aim to hold stocks where the present value of realistically achievable future earnings are greater than earnings currently captured in stock price Long term investor
Slide 3: Cost-Efficiency: Low Wholesale MER
COST-—EFFICIENCY LOW WHOLESALE MER LIC MANAGEMENT EXPENSES (Management Expense Ratio) * MER’s below 0.35% Impact * Ifaninvestment ina low MER LIC is worth $500,000 in 25 years, that same investment would only be worth $360,000 if MER 2% higher (diff $140,000) Range of LiCs May 2004 Source: Annual Re
Slide 4: LIC Discount CGT Status
LIC DISCOUNT CGT STATUS LIC DISCOUNT CAP GAINS IMPACT . WH F/SYL have LIC * If an investment worth Discount CGT status $500,000 in 25 years with because they are long LIC Disc CGT term investors « Same investment worth ¢ Allows individual and only $360,000 if LIC does super fund shareholders NOT hav
Slide 5: Benefit of Low MER and LIC Disc CGT Status
BENEFIT OF LOW MER AND LIC DISC CGT STATUS BENEFIT OF LOW MANAGEMENT EXPENSE RATIO AND LIC DISCOUNT CGT STATUS (Value of an investment after 25 years after ultimate tax paid at maximum personal rates) 110.00% x 100.00% 4. 90.00% 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Base Case
Slide 6: Investment Strategy
INVESTMENT STRATEGY * Style-neutral, Earnings-based strategy « Aim to hold stocks where the present value of realistically achievable future earnings are greater than earnings currently captured in stock price | Would we make or lose money over the long term by investing? How much? WHITEFIELD vow
Slide 7: Investment Strategy: Future Earnings Outlook
INVESTMENT STRATEGY FUTURE EARNINGS OUTLOOK 250 200 150 Line / Line = 100 Earnings Captured In Current Share 50 * | Price oe 42 3 4 5 6 T 8 9 10 17:12 43 14 15 16 17 18 19 20 21 22 23 24 25 Years WHITEFIELD vow
Slide 8: Outcomes
OUTCOMES > WHITEFIELD (Y/E Mar 2004) 21.42% (1.99%) 1 Year 23.41% 5 Years 6.84% 6.25% 0.59% 10 Years 10.39% 9.19% 1.20% 20 Years 14.91% 12.25% 2.67% 40.00% 35.00% 30.00% 25.00% 20.00% 15.00% 40.00% 5.00% 0.00% ROLLING 5 YEAR RETURNS WHITEFIELD VS ASX200 ACCUMULATION BWHF DASX200 nO 2001 2002 2003 20
Slide 9: Investment Outcomes: Whitefield
INVESTMENT OUTCOMES: WHITEFIELD ROLLING 5 YEAR OUTPERFORMANCE WHITEFIELD VS ASX200 ACCUMULATION 14.00% 42.00% 10.00%, 8.0% 6.01 4.00% 2.00% 0.00% (2.00%) CFE EF EPSEELEFSEFESESPS HS WHITEFIELD vow
Slide 10: Investment Portfolio: Whitefield
INVESTMENT PORTFOLIO: WHITEFIELD NAB NAT. BANK 10.20% 7.22% 2.98% BA CWLTH BANK 9.74% 6.49% 3.25% ANZ ANZ BANKING 877% 6.28% 1.49% ‘ABC WESTPAC BANKING CORPORATI 8.69% 487% 1.82% NCPDP NEWS CORPORATION PREFERR 5.50% 4.46% 1.04% TS TELSTRA 5.19% 4.34% 0.85% MB. MACQ BANK 4.06% 1.19% 2.86% PPT PERPETU
Slide 11: Recent Actions
RECENT ACTIONS LAST YEAR Remained strong industrials and financials which were undervalued Did not buy resources Reduced ~ Stocks excessively overvalued (ASX, Transfield) ~ Cyclical stocks at peak cycle (Insurers, Building Stocks) ~ Retailers due to increased competition and lower margins Bought whe
Slide 12: Recent Actions
RECENT ACTIONS RECENTLY « Strengthened PRK, AMC, CGF ~ See future earnings undervalued in each stock ~ PRK ports very strong, rail infrastructure enhancement positive ~ AMC well positioned in an industry being rationalised ~ CGF market doesn’t appreciate value created as annuities book matures * Add
Slide 13: Market Outlook
MARKET OUTLOOK Resources Chinese story is not new. We're 20 years into a 50 year story with many ups and downs. Generally positive for resources, but only worth buying if earnings not fully priced in. (Currently overpriced and increasing medium term risk). WHF/SYL have produced greatest periods of o
Slide 14: Market Outlook
MARKET OUTLOOK Insurers « Investment returns, claims, premiums have all been cyclically favourable « Uhnlikely to continue. Earnings and margins likely to ease (not collapse) * Our concern: Market believes earnings will be too favourable for too long Media * Election years in Aust and US * Airline a
Slide 15: Market Outlook
MARKET OUTLOOK Building Exposed « Almost certain weakness in earnings from long term cyclical highs Industrials * Economic conditions supportive * Earnings generally undervalued or fair value at present Conclusion * Earnings momentum to remain moderately positive in sectors to which WHF exposed « Va
Slide 16: Corporate Objectives
CORPORATE OBJECTIVES Shareholder Numbers * Large increases in 2003 (>60% WHF) « Process to be continued through liaison with intermediaries, greater research coverage and expanding share availability Market Capitalisation & Liquidity « Free float increased >25% in 2003 * Process to be continued via
Slide 17: Conclusion
CONCLUSION 2004/5 * Amoderately good year for investment outcomes expected « Further increases in shareholder numbers « Further increases in market capitalisation « Anincreasingly strong Whitefield in Listed Investment Company market in 2005 WHITEFIELD vow