Flagship Investments Ltd. · ASX:FSI
Flagship Investments — Investor Presentation (July 2018)
25 slides from Flagship Investments's investor presentation, Jul 10, 2018
Slide 1: Flagship Investments Limited Retail Presentation
Flagship Investments Limited ABN 99 080 135 913 10 July 2018 Level 12 For personal use only Corporate Centre One 2 Corporate Court The Manager BUNDALL QLD 4217 Company Announcements Office PO Box 7536 ASX Ltd GCMC Exchange Centre BUNDALL QLD 9726 Level 6, 20 Bridge Street Telephone 07 5644 4400 Facs
Slide 2: FSI Year-end Update 2018-7-10
For personal use only FSI Year-end Update 2018-7-10
Slide 3: Successful active management requires liquidity but an information advantage is a necessity
Successful active management requires liquidity but an information advantage is a necessity For personal use only • The information advantage obtained by conducting forensic research of high quality growth businesses can produce superior investment performance over the long-term. • Great investment
Slide 4: A Fully Aligned Investment Team
A Fully Aligned Investment Team For personal use only Jared Pohl Andrew Dale Dr Manny Pohl Jason Pohl Sam Byrnes Damon Callaghan BCom. BIT. MBA BCom. CA B.Sc(Eng). MBA. BCom. LLB BCom. CFA BCom. CFA DBA Years in Industry: 11+ Years in Industry: 15+ Years in Industry: 30+ Years in Industry: 3+ Years
Slide 5: Performance of market cap segments since 2001
Performance of market cap segments since 2001 For personal use only Year-end All Ords Small cap Mid cap Large cap Size Range $0-$133bn $0-$1bn $1bn-$8bn $8bn-$133bn Dec-01 10% 2% 16% 11% • Small and mid caps: Dec-02 -8% -9% 5% -10% • Outperformed in 76% of Dec-03 16% 32% 23% 13% Dec-04 28% 27% 43% 2
Slide 6: ECP has three Listed Investment Companies for retail investors
ECP has three Listed Investment Companies for retail investors For personal use only
Slide 7: When the market is crowded with quants and copycats one needs truly idiosyncratic managers
When the market is crowded with quants and For personal use only copycats one needs truly idiosyncratic managers to outperform “THE CRISIS OF CROWDING”: Ludwig B Chincarini 2012 “SMART BETA MAY NOT BE SO SMART” : Foresight Analytics 2018 Recent survey showed that median systematic risk was around 80
Slide 8: LIC Factor Comparison
LIC FACTOR COMPARISON For personal use only 7
Slide 9: LIC Factor Tilt Comparison
LIC FACTOR TILT COMPARISON For personal use only
Slide 10: Our focus on quality growth produces alpha
Our focus on quality growth produces alpha For personal use only Performance is only statistically significant after 15 years – Willis, Towers Watson Historical Performance 3m 1 year 3 Years 5 Years 10 Years 20 Years (Inception May to 31 June 2018* 1998) FSI Portfolio 11.43 19.04 13.01 14.19 11.56 1
Slide 11: Our philosophy guides everything we do
Our philosophy guides everything we do For personal use only Investment Philosophy • Our Investment Philosophy is based on the belief the economics of a business drives long-term investment returns. This expresses itself through our investment process in: • Valuing potential, not just performance •
Slide 12: Talking Stocks: Top Five Holdings
Talking Stocks: Top Five Holdings For personal use only FLAGSHIP Weight % BARRACK Weight % GLOBAL MASTERS Weight % Macquarie Group 6.2 Magellan 7.1 Berkshire Hathaway 60.1 Rio Tinto 6.1 Pendall 6.9 FSI 9.3 CBA 5.5 Carsales.com 6.5 Athelney Trust 6.7 RIO 5.4 Seek 5.8 Other UK 21.9 DMP 5.1 Dominoes 5.
Slide 13: Alpha Attribution (BST)
Alpha Attribution (BST) For personal use only We are proven stock pickers! Timing Sector 4% allocation 13% Stock selection 83% 12
Slide 14: Stock Attribution (last months)
Stock Attribution (last 3 months) For personal use only Contributors Detractors MQG (+20.2%) BLA (-70.0%) IPH(+31.3%) IRI (-20.0%) DMP (+25.2%) TPM (-5.8%) RWC (+25.1%) MFG (-2.3%) SM1 (+33.3%) AUB (-4.0%)
Slide 15: Process at work - BLA
Process at work - BLA For personal use only
Slide 16: BLA - Blue Sky Alternatives Ltd
BLA - Blue Sky Alternatives Ltd For personal use only Thesis: ● BLA will raise significant capital into their real assets business (water and ag) as they switch their capital base from Wholesale to Institutional. ● Our target was 7bn of AUM in 2023. ● Ability to succeed was based on Reputation and a
Slide 17: BLA - Blue Sky Alternatives Ltd (contd)
BLA - Blue Sky Alternatives Ltd (contd) For personal use only Response to Report: ● Two courses of action: Firstly, prove or disprove claims made by GRG. Secondly, assess whether BLA was able to meet our forecast AUM assumptions. Claims Validation ● Spoke with all major LP’s of BLA. They were all su
Slide 18: Changes to Portfolio (Last months)
Changes to Portfolio (Last 3 months) For personal use only Sold and re-bought: A2M – A2 Milk Company Structural Changes: Valuation Changes: Added: APT - Afterpay ARB – ARB Corporation PPH – Pushpay NWL – Netwealth XRO - Xero RMD - Resmed WTC - Wisetech Sold: BLA - Blue Sky CAT – Catapult
Slide 19: Process at work - A2M
Process at work - A2M For personal use only
Slide 20: PPH AU - Pushpay Ltd
PPH AU - Pushpay Ltd For personal use only THESIS: ● Huge market opportunity. $150 bn annual giving in the faith sector - mostly cash and cheque. ○ $ 33 bn addressable versus $ 2.2 bn processing volumes today. ● Large ROI for the underlying customers (30% increase in giving after use, lowers churn,
Slide 21: XRO AU - Xero Ltd
XRO AU - Xero Ltd For personal use only THESIS: ● Early stages of a global opportunity with only one significant competitor. ● Barriers to entry are increasing as the platform and its ecosystem continue to grow. ● Additional revenue opportunities through scale. SCA: Physical: Land grab strategy is i
Slide 22: BST & FSI Metrics (30 June 2018)
BST & FSI Metrics (30 June 2018) For personal use only BST(EX 50) FSI (All Cap) • Share Price 98 cents • Share Price 168 cents • NTA 118 cents • NTA 198 cents • Discount 17.0% • Discount 15.2% • Dividend Yield 2.8% • Dividend Yield 4.5%
Slide 23: FSI Historical Dividends
FSI Historical Dividends For personal use only Year 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Dividend 4.5 6.0 6.75 8.00 8.50 8.50 8.50 8.50 6.0 6.5 6.75* 7.25 7.25 7.25 3.75 Chg % 15.4 33.3 12.5 18.5 6.25 0.0 0.0 0.0 -30.0 8.3 3.9 11.1 0.0 0.0 CPI 2.50 2.50 4.00 2.1
Slide 24: Looking forward, investors are generally no better equipped given the changing political landscape
Looking forward, investors are generally no better For personal use only equipped given the changing political landscape • The global economy has picked up, inflation is rising, central banks are still being helpful • US investors remain committed to the view that President Trump will deliver on his
Slide 25: Disclaimer
Disclaimer For personal use only This communication is not a securities recommendation. Any person considering action on the basis of this communication must seek out individual advice relevant to their particular circumstances and investment objectives. Past performance is no guide for future perfo
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