Slide 1: Treasury Group Limited Full Year Results - 30 June 2010
Wednesday, 25 August 2010 TREASURY GROUP LIMITED FULL YEAR RESULTS - 30 JUNE 2010 Overview Treasury Group (ASX:TRG) today announced a consolidated profit after tax of $11.68 million for the period ended 30 June 2010, up by 136% from $4.95 million reported from the previous corresponding year’s equiv
Slide 2: Funds Under Management
Whilst the investing environment has been difficult, we are pleased with the strong performance of our investment managers during this difficult period. Managers such as RARE Infrastructure, Orion Asset Management and Trilogy Global Advisors have also enjoyed positive inflows and support from local
Slide 3: Comments on Current Market Conditions
Comments on Current Market Conditions The increase in profitability reflects the improvement in the investment climate during most of last financial year, the net new flows and a focus on maintaining cost control at Treasury Group. We saw an increase in our institutional business when compared with
Slide 4: Strategy Ahead
Strategy Ahead We are pleased with the way in which our business model has emerged from the turbulence of the last two and a half years. With our boutique partners solely focused on managing funds, we believe that this endorses Treasury’s approach; working with only the highest quality investment te
Slide 5: Detailed Financial Analysis
Detailed Financial Analysis: Below we offer more detail on our financial results including: Normalised Earnings Share of net profit from equity accounted investments Cash Flow Dividend Detailed disclosure of business profit and loss o Analysis of aggregated boutique earnings and Treasury G
Slide 6: Share of Net Profit from Equity Accounted Investments, Cash Flow, Dividend
Share of net profit from equity accounted investments Share of net profit from equity accounted investments increased by 54% due to the improved performance overall by the fund managers. This result was also impacted by the addition of Celeste Funds Management for the period since it was acquired on
Slide 7: Treasury Group Income Statement
The boutique asset managers do not have any external borrowings. Some managers do have loans from TRG that are issued to assist with working capital requirements during the start up phase and the loans are structured to meet Australian Financial Services Licensing requirements. These loans are repai
Slide 8: Funds Under Management (FUM)
Funds Under Management (FUM) In response to shareholder requests we are pleased to provide you with further details assets managed on behalf of our clients. FUM attribution is analysed in a number of ways. The application of business segments as detailed in the financial accounts attributes the sour
Slide 9: Review of Operations
Review of Operations Treasury Group Investment Services (TIS) - (100% owned at 30 June 2010) Treasury Group through TIS provides its managers with risk and compliance services as well as a Responsible Entity function. TIS is focused solely on supporting our internal managers and offers a high value
Slide 10: Treasury Asia Asset Management (TAAM) and other managers
Treasury Asia Asset Management (TAAM) - (40% owned at 30 June 2010) Investment markets were volatile over the year, resulting in a client allocating away from region in the latter part of 2009/10. Importantly TAAM continues to attract strong interest from offshore clients. TAAM has also gained repre
Slide 11: Treasury Group Limited Results Presentation June 2010
Treasury Group Limited Results Presentation 30 June 2010
Slide 12: A Summary of the Profit and Loss
A Summary of the profit and loss 12 months to 30 June 2010 $000 2010 2009 % Change Total revenue 5,602 6,004 (6.7) Equity share of associates 14,045 9,103 54.3 Expenses 8,492 9,489 (10.5) Net profit after tax (TRG shareholders) 11,676 4,946 135.7 NORMALISED NET PROFIT 10,187 7,515 35.6 Basic earning
Slide 13: Comment on results
Comment on results • Net new funds flow strong over the year • Institutional flows strong over the 12 months primarily at RARE, Orion and Trilogy • Rising institutional flows resulted in increased institutional share • Retail investor confidence remains weak. IML saw outflows • Addition of new bouti
Slide 14: Capital management & dividends
Capital management & dividends • TRG has a strict approach to capital management • We assess all new partnerships on likely return on capital • Although unlikely, we also factor in risk of boutique not achieving performance goals • Dividend policy – growth in dividend reflects improved outlook and u
Slide 15: Strong net new funds flow
Strong net new funds flow • Net new funds flow strong over the year • TRG continues to diversify assets across managers • Net fund inflows of $1,400m over the year (excluding new managers) • Total assets at $14.708bn to June 2010 • Flow primarily to institutional. Retail remains weak. FUM to 30 June
Slide 16: FUM by region, retail, distribution
FUM by region, retail, distribution FUM by Region Segment 30 June 2010 30 June 2009 Australian Equities 8,239,293,864 7,031,593,333 International Equities 3,797,193,557 2,960,114,371 Alternatives 2,671,134,455 933,419,133 TOTAL 14,707,621,876 10,925,126,837 Clients by Region Client Source % % Domest
Slide 17: A year of major change
A year of major change • Three new boutiques • Aubrey Capital Management - global growth equity in Edinburgh • Celeste Funds Management – Australian small companies • AR Capital Management – Australian equity absolute return • Addition of retail distribution services to our boutiques • Senior resour
Slide 18: Three new outstanding managers
Three new outstanding managers • AR Capital • Outstanding Australian equity absolute return fund • Key principals held senior roles at Credit Suisse and Goldman Sachs • Aubrey Capital • Edinburgh based global growth equity manager • Experienced team of senior investment managers from Walter Scott an
Slide 19: Manager Snapshot
Manager Snapshot Value IM INVESTORS Pe) GLOBAL VALUE | MUTUALLTD = investors TREASURY AS|A Sl S CELESTE ASSET MANAGEMEN Funds Management Bion asset management PREMLIU M AUBREY Tes Growth K's KimZ > RARE Australian equity International equity Specialist Fixed income Absolute
Slide 20: Injection of senior talent at IML
Injection of senior talent at IML • Brings together two leading investment professionals • Hugh Giddy and Anton Tagliaferro – value investment style • Deepens the team experience • Adds additional support in team management and product growth • Allows for medium term succession planning • Developmen
Slide 21: Distribution – expansion of services
Distribution – expansion of services • Retail Distribution services • New service to boutiques • Addition of outstanding senior distribution talent and servicing • Provides researcher, client and platform coverage • Historically TRG managers have either used internal or 3rd party distribution skills
Slide 22: Australian distribution
Australian distribution Institutional Retail Platforms Rating Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes - - Yes Yes Yes Yes HNW - - Yes 12
Slide 23: TRG expands service offerings
TRG expands service offerings • TIS Service offerings • Compliance improvements • Rollout of Complispace program • Significant internal efficiencies and improved monitoring • Offers other networking services • Global services • UCITS III, ERISA (US pension), Australian funds expertise • Addition of
Slide 24: Outlook
Outlook • Investor confidence post GFC has returned but remains fragile • Institutional investors have moved to allocate again to growth assets through the year • Retail investors remain very cautious globally • Clients are prepared to consider alternative and other asset • Fees remains a focus alth
Slide 25: Industry Themes
Industry Themes • Global allocations to alternatives and other asset classes remains a focus • Alternative investments remains a reasonable focus • Retail investors remain cash/yield oriented • Consolidation of the financial services industry will continue • Industry overcapacity will be resolved by
Slide 26: Summary
Summary • Strong results improvement with net funds inflow and expenses controlled. • Three new boutiques, expansion of retail distribution, deepening of team at IML • Investor confidence post GFC has improved but remains fragile. • TRG continues to be approached by large number of high quality inve
Slide 27: Appendix: Normalised NPAT
Appendix: Normalised NPAT • Normalised earnings to reflect underlying earnings growth NPAT (TRG shareholders) $11.676 million Add back: Write off of CCP notes $0.090 million Restructuring cost across the Group $0.255 million Acquisition and due diligence costs $0.154 million $0.499 Million Less: Rev