Glennon Small Companies Ltd · ASX:GC1
Glennon Small Companies — Investor Presentation (April 2020)
20 slides from Glennon Small Companies's investor presentation, Apr 15, 2020
Slide 1: Company announcement: Quarterly Webinar
For personal use only Wednesday, 15 April 2020 Company Announcements Australian Securities Exchange Level 4, 20 Bridge Street Sydney NSW 2000 Glennon Small Companies Limited (ASX: GC1) – Quarterly Webinar Please find attached a copy of the Company’s Quarterly Webinar Presentation that Michael Glenno
Slide 2: Glennon Capital Quarterly Webinar April 2020
For personal use only Glennon Capital Quarterly Webinar April 2020 1
Slide 3: Market Performance (3-Year)
MARKET PERFORMANCE (3-YEAR) For personal use only Small ordinaries outperform Emerging Companies vs Small Ordinaries FY17 FY18 FY19 FY20 to 19th Feb 19th Feb to 31st Mar Emerging Companies Accumulation Index -2.80% 23.22% -2.89% 14.85% -41.05% Small Ordinaries Accumulation Index 7.01% 24.25% 1.92% 1
Slide 4: Market Performance (1-Month)
MARKET PERFORMANCE (1-MONTH) For personal use only Small Ordinaries: With higher liquidity, small caps outperformed during bear market Emerging companies vs Small ordinaries 5 0 -5 -10 Accumulative Return (%) -15 -20 Small Ordinaries Accumulation Index -25 -30 -35 -40 Emerging Companies Accumulation
Slide 5: Market Performance (3-Year): Small cap vs Large cap
MARKET PERFORMANCE (3-YEAR) For personal use only Small cap vs Large cap 50 40 ASX Midcap 50 Accumulation Index 30 20 Accumulative Return (%) 10 0 Emerging Comapnies Accumulation Index -10 ASX50 Accumulation Index -20 -30 -40 Jun 2017 Dec 2017 Jun 2018 Dec 2018 Jun 2019 Dec 2019 Emerging Companies A
Slide 6: What We Are Doing in COVID-19
WHAT WE ARE DOING IN COVID-19 For personal use only Talking to management Looking at balance sheet Looking at range of earnings outcomes 5
Slide 7: Government Stimulus
GOVERNMENT STIMULUS For personal use only Money injects directly from government: Support employment, consumption Support from banking sector: Waive fees to deferred business loan and overdraft repayments QE from RBA: Reduce long term interest rate and provide liquidity to corporations Greatest stim
Slide 8: GC1 Performance
GC1 PERFORMANCE For personal use only Discount to NTA vs Market Capitalisation 350 MIR 300 GC1 Market Capitalisation ($ million) 250 Market Cap: $24 million WAX Discount to NTA: -32% 200 QVE 150 CDM WMI 100 TOP RYD SNC 50 TEK ACQ NSC WAA TGF NAC FSI 0 -50 -40 -30 -20 -10 0 10 Discount to NTA (%) FSI
Slide 9: GC1 Share Price v NTA
GC1 SHARE PRICE V NTA For personal use only Widening discount: provides a buying opportunity for investors 1.3 1.2 1.1 1.0 0.9 Price ($) 0.8 0.7 0.6 32% Discount 0.5 0.4 Dec 2015 Jun 2016 Dec 2016 Jun 2017 Dec 2017 Jun 2018 Dec 2018 Jun 2019 Dec 2019 Pre-tax NTA Share Price 8
Slide 10: Top Positions
TOP 3 POSITIONS For personal use only Sustainable revenue during or post lockdown: A sustainable revenue ensures speedy recovery after lockdown is lifted Manageable debt level: Most companies' operation and revenue are now disrupted. A management debt level can protect companies from survival Low pr
Slide 11: Probiotec (Market Cap: $142 mil)
For personal use only Probiotec (Market Cap: $142 mil) Non-cyclical product: Probiotec manufactures pharmaceuticals products. Demand and operation should not be disrupted in current pandemic Low net debt: Probiotec has sufficient amount of cash to pay off short term borrowings. Long term borrowing r
Slide 12: Shine Justice (Market Cap: $127 mil)
For personal use only Shine Justice (Market Cap: $127 mil) Practice area unaffected: Legal actions are less likely to be affected. Inquiries from people on the Ruby Princess may also provide opportunities Opportunity for Claimify: New product Claimify, an online platform servicing small Queensland m
Slide 13: Johns Lyng (Market Cap: $489 mil)
For personal use only Johns Lyng (Market Cap: $489 mil) Essential construction work: Construction work is listed as essential services. Profitability should remain strong Strong demand: Johns Lyng confirms a strong demand for its Insurance Building & Restoration Services No solvency concern: Since J
Slide 14: What We Sold
For personal use only WHAT WE SOLD Significant reduction in revenue: A reduction in revenue after lockdowns and social distancing will significantly damage the profitability High net debt level: Lenders are less likely to provide refinancing when companies have high net debt and cash flow problem Hi
Slide 15: Viva Leisure (Market Cap: $82 mil)
For personal use only Viva Leisure (Market Cap: $82 mil) Cancellation triggered by social distancing: 1.5% of customers cancelled the membership and 8.2% of customers suspended. It takes time to recover GYM closure: All gym are closed as required by the government. Digital membership continues with
Slide 16: Enero (Market Cap: $75 mil)
For personal use only Enero (Market Cap: $75 mil) Highly cyclical industry: Enero provides integrating marketing services. During a recession, advertising expense is the first cost to be cut by companies Customer base: 50% of customers are in media, retailing, manufacturing, transportation and banki
Slide 17: Thorn (Market Cap: $21 mil)
For personal use only Thorn (Market Cap: $21 mil) Closure of business: Radio Rental division closes all stores and the online platform continues to operate. Revenue will significantly reduce Clients at risk: This business relies on client repayment ability Cheap company: This company is still tradin
Slide 18: Outlook
For personal use only OUTLOOK Opportunities arise: Short term benefits: Companies, which sell essential products, are likely to receive a short term benefit from this pandemic Oversold: Companies, which operation are not affected, are sold together with the market High recurring revenue: Companies w
Slide 19: For personal use only
For personal use only 18
Slide 20: Important Information
IMPORTANT INFORMATION This presentation is prepared by Glennon Capital Pty Ltd (AFSL 338567, ABN 84 137 219 866) (Glennon Capital) for general information purposes only and has been prepared for use in conjunction with a verbal presentation and should be read in that context. Each recipient of this
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