Plato Income Maximiser Ltd. · ASX:PL8
Plato Income Maximiser — FY2023 Earnings Presentation
24 slides from Plato Income Maximiser's earnings presentation, August 2023
Slide 1: Company Full-Year FY23 Results
COMPANY FULL-YEAR FY23 RESULTS PLATO INCOME MAXIMISER LIMITED ASX: PL8 1
Slide 2: Disclaimer
Disclaimer Note: Past performance is not a reliable indicator of future performance. This communication has been prepared by Plato Income Maximiser Limited ABN 63 616 746 215 (PL8). Nothing contained in this communication constitutes investment, legal, business, taxation or other advice. This commun
Slide 3: Agenda
Agenda 01 PL8 Company Update 02 Market update 03 Questions 3
Slide 4: PL8 Company Update
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Slide 5: FY23 results highlights
FY23 results highlights CONTINUING TO DELIVER ON COMPANY OBJECTIVES • FY23 operating profit after tax of $57.4 million (+$70.2m to FY22) • Total dividends of $0.066 per share, equivalent to annualised distributed yield of 7.8%1,4 • Total portfolio return of +15.8%1, -0.8% compared to benchmark of +1
Slide 6: PL8 NTA performance breakdown for FY23
PL8 NTA performance breakdown for FY23 PRE-TAX NTA PER PL8 SHARE* Source: Plato. *Excludes franking credits. Portfolio performance is net of management fees. 6
Slide 7: PL8 investment portfolio performance
PL8 investment portfolio performance PERFORMANCE TO 30 JUNE 2023 AFTER FEES AND COSTS* Since 12 Months Inception p.a.** Including Franking (28/4/2017) Portfolio 15.8% 9.0% S&P/ASX200 Tax Exempt 16.6% 8.9% Active -0.8% 0.1% *Inclusive of the net impact of GST and Reduced Input Tax Credits. Past perfo
Slide 8: PL8 delivering high income
PL8 delivering high income 12 month realised yield* 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% S&P/ASX 200 PL8 CASH 4.5 5.5 FRANKING 1.6 2.3 *to 30 June 2023, Plato, Bloomberg 8
Slide 9: PL8 portfolio outperforming the Benchmark over full investment cycle
PL8 portfolio outperforming the Benchmark over full investment cycle $450,000 Plato Aust. Shares Income Fund v S&P/ ASX200 Accumulation Series (incl. Franking Credits) $400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $0 Sep-11 Sep-12 Sep-13 Sep-14 Sep-15 Sep-16 Sep-17 Sep-18 Se
Slide 10: Delivering consistent monthly income
Delivering consistent monthly income MONTHLY DIVIDENDS STEADY AT HIGHER LEVEL OF $0.0055 PER SHARE Only Australian LIC paying monthly fully franked dividends Source: Plato. While monthly income has been consistent since October 2017, this may change in the future. The declaration of dividends by the
Slide 11: Share price at a premium to NTA
Share price at a premium to NTA PL8 PRICE VERSUS PRE-TAX NTA SINCE LISTING PL8 Share Price v Pre-tax NTA $1.35 $1.30 $1.25 $1.20 $1.15 Share Price / Pre-tax NTA $1.10 $1.05 $1.00 $0.95 $0.90 $0.85 $0.80 $0.75 Oct-17 Oct-18 Oct-19 Oct-20 Oct-21 Oct-22 Feb-18 Feb-19 Feb-20 Feb-21 Feb-22 Feb-23 Apr-17
Slide 12: Growing asset base improves liquidity and lowers costs
Growing asset base improves liquidity and lowers costs PL8 ASSET BASE UP >100% SINCE IPO PL8 - Growth in asset base since IPO 700.0 600.0 Pre-tax Net Tangible Assets ($ million) 500.0 400.0 300.0 200.0 100.0 - 5-May-17 30-Jun-21 30-Jun-22 30-Jun-23 Net Tangible Assets Source: Plato, Automic, ASX Com
Slide 13: Market Update
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Slide 14: Retirees are different
Retirees are different • Retirees are different to accumulators • They need to live off the income from their investments: • Investment income replaces regular salary • They are taxed differently: • The first $1.9m in pension phase superannuation is tax free whereas accumulation superannuation is ta
Slide 15: Pension phase super tax rates are different
Pension phase super tax rates are different (what about that super cap?) $1.60 $1.40 $1.20 $1.00 $0.80 $0.60 $0.40 $0.20 $- Pension/Tax Exempt (0%) Super (15%) Super (30%) Individual over $120k Top Individual (47%)* Fully Franked Dividend Long Term Capital Gain Short Term Capital Gain Unfranked Inco
Slide 16: Interest rates are rising…
Interest rates are rising… Nominal earnings on $1m $180,000 Earnings Term Deposits Earnings Bonds $160,000 $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $- …but what about inflation? Source : Plato, RBA updated to 31/7/2023 16
Slide 17: Safe assets now losing you money
Safe assets now losing you money Real after inflation earnings on $1m Real Earnings Term Deposits Real Earnings Bonds $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $- -$20,000 -$40,000 -$60,000 -$80,000 Inflation hit 7.8% in 2022, still 6% Source: Plato, RBA, 31 July 2023. 17
Slide 18: Results season August 2023 - Dividends
Results season August 2023 - Dividends Dividends Up but some retracement • Over $29bn in dividends have been declared, 21.2% less than last year. • Strong dividend increases: AUG 2023 CHANGE IN DIVIDENDS PCP • IAG (80%), QBE Insurance (56%), Suncorp (59%), Commonwealth Bank Average Median (14%) and
Slide 19: Reporting Season Analysis
Reporting Season Analysis BHP Group • FY23 NPAT of US$13.4b down 37% vs pcp, in line with market expectations. • Dividend declared was US80c, 54% lower than last year which equates to an annual gross dividend yield of 8.6%. Payout ratio is 59%. • Oz Minerals takeover completed. Increases BHP’s expos
Slide 20: Reporting Season Analysis
Reporting Season Analysis CBA • Good result, FY23 Cash NPAT of $10,164m, up 6% from PCP but down 3% vs 1H given peak in margins. • Interim Dividend 240c vs 210c last year, up 14%. Equates to 6.5% annual gross yield. • Payout Ratio 74% of FY23 Earnings • 2H Net Interest Margin 2.05% around market exp
Slide 21: Reporting Season Analysis
Reporting Season Analysis JB Hi-fi • FY23 sales up 4.3% (up 35.7% vs pre-Covid), EPS up 0.1% (up 120.7% vs pre-Covid) but 4% above expectations. • Final Dividend 115c vs 153c last year (25% reduction). Equates to 9.6% annual gross yield. 65% payout ratio. • July LFL sales slowed from the elevated le
Slide 22: Dividend cut risk rising but still within normal range
Dividend cut risk rising but still within normal range Average % chance of dividend cuts for Australian market Div Cut Probability - Australia 31 Dec 2001 - 28 Aug 2023 50% 45% 40% 35% 30% Long term average 25% 20% 15% 10% 5% 0% 200112 200212 200312 200412 200512 200612 200712 200812 200912 201012 2
Slide 23: The income summary
The income summary Bad news: Interest rates are rising quickly • Rising interest rates will challenge asset prices but “safe assets” face negative real returns Good news: Dividends are still strong – Plato dividend cut model still fairly benign – Balance sheets are strong – Active management critica
Slide 24: Questions
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