BKI Investment Co. Ltd. · ASX:BKI
BKI Investment — Shareholder Meeting (November 2023)
35 slides from BKI Investment's shareholder meeting presentation, Nov 8, 2023
Slide 1: 2023 Annual General Meeting
For personal use only 2023 Annual General Meeting Wednesday 8th November 2023 Brickworks Design Studio 2 Barrack Street, Sydney, NSW 2000
Slide 2: Disclaimer
Disclaimer For personal use only This material has been prepared by Contact Asset Management on behalf of BKI Investment Company Limited. The information within this document is not intended to provide advice to investors or take into account an individual’s financial circumstances or investment obj
Slide 3: Agenda
Agenda For personal use only 1. Welcome 2. Introductions 3. Chairman’s Address 4. Investment Manager’s Report 5. Questions 6. Formal Business 3
Slide 4: Introductions: Non-Executive Directors
Introductions Non-Executive Directors For personal use only Robert Millner AO Chairman of the Board Chairman of the Investment Committee Member of the Remuneration and Nomination Committees David Hall AM Independent Non-Executive Director Chairman of the Audit Committee Member of the Remuneration Co
Slide 5: Introductions: Contact Asset Management
Introductions Contact Asset Management For personal use only Tom Millner Portfolio Manager Member of the Investment Committee Will Culbert Portfolio Manager Member of the Investment Committee Amanda Wong Company Secretary Rob Horne Investment Analyst MGI Sydney Assurance Services Kimmy Jongue Compan
Slide 6: Chairman's Address
For personal use only Chairman’s Address
Slide 7: Full Year Results
Full Year Results For the year ended 30 June 2023 For personal use only Result excluding special investment revenue 2023 2022 Movement Investment revenue – ordinary $71.1m $62.6m 14% Revenue from operating activities $72.8m $63.4m 15% Net operating profit after tax $65.1m $58.1m 12% Earnings per sha
Slide 8: Corporate Actions
Corporate Actions For personal use only Share Purchase Plan • Completed another successful Share Purchase Plan (SPP) during FY2023, raising $72.98 million. • Shareholders were given the opportunity to purchase shares up to a maximum amount of $30,000 at $1.66 per share. SPP Shares were eligible for
Slide 9: Years of Strong Dividends
20 Years of Strong Dividends BKI has a strong history of paying fully franked dividends and offering an attractive yield. For personal use only BKI Dividend History – 20 Years (2003 -2023) 5.00 FY2023 Ordinary 4.00 Dividends of 3.00 7.70cps was up 7% on 2.00 last year. 1.00 0.00 Ordinary Dividends p
Slide 10: Investor Focused
Investor Focused BKI has an investor focused approach. Higher fees don’t automatically translate into better returns. For personal use only History of BKI’s Management Expense Ratio (MER) Cumulative Share Price Returns We know that small fees have positive impacts on Assuming all dividends were rein
Slide 11: Quality Portfolio: BKI's Top Investments
Quality Portfolio For personal use only BKI’s Top 10 Investments 1 2 3 4 5 6 7 8 9 10 11
Slide 12: Investment Manager's Address
For personal use only Investment Manager’s Address
Slide 13: Portfolio Movements
Portfolio Movements Purchases/Disposals during FY2023 For personal use only Main Purchases Sales Add Exit 13
Slide 14: Performance - Total Shareholder Return (TSR)
Performance - Total Shareholder Return (TSR) As at 30 June 2023 For personal use only Total Shareholder Returns (TSR) 20.0% 16.0% 15.0% 14.3% 12.5% 11.6% 9.7% 10.0% 9.6% 10.0% 8.6% 8.8% 8.1% 5.0% 0.0% 1 Year 3 Yrs pa 5 Yrs pa 10 Yrs pa 15 Yrs pa BKI Total Shareholder Returns - 100% Franked S&P/ASX 3
Slide 15: Performance – Premium/Discount
Performance – Premium/Discount As at 30 June 2023 For personal use only $1.90 30% $1.80 $1.70 $1.60 20% $1.50 $1.40 $1.30 10% $1.20 $1.10 $1.00 0% $0.90 $0.80 $0.70 -10% $0.60 $0.50 $0.40 -20% Prem/Disc % Pre Tax NTA BKI Share Price Source: BKI, Contact Asset Management. 15
Slide 16: Portfolio Positioning
Portfolio Positioning As at 30 June 2023 For personal use only Stock % of Total Portfolio Stock % of Total Portfolio 1 BHP Group 8.54% 11 Sonic Healthcare 3.23% 2 Macquarie Group 8.37% 12 Telstra Group Limited 3.01% 3 Commonwealth Bank 6.62% 13 Rio Tinto Limited 2.43% 4 National Australia Bank 6.14%
Slide 17: Portfolio Positioning
Portfolio Positioning As at 30 June 2023 For personal use only Stock % of Total Portfolio Stock % of Total Portfolio 21 Aurizon Holdings 1.48% 31 Reece Limited 0.69% 22 Lindsay Australia 1.41% 32 Ampol Limited 0.59% 23 Goodman Group Limited 1.36% 33 Orora Limited 0.59% 24 Yancoal Australia 1.15% 34
Slide 18: Overweight / Underweight Positions
Overweight / Underweight Positions As at 30 June 2023 For personal use only Overweight Positions Underweight Positions Company Active Weight Company Active Weight APA Group 5.6% CSL Limited -5.6% Macquarie Group 5.5% Westpac Bank -3.1% New Hope Group 4.3% ANZ Banking Group -3.0% National Australia B
Slide 19: Sector Analysis – Active Weight and Exposure
Sector Analysis – Active Weight and Exposure As at 30 June 2023 For personal use only BKI Portfolio: Active Weight by Sector BKI Portfolio: Exposure by Sector Cash 8.3% Communication Services, Real Estate, 1.7% Materials, 14.2% 5.8% Energy 5.5% Health Care, 5.8% Utilities 4.6% Consumer Discretionary
Slide 20: FY2024 Update
For personal use only FY2024 Update As at 31 October 2023
Slide 21: Interest Rates, Bond Yields, Dividend Yields
Interest Rates, Bond Yields, Dividend Yields For personal use only 4.1% 4.4% 7.0% RBA Cash Rate 10-Year Aust Govt Bond Yield BKI Grossed-up Dividend Yield Source: RBA, Yieldbroker, Factset, BKI, Contact Asset Management. 21
Slide 22: Opportunities for Long-Term Investment
Opportunities for Long-Term Investment As at 31 October 2023 For personal use only 22
Slide 23: Areas of Focus - Resources
Areas of Focus - Resources As at 31 October 2023 For personal use only Resources – Materials and Energy Requirements Source: BP Energy Outlook 2023 23
Slide 24: Areas of Focus - Resources
Areas of Focus - Resources As at 31 October 2023 For personal use only Resources – Thermal Coal Supply/Demand Source: Commodity Insights 2023. BP Energy Outlook 2023 24
Slide 25: Areas of Focus - Migration
Areas of Focus - Migration As at 31 October 2023 For personal use only Property – Dwelling Completions and Targets Source: ABS, Oxford Economics September 2023. Mirvac living sector investor day 2023. 25
Slide 26: Areas of Focus - Superannuation
Areas of Focus - Superannuation As at 31 October 2023 For personal use only Superannuation – Asset Allocation into Equities Projected Superannuation Assets in Australia ($billion) Projected Superannuation Assets of Australian Listed Shares ($billion) $10,000 $2,500 $9,000 $8,000 $2,000 $7,000 $6,000
Slide 27: Portfolio Movements
Portfolio Movements As at 31 October 2023 For personal use only Main Purchases Sales Add Exit 27
Slide 28: Portfolio Positioning – Yield and Valuation
Portfolio Positioning – Yield and Valuation As at 31 October 2023 For personal use only 12% 12% Cheap / High Yield Cheap / High Yield Expensive / High Yield Expensive / High Yield NHC 10% 10% Energy YAL 8% 8% WDS HVN NAB Yield (FY2) Yield (FY2) 6% Banks 6% BHP SUN APA LAU Materials Infra / Utilities
Slide 29: Portfolio Positioning – Sector Analysis
Portfolio Positioning – Sector Analysis As at 31 October 2023 For personal use only BKI Portfolio: Active Weight by Sector BKI Portfolio: Exposure by Sector Health Care, 5.1% Real Estate, 1.8% Cash 8.0% Utilities, 5.9% Banks, 13.9% Energy 7.1% Utilities 4.4% Communication Consumer Discretionary 2.3%
Slide 30: Portfolio Positioning – Top
Portfolio Positioning – Top 25 As at 31 October 2023 For personal use only Stock % of Total Portfolio Stock % of Total Portfolio 1 BHP Group 9.6% 14 Harvey Norman Holdings 2.2% 2 Macquarie Group 7.9% 15 ARB Corporation 2.1% 3 Commonwealth Bank 7.3% 16 Ramsay HealthCare 2.1% 4 National Australia Bank
Slide 31: Performance
Performance As at 31 October 2023 For personal use only 15.0% 13.3% 10.1% 9.8% 9.6% 9.8% 9.6% 10.0% 8.9% 8.7% 7.5% 8.0% 7.0% 5.0% 3.9% 0.6% 0.0% 6 mths 1 Year 3 Yrs pa 5 Yrs pa 10 Yrs pa 15 Yrs pa Inception (p.a.) -5.0% -4.5% BKI Total Shareholder Returns including Franking Credits S&P/ASX 300 ACC I
Slide 32: FY2024 Update
FY2024 Update For personal use only Following the August/September reporting season, BKI expects to receive approximately $33.0m in Ordinary Revenue (excluding Special Dividend Income) for the first half of FY2024. This compares to BKI’s first half FY2023 Ordinary Revenue result of $35.8m. BKI also
Slide 33: Rating and Research Update
Rating and Research Update For personal use only “Recommended” - BKI has maintained its Lonsec Rating of Recommended “Recommended Plus” - BKI has an IIR Rating of Recommended Plus “Preferred Traditional LIC” - BKI is currently Ord Minnett‘s Preferred Traditional LIC Source: BKI, Contact Asset Manage
Slide 34: Questions
For personal use only 2023 Annual General Meeting Questions
Slide 35: Thank you
For personal use only 2023 Annual General Meeting Thank you
BKI Investment Company — Shareholder Meeting (November 2023) on 6ix