Australian Foundation Investment Co. Ltd. · ASX:AFI
Australian Foundation Investment — Investor Presentation (May 2010)
31 slides from Australian Foundation Investment's investor presentation, May 10, 2010
Slide 1: ASX cover letter: Shareholder Information Meetings
10 May 2010 For personal use only The Manager Company Announcements Office Australian Securities Exchange Limited Exchange Centre Level 4 20 Bridge Street Sydney NSW 2000 Electronic Lodgement Australian Foundation Investment Company Limited Shareholder Information Meetings Dear Sir or Madam Please f
Slide 2: Shareholder Meetings Tasmania May 2010
For personal use only Australian Foundation Investment Company Shareholder Meetings Tasmania May 2010
Slide 3: Disclaimer
Disclaimer For personal use only Australian Foundation Investment Company Limited, its related entities and each of its respective directors, officers and agents (together the Disclosers) have prepared the information contained in these materials in good faith. However, no warranty (express or impli
Slide 4: Directorship
Directorship For personal use only Appointment of Peter Williams as a Director on 3 February Previously Managing Director of Equity Trustees Over 40 years experience in the financial services industry Broad experience in investments, insurance and superannuation Appointment is part of the ongoing pr
Slide 5: Overview
For personal use only Overview
Slide 6: What Happened in the Market - All Ordinaries
What Happened in the Market - All Ordinaries For personal use only 5200 Price Index 5000 4800 4600 4400 4200 Value 4000 3800 3600 3400 Strong recovery but some uncertainty persists, market has tended to trade in a range more 3200 recently 3000 9 9 09 0 9 9 9 09 9 9 10 0 09 10 09 9 -0 -0 -1 l-0 -0 -0
Slide 7: All Ordinaries Price Index – A Long Term View
All Ordinaries Price Index – A Long Term View For personal use only
Slide 8: Key Investment Themes over the financial year to date
Key Investment Themes over the financial year For personal use only to date Ongoing participation in discounted placements/dividend reinvestment plans Added to holdings on our ‘watch list” during specific weakness Utilising attractive buy/write opportunities in the Trading Portfolio Now close to ful
Slide 9: Financial Results
For personal use only Financial Results
Slide 10: Financial Highlights - Half Year to December 2009
Financial Highlights - Half Year to 31 December 2009 For personal use only 2008 2009 Change Operating Profit After Tax $107.8m $94.1m -12.8% Reported Profit After Tax* $110.2m $93.6m -15.1% Operating Profit Per Share 11.1c 9.6c -13.7% Interim dividends per share 8.0c 8.0c - * This figure includes re
Slide 11: Total Income - Half Year to December 2009
Total Income - Half Year to 31 December 2009 For personal use only 2008 2009 Change Dividends and distributions $123.9m $90.5m -27.0% Revenue from Deposits $8.4m $2.3m -72.7% Other Revenue $1.7m $2.1m 20.9% Net losses/gains on Trading -$21.6m $12.4m Large +ve Portfolio Total Income $112.4m $107.3m -
Slide 12: Earnings Per Share and Dividends Per Share
Earnings Per Share and Dividends Per Share For personal use only 24.00 22.00 20.00 18.00 12.3 16.00 9.7 9.4 Cents per share 14.00 9.9 13.0 13.0 13.0 8.4 12.00 10.5 10.0 10.00 8.00 6.00 11.4 11.5 11.1 8.9 9.5 9.6 4.00 8.0 8.0 8.0 8.0 6.0 6.5 2.00 0.00 2005 2006 2007 2008 2009 2010 Financial year Earn
Slide 13: The Portfolio
For personal use only The Portfolio
Slide 14: Major Acquisitions in the Investment Portfolio
Major Acquisitions in the Investment Portfolio For personal use only (above $5m) Six Months to 31 December 2009 $m Hastings Diversified Utilities Fund 15.6 Oil Search 11.8 Amcor 11.0 Westpac Banking Group 9.9 Woodside Petroleum 9.8 Eastern Star Gas 9.2 Perpetual Limited 7.7 National Australia Bank 6
Slide 15: Major Sales in the Investment Portfolio
Major Sales in the Investment Portfolio (above $5m) For personal use only Six Months to 31 December 2009 $m Santos FUELS (a) 13.2 (a) Redeemed by the Company
Slide 16: Major Purchases in the Investment Portfolio
Major Purchases in the Investment Portfolio For personal use only (above $1m) from 1 January to 30 April 2010 $m Transurban Group 4.9 Trust Company 4.7 Healthscope 2.5 Nufarm 2.4 Australian Infrastructure Fund 2.3 CFS Retail Property 1.2 QBE Insurance Group 1.0
Slide 17: Major Sales in the Investment Portfolio
Major Sales in the Investment Portfolio (above For personal use only $1m) from 1 January to 30 April 2010 $m Nufarm (a) 7.9 (a) Sumitomo Tender Offer
Slide 18: AFIC’s Investment Structure – April 2010
AFIC’s Investment Structure – For personal use only 30 April 2010 Long Term Investment portfolio: A$4.8 billion Approximately 75 securities Focus on S&P/ASX 200 Trading portfolio: Up to 10% of total portfolio – currently A$57 million or 1.2% Short term positions Options writing strategies Fixed rate
Slide 19: Top Ordinary Securities – April 2010
Top 25 Ordinary Securities – 30 April 2010 For personal use only % of portfolio $million (excl. cash) * 1 BHP Billiton 580.9 11.9% 2 Westpac Banking Corporation 496.0 10.1% 3 Commonw ealth Bank of Australia 495.7 10.1% 4 Rio Tinto 257.7 5.3% * 5 National Australia Bank 246.0 5.0% 6 Wesfarmers (a) 22
Slide 20: Top Ordinary Securities – April 2010 con’t.
Top 25 Ordinary Securities – 30 April 2010 con’t. For personal use only % of portfolio $million (excl. cash) 11 Computershare 96.6 2.0% * 12 Santos 94.1 1.9% * 13 QBE Insurance Group 91.5 1.9% 14 Amcor 87.4 1.8% 15 Origin Energy 79.5 1.6% * 16 Oil Search 79.2 1.6% 17 Orica 66.4 1.4% * 18 AMP 64.7 1.
Slide 21: Top Ordinary Securities – April 2010 con’t.
Top 25 Ordinary Securities – 30 April 2010 con’t. For personal use only % of portfolio $million (excl. cash) * 21 Brambles 62.2 1.3% 22 Incitec Pivot 58.8 1.2% 23 Australian Infrastructure Fund 58.4 1.2% 24 Toll Holdings 58.1 1.2% * 25 Transurban Group 57.3 1.2% Total 3,986.3 As % of Total Portfolio
Slide 22: Annualised Portfolio Returns – to April 2010
Annualised Portfolio Returns –to 30 April 2010 For personal use only 35% 32.9% 32.4% 30% 25% 20% 15% 11.2% 10% 9.6% 8.4% 8.8% 5% 0% -0.7% -5% -3.8% 1 year return 3 year return 5 year return 10 year return -10% Net Asset per share growth plus dividends S&P/ASX 200 Accumulation Index
Slide 23: Share Price Relative to Net Asset Backing (before tax)
Share Price Relative to Net Asset Backing (before tax) For personal use only 20% Premium 15% 10% 5% 0% -5% -10% Discount -15% NTA at 30 April was $4.98 per share -20% Apr-00 Apr-02 Apr-04 Apr-06 Apr-08 Apr-10
Slide 24: The Market
For personal use only The Market
Slide 25: Outlook
Outlook For personal use only Australian economy benefiting from ongoing demand for resources and growth in Asia Reporting season has shown the benefit of investing in companies with quality franchises and management Equity markets have recovered to a point where valuations look reasonable – market
Slide 26: Prospective PE’s close to the long term average
For personal use only ! " ! ! " ! ! " ! ! " !# !# " !$ !$ " !% !% " !& !& " !' !' " ! ! " !! !! " " " " # # " $ $ " % % " & & " ' ' " " ! Prospective PE’s close to the long term average ! "
Slide 27: Expectations of strong earnings growth
Expectations of strong earnings growth For personal use only ( )* +, ) - + !" # $ %# & ' 12 3 %. 4 . %. . 4 %. 4 ( . %. . ! 4 ! %. . & ' ! & & & ' ' ' ! ! ! / / / / " " " " " 0 0 0 0
Slide 28: Gross Government debt as a % of GDP in developed countries
Gross Government debt as a % of GDP in developed For personal use only countries is forecast to remain high in 2011
Slide 29: Share Purchase Plan – Information Sent May 2010
Share Purchase Plan – Information Sent 3 May 2010 For personal use only Shareholders may acquire parcels of shares up to the value of either A$500, A$1,000, A$2,500, A$5,000, A$10,000 or A$15,000. Shares issued under the Plan will not be entitled to any upcoming final dividend - but will rank equall
Slide 30: Our New Website
For personal use only Our New Website
Slide 31: Shareholder Meetings
For personal use only Australian Foundation Investment Company Shareholder Meetings
Australian Foundation Investment Company — Investor Presentation (May 2010) on 6ix