Flagship Investments Ltd. · ASX:FSI
Flagship Investments — Investor Presentation (June 2020)
22 slides from Flagship Investments's investor presentation, Jun 4, 2020
Slide 1: Retail Presentation as at 3 June 2020
Flagship Investments Limited ABN 99 080 135 913 Level 12 For personal use only Corporate Centre One 2 Corporate Court BUNDALL QLD 4217 4 June 2020 PO Box 7536 GCMC BUNDALL QLD 9726 The Manager Telephone 1800 352 474 Company Announcements Office Facsimile 07 5574 1457 ASX Ltd Exchange Centre www.flag
Slide 2: FSI and ECP Update
For personal use only Presentation | ECP Asset Management Redefining Active Investing FSI AND ECP UPDATE Video Conference: 4 June 2020 At ECP, we think the only way to grow wealth that is resilient and sustainable, is to invest money in a careful, considered and committed way. 1
Slide 3: We are associated with three Listed Investment Companies
Redefining Active Investing We are associated with three Listed Investment For personal use only Companies Emerging Growth Limited
Slide 4: ECP Asset Management Business Evolution
For personal use only Redefining Active Investing ECP Asset Management Business Evolution 1) One new institutional mandate in CY19 & two further applications for current mandates in CY19; and 2) Q1CY20 further application by current client, currently awaiting a transition of a further $80m, due prio
Slide 5: Performance of market cap segments since 2001
Redefining Active Investing Performance of market cap segments since 2001 For personal use only Year-end All Ords Small cap Mid cap Large cap Size Range $0-$133bn $0-$1bn $1bn-$8bn $8bn-$133bn Dec-01 10% 2% 16% 11% Dec-02 -8% -9% 5% -10% • Small and mid caps: Dec-03 16% 32% 23% 13% Dec-04 28% 27% 43
Slide 6: Successful active management requires liquidity
Redefining Active Investing Successful active management requires liquidity For personal use only but an information advantage is a necessity • The information advantage obtained by conducting forensic research of high quality growth businesses can produce superior investment performance over the lo
Slide 7: Fundamental Research
For personal use only Redefining Active Investing Fundamental Research There’s no substitute for due diligence. Through in-depth, detailed analysis, we come to a conclusion as to whether a business is a quality franchise, has a sustainable competitive advantage, is operating in a favourable industry
Slide 8: Investment Team
For personal use only Redefining Active Investing Investment Team Dr Manny Pohl AM Andrew Dale CA Damon Callaghan CFA Co-Founded ECP in 2012 Joined ECP in 2014 Joined ECP in 2017 Joined Industry in 1989 Joined Industry in 2001 Joined Industry in 2011 Jared Pohl MBA Sam Byrnes CFA Jason Pohl MBA Co-F
Slide 9: Our Investment Philosophy
For personal use only Redefining Active Investing Our Investment Philosophy The economics of a business drives long-term investment returns. Investing in high quality, growth businesses, that have the ability to generate predictable, above average economic returns will produce superior investment pe
Slide 10: Market Inefficiencies We Exploit
For personal use only Redefining Active Investing Market Inefficiencies We Exploit QUALITY GROWTH Growth Anomaly On average the market undervalues extremely high-quality, capital efficient, organic growth businesses. SUSTAINABLE OPPORTUNITY Time Arbitrage The market tends to overemphasize temporary
Slide 11: How are we handling Covid-19?
For personal use only Redefining Active Investing How are we handling Covid-19? We have continued to apply our investment process diligently. Key points to note: 1) We did not decide to reposition the portfolio to Covid unaffected companies. Our investment process was naturally overweight companies
Slide 12: Portfolio Performance
Redefining Active Investing Portfolio Performance For personal use only Historical Performance to 31 May 2020 Product 3 Month 6 Month 1 Years 3 Years 5 Years ^ Inception FSI 0.22 -3.66 8.21 14.96 11.44 12.32 All Ords Accumulation -9.04 -14.12 -6.21 4.72 4.56 7.85 Index Alpha 9.26 10.46 14.42 10.24 6
Slide 13: Talking Stocks: Top Five Holdings
Redefining Active Investing Talking Stocks: Top Five Holdings For personal use only Emerging Growth Limited FLAGSHIP Weight % ECP Weight % Rio Tinto 6.69 Seek 5.73 CBA 6.32 Domino’s 5.70 Macquarie Group 5.93 Altium 5.68 Domino’s 5.85 Afterpay 5.59 Carsales.Com 4.82 HUB24 4.41 (31 May 2020) 12
Slide 14: Name Changes to Portfolio (YTD)
Redefining Active Investing Name Changes to Portfolio (YTD) For personal use only FSI (Allcap) ECP (Ex50) Sold Fisher & Paykel (FPH) Fisher & Paykel (FPH) Pushpay (PPH) Additions IDP Education (IEL) IDP Education (IEL) Lifestyle Communities (LIC) Audinate Group (AD8)
Slide 15: Portfolio Decision Sell - IRR below threshold
For personal use only Redefining Active Investing Portfolio Decision Sell - IRR below threshold FPH AU COVID Thesis - FPH will maintain and grow market share in their How has COVID impacted the investment thesis? core products (ventilators and masks) and will increase ● COVID has had a positive impa
Slide 16: Portfolio Decision Sell - Thesis Break
Redefining Active Investing Portfolio Decision Sell - Thesis Break For personal use only RWC AU Thesis - Market leading position in ‘Behind the Wall’ plumbing What changed about our thesis? supplies, particularly their SharkBite products in the Push to ● Acquisition of John Guest Holdings Connect (P
Slide 17: IDP Education
For personal use only IEL IDP EDUCATION Redefining Active Investing HYPOTHESIS IDP is building a global student placement platform that is the largest and best place for students to find a place to study internationally, benefiting from the rising wealth in Asia. IDP has significant runway to reach
Slide 18: FSI and ECP Metrics (31 May 2020)
Redefining Active Investing FSI and ECP Metrics (31 May 2020) For personal use only FSI (All Cap) ECP(EX 50) Share Price 176 cents 103 cents NTA 209.3 cents 137.5 cents Discount 15.9% 25.1% Dividend Yield 4.8% 3.9% 17
Slide 19: FSI Historical Dividends
Redefining Active Investing FSI Historical Dividends For personal use only Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Dividend 8.50 8.50 6.0 6.5 6.75* 7.25 7.25 7.25 7.75 8.25 4.25 Chg % 0.0 0.0 -30.0 8.3 3.9 11.1 0.0 0.0 6.9 6.5 CPI 3.10 3.60 1.20 2.40 3.00 1.5 1.0 1.9 2.1 1.6 10.0
Slide 20: ECP Historical Dividends
Redefining Active Investing ECP Historical Dividends Emerging Growth Limited For personal use only Year 2015 2016 2017 2018 2019 2020 Dividend 1.00 2.5 2.5 3.25 3.75 1.75 Chg % 150.0 0.0 30.0 15.4 CPI 1.5 1.0 1.9 2.1 1.6 4 3 2 1 0 2015 2016 2017 2018 2019 2020 Interim Final Special 19
Slide 21: Bottom Up Total Return Expectations
For personal use only Redefining Active Investing Bottom Up Total Return Expectations Our bottom up fundamental drivers for the portfolio as at 31 April 2020 is as follows: Forecast IRR EPS Growth1 Income3 PE Expansion2 (% pa) (% pa) (% pa) (% pa) FSI (Allcap) 13.0% 13.6% 2.8% -3.5% ECP (ex50) 13.0%
Slide 22: Disclaimer
For personal use only Disclaimer This presentation is for general information purposes only and does not take into account the specific investment objectives, financial situation or particular needs of any specific reader. As such, before acting on any information contained in this presentation, rea
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