Whitefield Industrials Limited · ASX:WHF
Whitefield Industrials — Investor Presentation (November 2007)
17 slides from Whitefield Industrials's investor presentation, Nov 19, 2007
Slide 1: Whitefield & Sylvastate Update Nov 2007
For personal use only Listed Investment Companies WHITEFIELD & SYLVASTATE UPDATE Nov 2007 WHITEFIELD 1 SYLVASTATE ▼▼ ▼▼
Slide 2: Whitefield
WHITEFIELD For personal use only Company: WHITEFIELD LTD Founded: 1923 Objective: 1. To generate an investment return which is in excess of the market return over the longer term. 2. To provide investors with a structurally efficient investment vehicle. Assets: Shares listed on the Australian Stock
Slide 3: Sylvastate
SYLVASTATE For personal use only Company: SYLVASTATE LTD Founded: 1924 Objective: 1. To generate a strong outright investment return and a growing stream of income over the long term. 2. To provide investors with a structurally efficient investment vehicle. Assets: Shares and securities listed on th
Slide 4: Investment Methodology
INVESTMENT METHODOLOGY For personal use only Research & Analysis •Style neutral, valuation and earnings focus; Defined and Structured process; In house analytical team; •No individual share trait such as growth, value or cash flow quality alone can predict the ultimate return to an investor. Instead
Slide 5: Investment Outcomes: Sylvastate
INVESTMENT OUTCOMES: SYLVASTATE For personal use only • Last 12 months a strong period of outright return for SYL (+25.81%) Primary return drivers in FY07 were: • Earnings growth was subject to some slowing: Alesco, CBA, CSL, Challenger, Seven Network, Toll Holdings, – Due largely to the timing of d
Slide 6: Investment Outcomes: Whitefield
INVESTMENT OUTCOMES: WHITEFIELD For personal use only • 5.37% return for 6 Months to 30 Sep As for SYL, WHF will be subject to an artificial skewing of income growth in the current year due to the timing of dividends earned and the date of investing new capital. • 0.98%pa outperformance vs All Indus
Slide 7: Economic Outlook
ECONOMIC OUTLOOK For personal use only • Global inflationary pressure continues to build. COMMODITY PRICES (CRB INDEX) •Commodity prices remain at extremely high levels. 360 •Labour markets remain tight. 340 320 •Chinese Export Prices are rising, driven by a rising cost of living, higher materials c
Slide 8: Economic Outlook: USA Long Term Credit Hangover
ECONOMIC OUTLOOK For personal use only USA: A long term credit hangover • Credit Crunch & US Housing an immediate issue, but one part of a larger problem • US (at a macro and micro level) has used cheap external debt to fund consumption and to fuel asset prices for many years • With debt levels high
Slide 9: Economic Outlook: China
ECONOMIC OUTLOOK For personal use only CHINA GDP CHINA: OPPORTUNITIES COME WITH RISKS 12 11.5 • Based on the pattern of expected materials consumption in developing economies, 11 China remains mid-way through the process of industrialisation. % growth pa 10.5 10 • GDP growth (+11.5%yoy) and fixed as
Slide 10: Economic Outlook: Australian Equities
ECONOMIC OUTLOOK For personal use only Macro thematics are likely to dominate the outlook for Australian Equities over 2007/8. • Either US-led credit concerns spill over into Europe and Asia and we move into a widespread easing of global growth which lessens inflationary pressures; • OR more probabl
Slide 11: Implications for Stocks and Sectors
IMPLICATIONS FOR STOCKS AND SECTORS For personal use only Short term risks persist, best relative value can be found in a small number of stocks with heavily undervalued future earnings and/or earnings streams benefiting from the expected macro environment 1. Consumer Staples Key Positions: WOW, MTS
Slide 12: Strategic Positions
STRATEGIC POSITIONS For personal use only WHITEFIELD & SYLVASTATE PORTFOLIOS : TOP ~20 HOLDINGS WHF SYL Woolworths Limited 7.89% 8.83% Commonwealth Bank of Aust Ltd 7.49% 8.73% National Australia Bank Limited 7.12% 8.12% Macquarie Bank Limited 6.67% 6.01% Brambles Industries Limited 5.76% 6.47% Fair
Slide 13: Pricing & Corporate Actions
PRICING & CORPORATE ACTIONS For personal use only WHITEFIELD LTD: PRICE AND NTA $5.70 $5.20 $4.70 Whitefield NTA (Oct – Post Dividend) $4.20 $3.70 NTA Before Tax $5.36 $3.20 $2.70 NTA After Tax $4.82 $2.20 $1.70 Share Purchase Plan running into Dec $1.20 20 1 20 3 20 1 20 3 20 1 20 3 1 93 95 97 99 0
Slide 14: Deferred Tax Per Share
DEFERRED TAX PER SHARE For personal use only DEFERRED TAX PER SHARE • Deferred tax as a percentage of asset backing has been consistently growing over the last decade. • Over short periods it will bounce up and down as a % of asset backing, based on the movement in the market. Over longer periods th
Slide 15: WHF/SYL Structural Areas of Value Accretion
WHF/SYL STRUCTURAL AREAS OF VALUE ACCRETION For personal use only WHF/SYL: POTENTIAL AREAS OF VALUE ACCRETION VALUE ACCRETION AT THE SHAREHOLDER LEVEL: EXAMPLE • Return of All Industrials 12.0% (Indicative 20 year avg) • Manager Outperformance +0% to 4.0% (Long Term range over 20 years) One-off bene
Slide 16: Investment Outcomes: Efficiency
INVESTMENT OUTCOMES: EFFICIENCY For personal use only IMPACT OF HIGH FEES ON INVESTMENT OUTCOMES • WHF & SYL are structurally efficient 700,000 (Cost after Tax: $170,000 out of $600,000) investment vehicles 600,000 500,000 400,000 An investment in Aust shares of $100,000 today will grow to $600,000
Slide 17: Corporate Achievements & Targets
CORPORATE ACHIEVEMENTS & TARGETS For personal use only INVESTMENT OUTCOMES • WHF and SYL have generated portfolio returns of 146% and 134% respectively over the last 4 ½ years • With the benefit of the deferred tax uplift, the effective pre-tax return at a shareholder level is moderately higher agai
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