Mirrabooka Investments Ltd · ASX:MIR
Mirrabooka Investments — Shareholder Meeting (September 2008)
32 slides from Mirrabooka Investments's shareholder meeting presentation, Sep 25, 2008
Slide 1: 2008 Annual General Meeting Chairman's Presentation
For personal use only 25 September 2008 The Manager Company Announcements Office Australian Securities Exchange Limited Exchange Centre Level 4 20 Bridge Street Sydney NSW 2000 Electronic Lodgement Mirrabooka Investments Limited 2008 Annual General Meeting Chairman’s Presentation Dear Sir or Madam M
Slide 2: Annual General Meeting 25 September 2008
For personal use only Annual General Meeting 25 September 2008
Slide 3: In the falling market large cap stocks outperformed small and mid cap
In the falling market large cap stocks outperformed the small For personal use only and mid cap sectors – however no sector has been spared 12.0% 8.0% 4.0% 0.0% -4.0% -8.0% -12.0% -16.0% -20.0% -24.0% -28.0% -32.0% N Ja Ju Se M M Ju Se ov ar ay n- l-0 p- l-0 p- -0 - -0 08 08 07 08 7 8 7 8 Small Cap
Slide 4: The sub prime credit crunch has severely impacted companies
The sub prime credit crunch has severely For personal use only impacted companies over the past year limited access to debt cost of debt has increased substantially high leverage/complex structures have been heavily penalised investor sentiment - greater predisposition to large cap stocks reparation
Slide 5: Continued demand for resources and energy from emerging economies
Whilst continued demand for resources and For personal use only energy from emerging economies provided some support for these sectors rising share prices of small/mid cap resources/energy companies companies servicing these sectors also enjoying strong demand
Slide 6: Outside these sectors earnings pressure was evident
However outside these sectors earnings For personal use only pressure was evident rising input costs impacting margins high interest rates slowing economic growth and falling consumer spending
Slide 7: Operating Profit was down on reduced dividends received
Operating Profit was down as a result of reduced For personal use only dividends received as a result of higher cash levels and lower contribution of trading portfolio $9.9m Major Changes in 10 Operating Profit 9 $0.7m less in $8.3m dividends 8 $ million Trading & options 7 income was negative $0.1m
Slide 8: Reported Profit was up substantially on higher realised gains
However, Reported Profit was up substantially as For personal use only a result of a higher level of realised gains 30 Major Changes in $29.1m Reported Profit 25 $24.5m $6.2m increase in net 20 realised gains $ million 15 Operating Profit down $1.6m 10 $9.9m 5 $8.3m 0 2007 2008 Reported Reported Pro
Slide 9: Earnings and Dividends Per Share
Earnings and Dividends Per Share – final dividend sourced For personal use only from profits from sale of investments. This allowed us to distribute LIC capital gain credits 30 25 Cents per share 20 15 10 5 0 2003 2004 2005 2006 2007 2008 Financial year Net operating profit per share Realised gains
Slide 10: Benefit of LIC Capital Gains
Benefit of LIC Capital Gains For personal use only Final Dividend fully franked: 6.5 cents per share Sourced from pre tax capital gains: 9.3 cents per share Shareholders entitled to tax deduction of 50% of 9.3 cents: 4.65 cents per share At 45% tax rate, a shareholder has a tax saving of: 2.09 cents
Slide 11: Top Contributors to the Portfolio Performance
Top 5 Contributors to the Portfolio Performance For personal use only for year to 30 June 2008 $m % COMPANY change change Incitec Pivot 12.8 95.4% Origin Energy 4.0 58.9% Queensland Gas 3.4 85.8% Oil Search 2.9 61.8% Nufarm 2.1 18.1%
Slide 12: Largest Disposals - because of takeovers
Largest Disposals - (1/7/07 to 30/6/08) For personal use only because of takeovers COMPANY $m Dyno Nobel (take over by Incitec Pivot) 5.3 Alinta (take over by a consortium of interests) 5.3 Smorgon Steel (take over by OneSteel) 3.3 Southern Cross Broadcasting (take over by Macquarie Media Group and
Slide 13: Largest Disposals - other
Largest 5 Disposals - (1/7/07 to 30/6/08) For personal use only - other COMPANY $m Incitec Pivot 26.1 McMillan Shakespeare 5.2 Transpacific Industries 4.2 BOOM Logistics 3.9 Transurban 3.9
Slide 14: Largest Acquisitions
For personal use only Largest 5 Acquisitions - (1/7/07-30/6/08) COMPANY $m Tox Free Solutions 4.8 Coca-Cola Amatil 4.4 Perpetual 3.0 James Hardie Industries N.V. 2.7 Becton Property Group 2.6
Slide 15: Mirrabooka raised additional capital with a 1 for 7 Rights Issue
Mirrabooka raised additional capital in the early For personal use only part of the calendar year in what proved to be difficult market conditions 1 for 7 Rights Issue issue raised $12.6 million 33% of shareholders participated representing 39% of company’s capital market volatility greater than exp
Slide 16: Very strong cash position following rights issue and disposals
Following the rights issue and disposals the For personal use only $m Company has a very strong cash position 50 45 40 35 30 25 20 15 10 5 0 Jun05 Sep05 Dec05 Mar06 Jun06 Sep06 Dec06 Mar07 Jun07 Sep07 Dec07 Mar08 Jun08
Slide 17: Portfolio Management Performance - % Per Year
Portfolio Management Performance - % Per Year For personal use only 20% 16.3% 14.5% 15% 12.2% 10.7% 10% 5% 0% 1 year 5 years Since inception -5% -10% -15% -15.2% -20% -17.6% Annualised to 31 August 2008 MIR net asset per share growth plus dividends S&P/ASX Mid Cap 50 and Small Ordinaries Accumulatio
Slide 18: Portfolio Management Performance - including franking credits
Portfolio Management Performance - % Per Year For personal use only adding the benefits of the distributed franking credits 20% 16.5% 17.3% 14.1% 13.6% 15% 10% 5% 0% 1 year 5 years 8 years -5% -10% -15% -13.4% -16.8% -20% Annualised to 31 August 2008 MIR Net Asset Growth plus Dividends - Gross Retur
Slide 19: Relative Portfolio Performance has been strong
Relative Portfolio Performance has been strong For personal use only through the recent market turbulence Month to Date Year to Date -8.3% -9.6% -4.5% -1.9% 3.8% 7.7%
Slide 20: Share Price trading close to Net Asset Backing
For personal use only A ug -16% -12% -8% -4% 0% 4% 8% -0 O 4 ct -0 D 4 ec -0 Fe 4 b- 0 A 5 pr -0 Ju 5 n- 05 A ug -0 O 5 ct -0 D 5 ec -0 Fe 5 b- 0 A 6 pr -0 Ju 6 n- 06 A ug -0 O 6 ct -0 D 6 ec -0 Fe 6 b- 0 A 7 pr -0 Ju 7 the end of August n- 07 A ug -0 O 7 ct -0 D 7 ec -0 Fe 7 b- 0 A 8 pr -0 Ju 8 n-
Slide 21: Top Investments - August 2008
Top 20 Investments - 31 August 2008 For personal use only $m 1 Nufarm 14.1 2 Bradken 8.3 3 Campbell Brothers 8.1 4 * Oil Search 6.5 5 Origin Energy 6.5 6 Healthscope 6.3 7 Australian Infrastructure Fund 5.6 8 Tox Free Solutions 5.3 9 IRESS Market Technology 5.1 10 ASG Group 4.8 * Indicates that opti
Slide 22: Top Investments - August 2008 con't
Top 20 Investments - 31 August 2008 con’t For personal use only $m 11 * Queensland Gas Company 4.8 12 Coca-Cola Amatil 4.7 13 Iluka Resources 4.7 14 Fleetwood Corporation 4.6 15 Tassal Group 4.5 16 APN News & Media 4.4 17 Peet 4.4 18 Toll Holdings 4.4 19 West Australian Newspapers Holdings 4.3 20 *
Slide 23: Major Purchases Since June 2008
Major Purchases Since 30 June 2008 For personal use only Existing Stocks: West Australian News – printer and publisher of the West Australian Newspaper PanAust – see upcoming slides Mermaid Marine – see upcoming slides Iluka Resources – see upcoming slides IRESS Market Technology – designs, develops
Slide 24: Major Purchases Since June 2008 con't
Major Purchases Since 30 June 2008 For personal use only con’t. New Stocks : Seek – leading provider of online employment classifieds in Australia and New Zealand
Slide 25: PanAust
PanAust For personal use only Has developed copper/gold project in Laos on time and on budget – now producing Plan to increase production over next 3 years Utilising hydro power (Laos is large exporter of hydro energy) Large exploration area in Laos – already have another development opportunity Dev
Slide 26: Mermaid Marine
Mermaid Marine For personal use only Provider of vessels (boats) to the offshore oil and gas industry in WA Also operate supply bases that service the industry Growth driven by continued development of oil and gas fields offshore WA Global demand for energy is driving sector
Slide 27: Iluka
Iluka For personal use only Producer of mineral sands (WA, Murray Basin in Victoria, and new development in the Eucla Basin, SA) These products are used in paint (titanium dioxide) and ceramics (zircon) Global supply is dominated by a few companies (they largest producer of Zircon in the world and t
Slide 28: Major Sales Since June 2008
Major Sales Since 30 June 2008 For personal use only Disposed of: Cabcharge Reduced holding in: Origin Energy Computershare Oil Search Arrow Energy Molopo Australia
Slide 29: Outlook - Positives
Outlook For personal use only Positives Recent profit results generally in line with expectations Ongoing resources demand from China still likely to underpin the Australian economy Ongoing reduction in interest rates expected Unemployment levels at relatively low levels
Slide 30: Outlook (continued) - Concerns
Outlook (continued) For personal use only Concerns Credit market difficulties severely impacting growth expectations in US, Europe and Japan Cost pressures impacting margins Some sectors of the Australian economy facing difficult demand conditions Outlook comments from companies outside resources/en
Slide 31: Going Forward
Going Forward For personal use only The pressure on the global financial system is a twice a century event We expect markets to remain cautious and it may be 2-3 years before a new uptrend begins Mirrabooka has an extremely strong cash position Current valuations are providing some selected buying o
Slide 32: Annual General Meeting September 2008
For personal use only Annual General Meeting 25 September 2008
Mirrabooka Investments — Shareholder Meeting (September 2008) on 6ix