Mirrabooka Investments Ltd · ASX:MIR
Mirrabooka Investments — Investor Presentation (March 2019)
33 slides from Mirrabooka Investments's investor presentation, Mar 19, 2019
Slide 1: Information Meetings – Presentation
19 March 2019 For personal use only The Manager ASX Market Announcements Australian Securities Exchange Exchange Centre Level 4 20 Bridge Street Sydney NSW 2000 Electronic Announcement Mirrabooka Investments Limited Information Meetings – Presentation Dear Sir / Madam Please find attached the presen
Slide 2: Shareholders Meetings March 2019
For personal use only Shareholders Meetings March 2019
Slide 3: Disclaimer
For personal use only Disclaimer Mirrabooka Investments Limited and Australian Investment Company Services Limited (AFSL: 303209), its related entities and each of their respective directors, officers and agents (together the Disclosers) have prepared the information contained in these materials in
Slide 4: Our Investment Approach
For personal use only Our Investment Approach Shareholder Meetings March 2019
Slide 5: Mirrabooka's Investment Approach
For personal use only Mirrabooka’s Investment Approach Small and Mid Cap listed companies in Australia and New Zealand Shareholder Meetings March 2019
Slide 6: Management of the Portfolio
For personal use only Management of the Portfolio Shareholder Meetings March 2019
Slide 7: Our Results
For personal use only Our Results Shareholder Meetings March 2019
Slide 8: Portfolio Performance – Per annum returns to February
For personal use only Portfolio Performance – Per annum returns to 28 February 2019 Shareholder Meetings March 2019
Slide 9: Half Year Financial Summary – December 2018
For personal use only Half Year Financial Summary – 31 December 2018 Shareholder Meetings March 2019
Slide 10: Special dividend
For personal use only Special dividend 10 cent special dividend. Sourced from capital gains on which the Company has paid tax. Board felt it was prudent to pay with the interim result given the policy uncertainty surrounding the future refundability of franking credits. Following payment, Mi
Slide 11: Ending refundability of franking credits – we continue to act on shareholders behalf
For personal use only Ending refundability of franking credits – we continue to act on shareholders behalf • Mirrabooka has provided a template letter on its website for shareholders to write to their parliamentary representatives. • We have engaged through various industry groups to lobby on your b
Slide 12: Shareholder survey refundability of franking credits – your response
For personal use only Shareholder survey refundability of franking credits – your response A strong response with 463 replies received. 90% of respondents negatively impacted and dependent on franking credit refunds. 88% retired or approaching retirement. Shareholder Meetings March 2019
Slide 13: Cumulative Share Price Return Including Franking Credits against the benchmark
For personal use only Cumulative Share Price Return Including Franking Credits against the benchmark – 10 Years to 28 February 2019 Shareholder Meetings March 2019
Slide 14: Dividends are a significant component of shareholder returns
For personal use only Dividends are a significant component of shareholder returns – 10 Years to 28 February 2019 * Assumes an investor can take full advantage of franking credits. Shareholder Meetings March 2019
Slide 15: Share Price at a significant Premium to Net Asset Backing
For personal use only Share Price at a significant Premium to Net Asset Backing Shareholder Meetings March 2019
Slide 16: Market Settings and the Portfolio
For personal use only Market Settings and the Portfolio Shareholder Meetings March 2019
Slide 17: Mid and small cap stocks have started to underperform the ASX 200
For personal use only After a period of outperformance mid and small cap stocks have started to underperform the ASX 200 recently – returns to 28 February 2019 Shareholder Meetings March 2019
Slide 18: Small and mid cap resources can outperform on sentiment but rarely sustain it
For personal use only Small and mid cap resources can outperform on market sentiment/rotation over the medium to term but rarely sustain this for the long term – returns to 28 February 2019 As a long term investor we remain underweight resource stocks Shareholder Meetings March 2019
Slide 19: In small and mid industrials elevated ratings are capping future returns
For personal use only In small and mid industrials elevated ratings are now capping future returns Small Industrials Ordinaries - Price Earnings Ratio (10 years) Mid Cap Industrials Price Earnings Ratio (10 years) Source: FactSet. Source: FactSet. Shareholder Meetings March 2019
Slide 20: Very highly rated growth stocks trading above the 15 year average
For personal use only Very highly rated growth stocks continue to be a feature of this part of the market – these are trading on valuations 39% above the 15 year average These stocks can be subject to sudden changes in sentiment as was experienced recently in December Times Source: FactSet, Goldman
Slide 21: High quality businesses back toward fair value in late 2018 but rebounded
For personal use only We began to see high quality businesses back toward fair value in late 2018 but they have rebounded strongly since.. Share price performance of a basket of high quality stocks that Mirrabooka has been buying $33m invested this Financial Year in: • James Hardie % • Atlas Arteria
Slide 22: This market rebound has seen us building cash strongly
For personal use only This market rebound has seen us building cash strongly in early 2019 Shareholder Meetings March 2019
Slide 23: Our Portfolio
For personal use only Our Portfolio Shareholder Meetings March 2019
Slide 24: Portfolio at February 2019 (Excluding Cash)
For personal use only Portfolio at 28 February 2019 (Excluding Cash) Diversification of the Portfolio Top 10 Holdings – 64 holdings in total Rank Company % of Portfolio 1 Mainfreight 4.5% 2 Lifestyle Communities 3.5% 3 Qube Holdings 3.5% 4 Alumina* 3.3% 5 Breville Group 2.9% 6 James Hardie Industrie
Slide 25: Portfolio at February 2019 (Excluding Cash) continued
For personal use only Portfolio at 28 February 2019 (Excluding Cash) continued Diversification of the Portfolio Next 10 Holdings – 64 holdings in total Rank Company % of Portfolio 11 Reece 2.5% 12 Webjet 2.5% 13 Reliance Worldwide Corporation 2.4% 14 Brickworks 2.4% 15 Freedom Foods Group 2.4% 16 Ca
Slide 26: New Holding – James Hardie Industries
For personal use only New Holding – James Hardie Industries What we like: Leadership position in a growing end market Self help drivers delivering growth above the market cycle Higher exposure to renovation market than new housing construction Cash generative business model Source: FactSet.
Slide 27: New Holding – Atlas Arteria
For personal use only New Holding – Atlas Arteria What we like: • Attractive toll road assets - Autoroutes Paris-Rhin-Rhone and Dulles Greenway in the US. • Very strong cash flow growth over the next 4 to 5 years. • Internalisation of management - reduction in base running cost and no performance fe
Slide 28: More recent activity has involved selling
For personal use only More recent activity has involved selling Valuations Takeovers Reduced conviction Shareholder Meetings March 2019
Slide 29: Moving Forward
For personal use only Moving Forward Shareholder Meetings March 2019
Slide 30: Recent Reporting Season Summary – Small and Mid Caps
For personal use only Recent Reporting Season Summary – Small and Mid Caps Generally reasonable to good results for Mirrabooka, with the usual mixed fortunes of the mid and small cap market: after elevated M&A activity in 2018, our holdings have become more focused on improving existing operations
Slide 31: Closing Comments
For personal use only Closing Comments • Small and midcap shares have enjoyed good earnings growth in the past decade since the GFC. • Valuation re-rating has also been a significant driver of returns. • Future performance from smaller companies likely to be driven mostly by earnings growth. • Weak
Slide 32: Closing Comments (continued)
For personal use only Closing Comments (continued) • We are extra vigilant in our process – quality, before growth and value. • Monitoring for deteriorating prospects or extreme valuations in our portfolio - stocks in portfolio down to 64 from consistently greater than 80. • Patiently waiting for mo
Slide 33: Mirrabooka Investments Limited
* MIRRABOOKA * Investments Limited
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