NAOS Ex-50 Opportunities Co. Ltd. · ASX:NAC
NAOS Ex-50 Opportunities — NAOS Asset Management — Non-Deal Roadshow (March 2017)
31 slides from NAOS Ex-50 Opportunities's roadshow presentation, March 2017
Slide 1: 2017 Half Year Investor Presentation
2017 HALF YEAR INVESTOR PRESENTATION
Slide 2: Agenda
AGENDA 1. INTRODUCTION 2. 3. PHILOSOPHY NAOS 4. NAOS 5. NAC: SHARE EMERGING ABSOLUTE PURCHASE PLAN OPPORTUNITIES OPPORTUNITIES COMPANY LIMITED COMPANY LIMITED (ASX: NCC) (ASX: NAC) 6. MARKET 7. 8. INVESTMENT SHAREHOLDER 9. INVESTOR 10. Q & A OUTLOOK/ CASE STUDY: GROWTH AND COMMUNICATIONS REVIEW MY N
Slide 3: NAOS – An Introduction
NAOS – AN INTRODUCTION NAOS PROVIDES INVESTORS WITH POSITIVE EXPOSURE TO NICHE MARKET SECTORS WHERE WE HAVE A CLEAR COMPETITIVE ADVANTAGE TO OUTPERFORM AND DELIVER VALUE FOR OUR SHAREHOLDERS OVER THE LONG TERM • THESE MARKET NICHES ARE OFTEN NOT THE CORE COMPETENCY OF MANY IN VESTORS • WE MANAGE TWO
Slide 4: NAOS Investment Philosophy
NAOS INVESTMENT PHILOSOPHY NAOS BELIEVE THAT LONG TERM INVESTMENT OPPORTUNITIES ARISE DUE TO MARKET INEFFICIENCIES THAT OCCUR FOR THE FOLLOWING REASONS: 1) SHORT TERMISM OF MARKET PARTICIPANTS I.E. 12 MONTHS OR LESS 2) LUMPINESS OF A COMPANY’S PROFITABILITY AND CASH GENERATION PROFIL E 3) BIAS TOWAR
Slide 5: NAOS Emerging Opportunities Company (ASX:NCC)
NAOS EMERGING OPPORTUNITIES COMPANY (ASX:NCC) Conviction Absolute Long Short Investing | Copyright 2014 NAOS Asset Management Limited 5
Slide 6: Month Review to 31/01/2017 – NCC
7 MONTH REVIEW TO 31/01/2017 NAOS Emerging Opportunities Company (ASX:NCC) Dividend Yield Gross Assets Shareholders NTA $1.38 Share Price $1.34 5.04% p.a. (7.20% $65,300,000 p.a. Gross Yield) 1,487 Portfolio Performance • BSA Limited (ASX: BSA) Two contracts with NBN Co. were secured, BSA announced
Slide 7: NCC Outperformance
PERFORMANCE NAOS Emerging Opportunities Company (ASX:NCC) $12,000 Gross Return of $10,000 Investment (Gross NTA) v Benchmark XSOAI $21,499 $24,000 NCC Outperformance $10,000 Gross Return of $10,000 $22,000 $10,348 $8,000 $20,000 Investment $6,000 $18,000 $15,022 $16,000 $4,000 $14,122 $13,884 $11,63
Slide 8: Competitive Advantage: NAOS Emerging Opportunities Company
COMPETITIVE ADVANTAGE: NAOS Emerging Opportunities Company Limited (ASX:NCC) DIRECTOR’S INTERESTS SINCE IPO NCC Concentrated Portfolio Structure 2,500,000 Consistent Fully Franked Dividend Stream Benchmark Unaware 1,958,246 AUM Limit to Maximise Performance 2,000,000 Can Hold +100% Cash 1,
Slide 9: Dividend Profile: NCC
DIVIDEND PROFILE: NAOS Emerging Opportunities Company (ASX:NCC) Historical Fully Franked Dividends, Cents per Share, Growth Rate 9% p.a.* $0.07 $0.0675 $0.0625 $0.06 $0.0575 $0.05 $0.04 Dividend $0.0350 $0.03 $0.0250 Interim $0.02 $0.01 $0.00 FY13 Maiden FY14 FY15 FY16 1H FY17 *Assuming annualised d
Slide 10: NCC Current Investments
NCC CURRENT INVESTMENTS Enero Group Limited (ASX: EGG) • Enero has been a long term value play, focusing on business rationalisation and increasing EBITDA margins to that of other listed advertising businesses. • Market capitalisation of $88 million with net cash balance of ~ $34 million and ~$22 mi
Slide 11: Responsible Investment: Environmental & Social Governance (ESG)
RESPONSIBLE INVESTMENT: ENVIRONMENTAL & SOCIAL GOVERNANCE (ESG) “We invest and exercise our ownership rights responsibly, because the fund’s investments are about “Magellan revealed they are targeting the future and belong to our future generations. We potentially $US30 billion in new aim to contrib
Slide 12: NAOS Absolute Opportunities Company (ASX:NAC)
NAOS ABSOLUTE OPPORTUNITIES COMPANY (ASX:NAC) Conviction Absolute Long Short Investing | Copyright 2014 NAOS Absolute Opportunities Company 12
Slide 13: Month Review to 31/01/2017 – NAC
7 MONTH REVIEW TO 31/01/2017 NAOS Absolute Opportunities Company (ASX:NAC) Dividend Yield Gross Assets NTA (Pre Tax) Share Price 4.17% p.a. Shareholders $49,290,000 $1.15 $1.14 (5.95% p.a. 701 Gross Yield) SPP Opportunity All NAC Options Oversubscribed $15,000 per fully exercised Placement eligible
Slide 14: NAC Outperformance
PERFORMANCE NAOS Absolute Opportunities Company (ASX:NAC) Gross Return of $10,000 Investment (Gross NTA) v Benchmark & XAOAI $15,692 $16,000 Gross Return of $10,000 $14,850 NAC Outperformance $4,594 $4,000 $14,000 Investment $12,617 $2,000 $11,769 $10,968 $11,098 $11,412 $12,000 $10,462 $10,564 $0 $
Slide 15: Competitive Advantage: NAOS Absolute Opportunities Company
COMPETITIVE ADVANTAGE: NAOS Absolute Opportunities Company Limited (ASX:NAC) DIRECTOR’S INTERESTS SINCE IPO Focus on Domestic ASX Closed Ended Fund Listed Mid Cap Benefits Opportunities 6,000,000 Can Hold Shorting +100% Ability Cash 4,890,775 5,000,000 Fully Absolute Franked Return Ability to 4,000,
Slide 16: Dividend Profile: NAC
DIVIDEND PROFILE: NAOS Absolute Opportunities Company (ASX:NAC) Historical Fully Franked Dividends, Cents per Share, Growth Rate 8% p.a.* $0.05 $0.0475 $0.05 $0.04 $0.04 $0.03 $0.0250 $0.03 $0.0200 $0.02 $0.02 Interim $0.01 $0.01 $0.00 FY15 Maiden FY16 1H FY17 *Assuming annualised dividend for FY15
Slide 17: NAC Current Investment: Elders Limited
NAC CURRENT INVESTMENT ELDERS LIMITED (ASX:ELD) • Service provider to the agriculture industry for 175 years • Checkered history of poor capital allocation and management • Turnaround in place since 2014 • Targeting 20% return on capital and a minimum of $60m in Earnings Before Interest & Tax (EBIT)
Slide 18: Opportunity?
INVESTMENT IDEAS FOR THE YEAR AHEAD NAC: 6 MONTH PRICE CHANGES % i-Sentia (ASX:ISD) -46% Aconex (ASX:ACX) -57% TPG Telecom (ASX:TPM) -47% Sirtex (ASX:SRX) -47% Blackmores (ASX:BKL) -36% OPPORTUNITY? Netcomm Wireless (ASX:NTC) -42% Adairs (ASX:ADH) -47% Vita Group (ASX:VTG) -46% Virtus Health (ASX:VR
Slide 19: NAC Share Purchase Plan (SPP)
NAOS ABSOLUTE OPPORTUNITIES COMPANY (ASX: NAC) Share Purchase Plan (SPP) EVENT DATE No brokerage, Record Date 7.00 pm commissions or (Sydney time) other transaction Shareholders 15 February 2017 costs entitled to fully Issue price is SPP offer opens 9.00 am franked dividend $1.12 per new 2.5 cents,
Slide 20: Market Review/Outlook
MARKET REVIEW/OUTLOOK Conviction Absolute Long Short Investing | Copyright 2014 NAOS Absolute Opportunities Company 20
Slide 21: Market Review
MARKET REVIEW Even in flat markets there is always significant dispersion between returns of certain stocks, even those of larger market capitalisations. This can provide opportunities, as highlighted by the following which have been significant underperformers for a number of years: Woolworths: 1-Y
Slide 22: Market Outlook: Key Risk Indicator (High Yield Bond ETF)
MARKET OUTLOOK: KEY RISK INDICATOR (HIGH YIELD BOND ETF) Concentrated Long Term Investing | Copyright 2017 NAOS Asset Management Limited 22
Slide 23: Market Outlook: Key Risk Indicator (High Yield Corporate Spreads)
MARKET OUTLOOK: KEY RISK INDICATOR (HIGH YIELD CORPORATE SPREADS) COST OF DEBT FOR CORPORATES COMPARED TO GOVERNMENT BOND YIELDS Concentrated Long Term Investing | Copyright 2017 NAOS Asset Management Limited 23
Slide 24: Market Outlook: Industry Rotation Over the Past 6 Months
MARKET OUTLOOK: INDUSTRY ROTATION OVER THE PAST 6-MONTHS Concentrated Long Term Investing | Copyright 2017 NAOS Asset Management Limited 24
Slide 25: Investment Case Study: My Net Fone (ASX:MNF)
INVESTMENT CASE STUDY: MY NET FONE (ASX:MNF) Invested due to the consistent strategy of management since first meeting, earnings potential through new service offerings, excellent cash flow conversion and pristine balance sheet. • Three year annualised return inc. dividends +33.51% p.a. • EBITDA FY2
Slide 26: Market Outlook: NAOS Investment Philosophy – Focus on the Controllable
MARKET OUTLOOK: NAOS INVESTMENT PHILOSOPHY Companies valued based on todays Balance sheet flat earnings flexibility profile but not tomorrows growing earnings base Proven management Ability to drive teams with strong revenue and/or shareholder margin growth alignment Existing Core revenue streams co
Slide 27: Shareholder Growth and Marketing Activities
SHAREHOLDER GROWTH AND MARKETING ACTIVITIES Conviction Absolute Long Short Investing | Copyright 2014 NAOS Absolute Opportunities Company 27
Slide 28: Shareholder Growth and Marketing Activity
SHAREHOLDER GROWTH AND MARKETING ACTIVITY CEO Insights NAOS Roadshow Twitter Followers NAC Shareholders NCC Shareholders Distribution +35% for Attendees +45% for +80% YOY 768 +95% YOY 1,524 + 62% YOY the HY the HY 1,524 1,400 1,100 800 768 500 200 NCC Shareholders NAC Shareholders As at 22 February
Slide 29: Investor Awareness and Communications
INVESTOR AWARENESS AND COMMUNICATIONS CEO Insights, Quarterly Monthly The news and Twice yearly Weekly NAOS Shareholder Investment Report media section of National Newsletter, Conference Calls, & NTA email our website is Roadshow register subscribe via our subscribe via our updates, subscribe update
Slide 30: The NAOS Team and Directors
THE NAOS TEAM AND DIRECTORS Sebastian Evans Richard Preedy Ben Rundle Chief Investment Officer/ Chief Financial & Portfolio Manager Managing Director Operating Officer Sebastian Evans Warwick David Rickards Director Evans Independent Chairman Director Julie Coventry Jeffrey Kim Julia Compliance Offi
Slide 31: Disclaimer
DISCLAIMER This presentation has been prepared by NAOS Asset Management Limited (ABN 23 107 624 126, AFSL 273529, “NAML”). The purpose of this presentation is to provide information only; any other use other than informational purposes is disclaimed. The information provided is given in summary form
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