Spheria Emerging Cos. Ltd. · ASX:SEC
Spheria Emerging Cos — H1 2025 Earnings Presentation
20 slides from Spheria Emerging Cos's earnings presentation, Mar 6, 2025
Slide 1: Shareholder webinar reminder and presentation on half-year results
Spheria Emerging Companies Limited (Company) Level 25 Australia Square Tower 264 George Street Sydney NSW 2000 Telephone: 1300 010 311 Email: [email protected] ACN 621 402 588 6 March 2025 For personal use only By Electronic Lodgement Market Announcements Office ASX Limited 20 Bridge Str
Slide 2: 1HFY25 Results & Portfolio Update
For personal use only Spheria Emerging Companies Limited (ASX:SEC) 1HFY25 Results & Portfolio Update
Slide 3: Disclaimer
Disclaimer For personal use only Note: Past performance is not a reliable indicator of future Subject to any liability which cannot be excluded under the information is not intended as a securities recommendation or performance. relevant laws, SEC and Spheria disclaim all liability to any person s
Slide 4: Agenda
Agenda 3 For personal use only 1. SEC Company update 2. Portfolio update 3. Questions
Slide 5: SEC
For personal use only SEC Company Update
Slide 6: 1HFY25 Highlights
5 1HFY25 Highlights Yield (including 1HFY25 Profit Company Performance1 Dividends2 Yield For personal use only franking) $10.8m 11.3% 7.0c 5.8%3 8.3%4 • 1HFY25 net profit after tax of $10.8m • Company Performance of 11.3%, +5.8% above benchmark5 of 5.5% (also +2.5% p.a. above benchmark since incepti
Slide 7: NTA breakdown for 1HFY25
6 NTA breakdown for 1HFY25 Portfolio performance less dividends paid leads to an increase in NTA per share For personal use only • Pre-tax NTA increased by $0.178 from $2.231 at 30 June 2024 to $2.409 at 31 December 2024 • Portfolio performance and dividends paid drive NTA changes. Source: Spheria E
Slide 8: Performance History
7 Performance History Since inception Company outperformance of 2.5% p.a. SEC Company performance For personal use only SEC Limited Net Performance as at 31st January 2025 Period 3 month 1 year 3 year (pa) 5 year (pa) Since Inception (pa) Inception Date SEC Ltd. 5.2% 13.7% 5.4% 8.2% 7.9% 30/11/2017
Slide 9: Dividends
8 Dividends Since Q2 2024, dividend target raised to 6.0% p.a. (excl. franking) paid at a quarterly rate of 1.5% of post-tax NTA For personal use only
Slide 10: Significant improvement in the NTA Discount
Significant improvement in the NTA Discount 9 Higher dividends and Conditional Proposal help tighten the NTA discount For personal use only Source: Spheria Emerging Companies, as at 31 January 2025
Slide 11: Reinstatement of condition proposal
10 Reinstatement of condition proposal • On 7th January 2025 – announced the results of the conditional proposal. For personal use only • NTA discount over measurement period (Q4 2024) was 4.75% • This being <5% meant condition to undertake the proposal to convert to an open-end fund was not met • O
Slide 12: SEC Portfolio Update
For personal use only SEC Portfolio Update
Slide 13: Spheria Asset Management Investment Process
12 Spheria Asset Management Investment Process How our investment process is different For personal use only 1. Focus on quality businesses with risk control overlay • Sustainable free cash flow generation through the cycle 2. Fundamental investment focus • Free cash flow valuation model • Lowly gea
Slide 14: SEC Portfolio Performance
13 SEC Portfolio Performance Strong relative performance over the last 4 years SEC Portfolio - Net Performance* since Inception 100% For personal use only Spheria Index 80% Relative Performance 60% 40% 20% 0% -20% -40% Jul-22 Jun-20 Nov-20 May-18 Apr-21 May-23 Dec-17 Aug-19 Aug-24 Mar-19 Jan-20 Sep-
Slide 15: Stock Attribution – Top and Bottom
14 Stock Attribution – Top 10 and Bottom 10 Spheria Emerging Companies - Attribution - 12 Month - January 2025 4% For personal use only 3% 2% 1% 0% -1% -2% -3% * Red Outline – companies we did not hold during the period Source : Bloomberg Data as at 31st January 2025. Companies mentioned on this sli
Slide 16: Top Holdings & Sector Exposure
15 Top 10 Holdings & Sector Exposure For personal use only Spheria Emerging Companies Limited Spheria Emerging Companies Limited 30% Ticker Company Name % Portfolio 25% SNL Supply Network 6.1 20% IFL Insignia Financial 5.0 DRR Deterra 4.7 15% HLS Healius 4.6 10% FBU Fletcher Building 4.2 5% SGM Sims
Slide 17: Domain Holdings: Opportunity in a two-player market
Domain Holdings (ASX:DHG) 16 Opportunity in a two-player market Cash Flow Conversion (EBITA) P/E Ratio Differential For personal use only 120 120% 60 109% 55 100 100% 50 45 80 80% 40 P/E 35 60 60% 30 25 40 40% 20 20 20% 15 10 0 0% FY18A FY19A FY20A FY21A FY22A FY23A FY24A Free Cash Flow before Tax a
Slide 18: Very attractive entry point
Very attractive entry point 17 Global Smalls are very cheap in a historical context vs large caps EV/EBIT Difference between MSCI World Small vs Large For personal use only 35% 30% 25% 20% 15% 10% 5% 0% -5% -10% -15% Difference Average +1s.d. -1s.d +2s.d. -2s.d Source: Bloomberg, to 31st December 20
Slide 19: Key Themes
Key Themes 18 For personal use only • Moderating inflation and lower rates should be supportive for cyclically exposed companies, many of which have been out of favour over the last few years. • Short term earnings risk remain; however, resumption of M&A activity seems likely. • Conclusion - One of
Slide 20: Questions
For personal use only Questions
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