Spheria Emerging Cos. Ltd. · ASX:SEC
Spheria Emerging Cos — Shareholder Meeting (November 2018)
27 slides from Spheria Emerging Cos's shareholder meeting presentation, Nov 1, 2018
Slide 1: Annual General Meeting
For personal use only Spheria Emerging Companies Limited ASX : SEC Annual General Meeting 1 November 2018
Slide 2: Agenda
2 For personal use only Agenda 1. Chairman’s Address 2. Investment Update 3. Q&A 4. Formal Business
Slide 3: Chairman's Address
3 For personal use only Chairman’s Address Mr Jonathan Trollip
Slide 4: Chairman's Address: Overview
4 Chairman’s Address Overview For personal use only • SEC (Company) offers investors access to an actively managed Australian and New Zealand small cap equities portfolio • Managed by Spheria Asset Management Pty Limited (Manager) • IPO raised $132 million and listed on the ASX on 5 December 2017 •
Slide 5: Investment Objective
5 Chairman’s Address Investment Objective For personal use only The Company’s investment objectives are to: • outperform the benchmark, the S&P/ASX Small Ordinaries Accumulation Index, over each full investment cycle (which the Manager considers to be a period of typically 3 to 5 years); and • provi
Slide 6: Company Details
6 Chairman’s Address Company Details For personal use only Manager Shares1 (ASX: SEC) Spheria Asset Management Outstanding 66,337,546 Price $1.765 Board of Directors Market capitalisation $117m • Jonathan Trollip (Chairman) NTA2 • Lorraine Berends Which includes tax provided for on $1.942 • Adrian W
Slide 7: Dividends
7 Chairman’s Address Dividends For personal use only • The Company aims to pay fully franked dividends from the portfolio income at least annually, subject to available profits, cash flow and franking credits • The Board declared its first fully franked dividend of 4.0 cents per share which was paid
Slide 8: Company Performance
8 Chairman’s Address Company Performance For personal use only NTA Performance1 ▪ -0.9% from listing date to 26 October 2018 (from $2.00 at inception to $1.942, with dividends paid of $0.04 during the period). This compares to Benchmark2 performance of -3.0% for same period. ▪ Current share price3 o
Slide 9: Shareholder Engagement
9 Chairman’s Address Shareholder Engagement For personal use only Regular shareholder Weekly NTA Half & full year email updates announcement and financial results monthly updates Website Media Conference spheria.com.au presentations
Slide 10: Investment Update
10 For personal use only Investment Update Mr Marcus Burns and Mr Matthew Booker Portfolio Managers, Spheria Asset Management
Slide 11: Spheria Philosophy
11 Spheria Philosophy For personal use only “Purchase securities where the present value of future free cash flows can be reasonably ascertained and the security is trading at discount to its intrinsic value. Explicit risk controls include a preference for companies with low or no balance sheet gear
Slide 12: Experienced, cohesive investment team
12 Experienced, cohesive investment team For personal use only Matthew Booker (PM) Marcus Burns (PM) Over 20 years industry experience. Over 20 years industry experience of Significant alpha generation which 7 years in London. managing Small Companies funds at Significant alpha generation Concord Ca
Slide 13: Spheria Investment Process
13 Spheria 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 geared balance sheet
Slide 14: Spheria Portfolio Construction Process
14 Spheria Portfolio Construction Process Valuation and risk based portfolio outcome For personal use only Considerations Valuation Ideas ranked on Tax upside subject to risk Dividend rule control Benchmark risk Liquidity Risk Parameters Position sizing Low risk, upside – Core Liquidity analysis und
Slide 15: Example of process in action
15 Spheria Investment Process Example of process in action For personal use only Spheria Risk Scorecard Quantitative Risk Factors: Cash Flow Conversion Balance Sheet - last fy end Net Cash 80 100% Net Interest (CF) - last fy 2.6 70 Avg Borrowing Cost (CF) - last fy 0.0% 80% 6077% 50 Forecast Interes
Slide 16: Spheria Portfolio Positioning
16 Spheria Portfolio Positioning Diversified exposures across companies and sectors For personal use only Spheria Emerging Companies Portfolio* Spheria Emerging Companies Portfolio* Ticker Name % Portfolio 25% BGA Bega Cheese Ltd 6.3% 20% CL1 Class Limited 4.6% TNE Technology One 5.0% 15% NVT Navita
Slide 17: Spheria Illustrative Performance
17 Spheria Illustrative Performance* Consistent performance in volatile market For personal use only SEC Portfolio - Net Performance* since Inception 13.0% 12.0% Spheria 11.0% Index 10.0% Relative Performance 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% -1.0% -2.0% -3.0% -4.0% 04-Apr-18 18-Apr-
Slide 18: Outlook
18 Outlook For personal use only Momentum trade unwinding? Spheria portfolios NOT immune to volatility BUT: • cash flow generative businesses; • balance sheets strong; and • most importantly valuations supportive. Further takeover activity in our portfolios seems likely.
Slide 19: Q&A
19 For personal use only Q&A Mr Jonathan Trollip
Slide 20: Formal Business
20 For personal use only Formal Business Mr Jonathan Trollip
Slide 21: Financial Statements
21 Formal Business Financial Statements For personal use only • Financial Statements of the Company for the year ended 30 June 2018, together with the Directors’ Report and the Auditor’s Report as set out in the 2018 Annual Report.
Slide 22: Resolution: Re-election of Adrian Whittingham
22 Formal Business Resolution 1 For personal use only 1. Re-election of Adrian Whittingham as Director • To consider and, if thought fit, to pass the following resolution as an ordinary resolution: “That Mr Adrian Whittingham, who retires by rotation in accordance with rule 6.7 of the Company’s Cons
Slide 23: Resolution - Proxies
23 Formal Business Resolution 1 - Proxies For personal use only Shares Voted For 1,353,863 95.42% Open 60,257 4.25% Against 4,700 0.33% Abstain 50,000
Slide 24: Resolution: Adoption of the Remuneration Report
24 Formal Business Resolution 2 For personal use only 2. Adoption of the Remuneration Report • To consider and, if thought fit, to pass the following resolution as an ordinary resolution: “That the Remuneration Report of the Company for the financial year ended 30 June 2018 be adopted.”
Slide 25: Resolution - Proxies
25 Formal Business Resolution 2 - Proxies For personal use only Shares Voted For 380,650 59.80% Open 57,757 9.07% Against 198,122 31.13% Abstain 807,291
Slide 26: Thank you for joining us for our inaugural AGM
26 For personal use only Thank you for joining us for our inaugural AGM SEC Shareholder Enquiries For general information and investment enquiries please contact the Share Registry. T: 1300 288 664 E: [email protected]
Slide 27: Disclaimer
27 Disclaimer For personal use only Spheria Emerging Companies Limited ACN 621 402 588 (SEC) Spheria Asset Management Pty Ltd (ABN 42 611 081 326, Corporate Authorised Representative No. 1240979) (‘Spheria’) is the investment manager of Spheria Emerging Companies Limited ABN 84 621 402 588 (‘SEC or
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