Spheria Emerging Cos. Ltd. · ASX:SEC
Spheria Emerging Cos — Shareholder Meeting (November 2023)
25 slides from Spheria Emerging Cos's shareholder meeting presentation, Nov 21, 2023
Slide 1: 2023 Annual General Meeting
For personal use only Spheria Emerging Companies Limited (ASX:SEC) 2023 Annual General Meeting 21 November 2023
Slide 2: Agenda
Agenda 2 For personal use only 1. Chairman’s Address 2. Formal Business 3. Investment Update 4. Questions
Slide 3: Chairman's Address
For personal use only Chairman’s Address
Slide 4: Chairman's Address: Investment Objectives
4 Chairman’s Address Investment Objectives 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 • prov
Slide 5: Objective 1: Outperform the benchmark
5 Chairman’s Address Objective 1: Outperform the benchmark Company Performance1 For personal use only • 2.6% annualised outperformance from inception to 30 June 2023 (+6.0% p.a. compared to benchmark 3.4% p.a.) • 1.7% annualised outperformance from inception to 31 October 2023: Performance - 6 month
Slide 6: Objective 2: Provide Capital Growth and Income
6 Chairman’s Address Objective 2: Provide Capital Growth and Income 1. Company Performance and TSR Performance For personal use only Performance 30 June 2023 31 October 2023 Company Performance1 (since inception) 6.0% p.a. 3.6% p.a. TSR Performance2 (since listing date) 2.9% p.a. 2.2% p.a. 2. TSR Pe
Slide 7: Objective 2: Provide Capital Growth and Income
7 Chairman’s Address Objective 2: Provide Capital Growth and Income • Looking back since the IPO of the Company until For personal use only today: • Pre-tax NTA is slightly lower than IPO value, despite portfolio outperformance, driven by low returns from Australian small cap shares over this period
Slide 8: Spotlight on Dividends
8 Chairman’s Address Spotlight on Dividends • Total FY23 quarterly dividends of 9.3 cents per For personal use only share • Target dividend yield was increased to 5% of Increase to NTA p.a. (7.1% including franking) from the June Quarterly dividends of 1% of post-tax NTA 1.25% post- tax NTA 2023 qua
Slide 9: Share price vs NTA
9 Chairman’s Address Share price vs NTA • NTA discount has narrowed substantially to a range of 5%-10% over the last 12 months, aided by higher and more regular income and re-instatement of the on-market share buy-back • Board remains very focused on the NTA discount and solutions to reduce it For p
Slide 10: Share price vs NTA
10 Chairman’s Address Share price vs NTA • NTA discount is one of the lowest of the small cap LICs on the ASX For personal use only Source: Morningstar. Data as at 2nd November 2023
Slide 11: Formal Business
For personal use only Formal Business
Slide 12: Consideration of financial statements and reports
Formal Business – Financial statements and reports 12 For personal use only Consideration of financial statements and reports
Slide 13: Resolution: Adoption of the Remuneration Report
Formal Business – Resolution 1 13 For personal use only Adoption of the Remuneration Report To consider and, if thought fit, to pass the following resolution: “That the Remuneration Report of the Company for the financial year ended 30 June 2023 be adopted.”
Slide 14: Resolution - Proxies
Formal Business – Resolution 1 - Proxies 14 For personal use only Shares voted For 1,588,361 84.40% Open 137,368 7.30% Against 156,142 8.30% Abstain 19,268
Slide 15: Re-election of Lorraine Berends as a director
Formal Business – Resolution 2 15 For personal use only Re-election of Lorraine Berends as a director To consider and, if thought fit, to pass the following resolution as an ordinary resolution: “That Ms Lorraine Berends, who retires by rotation in accordance with rule 6.7 of the Company’s Constitu
Slide 16: Resolution - Proxies
Formal Business – Resolution 2 - Proxies 16 For personal use only Shares voted For 1,952,721 91.87% Open 137,368 6.46% Against 35,421 1.67% Abstain 92,483
Slide 17: Investment Manager Update
For personal use only Investment Manager Update Fundamental investing shines through
Slide 18: Product Background
Product Background 18 For personal use only SEC is a listed version of the Spheria Australian Smaller Companies Fund Designed to give investors exposure to: • cash generative • lowly geared smaller companies • with supportive valuations SEC will typically have 20-65 stocks (currently 47) with a max
Slide 19: Performance – Graphical Illustration
Performance – Graphical Illustration 19 For personal use only Source: IRESS, Spheria to 31st October 2023
Slide 20: GWA Group: Consistent cash generator through housing cycles
GWA Group (ASX:GWA) 20 Consistent cash generator through housing cycles Cash Flow Conversion (EBITA) Margin Analysis For personal use only 160 120% 25% 22% 140 21% 96% 100% 20% 18% 18%18% 18%17% 120 16% 17% 17% 80% 15% 15%15%15% 14%15% 100 15% 13%14% 13% 12%12%12% 80 60% 10% 60 40% 40 5% 20% 20 0 0%
Slide 21: Top Company Holdings and Sector Exposure
Top 10 Company Holdings and Sector Exposure 21 For personal use only Spheria Emerging Companies Limited Spheria Emerging Companies Limited 30.0% Ticker Company Name % Portfolio 25.0% IRE IRESS Limited 4.8 BGA Bega Cheese Ltd 4.2 20.0% SNL Supply Network 4.0 15.0% ABC Adbri Limited 3.9 10.0% LNK Link
Slide 22: Outlook
Outlook 22 • Waves of selling across small cap complex with large industry funds exiting, retail investors deleveraging and For personal use only hedge funds either reducing beta or shorting • Compounded by a withdrawal of buying in anything with “warts” particularly earnings weakness whether it is
Slide 23: Questions
For personal use only Questions
Slide 24: 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 25: Thank you for joining us
For personal use only Thank you for joining us SEC Shareholder Enquiries For general information about your shareholding please contact the Share Registry, Automic. T: 1300 288 664 E: [email protected] For investment enquiries please contact Pinnacle T: 1300 010 311 E: [email protected]
Spheria Emerging Companies — Shareholder Meeting (November 2023) on 6ix