PBT Holdings Limited · JSE:PBT
PBT — Prescient — FY2015 Earnings Presentation
48 slides from PBT's earnings presentation, June 2015
Slide 1: Prescient Limited Results Presentation
Prescient Limited Results Presentation 31 March 2015 Presented by: Herman Steyn (CEO) and Michael Buckham (FD) June 2015
Slide 2: Contents
CONTENTS Business environment About Prescient Our business strategy Financial highlights Operational overview The year ahead Questions Appendices 2
Slide 3: Business Environment
Business Environment PRESCIENT LIMITED
Slide 4: Business Environment
BUSINESS ENVIRONMENT Weakening credit rating Increased regulatory burden World grappling with QE Regulatory Changes – Retail distribution review – Retirement reform Worsening employment situation BEE Poor service delivery Education crisis Cyber security Increased tension around I
Slide 5: Global Markets
GLOBAL MARKETS Global Markets USD 200 MSCI World 180 China 160 Africa 140 ALSI 120 100 80 60 40 20 0 Jan‐11 Mar‐11 May‐11 Jul‐11 Sep‐11 Nov‐11 Jan‐12 Mar‐12 May‐12 Jul‐12 Sep‐12 Nov‐12 Jan‐13 Mar‐13 May‐13 Jul‐13 Sep‐13 Nov‐13 Jan‐14 Mar‐14 May‐14 Jul‐14 Sep‐14 Nov‐14 Jan‐15 Mar‐15 May‐15 Source: Bl
Slide 6: About Prescient
About Prescient PRESCIENT LIMITED
Slide 7: Group Organogram
GROUP ORGANOGRAM PRESCIENT LIMITED Financial Services Information Management Services Prescient Holdings (Pty) Ltd Prescient Capital (Pty) PBT Operations Ltd Current AUM in investment management – R65.5 billion (FY14: R59.1 billion) Current third party AUA in Fund Services business • South Afric
Slide 8: Our Business Strategy
OUR BUSINESS STRATEGY Entrepreneurial Spirit Highly Skilled Staff Long Term Client – Centric Short Term Strategies Opportunities Strong Technology Well Capitalised Balanced Sheet Unwavering Investment Philosophy Growth across all operating units Diversification benefits in emerging markets Div
Slide 9: Financial Highlights
Financial Highlights PRESCIENT LIMITED
Slide 10: Financial Highlights: Financial Services
FINANCIAL HIGHLIGHTS Financial Services Investment Management – AUM higher with increased flows from retail sales – Good performance with enhanced performance fee revenue – Very strong performance from China Balanced Fund Prescient Fund Services and Prescient Fund Services (Ireland) – Significan
Slide 11: Financial Highlights: Information Management Services
FINANCIAL HIGHLIGHTS Information Management Services Strong growth in revenue and earnings Demand for services remains high across all technology stacks Rand depreciation has enhanced revenue Strong local growth contributes to revenue generated in foreign currency at 50% Weakening rand has
Slide 12: Statement of Profit and Loss – continuing operations
FINANCIAL OVERVIEW Statement of Profit and Loss – continuing operations 31-Mar-15 31-Mar-14 % Change R'000s Revenue 835 861 664 626 26% Operating expenses (645 953) (518 319) Profit from operations 189 908 146 307 30% Other income 8 576 10 652 Share of loss of equity accounted investee (3 261) (573)
Slide 13: Segmental reporting
FINANCIAL OVERVIEW Segmental reporting Financial Services % Information Management % Total % Change Services Change Change R'000s 2015 2014 2015 2014 2015 2014 Segment external revenue Continuing 352 931 287 124 23% 482 930 377 502 28% 835 861 664 626 26% Discontinued - 94 906 - - - 94 906 Total seg
Slide 14: Earnings per share
FINANCIAL OVERVIEW Earnings per share 31-Mar-15 31-Mar-14 % Change Earnings per share - continuing operations Earnings per share 8.31 7.15 16.3% Headline earnings per share 7.78 6.96 11.8% Earnings per share - discontinued operations Earnings per share (0.24) (3.12) Headline earnings per share (0.24
Slide 15: Dividend
FINANCIAL OVERVIEW Dividend The Company declared a dividend of 3.0 cents per share on 24 June 2015 for a total dividend for the year of 5.75 cents per share (FY14: 5.1 cents per share) 31-Mar-15 31-Mar-14 % Change Dividend per share 5.75 5.10 12.7% Dividend cover (continuing operations) 1.45 1.40 3.
Slide 16: Operational Overview
Operational Overview PRESCIENT LIMITED
Slide 17: Prescient Investment Management
PRESCIENT INVESTMENT MANAGEMENT 16 Year track record Assets under management Specialising in the delivery of superior risk 66 adjusted returns across a range of mandates Markets include South Africa, Africa, China, 64 Global Developed Markets 62 Assets under management of R65.5 billion Rand
Slide 18: Core Solution Range
CORE SOLUTION RANGE Expected Capital Volatility Equity Absolute Balanced Positive Balanced Income Return Expected Real Returns Provider Equity Global Equity Africa Defender Balanced Quant Equity Fund Strategy Feeder Global Bond China China Money Positive Quant Conservative Equity Balanced Market Ret
Slide 19: Performance
PERFORMANCE Period Performance as at 31 March 2015 3 Months 12 Months Benchmark Fund BM Alpha Fund BM Alpha Balanced Funds SA Absolute Balanced 4.10% 2.00% 2.10% 9.00% 8.40% 0.60% CPI + 5% Global Absolute Balanced 6.60% 2.00% 4.60% 16.70% 8.40% 8.30% CPI + 5% Prescient Balanced (Index) 5.90% 2.00% 3
Slide 20: Prescient Offshore Range
PRESCIENT OFFSHORE RANGE Expected Capital Volatility Expected Real Returns China Balanced Africa Equity Global Global Growth Positive China Return Conser- (Euro) vative Global Income Asset Class Interest Bearing Multi Asset Equity EU Harmonised MSCI World Nedbank 100 ex- Benchmark 90 day US TB China
Slide 21: Performance – Offshore Funds
PERFORMANCE – OFFSHORE FUNDS Period Performance as at 31 March 2015 3 Months 12 Months Benchmark Fund BM Alpha Fund BM Alpha International Funds Global Income US$ 0.00% 0.00% 0.00% 1.50% 0.00% 1.50% USTB Global PR (Euro) 4.10% 0.50% 3.60% 8.10% 0.60% 7.50% EURO Inflation Global Growth US$ 0.30% 2.50
Slide 22: Funds Performance: Multi Asset High Equity
FUNDS PERFORMANCE Multi Asset High Equity 18% 16% 3 Months 14% 6 Months 1 Year 12% 10% 8% 6% 4% 2% 0% Prescient Absolute Prescient Balanced A2 SA MA High Equity Top SA MA High Equity Median SA MA High Equity Bottom Balanced A1 Quartile Quartile Source: Morningstar as at 31 March 2015. Comparison to
Slide 23: Funds Performance: General Equity
FUNDS PERFORMANCE General Equity 25% 3 Months 6 Months 1 Year 20% 3 Years 15% 10% 5% 0% Prescient Equity A1 Prescient Equity Income Prescient Equity Quant SA General Equity Top SA General Equity SA General Equity A1 A1 Quartile Median Bottom Quartile Source: Morningstar as at 31 March 2015. Comparis
Slide 24: Funds Performance: Income Funds
FUNDS PERFORMANCE Income Funds 14% 3 Months 6 Months 12% 1 Year 3 Years 10% 8% 6% 4% 2% 0% Prescient Income Provider A1 SA MA Income Top Quartile SA MA Income Median SA MA Income Bottom Quartile Source: Morningstar as at 31 March 2015. Comparison to top, median and bottom quartile within the Income
Slide 25: Performance: Interest Bearing Funds
PERFORMANCE Interest Bearing Funds Prescient Interest Bearing Funds vs Benchmarks Five Years to 30 April 2015 11% ILB Index, 10.2% Income Provider, 9.5% 10% ALBI, 9.6% Flexible Bonds, 9.1% Performance (p.a.) 9% Income Fund , 8.1% 8% Yield QuantPlus Comp, 6.9% ALBI 1 - 3 Years, 7.0% 7% Money Market C
Slide 26: Performance: Positive Return and Absolute Balanced Funds
PERFORMANCE Positive Return and Absolute Balanced Funds Prescient Positive Return and Absolute Balanced Fund vs Benchmarks Risk/Return - Since Inception of Absolute Balanced Fund (August 2003) to 30 April 2015 22% 20% FTSE/JSE All Share Index, 19.8% 18% Prescient Absolute Balanced Composite Fund, 15
Slide 27: The African Story
THE AFRICAN STORY Dividend Yield 4.0 3.7 3.3 3.4 3.5 3.1 3.0 2.6 2.4 2.5 2.0 Currently SA-based Unit Trust 1.5 1.0 UCITS approved December 2014 0.5 0.0 Convert CIS to feeder via asset swap MSCI FTSE/JSE MSCI EM MSCI EFM Nedbank Prescient World All Share Africa ex Africa 100 ZA Africa Equity
Slide 28: Top Countries in the MSCI World vs GDP
TOP COUNTRIES IN THE MSCI WORLD VS GDP 60% • 2005 - CNY de-peg from USD 2005 - CNY de-peg from USD • CNY has strengthened 30% from 8,2 to 6,2 to USD currently. PPP by IMF puts the level at around 4.1 50% CNY strengthened 30% from 8.2 • QFII program started in 2004. By 2011 $20.7 billion. to 6.2
Slide 29: Prescient Evolution Clean Energy and Infrastructure Fund
PRESCIENT EVOLUTION CLEAN ENERGY AND INFRASTRUCTURE FUND Objective Deliver above inflation after fees (yields range from +3% to +8%) Less volatility than All Bond Index Strong Developmental, Environmental and Social impact Investment Universe Predominantly unlisted debt instruments Listed
Slide 30: Renewable Statistics
RENEWABLE STATISTICS Unit Round 1 Round 2 Round 3 Round 4 Total Financial Close June ‘12 June ‘13 Nov ’14 Oct ’15 Capacity offered MW 3 625 1 275 1 473 1 161 7 534 Capacity awarded MW 1 416 1 044 1 456 1 105 5 021 Projects awarded No 28 19 17 13 77 Total investment Rm 47 792 28 059 44 413 48 886 169
Slide 31: Prescient Fund Services and Prescient Fund Services Ireland
PRESCIENT FUND SERVICES AND PRESCIENT FUND SERVICES IRELAND Providing outsourced administration services since 2010 Operating in South Africa and Ireland South African assets under administration Significant growth in 3rd party AUA: 60.00 – South Africa – R48.6 billion (FY14: R31.1 billion) –
Slide 32: Prescient Life Limited
PRESCIENT LIFE LIMITED Policyholder AssetsAssets Policyholder Institutional: Offers a range of life-pooled portfolios managed by internal and third party managers with 12.00 full administration services Retail: Offers retirement annuities, preservation funds, umbrella funds, living annuities, en
Slide 33: Prescient Securities and Prescient Wealth Management
PRESCIENT SECURITIES Focus on the institutional fund management market Research and trade offering covers equity, derivatives and fixed income Consistent performance in FM rankings and Spire awards (refer to Appendix) Focus - Strengthen research/trade offering across asset classes PRESCIENT
Slide 34: Information Management Services
INFORMATION MANAGEMENT SERVICES The PBT Group is a consulting company, specialising in data management, to SA, MEA and Australian clients These professional services are conducted in, amongst others, the Financial Services, Retail and Mobile Telecommunication sectors Successful track record in
Slide 35: The Year Ahead
The Year Ahead PRESCIENT LIMITED
Slide 36: The Year Ahead
THE YEAR AHEAD Focus on investment performance Positioned for growth – Strong balance sheet – Technology platform – Appropriate solutions Maintain competitive positioning Specific focus areas: – Retail – Multi asset class performance – Prescient Wealth – Renewable energy – Africa Maintain
Slide 37: The Year Ahead: Challenges and Growth Drivers
THE YEAR AHEAD Challenges – Regulatory burden – Pressure to reduce costs of investment management services – Dollar denominated costs for systems – Conversion time for Prescient Wealth – Pressure on revenue for Prescient Securities – Funding growth Earnings growth drivers – Improved performance
Slide 38: Q&A
O&A PRESCIENT LIMITED
Slide 39: Thank You – Regulatory Information
Thank You Regulatory Information This presentation contains certain forward-looking statements. These forward-looking statements are based on current information and expectations, and involve a number or risks and uncertainties. Although Prescient believes that the expectations reflected in such for
Slide 40: Appendices
Appendices PRESCIENT LIMITED
Slide 41: Group Organogram
GROUP ORGANOGRAM Prescient Investment Management Stricklands Tetra Cape INFORMATION MANAGEMENT SERVICES Prescient Securities PBT Infosight Prescient Wealth Management PBT Technology Services (Cape Town) Prescient Fund Services FINANCIAL SERVICES PBT Technology Services Prescient Fund Services (Irela
Slide 42: Industry Recognition
INDUSTRY RECOGNITION In 2014, Prescient was recognised as being one of the top 100 most Gender Empowered Companies in South Africa. Top Women in Business and Government Media research revealed Prescient as an organisation encompassing gender empowerment at the very core of our business practices.
Slide 43: Industry Recognition
INDUSTRY RECOGNITION Prescient Fund Services uses Eagle Investment Systems as its primary administration system. The business unit received an award from Eagle for innovative use of its software. In 2014, EMHPrescient Investment Management was awarded Best Investment Management Company in Namibi
Slide 44: Industry Recognition
INDUSTRY RECOGNITION The 2015 Financial Mail “Rating the Analysts (equities and derivatives) Awards”: – #1 – Innovative Research – #1 – Electronic & Electrical Equipment – #2 – Derivatives Research – #2 – Derivatives Dealing – #3 – Financial and Industrial Small & Medium Market Cap Companies – #3
Slide 45: Prescient Value Creation Story Board
PRESCIENT VALUE CREATION STORY BOARD 45
Slide 46: Revenue
REVENUE 900 800 Information Management Services 700 Financial Services 600 482 500 378 Rand Millions 400 204 300 200 354 281 277 274 287 100 - 2011 2012 2013 2014 2015 46
Slide 47: Profit Before Tax
PROFIT BEFORE TAX 200 180 Information Management Services 160 56 Financial Services 140 44 25 120 Rand Millions 100 80 133 130 60 118 113 108 40 20 ‐ 2011 2012 2013 2014 2 015 47
Slide 48: Analysis of Shareholders
ANALYSIS OF SHAREHOLDERS 2% 17% 21% External BEE shareholding BEE staff and management 7% Other staff and management 2% Non-executive directors and other related parties Other Treasury shares 52% As at 31 March 2015 48