Spheria Emerging Cos. Ltd. · ASX:SEC
Spheria Emerging Cos — Shareholder Meeting (November 2019)
13 slides from Spheria Emerging Cos's shareholder meeting presentation, Nov 6, 2019
Slide 1: Spheria Emerging Companies Limited Annual General Meeting
For personal use only Spheria Emerging Companies Limited ASX : SEC Annual General Meeting 6 November 2019
Slide 2: Agenda
2 For personal use only Agenda 1. SEC Company update 2. Smaller companies investing 3. Opportunities
Slide 3: Spheria Emerging Companies (SEC.ASX)
3 Spheria Emerging Companies (SEC.ASX) 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 (c
Slide 4: The great re-rating
4 The great re-rating For personal use only PE re-rating by PE quintiles over last year 400% • Highest rated PE stocks one Quintile 1 Quintile 2 year ago, have had a huge Quintile 3 300% Quintile 4 re-rating during the year Quintile 5 200% • Unjustified by growth in earnings, likely driven by 100% g
Slide 5: Relative valuations – WAAAX vs Spheria Basket
5 Relative valuations – WAAAX* vs Spheria Basket For personal use only Aggregate Market Valuations (A$bn) WAAX vs Spheria Basket 160x A select basket of five 140x Spheria stocks is valued at only 11% of the WAAAX Aggregate Profit (EBIT) Multiple 120x WAAAX* complex and yet has a 100x $35bn similar l
Slide 6: SEC portfolio performance
6 SEC portfolio performance For personal use only Net portfolio performance as at 31st October 2019 Since Inception 1 month 3 month FYTD 1 year Inception Date (p.a.) SEC Mandate 0.9% 0.8% 2.7% 9.7% 6.3% 30/11/2017 S&P/ASX Small Ordinaries -0.5% -1.8% 2.6% 14.4% 6.4% Accumulation Index Outperformance
Slide 7: SEC portfolio performance
7 SEC portfolio performance For personal use only Net Performance* since Inception 20.0% Spheria Index 15.0% Relative Performance 13% 10.0% 5.0% 0.0% -5.0% -10.0% Nov-17 Feb-18 May-18 Aug-18 Nov-18 Feb-19 May-19 Aug-19 * Net Portfolio performance = investment performance of mandate after investment
Slide 8: Investment philosophy
8 Investment philosophy For personal use only Sirtex – Cash Flow Dynamics Mesoblast – Cash Flow Dynamics 80 0 70 -20 60 -40 50 -60 A$m 40 -80 A$m 30 -100 20 -120 10 -140 0 -160 FY07A FY09A FY14A FY15A FY11A FY13A FY18A FY17A FY08A FY10A FY12A FY16A FY12A FY13A FY14A FY15A FY16A FY17A FY18A Free Cash
Slide 9: Blackmores
9 Blackmores (ASX:BKL) Bloated cost base – will be remedied For personal use only Cash Flow Dynamics BKL - Net Sales vs EBITA margin 160 73% 80% 700 30% 140 120 600 25% 60% 614 100 500 Net Sales (A$m) 80 20% 40% 400 60 13.8% 13.5% 15% 40 300 20 20% 287 10% 0 200 FY04A FY09A FY18A FY05A FY00A FY01A F
Slide 10: Company Positions
10 Company Positions For personal use only SEC holdings as at 31 October 2019 Ticker Name % Portfolio CL1 Class Limited 4.9% BKL Blackmores Limited 4.7% HT1 Ht&E Limited 4.2% MOC Mortgage Choice Ltd 4.2% PTM Platinum Asset 4.1% HLS Healius 4.1% GBT GBST Holdings.. 4.1% ABC Adelaide Brighton 4.1% FBU
Slide 11: Outlook
11 Outlook For personal use only • Value end of the small cap market very attractive • SEC beneficiary of M&A activity • cash flow generative businesses; • balance sheets strong; and • most importantly valuations attractive • Economically sensitive businesses offering good relative value
Slide 12: Thank you for joining us
12 For personal use only Thank you for joining us SEC Shareholder Enquiries For general information and investment enquiries please contact the Share Registry. T: 1300 288 664 E: [email protected]
Slide 13: Disclaimer
13 Disclaimer For personal use only Note: Past performance is not a reliable indicator of future performance. Spheria Asset Management Pty Ltd (“Spheria”) ABN 42 611 081 326, a corporate authorised representative (No. 1240979) of Pinnacle Investment Management Limited (“PIML”) ABN 66 109 659 109, AF
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