Praemium Ltd · ASX:PPS
Praemium — Investor Presentation (May 2008)
28 slides from Praemium's investor presentation, May 13, 2008
Slide 1: Copy of Managing Director's Presentation
Copy of Managing Director’s Presentation For personal use only For Release to the ASX 13 May 2008 Please find attached a copy of a presentation given by Arthur Naoumidis, the Managing Director of Praemium Limited (ASX:PPS) to institutional and professional investors. About Præmium: Præmium supplies
Slide 2: Præmium Update May 2008
For personal use only Præmium Update May 2008 Arthur Naoumidis Managing Director
Slide 3: Agenda
Agenda For personal use only Præmium History Præmium in Australia United Kingdom Key Financials
Slide 4: Præmium History
Præmium History For personal use only Præmium founded Oct 2001 Live for intermediaries Jun 2003 Floated on ASX May 2006 Opened London offices Jun 2006
Slide 5: Præmium in Australia
Præmium in Australia For personal use only 3 key services: Virtual Wrap Separately Managed Accounts (SMA) Market Data & Trading System
Slide 6: V-Wrap growth to $28.5 billion in 5 years
For personal use only June December March 2007 2007 2008 V-Wrap Committed Portfolios 22,860 32,160 34,417 Funds under Administration $24.1 billion $28.5 billion $28.1 billion Number of Wholesale 346 423 438 Clients Growth from $100m to $28.5 billion in 5 years
Slide 7: H1 2007/2008 highlights
For personal use only H1 2007/2008 highlights Macquarie Equities July 07 UBS Nov 07 Evans & Partners Nov 07 Asgard Phase II live Nov 07 Prime Dec 07 3% market share of SMSFs Feb 08 Ausmaq interface Feb 08 Coin Office interface Apr 08 6
Slide 8: SMA high brand awareness
SMA High brand awareness For personal use only Which SMA providers can you name off the top of your head? Praemium 7 Source: Investment Trends Pty Limited. 2007 SMA Report (n=322)
Slide 9: Australia Integrated market data system
Australia For personal use only Integrated market data system Industrial strength Desktop interface to V-Wrap Live portfolio valuations & CGT ASX Trading Available to all V-Wrap & SMA clients Expected to further fuel growth of V-Wrap 8
Slide 10: AUS V-Wrap Revenue Model
AUS V-Wrap Revenue Model For personal use only $200 per portfolio – base Does scale down at volume Current average is $180 Good Market Penetration 3.7% of SMSF market ( 360,000 SMSF’s) 3.5% of investment grade equity portoflios - estimated 1,000,000 P/F’s On track for 50,000 for CY 200
Slide 11: AUS SMA Revenue Model
AUS SMA Revenue Model For personal use only 20% of Blackrock’s fee SMA Approx 11 basis points Currently ~$300 Million 90+ firms sign up Blackrock Exclusivity expires November 2008 Revenue Very scalable offerings & $300K + Annualised Revenue & growing Costs Current costs (approx $2m p
Slide 12: AUS Desktop Revenue Model
AUS Desktop Revenue Model For personal use only $15 - $85 per month per seat for live prices $100 per month per seat for trading 117+ services Signed up 500 Users (~100 Live prices) Key role to up sell V-Wrap & SMA Operating Very scalable offerings Costs Current costs (approx $0.8m pa)
Slide 13: United Kingdom Status
United Kingdom Status For personal use only Infrastructure in place Systems, Datacentres, Offices, Staff IF market is where we expected it to be Shift from insurance to Managed Investments UK Tax laws strongly favour managed funds over US/AUS style SMA’s PPS spent last 18-24 months creat
Slide 14: United Kingdom Smartfund
United Kingdom Smartfund For personal use only Smartfund is a complex legal and tax structure Blend of Unitised Managed Fund and an SMA it involves a legal and tax structure that has been created by Praemium it is unique to Praemium it is reliant upon a technology capability that only Prea
Slide 15: The opportunity: High Net Worth
The opportunity Three key target markets For personal use only Three key markets: 1. High Net Worth (>£1m liquid assets) 135,000 individuals with >£800bn liquid assets Serviced by wealth managers, brokers & private banks Alternative to discretionary managed accounts Smartfund creates a tax f
Slide 16: The opportunity: Financial planners
The opportunity Three key target markets For personal use only 2. Financial planners >15,000 planners Primarily service the Mass Affluent £50-500k liquid assets 5.2 million individuals with >£820bn liquid assets Predicted to grow by 18% over 3 years Not yet embedded with wrap platforms
Slide 17: The opportunity: Platform market
The opportunity Three key target markets For personal use only 3. Platform market Circa £60 billion under management 8 current platform providers 2 clear market leaders New entrants expected Tax and direct equity functionality SMA capabilities 16
Slide 18: Revenue model
Revenue model For personal use only Flagship offering in the UK market We are the Operator 50 basis points entry fee 25 basis points ongoing £100 – 200 per portfolio Operating Very scalable offerings Costs Current costs (approx $8m pa) indicative of future 17
Slide 19: Smartfund Advantages
Smartfund Advantages For personal use only 1. Creates Tax Free Structure Allows IFA’s to deploy lifestyle funds to clients with no CGT 2. Strong IFA Lock In IFA Branding & pricing control Only Variable MER pricing Investor pays CGT penalty if they leave IFA 3. Superior Investment Vehicle C
Slide 20: Distribution partnerships
Distribution partnerships For personal use only One of the two largest platform providers in the UK 19% market share with $14.1bn AUA (29 Feb 2008) AUA grew 35% in 2007 Signed contract on 12 March 2008 First UK fee received - $180k (minimum per annum) Deployed CGT calculator in March I
Slide 21: Distribution partnerships: Capita
Distribution partnerships For personal use only Capita FTSE100 company, > £4bn market capitalisation Largest provider of fund administration services to investment managers LOI signed in 2007 Discussions continuing for deployment of Smartfund Provides access to institutional distribution 2
Slide 22: Distribution partnerships: Argenta – Lloyd's Adviser
Distribution partnerships For personal use only Argenta – Lloyd’s Adviser One of only two licensed Lloyd's adviser and members' agent Approx £1bn underwriting capacity Seeking to add value in management of funds held as security LOI signed in 2006 Discussions continuing for deployment of S
Slide 23: Other Distribution
Other Distribution For personal use only Direct IFA Networks Investment Conference Circuit Stock Brokers Accountants 22
Slide 24: Key Financial Details
Key Financial Details For personal use only EBITDA for Half Year 31 Dec 2007 = ($6.2 million) All UK establishment costs are expensed Praemium has no debt Operational revenue for: March 2008 Qtr = $1.7 million Half Year 31 Dec 2007 = $2.9 million Half Year 31 Dec 2006 = $1.8 million
Slide 25: Key Financial Details - cont
Key Financial Details - cont Quarterly Comparison For personal use only V-Wrap Nbr Quarter Revenue Receipts Portfolios FUA SMA FUM Mar-07 $1,159 k $1,133 k 20,500 $20.3 bn $64 m Jun-07 $1,337 k $1,054 k 22,860 $24.1 bn $193 m Sep-07 $1,320 k $1,380 k 25,300 $26.3 bn $233 m Dec-07 $1,651 k $1,598 k 3
Slide 26: Operating Performance to Dec 2007
Key Financial Details Operating Performance to Dec 2007 For personal use only Half Year to Operating Direct Operating Corporate EBITDA December Revenue Costs EBITDA Costs net of 2007 Corporate Costs V-Wrap 2,854 1,598 1,256 914 342 SMA 107 457 (350) 261 (611) Desktop 7 228 (221) 131 (352) UK 3,572 (
Slide 27: Operating Performance to Dec 2007 (cont.)
Key Financial Details Operating Performance to Dec 2007 (cont.) For personal use only 57% increase in gross margin per portfolio December 2006 December 2007 Operating Cost/Margin Operating Cost/Margin per Portfolio per Portfolio 28% 44.00% 56.00% 72% Cost/Portfolio Cost/Portfolio Gross Mgn/Portfolio
Slide 28: Presentation by Mr Arthur Naoumidis
For personal use only Presentation by: Mr Arthur Naoumidis Praemium Ltd Level 1 406 Collins Street Melbourne Victoria 3000 Australia 27 www.praemium.com.au