Mirrabooka Investments Ltd · ASX:MIR
Mirrabooka Investments — Shareholder Meeting (October 2019)
32 slides from Mirrabooka Investments's shareholder meeting presentation, Oct 10, 2019
Slide 1: 2019 Annual General Meeting Presentation
10 October 2019 For personal use only The Manager ASX Market Announcements Australian Securities Exchange Exchange Centre Level 4 20 Bridge Street Sydney NSW 2000 Electronic Lodgement Mirrabooka Investments Limited 2019 Annual General Meeting Presentation Dear Sir / Madam The following presentation
Slide 2: Annual General Meeting 2019
For personal use only Annual General Meeting 2019
Slide 3: Disclaimer
Disclaimer Mirrabooka Investments Limited, its related entities and each of their respective directors, officers and agents For personal use only (together the Disclosers) have prepared the information contained in these materials in good faith. However, no warranty (express or implied) is made as t
Slide 4: Investment Approach
For personal use only Investment Approach Annual General Meeting 2019
Slide 5: Mirrabooka's Investment Approach
Mirrabooka’s Investment Approach Small and Mid Cap listed companies in Australia and New Zealand For personal use only Annual General Meeting 2019
Slide 6: Management of the Portfolio
Management of the Portfolio For personal use only Annual General Meeting 2019
Slide 7: Financial Results
For personal use only Financial Results Annual General Meeting 2019
Slide 8: Five year summary
Five year summary For personal use only Includes special dividends Management expense ratio of 0.61% Annual General Meeting 2019
Slide 9: Portfolio performance, including franking – per annum returns to 30 September 2019
Portfolio performance, including franking – per annum returns to 30 September 2019 For personal use only Assumes an investor can take full advantage of franking credits. Annual General Meeting 2019
Slide 10: Cumulative share price return, including franking
Cumulative share price return, including franking – 10 years to 30 September 2019 For personal use only Assumes an investor can take full advantage of franking credits. Annual General Meeting 2019
Slide 11: Dividends enhanced by realised gains have been a significant component of shareholder returns
Dividends enhanced by realised gains have been a significant component of shareholder returns – 10 years to 30 September 2019 For personal use only Franking Credit Return* Dividend Return *Assumes an investor can take full advantage of franking credits. Annual General Meeting 2019
Slide 12: Unrealised gains and losses in the portfolio for each holding
This is despite us being very tax aware in our approach – unrealised gains and losses in the portfolio for each holding For personal use only current holdings in the portfolio • The portfolio has net unrealized gains of $125.4 million • Tax payable upon realisation would be $41.5 million Annual Gene
Slide 13: An example of holding for the long term - Wellcom Group
An example of holding for the long term - Wellcom Group has been a very rewarding investment since its Initial Public Offer For personal use only • Founder led business. • Maintained a very strong balance sheet, typically no debt. • Consistently paid very attractive fully franked dividends. • Delive
Slide 14: Share price remains at a small premium to net asset backing per share
Share price remains at a small premium to net asset backing per share, although well down from high point of over 25% For personal use only Annual General Meeting 2019
Slide 15: Market Settings and the Portfolio
For personal use only Market Settings and the Portfolio Annual General Meeting 2019
Slide 16: Large companies have substantially outperformed small and mid cap sectors over the year
Large companies have substantially outperformed the small and mid cap sectors over the year to 30 September 2019 For personal use only Includes dividends. Annual General Meeting 2019
Slide 17: Over years small and mid caps have outperformed large companies
But over 5 years small and mid caps have outperformed large companies For personal use only Includes dividends Annual General Meeting 2019
Slide 18: Firms on high price earnings ratios trading at average forward P/E of 37.8x
Firms on high price earnings ratios (P/E’s) are currently trading at an average forward P/E of 37.8x, which is 54% above the long term average For personal use only Source: FactSet, Goldman Sachs Global Investment Research. Annual General Meeting 2019
Slide 19: Volatility in James Hardie Industries provided an opportunity to add a quality company
However recent volatility in James Hardie Industries has provided an opportunity to add a quality company to the portfolio For personal use only • Leadership position in Fibre Cement exterior cladding market in the US • Fibre Cement siding only represents 20% of the siding market • Strong cash flow
Slide 20: Impact on small company share prices when included in an index
Another feature of the market has been the impact on the share prices of small companies when they are included in a index For personal use only Source: FactSet. Annual General Meeting 2019
Slide 21: Impact on small company share prices when included in an index continued
Another feature of the market has been the impact on the share prices of small companies when they are included in a index continued For personal use only Annual General Meeting 2019
Slide 22: A number of holdings have been sold – total holdings down from 72 to 64
A number of holdings have been sold – total holdings down from 72 to 64 over the past 12 months For personal use only A declining grade profile at its best asset has reduced reward vs the risk Taken over by Nippon Paint Cyclical headwinds for the building materials market and a stretched balance she
Slide 23: We have continued to identify new opportunities
We have continued to identify new opportunities Well managed, dominant player in the Australian waste management For personal use only sector. Should benefit from government focus on a sustainable waste management. Global leadership position in developing urban renewal projects with a significant fu
Slide 24: Featured holdings – Objective Corporation
Featured holdings – Objective Corporation For personal use only • Founder CEO with strong alignment to shareholders. • Transitioned business to subscription revenues away from one-off, upfront payments • Conservative accounts with all R&D expensed as its incurred • Strong net cash balance provides v
Slide 25: Featured holdings – Macquarie Telecom
Featured holdings – Macquarie Telecom For personal use only • Founder CEO with strong alignment to shareholders • Recently announced data centre expansion that will quadruple capacity and provide many years of growth • Strong balance with expansion funded through cashflow and conservative debt level
Slide 26: Details of some key holdings
Details of some key holdings Emerging leader in logistics solutions globally. Unique owner/driver For personal use only culture which enables long term view of investment. Generates attractive Return on Invested Capital. Quality portfolio of difficult to replicate assets seeking to reduce freight co
Slide 27: Details of some key holdings continued
Details of some key holdings continued Founder led business which has developed a very strong brand in the For personal use only Australian 4WD parts market. Long runway in overseas markets provides opportunity to capture substantial market share. Strong management team who have built a successful A
Slide 28: Portfolio at September 2019 (excluding cash)
Portfolio at 30 September 2019 (excluding cash) Diversification of the portfolio Top 10 Holdings For personal use only – 64 holdings in total Rank Company % of Portfolio 1 Mainfreight 4.8% 2 Qube Holdings 3.7% 3 James Hardie Industries 3.6% 4 Seek* 3.2% 5 EQT Holdings 2.9% 6 ARB Corporation 2.8% 7 R
Slide 29: Portfolio at September 2019 (excluding cash) continued
Portfolio at 30 September 2019 (excluding cash) continued Diversification of the portfolio Next 10 Holdings For personal use only – 64 holdings in total Rank Company % of Portfolio 11 Objective Corporation 2.5% 12 Macquarie Telecom Group 2.5% 13 Carsales.com* 2.5% 14 Alumina* 2.4% 15 Breville Group
Slide 30: Closing Comments
For personal use only Closing Comments Annual General Meeting 2019
Slide 31: Closing Comments
Closing Comments For personal use only • High quality stocks in Mirrabooka's universe continue to trade at an elevated premium to historic levels. • There is likely to be increased future market volatility, particularly in smallcap stocks. • Mirrabooka has cash available. • We will remain patient wi
Slide 32: Mirrabooka Investments Limited
* ¢. MIRRABOOKA * Investments Limited
Mirrabooka Investments — Shareholder Meeting (October 2019) on 6ix