Mirrabooka Investments Ltd · ASX:MIR
Mirrabooka Investments — Shareholder Meeting (October 2004)
32 slides from Mirrabooka Investments's shareholder meeting presentation, Oct 15, 2004
Slide 1: Chairman's Address - 2004 Annual General Meeting
* *% MIRRABOOKA cos irrabooka Invesiments Limited investments Limited S$ 296 938 Level 20 tO Collins Street Melbourne Victoria 3000 OPO Box 21/48 Telephane 03 9650 9944 Facsimile 03 9640 9400 fanail [email protected] Internet hteps//ww w.mired.com. alt 15 October 2004 The General Manager Australi
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Slide 3: Mirrabooka Investments
Mirrabooka Investments An investor in small and medium size companies in Australia & New Zealand Seeking to provide our shareholders with: =" Medium to long term investment gains # Attractive dividend returns
Slide 4: Big dividend increases and higher interest income led to improved profit
Big dividend increases and higher interest income led to improved profit $ Million $0.65m 210m |) a $0.73m Increased income because of higher dividend payment rates $2.95m Increase in dividends received because of the larger portfolio 2003 Profit Dividends Dividends Trading& Deposits Borrowing Tax 2
Slide 5: Earnings Per Share v Dividends Per Share
Earnings Per Share v Dividends Per Share Cents per share 9 s s £ aS Financial year i Earnings per share “ Realised investments per share if Dividends per share
Slide 6: Small and mid caps outperform again
Small and mid caps outperform again 145 5 140 - 135 130 - 125 - 120 | 115 110 5 Jul03. Sep03 Nov03 Jan04 Mar04 May04 Jul04 Sep04 — ASX Mid 50's Acc. Index ~—« ASX Small Ordinaries Acc Index om ASX200 Acc Index
Slide 7: Portfolio Management Performance - % Per Year
Portfolio Management Performance - % Per Year [Itsisin 30% 25% 20% 15% 10% 5% 0% 1 yearreturn 2 yearreturn 3 year return 4 year return 5 year return since inception @ Mirrabooka Net Asset per share growth plus dividends oOcpPI MS&P/ASX Mid Cap 50 and Small Ordinaries Accumulation Indices
Slide 8: Performance since inception
Performance since inception Base of 1,000 in April 1999 1,900 > 1,800 | 1,700 | 1,600 - 1,500 | 1,400 - 1,300 | 1,200 - 1,100 | r A. 900 r - T T Apr-99 Apr-00 Apr-01 Apr-02 Apr-03 Apr-04 — Mirrabooka net asset backing plus dividends »<« Combined S&P ASX Small Ordinaries and Mid Cap 50 Indices
Slide 9: Mirrabooka's Net Asset Backing Return up 25%, Share Price Return up 12%
Mirrabooka’s Net Asset Backing Return up 25%, Share Price Return up 12% 30% 5 25% + 20% + 15% + 10% + 5% + 0% 1 year return 2 year return 3 year return @ Share Price Accumulation Series OcPI @ Combined S&P/ASX Mid Cap 50 and Small Ordinaries Accumulation Indices
Slide 10: Discount to Net Asset Backing 11% - annoying but useful buffer
Discount to Net Asset Backing 11% - annoying but useful buffer against any small cap pull back 15% 12% 9% 6% 3% 0% -3% -6% -9% -12% -15% _| [Premium Discount Jun-01 Dec-01 Jun-02 Dec-02 Jun-03 gaa Dec-03 Jun-04 Net Asset Backing per share at 30 September 2004 was $1.46. Share price of $1.30 is at an
Slide 11: Listed Investment Company Sector has moved from premium to discount
Listed In move vestment Company Sector has d from premium to discount Price/NTA % 20% Pe BY ye ee ee ee lh et 10% 5% 0% f 5% ----- fhe f- 10% -ge~ We Yeo ee -15% Discount _ Jan 88 Apr89 Jul90 O -20% GSJBW Quantitative Research ct 94 Jan93 Apr94 Jul95 Oct96 Jan98 Apr99 Jul00 Oct01 Jan 03 Apr 04 —Mark
Slide 12: Why has this happened?
Why has this happened? = Significant number of new listed investment companies: >» approximately $1 billion of capital raised >» a number of the new LIC’s focus on small company sector = Increased supply of Mirrabooka shares following the rights issue and share acquisition plan = Listed Investment C
Slide 13: Largest Acquisitions (1/7/03-30/9/04)
Largest 5 Acquisitions - (1/7/03-30/9/04) Macquarie Airports Transurban Group Baxter Group Centennial Coal AuSelect $m 3.3 2.6 2.4 2.4 2.0
Slide 14: Macquarie Airports / Transurban Group
Macquarie Airports « Holds investments in Sydney (56%), Rome (34%), Bristol (31%) and Birmingham (15%) airports « Prospective 2005 yield of 6.4% Transurban Group « Toll road and tolling system operator = Operates Melbourne Citylink toll road and holds a 40% interest in Sydney’s Westlink toll project
Slide 15: Baxter Group / Centennial Coal
Baxter Group » Waste management business located in Clayton which dominates landfill in S.E. Melbourne « Has an important recycling JV with Visy Paper Centennial Coal « Fuels nearly 40% of NSW’s coal fired electricity = Growth potential via two large mine developments for local and export (23% in 20
Slide 16: AuSelect
AuSelect » Resource Investment Company « Provides exposure to small/medium gold and base metal Companies in Australia, Africa and South East Asia
Slide 17: Portfolio additions in the 2004 Financial Year
Portfolio additions in the 2004 Financial Year « AuSelect « Beach Petroleum = BOOM Logistics « Colorpak = Corporate Express « Excel Coal « GasNet Australia Group « Genepharm Australia # Geodynamics = GrainCorp « HHG PLC « Incitec Pivot « Macquarie Airports «McMillan Shakespeare « Pharmaxis = Primeli
Slide 18: Purchases Since June 2004 (Over $500,000)
Purchases Since 30 June 2004 (Over $500,000) New Stocks: « Argus Solutions - iris (eye) recognition technology « Diversified Utility & Energy Trusts - gas and electricity assets investor = Peet & Company - land estate development = Symex Holdings - manufacturer of soap (eg Velvet, Lux Flakes, Pental
Slide 19: Company Profit Share - Is this as good as it gets?
Company Profit Share — Is this as good as it gets? Ratio Ratio 0.21 0.20 0.19 0.18 0.17 0.16 0.15 0.14 0.13 0.12 0.5 Mar-86 Mar-88 Mar-90 Mar-92 Mar-94 Mar-96 Mar-98 Mar-00 Mar-02 Mar-04 — Profit Share of Factor Income (RHS) w= Wages Share of Factor Income (LHS) Source: ABS
Slide 20: The Small Industrials Sector has moved to point where valuations look high
The Small Industrials Sector has moved to point where valuations look high PER Premium/Discount % 15 7 Small Companies trading at a Premium vs Major Industrials GSIBW Quantitative Research Average -10 4 15> -20 + | -25 + Small Companies trading at a Discount vs Major Industrials -30 + Nov-93 Nov-94
Slide 21: ION is an example of a small/mid cap stock falling out of favour
ION is an example of what can happen when a small/mid cap stock falls out of favour $ Capital raising 2.6 5 2.4. / 2.2 2 Profit downgrade 1.8 - 1.6 - 1.4 - 1.2 - b 1 Sep- Dec- Mar- Jun- Sep- Dec- Mar- Jun- Sep- 02 02 03 03 #03 03 04 04 #4«904
Slide 22: Largest 5 Disposals (1/7/03 to 30/9/04)
Hills Industries G.U.D Holdings AV Jennings Housewares International Ten Network Largest 5 Disposals - (1/7/03 to 30/9/04) $m 3.7 3.6 2.5 2.3 2.1
Slide 23: Sales Since June 2004 - Disposed of
Sales Since 30 June 2004 (Over $500,000) Disposed of: » AV Jennings " Beach Petroleum « Hills Industries » ION « Primelife » Sunland Group
Slide 24: Sales Since June 2004 - Reduced holding in
Sales Since 30 June 2004 (Over $500,000) Reduced holding in: = APN News & Media 7.25% conv. notes = Computershare = DCA Group « Excel Coal = Foodland » James Hardie « Pacifica Group
Slide 25: Mirrabooka has moved to a higher cash position
- With the small/mid cap sector enjoying further. ; strong rises Mirrabooka has moved to a higher 18 16 14 12 10 oN FF & $m Jun02 Sep02 cash position Rights issue ’ Mar03 Jun03. Sep03 Dec03 Index value (base 1000 30/6/02) 1500 1400 1300 1200 + 1100 1000 900 800 Mar04 Jun04 Sepd4 Mi Cash Position ==
Slide 26: Top 20 Investments - 30 September 2004
Rank Healthscope 1 Nufarm 2 Hills Motorway Group 3 Patrick Corporation (a) 4 Baxter Group 5 (a) Includes $4.5 million of PRK 6% converting preference shares Top 20 Investments - 30 September 2004 $m 8.0 7.7 6.8 6.1 6.0
Slide 27: Top 20 Investments - 30 September 2004 (continued)
APN News & Media 7.25% conv. note Centennial Coal Macquarie Airports Programmed Maintenance Macquarie Infra. Group Rank oO ON O Top 20 Investments - 30 September 2004 $m 5.8 5.6 4.9 4.1 3.9
Slide 28: Top 20 Investments - 30 September 2004 (continued)
Alinta lluka Resources Gunns DCA Group Origin Energy Rank 11 12 13 14 15 Top 20 Investments - 30 September 2004 $m 3.8 3.7 3.6 3.4 3.3
Slide 29: Top Investments - September 2004
Top 20 Investments - 30 September 2004 Rank $m Transurban Group 16 3.3 Funtastic 17 3.0 Boom Logistics 18 2.9 Foodland Associated 19 2.7 Integrated Group 20 2.6 91.3 (Top 20 investments represents 59.3% of total portfolio of $153.9)
Slide 30: Mirrabooka uses a wide range of brokers
Mirrabooka uses a wide range of brokers Brokerage split for 2004 Goldman Sachs JBWere Other brokers included: Austock Brokers ABN Amro Equities Australia ABN Amro Morgans Bell Potter Securities Burdett Buckeridge Young CCZ Statton Equities Citigroup Global Markets Australia Deutsche Securities Austr
Slide 31: Outlook
Outlook = Positive reporting season momentum: » strong profit growth and dividend increases >» continuing cash inflows » higher share prices = More favourable float environment: » some of interest = High prices and valuations (P/E’s) » small caps at premium to large caps » risk in small caps rising
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