Aberdeen Leaders Limited. Quarterly Report Three months ended 31 March 2016

Transcription

1 Aberdeen Leaders Limited Quarterly Report Three months ended 31 March 2016

2 This document has been printed on 100% recycled paper, manufactured with 75% post consumer and 25% pre consumer waste. No virgin fibres used. Elemental chlorine free.

3 Quarterly Review Dear Shareholder The Australian share market, as measured by the S&P/ASX 200 Accumulation Index (ASX 200), ended the March quarter down 2.7%. Against this backdrop the Company s gross assets slightly outperformed, down 1.6%. During January events in China drew focus, with wild swings on the Chinese share market and efforts to stabilise its currency impacting all world markets. In local currency terms, the MSCI World fell by 6.1%, the Nikkei 225 in Japan declined by 8.0%, the US S&P 500 declined by 5.1% and the EURO STOXX 50 fell by 6.8%. The FTSE 100 in the UK performed comparatively well, only falling 2.5%. Here in Australia we had one of the worst starts to a new calendar year on record, with the ASX 200 falling by 5.5% over the month. The Property sector was one of the few to end the month in positive territory, up by 1.1%, joined by Utilities and Telecommunication Services up 0.7% each. Materials was the worst performing sector, off 9.5% on falling iron ore price, closely followed by Banks which declined 9.0%. Both consumer and business confidence suffered in the latest findings. The Australian dollar slipped by 2.8% against the US dollar during the month, ending at US$ February was another disappointing month, with the ASX 200 declining by 1.8% despite the Resources sector rising 9.0% to recoup its losses from the previous month. This was helped by a significant gain in the iron ore price, which rose by 18.9% on restocking in China. The Banking sector continued its downward trajectory, falling a further 7.0%. In other markets, the Nikkei 225 s 8.5% fall contributed to the 1.0% decline in the MSCI World Index. Reporting season in Australia led to revised earnings expectations, but only a modest reduction of 1.2%. BHP cut its dividend as we expected, however we were surprised by the extent of the cut (-74%). The Reserve Bank of Australia (RBA) held the cash rate at 2.0% and the Australian dollar gained modestly by 0.8%, ending at US$ March was the first positive month of 2016 with the ASX 200 rising by 4.7%, despite both ANZ and Westpac announcing towards the end of the month that provisions for bad and doubtful debts would have to rise. The Banking sector shrugged off this news to be the top performer, up 6.7% during the month. Resources were also strong, rising by 5.8% as iron ore prices jumped another 8.0%. Other markets also had a good month, with the MSCI World gaining 6.5% and emerging markets rallying on receding fears of a hard landing in China. Domestically, the RBA left the cash rate unchanged, the Australian dollar improved against the US dollar by 7.2% to end at US$0.7657, and Malcolm Turnbull, the Prime Minister, announced that the Federal Budget would be brought forward to May 3 (which could lead to a double dissolution election in July). The table below shows the key contributors and detractors over the quarter: Three months to 31 March 2016 Top 5 Contributors Relative weight Contribution Stock (%) (%) NAB (non-hold) Macquarie (non-hold) Westfield Cochlear CBA Top 5 Detractors Relative weight Contribution Stock (%) (%) Incitec Pivot Newcrest (non-hold) QBE Insurance Transurban (non-hold) Wesfarmers (non-hold) During the quarter, transactions included increasing our model weighting to Amcor, Cochlear, Tatts Group, Adelaide Brighton, Healthscope and South 32 and reducing the weighting to BHP Billiton, Rio Tinto, ANZ, ASX, Westpac and ResMed all other transactions being in the normal course of business. As at 31 March the Company s NTA per share stood at $1.12, representing a three-month return of -3.2%. Net of deferred tax on unrealised gains, the NTA was $1.10 per share. The share price closed at $1.025, representing a three-month return of -1.0%*. As at 31 March the share price was at a discount to both the pre and post-tax NTA. *after adding back dividends paid Interim Dividend A fully franked dividend of 1.0 cents per share was declared on 23 March, payable on 5 May The Board continues to monitor the level of dividends received amongst other factors when determining our pay-out policy. aberdeenasset.com.au 1

4 QUARTERLY REVIEW CONTINUED Dividend Reinvestment Plan I would like to remind investors of the Company Dividend Reinvestment Plan (DRP) which allows eligible shareholders to have their dividends automatically reinvested in the Company. If you would like to participate in the DRP or would like more information please phone and we will mail you a DRP booklet containing the relevant information. Outlook We expect market volatility to continue over the next 12 months, driven mainly by macro events and sovereign concerns. Specifically for Australian equities, however, we remain cautiously optimistic as lower interest rates spur on consumption and employment stabilises. We are encouraged that the balance sheets of our holdings remain in solid shape with many having taken the difficult decisions to cut costs earlier into this economic transition. We remain up-beat on tourism, which will be aided by the lower domestic currency, housing, healthcare, education and information technology. Meanwhile, those sectors we remain more cautious on include mining, mining services and banks. The key risk remains political uncertainty, and consumer and corporate confidence, although we are starting to see retail sales turn positive. We expect greater privatisation and infrastructure spend to stimulate the economy, as supported by an upward revision in the government s capital expenditure plans for the coming year. Aberdeen Asset Management Limited April aberdeenasset.com.au

5 Financial Record Net Tangible Assets At 31 March 2016 NTA per share (pre-tax) 1.12 NTA per share (post-tax) 1.10 Share Price (Discount) / Premium to NTA (pre-tax) (8.42)% (Discount) / Premium to NTA (post-tax) (6.96)% Annualised dividend yield* (100% franked) 4.88%** * Using the share price at the end of the period ** 6.97% gross of franking credits Performance Summary 3 Months % 12 Months % 3 Years % pa At 31 March Years % pa Total portfolio* Benchmark** Net Assets (pre-tax) Net Assets (post-tax) Share Price All returns assume reinvestment of dividends. * Performance is calculated based on the change in the value of the total portfolio (excluding the loan and tax liabilities) before deduction of all other fees. Past performance is not a guide to future performance. ** Benchmark: S&P/ASX 200 Accumulation Index. Portfolio Composition At 31 March 2016 Equities 92.9 Cash 7.1 Total 100% Asset allocation is on gross assets and excludes the loan facility liability. Dividend A fully franked dividend of 1.00 cents per share payable for the March quarter was declared on 23th March 2016, payable on 5th May Given the uncertain market conditions the Board will continue to review future dividends and will be closely monitoring corporate results, asset values and dividend statements in the months ahead. Franking Credits As at 31 March 2016 the Company franking account had a franking credits balance of $9.8m aberdeenasset.com.au 3

6 Portfolio of Investments The full portfolio of the Company at market value at 31 March 2016 is shown below: Sector Company Quantity Market value $ % Finance Ex Property Trusts ANZ Banking Group 122,800 2,880, ASX Ltd 133,800 5,512, AMP LTD 754,900 4,348, Commonwealth Bank 76,300 5,701, Medibank Private Ltd 376,200 1,094, QBE Insurance Group 271,000 2,926, Westpac Banking Corp 190,800 5,781, ,245, Property Trusts Westfield Corp Npv Stapled Units 438,500 4,367, Scentre Grp Npv 906,800 3,998, $8,366, Consumer Discretionary Tattersall's Limited 687,400 2,584, $2,584, Consumer Staples Coca-Cola Amatil 222,300 1,945, Woolworths Limited 55,100 1,215, $3,160, Health Care Cochlear Limited 33,700 3,419, CSL Limited 61,300 6,200, Healthscope Ltd 632,000 1,668, Resmed Inc 388,100 2,879, $14,167, Energy AGL Energy Limited 242,100 4,406, Caltex Australia 74,400 2,511, Woodside Petroleum 121,900 3,157, $10,075, Materials Adelaide Brighton Ltd 380,900 1,919, AMCOR Limited 237,900 3,371, BHP Billiton Limited 220,600 3,717, Brambles Limited 116,900 1,415, Incitec Pivot Limited 772,000 2,454, Rio Tinto 111,100 4,721, South32 Limited 460, , $18,273, Telecommunication Services Telstra Corporation Limited 916,700 4,876, $4,876, Utilities Ausnet Services 2,078,900 3,097, $3,097, Equity Total $92,847, Net Liquidity including dtl $5,220, Total Assets excluding Debt $98,068, Loan Facility ($30,000,000) Total Equity $68,068, aberdeenasset.com.au

7 Corporate Information Aberdeen Asset Management Limited, Australia, is the Manager of the Company. It is a subsidiary of Aberdeen Asset Management PLC ( Aberdeen ) whose group of companies as at 31 March 2016 managed a combined A$547.1 billion for institutions, unit trusts, listed investment companies, offshore funds and private clients. Aberdeen has its headquarters in Aberdeen, Scotland, and operates 37 offices in 25 countries around the world. Clients access Aberdeen s investment expertise across the three asset classes of equities, fixed income and property as well as tailored solutions. Aberdeen follows a predominantly long-only approach, based on fundamentally sound investments. Aberdeen s investment teams are based in the markets or regions in which they invest. Global reach, local understanding We know global markets from the local level upwards. We believe our focus, size and approach enable us to provide effective asset management and superior client service. Our teams champion original thinking and knowledge, so investment decisions are based only on our own research. As a group, we have the scale to provide global coverage of financial markets, yet we are small enough to focus on each and every portfolio decision. Close-knit teams, clear investment processes and flat structures are important to us. We seek to grow our clients assets in a way that is manageable and sustainable over the longer term. Aberdeen in Australia Aberdeen commenced its Australian operations in December 2000, and as at 31 March 2016 had A$14.7 billion in assets under management and advice. In addition to managing the investments of a number of Australian registered funds, Aberdeen in Australia also manages the Aberdeen Group s Australian and New Zealand assets for a range of global and domestic clients. This report has been prepared for information purposes only and should not be considered as an offer or solicitation, to deal in any of the investments mentioned. Aberdeen Asset Management Limited ABN (Aberdeen) is the investment manager of Aberdeen Leaders Limited ABN Neither Aberdeen, Aberdeen Leaders Limited nor any member of the Aberdeen Group, nor any of its officers, employees or agents guarantees the repayment of capital, the performance or any distribution by Aberdeen Leaders Limited. Information contained in this document is based on sources believed to be reliable, and all opinions expressed are honestly held. Information in this document is of a general nature only and is not intended to provide investment or financial product advice. This document has not been prepared taking into account the particular objectives, financial situation or needs of any investor, so it is important that before acting investors should consider their own circumstances and consult their Financial and/or Tax adviser. Aberdeen shall not be held liable for any loss or damage caused to any person in respect of any representation, except as required by law. Aberdeen Asset Management Limited holds an Australian Financial Services Licence No

8 Aberdeen Leaders Limited Quarterly Report three months ended 31 March 2016 Aberdeen Asset Management Limited Level 10, 255 George St Sydney NSW 2000 Phone: Fax: Toll Free: client.service.aust@aberdeen-asset.com Website: