Welcome to the 2017 Annual General Meeting

Transcription

1 1 Welcome to the 2017 Annual General Meeting

2 Summary of financial results for the year ended 30 June change Profit $211.5 million $216.3 million -2.2% Earnings per share 30.7 cents 32.0 cents -4.1% Total dividends per share for the full year Net tangible asset backing (NTA) per share 31.0 cents 30.5 cents +1.6% $7.71 $ % Management expense ratio (MER) 0.16% 0.17% -0.01% Number of shareholders 81,445 80,

3 Cash rate v Argo dividends 15 year history (excluding franking credits) 3 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% % 1.50% % 5 0.0% source: FactSet Interim Dividend (cps) Final Dividend (cps) Cash Rate % (LHS)

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5 Total Returns to 30 September 2017: % per annum % 11.6% 9.1% 9.8% 10.1% 7.7% 7.0% 4.9% 5.8% 3.9% 3.3% 3.1% 1 Year 3 Years 5 Years 10 Years Share Price NTA S&P/ASX 200 acc.

6 Argo attributes 6 A truly long-term, conservative investment philosophy An internally managed, low-cost business model with no performance fees A strong balance sheet with no debt Diversification of risk and administrative simplicity Active portfolio management offered by an experienced team in a strong and transparent corporate governance environment Fully franked, sustainably growing dividends

7 7 Argo s objective is to maximise long-term returns to shareholders through a balance of capital and dividend growth. It does this by investing in a diversified Australian equities portfolio which is actively managed in a low cost structure in a tax-aware manner.

8 Outlook 8 Underlying global macroeconomics have improved despite political uncertainty Australian economy continues to grow despite some conflicting signals Market valuations look somewhat stretched Cautious approach with cash available

9 S&P/ASX 200 performance excluding dividends ASX source: FactSet

10 S&P/ASX 200 v Accumulation Index including dividends Accumulation Index Price Index source: FactSet

11 S&P/ASX 20 dividend growth last three financial years (FY) % 150% 100% 50% 0% -50% -100% source: FactSet FY15 FY16 FY17

12 Dividend payers within the portfolio 12 5% 2% Grower Maintainer Cutter 35% 58% Non-payer

13 Major investment purchases during the year to 30 June

14 Major investment sales during the year to 30 June

15 Investment purchases since year end to 30 September Total purchases of approximately $50m, with larger purchases including:

16 Event Hospitality & Entertainment (EVT) 16

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18 Top 20 equity investments as at 30 September $M $M Westpac Banking Corporation Australian United Investment Co ANZ Banking Group Milton Corporation Commonwealth Bank of Australia Woolworths Wesfarmers Sydney Airport Macquarie Group Ramsay Health Care 89.5 BHP Billiton APA Group 85.8 National Australia Bank AGL Energy 85.1 Telstra Corporation Origin Energy 82.0 Rio Tinto Amcor 74.8 CSL Computershare 70.9

19 Portfolio sector allocation as at 30 September % 7.4% 5.5% 7.1% Listed Investment Companies 4.5% 3.5% 5.6% Cash Utilities Telecommunication Services & I.T. 4.0% Property Materials 20.3% 13.4% Industrials Health Care Other Financials Banks Energy 10.8% 7.6% 6.0% Consumer Staples Consumer Discretionary

20 Rural Funds Group (RFF) product & climatic diversification 20 Quality agricultural exposure is hard to find in ASX-listed environment source: RFF

21 Rural Funds Group business strategy 21 Invest across full spectrum of assets, whilst ensuring asset mix continues to fund distributions source: RFF

22 Rural Funds Group total shareholder return 22 $29,000 $24,000 $19,000 $14,000 March 2015: $15m Entitlement Offer Oct 2015: $35m Entitlement Offer March 2016: S&P/ ASX300 inclusion July 2016: $61m Entitlement Offer June 2017: $79m Entitlement Offer $9,000 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 S&P/ASX300 A-REIT RFF All ordinaries source: RFF & IRESS. Assumes $10,000 invested July 2014 and all distributions are reinvested at the DRP price. Total return of indices as provided by S&P. Data current to 10 August 2017

23 Outlook 23 US markets at all time highs; cautious on higher interest rates Ongoing economic growth in China is vital Banks face well-publicised head winds; increasingly stretched consumers Domestic economy will continue to grow

24 Outlook 24 Technology change and disruption continues

25 Executive team 25 Jason Beddow Managing Director Andy Forster Tim Binks Andrew Hill Senior Investment Officer Chief Operating Officer Chief Financial Officer Brydie Lloyd- Roberts Investment Analyst Colin Whitehead Investment Analyst Andrew Moller Investment Analyst Paul Frost Investment Analyst Stephen Mortimer Operations Officer Jo Chipperfield Legal Officer

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