6 march 2013 for personal use only sydney nsw 2000€¦ · · 2013-03-056 march 2013 the manager...
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6 March 2013 The Manager ASX Market Announcements Australian Securities Exchange Exchange Centre Level 4 20 Bridge Street Sydney NSW 2000 Electronic Lodgement
Australian Foundation Investment Company Limited Information Meetings – Presentation
Dear Sir / Madam Please find attached the presentation to be given at the Information Meetings being held in March and April 2013. Yours faithfully
Simon Pordage Company Secretary
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Half-Year Meeting 2013For
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Disclaimer
Australian Foundation Investment Company Limited and its subsidiary AICS (AFSL 303209), their related entities and each of their respective directors, officers and agents (together the Disclosers) have prepared the information contained in these materials in good faith. However, no warranty (express or implied) is made as to the accuracy, completeness or reliability of any statements, estimates or opinions or other information contained in these materials (any of which may change without notice) and to the maximum extent permitted by law, the Disclosers disclaim all liability and responsibility (including, without limitation, any liability arising from fault or negligence on the part of any or all of the Disclosers) for any direct or indirect loss or damage which may be suffered by any recipient through relying on anything contained in or omitted from these materials.
This information has been prepared and provided by AICS. To the extent that it includes any financial product advice, the advice is of a general nature only and does not take into account any individual’s objectives, financial situation or particular needs. Before making an investment decision an individual should assess whether it meets their own needs and consult a financial advisor.
Half-Year Meeting 2013
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Agenda
1. Half-year results2. Market and sector snapshot3. Portfolio highlights4. Looking ahead5. Dividend Substitution Share Plan
Half-Year Meeting 2013
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1. Half-year results
Half-Year Meeting 2013
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Summary of half-year results to 31 December 2012
Half-Year Meeting 2013
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Earnings and dividends per shareDividends maintained through the GFC
Half-Year Meeting 2013
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Portfolio & share price performance to 31 January 2013Portfolio has outperformed over the short and long term.
Half-Year Meeting 2013
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Share price moved to a premium of 4%
Half-Year Meeting 2013
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2. Market and sector snapshot
Half-Year Meeting 2013
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Half-Year Meeting 2013
S&P/ASX 200 Price IndexDemand for yield has been rising in the last year.
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Where the Convertible Note funds were invested in the six months following the issue
Financials/market related: AMP, ASX, IRESS
Healthcare: CSL, Ramsay Healthcare, Ansell, Sonic Healthcare
Infrastructure: Hastings Diversified Utilities Fund, Sydney Airport, Transurban, Australian Infrastructure Fund
Energy: Oil Search, Woodside Petroleum
Banks: ANZ, Commonwealth Bank
Telecommunications: Telstra
Capital raisings: AGL, Brambles, QBE and Tox Free Solutions
Half-Year Meeting 2013
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Key Trends - Households have been building deposits ($b)
Half-Year Meeting 2013
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Key Trends
Half-Year Meeting 2013
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Sectors returns over 12 months to 31 December 2012
Half-Year Meeting 2013
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3. Portfolio highlights
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Major purchases 1 July to 31 December 2012
Half-Year Meeting 2013
$60.5m $13.5m $13.2m
$8.9m $8.6m $8.1m
$5.8m $5.8m $5.4m
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Major sales 1 July to 31 December 2012
Half-Year Meeting 2013
Hastings DiversifiedUtilities Fund
$83.6mMetcash
$12.4m
Peet
$6.1mSeven West Media
$5.2m
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Top 25 at 31 January 2013 – Banks
Half-Year Meeting 2013
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Top 25 at 31 January 2013 – Resources
Half-Year Meeting 2013
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Top 25 at 31 January 2013 – Energy
Half-Year Meeting 2013
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Top 25 at 31 January 2013 – Mining Services
Half-Year Meeting 2013
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Top 25 at 31 January 2013 – Industrial
Half-Year Meeting 2013
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Top 25 at 31 January 2013 – Non Bank Financial Services
Half-Year Meeting 2013
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Top 25 at 31 January 2013 – Retail
Half-Year Meeting 2013
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Top 25 at 31 January 2013 – Infrastructure
Half-Year Meeting 2013
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Recent reporting season feedback from companies
“Cost pressures”
Half-Year Meeting 2013
“Subdued conditions”
“Cautious earnings outlook”
“Revenue growth challenge”“High Australian dollar”
“Industrial relations climate”
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4. Looking ahead
Half-Year Meeting 2013
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Key factors
• Central bank policies
• Global growth low, government debt high
• Earnings outlook subdued
• Market consolidation likely
AFIC portfolio well-positioned and in good shape
Half-Year Meeting 2013
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Annual consensus EPS growth
Half-Year Meeting 2013
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All ordinaries price index – long term performance
Half-Year Meeting 2013
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Longer term issues for investors to consider
Half-Year Meeting 2013
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5. Dividend Substitution Share Plan
Half-Year Meeting 2013
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Half-Year Meeting 2013
AFIC’s Dividend Substitution Share Plan (DSSP)
Important Notice
AFIC does not give taxation advice, and the following slides should not be construed as such.
The taxation laws are different in each country (including New Zealand) and shareholders need to be aware of the differences with regards to the operation of the DSSP.
Shareholders should in all cases seek their own advice as to whether or not participation in the DSSP is suitable for them.
A copy of the DSSP booklet and the relevant ATO Class Ruling in respect of the Plan are available on the Company’s website (www.afi.com.au) or by request from the AFIC office.
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Dividend Substitution Share Plan (DSSP)What is it?
• Instead of a dividend, shareholders can elect to receive substitute shares.
• The price under the DSSP will be the same as for the DRP.
• No income tax is payable on DSSP shares at the time of receipt (for Australian resident taxpayers) – instead, tax is paid only when the shares are sold.
• DSSP shares do not receive the franking credit or any LIC gains.
Half-Year Meeting 2013
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Half-Year Meeting 2013
Dividend Substitution Share Plan (DSSP)Who might it be suitable for?
Those shareholders who:
• Wish to increase their shareholding rather than take cash.
• Are Australian tax payers who wish to defer any tax payable until the AFIC shares are sold.
• Are on a high marginal tax rate on their dividend.
Shareholders who pay tax at a lower rate (e.g. super funds) are expected to prefer the DRP.
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