For personal use only
Perpetual Equity Investment
Company Limited
ABN 68 601 406 419
Angel Place,
Level 18, 123 Pitt Street
Sydney NSW 2000
Australia
GPO Box 4172
SYDNEY NSW 2001
Australia
Phone 02 9229 9000
Fax 02 9229 9009
www.perpetualequity.com.au
14 December 2021
ASX Limited
ASX Market Announcements Office
Exchange Centre
20 Bridge Street
SYDNEY NSW 2000
Perpetual Equity Investment Company Limited
Monthly Investment Update and NTA Report
Perpetual Equity Investment Company Limited (the Company) (ASX: PIC) advises that it has released the Monthly Investment Update and NTA Report (the Report) for the period ending 30 November 2021 (as attached).
If shareholders or other interested parties have any queries regarding the Report, they can contact:
Karen Davis
Investor Relations
Perpetual Investment Management Limited
P: 02 9229 9114
-
karen.davis@perpetual.com.au
Yours faithfully
Sylvie Dimarco
Company Secretary
(Authorising Officer)
onlyINVESTMENT UPDATE AND NTA REPORT
November 2021
PORTFOLIO SNAPSHOT
NET TANGIBLE ASSET (NTA) BACKING PER SHARE
AS AT 30 NOVEMBER 2021 | AMOUNT | AS AT 30 NOVEMBER 2021 | |||||||||||
ASX Code: | PIC | ||||||||||||
NTA after tax | $1.286 | ||||||||||||
Structure: | Listed Investment Company | ||||||||||||
NTA before tax | $1.333 | ||||||||||||
Listing Date: | 18 December 2014 | ||||||||||||
Daily NTA is available at www.perpetualequity.com.au | Market Capitalisation: | $483 million | |||||||||||
Share Price: | $1.29 | ||||||||||||
All figures are unaudited and approximate. | |||||||||||||
NTA figures are calculated as at the end of day on the last business day of | Shares on Issue: | 374,314,954 | |||||||||||
The before and after tax numbers relate to provisions for deferred tax on | |||||||||||||
use | |||||||||||||
the month. | Dividends: | Half-yearly | |||||||||||
capital raising costs and on unrealised gains and losses of the Company's | |||||||||||||
investment portfolio. | Management Fee | 1.00% p.a.* | |||||||||||
NTA figures are calculated as at the end of day on the last business day of | |||||||||||||
the month. | Manager | Perpetual Investment | |||||||||||
Management Limited | |||||||||||||
* exclusive of GST | |||||||||||||
INVESTMENT PERFORMANCE | |||||||||||||
AS AT 30 NOVEMBER 2021 | 1 MTH | 3 MTHS | 6 MTHS | 1 YR | 2 YRS P.A. | 3 YRS P.A. | 5 YRS P.A. | SINCE | |||||
INCEP P.A. | |||||||||||||
PIC Investment Portfolio | -4.4% | -3.4% | 2.7% | 20.5% | 16.5% | 16.3% | 12.4% | 11.0% | |||||
Net of fees, expenses and before tax paid | |||||||||||||
S&P/ASX 300 Acc Index | -0.5% | -2.3% | 3.6% | 16.0% | 6.8% | 12.9% | 10.3% | 9.4% | |||||
Excess Returns | -3.8% | -1.1% | -0.9% | 4.5% | 9.7% | 3.4% | 2.1% | 1.5% | |||||
personal |
R turns have been calculated on the growth of Net Tangible Assets (NTA) after taking into account all operating expenses (including management fees) and assuming
r investment of dividends and excluding tax paid. Any provisions for deferred tax on unrealised gains and losses are excluded. Past performance is not indicative of future
erformance. Inception date is 18 December 2014. Portfolio and Index return may not sum to Excess Return due to rounding.
TOP SECURITIES | DIVIDENDS IN CENTS PER SHARE | ||
TOP 5 AUSTRALIAN LISTED SECURITIES | Annual dividend yield: 4.3% | ||
COMPANY | PORTFOLIO WEIGHT | ||
Grossed up annual dividend yield: 6.2% | |||
ANZ Banking Group Ltd. | 7.4% | ||
Crown Resorts Limited | 7.1% | ||
BHP Group Ltd | 6.8% | ||
Oil Search Limited | 6.2% | ||
For | |||
a2 Milk Company Ltd. | 4.4% | ||
TOP 3 GLOBAL LISTED SECURITIES | |||
COMPANY | PORTFOLIO WEIGHT | ||
Ferguson Plc | 4.1% | ||
La Francaise des Jeux SA | 3.7% | ||
Yield is calculated based on the total dividends of 5.6 cents per | |||
Flutter Entertainment Plc | 3.5% | ||
share and the closing share price of $1.290 as at 30 November | |||
Portfolio weight based on direct investments in securities and does not include | 2021. Grossed up yield takes into account franking credits at a | ||
tax rate of 30%. | |||
any derivative exposure |
PAGE 1 OF 5 | PERPETUAL EQUITY INVESTMENT COMPANY LIMITED |
ALLOCATION OF INVESTMENTS^ | PORTFOLIO SECTORS^ |
96.5% of capital invested in securities |
only ^Weightings calculated based on direct investments in securities and any indirect exposure via S&P /ASX 200 related derivatives.
useAll figures are unaudited and approximate. Allocations may not sum to 100% due to rounding.
PORTFOLIO COMMENTARY
Markets began well in November, buoyed by a range of strong economic data and affirmation from the Reserve Bank of A stralia (RBA) that there would be no hikes in interest rates until 2023 or 2024; this is despite the futures markets appearing to price in inflation pressure which may force them to raise rates next year. The ANZ Australian Job Advertisement Series released in November¹ showed an increase in job advertisements of +6.2% in October compared to
-2.8% in September². In addition, retail sales were up +4.9% in October compared to +1.3% in September and -1.7% in August³.
personalThe reopening of Sydney and Melbourne positively impacted business conditions and consumer confidence, however the closing days of November were dominated by new COVID fears. First, a surge in cases ahead of the northern winter began gripping Europe and the US and then news of a new variant, Omicron, sent markets into a tailspin. Whilst details of the new variant were mixed, investors decided to panic first and ask questions later.
Pro cyclical value stocks, including consumer discretionary stocks such as travel and retail generally sold down aggressively, leading them to underperform relative to growth stocks by month close. For the 1 month to 30 November 2021, the PIC portfolio underperformed the S&P/ASX 300 Accumulation Index (the benchmark) by -3.8%. Over the 12 months to 30 November, the portfolio outperformed the benchmark by 4.5%4. The top contributors to absolute portfolio performance in November were Crown Resorts Limited (ASX: CWN), BHP Group Ltd (ASX: BHP), Ferguson PLC (LON: FERG) and Step One Clothing Limited (ASX: STP). On the domestic front, the share price for CWN, which is currently subject to a takeover bid from Blackstone, proved resilient, increasing 11% over the month to close at $11.02 on 30 November 2021. Globally, FERG continued its positive momentum, delivering strong profit growth over the quarter while navigating supply chain pressures. FERG along with CWN were top contributors to absolute performance for the 3 months to 30 November 2021.
For the month of November, the largest detractors to the portfolio's absolute performance were Flutter Entertainment (LON: FLTR), Oil Search (ASX: OSH) and Scientific Games Corporation (NAS: SGMS).
For¹ Source: ANZ Research.
https://media.anz.com/content/dam/mediacentre/pdfs/jobads/2021/ANZ_Australian_Job_Ads_lockdown_losses_recovered.pdf.
- Source: https://media.anz.com/content/dam/mediacentre/pdfs/jobads/2021/ANZ_Australian_Job_Ads.pdf
³ Source: Factset
4⁴ Returns have been calculated on the growth of Net Tangible Assets ⠀一吀䄀尩 after taking into account all operating expense (including management fees) and assuming reinvestment of dividends and excluding tax paid. Any provisions for deferred
tax on unrealised gains and losses are excluded. Past performance is not indicative of future performance.
PAGE 2 OF 5 | PERPETUAL EQUITY INVESTMENT COMPANY LIMITED |
Below, we hear from members of the Manager's broader equities team. Equities Dealer, Nick Buisman provides insights on the portfolio's recent acquisition of De'Longhi S.p.A (MIL: DLG), and Senior Equities Analyst, Clarke Wilkins, discusses Oil Search (ASX: OSH) and the approved merger with Santos Limited (ASX: STO). They outline the investment thesis and the research undertaken by the broader equities team to support PIC Portfolio Manager Vince Pezzullo's stock selection.
DE'LONGHI S.P.A (MIL: DLG) only(EQUITIES DEALER, EQUITIES - NICK BUISMAN)
De'Longhi SpA (MIL: DLG) ) is a globally recognised brand and leading manufacturer of small domestic appliances, headquartered and listed in Italy. DLG design and manufacture household appliances including coffee machines, cooking a d food preparation, home care and air conditioning. Their products are synonymous with quality, innovation, and design. DLG operate under the De'Longhi, Kenwood, Braun, Ariete, and Nutribullet brands and their products are sold in m re than 120 markets globally, generating revenue in excess of €2.3 billion in financial year 2020. By selling across a variety of household appliance categories through numerous retailers and channels globally, DLG has been able to diversify and reduce their dependence on any specific product, end market or distribution partner.
In pursuing quality global exposures, we recently initiated a position in DLG for the PIC portfolio. We are attracted to the usecompany due to their strong balance sheet, dominant market position (35% share of European coffee machine market)
and premium pricing power. We view their ongoing product development and innovation as a competitive advantage. Furthermore, DLG are vertically integrated, manufacturing out of three facilities in Europe and two facilities in China which they own and operate, allowing them to better control not only quality but also costs.
It is our view that the U.S. represents a significant growth opportunity for DLG over the medium-to-long term. The U.S. coffee machine market is estimated to be worth €1.8 billion annually and espresso machines are significantly underpenetrated, making up approximately 5-10% market share by volume versus filtered (drip) machines with 90-95%
share. For reference, this split in Europe is closer to 50%/50%, where espresso has grown at 11% compound annual growth personalr te between 2005 to 2020. We believe DLG is well positioned to benefit from this, with a sound balance sheet providing
optionality and investment for growth.
OIL SEARCH LIMITED (ASX: OSH)
(SENIOR EQUITIES ANALYST, EQUITIES - CLARKE WILKINS)
The scheme of arrangement merger with Santos Limited (ASX: STO) was approved by shareholders on 7 December, and the final Papua New Guinea (PNG) court approval was received on 9 December 2021. As a result, OSH ceased to trade on the ASX after 10 December 2o21.
Shareholders received 0.6275 STO shares for every OSH share and will end up owning 38.5% of the combined company. We believe there are significant synergies and opportunities that can be unlocked from the merged company. The balance sheet of STO has the financial flexibility to advance the key growth projects, that as a standalone company, OSH would have been unable to do due to the lack of a credit rating (a result of being domiciled in PNG), and the dwindling
ool of funds available to finance oil & gas projects. We also see the potential for the merged company to sell down a stake in PNG Liquefied Natural Gas (LNG) existing producing assets to create greater alignment of the Joint Venture Partners in the Papua LNG project. The potential sell down of the combined 42.5% stake in PNG LNG would increase balance sheet capacity, which could be further boosted by a sell down of the 51% stake in the Pikka project in Alaska. STO
Foralso has its own growth projects and is progressing a carbon capture and storage project at Moomba, South Australia, that c uld be an enabler for future hydrogen production. Although oil prices are likely to have ongoing volatility on COVID mutations, demand is still revering and latent supply from The Organization of the Petroleum Exporting Countries and
ther producers will be absorbed in 2022. Despite the decarbonisation of global transportation and energy generation, oil demand is still expected to increase over the next few years to above the pre-COVID level of ~100 million barrels per day. We believe that with a lack of investment in new capacity to offset natural field decline, and the challenges in financing new projects, STO is well placed to benefit from a period of robust oil prices before demand ultimately declines beyond 2030. LNG prices have maintained ongoing strength as Europe looks to build sufficient stockpiles for winter, with increased interest in contracting long-term supply de-risking the LNG growth of STO.
PAGE 3 OF 5 | PERPETUAL EQUITY INVESTMENT COMPANY LIMITED |
COMPANY NEWS
HALF YEAR RESULTS 2022
The Company's half year results for financial year 2022, including any dividend announcement, will be announced on 23 February 2022.
onlyBONUS ISSUE OF OPTIONS
On 29 June 2021, all eligible shareholders received their allotment of the one-for-one issue of bonus Options which the Company had announced on 2 June 2021. The Options are trading on the ASX, under the ASX code PICOA.
PIC Options provide holders with the opportunity to acquire a PIC ordinary share for $1.35 (exercise price) per Option bef re the expiry date of 2 September 2022. The Options Prospectus should be read carefully and in its entirety before you decide whether to deal in or exercise the Options. Further information on the Options, including the Prospectus and Options Exercise Form is available here.
useSHAREHOLDER COMMUNICATIONS
The PIC website hosts a range of information including Monthly Investment Updates, Portfolio Manager insights, dividend history and educational resources. The News and Insights section of the website also includes the ability for you to
s bscribe to receive regular updates via email.
personalREMINDER: TAX CERTIFICATION COMPLETION
Under the Australian Government's participation in Automatic Exchange of Information (AEOI) regimes, PIC is required to collect FATCA/CRS certification information and an investor's tax residency from shareholders. The information in certain circumstances may be reported to the Australian Taxation Office (ATO) which in turn reports to various global tax authorities.
Please check that you have completed your FATCA/CRS certification by logging into the Link investor portal here.
From there, under the Payments & Tax tab you will find 'FATCA/CRS', where you can fill in the Self Certification. Completing this information online is straightforward as the questions will guide you, and in some instances, it is only a couple of steps.
If you do not certify, PIC may be required to provide information about your account to the ATO. For more information on the self-certification process via Link please click here. For further information on FATCA and CRS, please visit here.
For
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Perpetual Equity Investment Company Ltd. published this content on 14 December 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 December 2021 03:47:01 UTC.