Selector June 2012 Quarterly Newsletter

8/13/2019 Selector June 2012 Quarterly Newsletter

1/21

In this quarterly edition we review performance and attribution. We profile Technology One and take a look at retailer Super Group Limited. We also comment on the economic landscape and transformations. Photo

Selector Funds Management Limited ACN 102756347 AFSL 225316 Level 3, 66 Hunter Street Sydney NSW 2000 Australia Tel 612 8090 3610 www.selectorfund.com.au

S e l e c t o r F u n d s M a n a g e

m e n t L t d

Q u a r t e r l y N e w s l e t t e r N o . 3

0

J u n e 2 0 1 2


2/21

June 201

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ACN 102

Level 3,

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downgr

risk dis

article

speciali

landsca

Finally,

a gross

Index.

To all o

Regard

Tony Sc

Corey

Selector Austr

Funds Manage

756347 AFSL 2

66 Hunter Stree

ne 612 8090 36

vestor,

un of the ev

rs are once

ng will shake

st to destroy

ecember 20

ent bonds

vestors buyi

arch 2012 q

ashamedly

e their capit

ent of

the

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onths on an

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quivalent PE

rprisingly, th

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extreme. N

ed that now

he time

to

b

election is

ades and ne

ount to shar

this quarter,

st Technolo

pe facing bus

over the cou

negative ret

nder the cir

ur investors

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alian Equities F

ent Limited

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nts that too

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of 65 times

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tances, it’s

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e in

equities

always criti

capital rais

e valuations

we profile

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inesses and

rse of the fi

urn of 1.13%

umstances,

e trust that

nd Quarterly N

000, Australia

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plating the

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because the

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ancial year,

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you find the

ewsletter #30

.au

the latter st

orst. Fear h

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earnings rati

James Grant

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report infor

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as taken hol

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3/21

June 201

Selector

ACN 102

Level 3,

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Table o

Page 1:

Page 4:

Page 13

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Page 1

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Quote

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Selector Austr

Funds Manage

756347 AFSL 2

66 Hunter Stree

ne 612 8090 36

f Contents

Letter to inv

Company Re

: Survival of

: Changing e

: Transforma

: Company v

politician th

king a series e, and by taon’t simply t pains to pe confidence

the politician

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alian Equities F

ent Limited

5316

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stors

view – Tech

he fittest – s

conomic lan

tions

isit diary Jun

at gets it;

of sensible ing most pee reversed bint out most to invest the

that gets it

Research C

nd Quarterly N

000, Australia

lectorfund.co

ology One

napshot revi

scape

Quarter 20

ecisions, whople with yoy the next lot days in parl ir own mone

John Key, P

ntre.

ewsletter #30

.au

ew Super Ret

2

ch build on u as you go, who come i iament – joby to expand

ime Ministe

ail Group

ach other a you can eff to governms are only cr hat they ar

of New Zeal

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4/21

June 201

Selector

ACN 102

Level 3,

Telepho

Perfor

Source: T

As the

investo

That sa

Decem

For the

In the group’s

of the

the mo

growin

compa

largest

focus i

Fund’s

Europe

period.

Selector Austr

Funds Manage

756347 AFSL 2

66 Hunter Stree

ne 612 8090 36

ance Global

he Australian Fi

accompanyin

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er 2011, rei

June quarte

ase of New

business tra

usiness into

e and expec

internation

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negative con

vestors on t

holding in P

an approval

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alian Equities F

ent Limited

5316

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Equity Mar

nancial review

g table abo

dex down d

e woes em

forcing our

a couple of

Corporatio

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two listed e

t further pos

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tribution for

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e now expect

nd Quarterly N

000, Australia

lectorfund.co

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the quarter,

heap funda

ich took an

ralian Phar

ed this quart

ewsletter #30

.au

the past tw

ompared to

Europe, th

stors are co

rmers inclu

ear has seen

inated in th

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the group’s

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ental valuat

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5/21

June 201

Selector

ACN 102

Level 3,

Telepho

Techno

Table 1Year

1987

1999

1999

1999

2000

2000

2000

2000

2000

2001

2001

2001

2002

2002

2002

2002

2003

2003

2003

2004

2005

2006

2007

2008

2009

2010

2011

2011

2012

History The Te

current

solutioestablis

applica

In Dece

the gro

investo

Selector Austr

Funds Manage

756347 AFSL 2

66 Hunter Stree

ne 612 8090 36

logy One (TN

: TechnologyEvent

Technology O

December, b

at $101M. Wi

Technology O

Technology O

supports the I

University of

Shares hit all

October, Tec

November, c

December, ac

fully integrat

January, foun

April, compa

August, anno

May, local go

July, compan

November, c

technology s

November, s

September, n

September, a

CEO Di Marc

expected rele

August, 2004

November, c

February, init

Company rep

Revenue exce

Company cel

Record reven

Revenue pass

Major corpor

investment in

First half prof

hnology On

executive ch

s,

servicing hed a separa

ions culmina

mber 1999,

up at just o

rs keen for i

alian Equities F

ent Limited

5316

t Sydney NSW

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E)

One time lin

ne founded by

siness lists on

th a forecast N

ne offering re‐p

ne service repu

IT requirements

echnology Syd

ime high of $4.

nology One rai

mpany undert

quires softwar

d software solu

der Adrian

Di

M

y announces a

nces revenue

ernment client

announces 10

ompany updat

ending slowdo

are price hits al

et profit drops

nnounces new

o re‐affirms c

ase of next gen

revenue up 7%

mpany announ

ial licence

fees

f

orting period ch

eds $100M, R&

brates ten year

ues of $136M,

es $150M, R&D

ations utilising

next generatio

its up 2% $9.3M

business tr

airman Adri

the

financite division t

ting in a gro

echnology

ver $100 mi

nformation t

nd Quarterly N

000, Australia

lectorfund.co

e 1987 – 20

drian Di Marco

tock exchange

AT of $5.5M, t

ositioned on pr

tation built on

of its clients in

ney selects Stud

74 per share, v

es $18M for ac

kes 3 for 1 shar

provider ProCl

tion to local go

arco appointed

.95 cent per sh

p 39% to $40M

list exceeds 50,

on market bu

es market, wit

n, dividends of

l time low of 20

0% to $7.0M, f

n market 10%

mmitment to

eration softwar

to $50M, net pr

ces intention to

or the

half

year

anged from Jun

D investment hi

s since listing, f

et profits of $1

investment $3

Technology On

n Cloud (Ci2 )so

, full year profit

ces its origi

n Di Marco,

l

managem investigate

ing client lis

ne listed on

llion. These

echnology (I

ewsletter #30

.au

2

focused on pro

with $1.00 per

e group’s price

oviding busines

“Power of One”

a full service off

ent One softwa

luing business a

quisition via pla

e split, increasin

aim software fo

ernment.

Chairman while

are special divi

, net profit pre

with 50% mark

back of shares

h net profits t

2 cents per sha

cents per share

ull year dividen

uy back of shar

invest heavily

“Connected In

ofits up 35% to

open operation

grew 70%,

with

e to September

ts $21M, record

ll time employ

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M, net profits

e enterprise so

tware offering,

s expected to ri

s back 25 ye

developing a

nt

and

accthe develop

t servicing ed

the stock e

were the he

T) exposure.

viding accounti

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earnings ratio s

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, whereby the

ering.

re system to su

t $478 million.

ement of new

g issued shares

r $10.6M, enabl

continuing

as

C

end to release

mortisation up

et share of 75 o

, representing a

o fall 25% bel

re maintained.

(equal to 60 ce

s up 25% to 2.5

es, to maximu

in research an

telligence CI ser

$9.5M, R&D ful

s in United Kin

customer

num

.

net profit of $

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ar dividends of

it $20M, cash b

ftware applicat

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ars, with fou

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change, rais

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Back then t

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, raising $28M,

ood at 18.5x.

enterprise soft

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port student gr

hares at $4.03

to 316M.

ling Technology

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xcess franking

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f largest Austral

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ow 2002 level

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cents per shar

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d development

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ly expensed tot

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ions passes 800

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3M, FTE exceed

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stry.

In

198 scale custo

government

ing $27.8 mi

the technol

he Technolo

business.

valuing compa

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implements a

owth.

per share.

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credits.

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of $9.4M po

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lling $9.5M.

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ase 900.

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ith

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6/21

June 201

Selector

ACN 102

Level 3,

Telepho

was ra

prospe

August

2000).

In subs

offerin

softwar

its co

market

formid

Table $’M

Revenu

Operat

Resear

EBIT

NPAT

EBIT M

Shareh

Net De

Market

Enterp

Buyout

ROCE (

GOCF /

Underl

PER

Divide

Divide

Share

Issued

* Adjuste

cash. Shar

Selector Austr

Funds Manage

756347 AFSL 2

66 Hunter Stree

ne 612 8090 36

e in what it

tus docume

2000, the s

equent year

s. Today, th

e solution pr

mitment to

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: Technolog

e

ing Expenses

h & Developm

argins (%)

olders’ Equity

bt / (net cash)

Capitalisation

ise Value

(%) **

) ***

EBITDA (%)

ing EPS (¢)

d per

share

(¢)

d Yield %

rice 30 June ($)

shares (m)

for 3:1 share spl

e price as at 30 Ju

alian Equities F

ent Limited

5316

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0 Web www.s

offered inv

t a net profi

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s managem

e group tar

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customers,

nting and s

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One Financ2000

28.1

(14.6)

nt (4.7)

8.8

5.8

31.3

14.3

(14.3)

369.7

355.4

2.5

>100

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1.9

61.5

1.5

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1.17

316.0*

it Nov 2000 ** B

ne 2012

nd Quarterly N

000, Australia

lectorfund.co

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53.7 6

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yout represents

ewsletter #30

.au

ually made

lion and a di

4.74 ($1.58

sted heavil

ndustry seg

ompany’s ke

gement ter

ir clients, Te

ed sharehol

06 2007

.2 76.8

.2) (44.5)

.7) (13.8)

.3 18.5

.3 14.8

.1 24.0

.3 44.3

.1) (24.0)

5.8 351.3

7.7 327.3

.2 5.6

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.0 106.0

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3.8

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66 1.18

6.7 297.7

EBIT / EV as a per

oney, with

idend paym

djusted for

in building

ents, offeri

y point of di

s the “Po

chnology O

ers.

2008 200

108.5 120.

(65.5) (76.

(21.2) (24.

21.8 19.

17.2 15.

20.1 16.

50.5 57.

(16.5) (22.

236.1 237.

219.6 214.

9.9 9.1

64.1 56.

71.0 103.

5.8 5.2

13.6 15.

4.1

3.8

5.2 4.8

0.79 0.7

298.9 300.

centage *** ROC

the group f

ent of 1.5 ce

3:1 share sp

out the s

ng ten com

ferentiation

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e has built

9 2010

7 134.0

) (84.8)

) (27.0)

22.2

17.8

16.6

63.4

) (29.8)

2 242.7

4 212.9

10.4

66.1

0 140.0

5.9

13.6

5.7

7.1

0.80

3 303.4

E = EBIT / (Shareh

orecasting in

nts per shar

lit in Novem

ftware solu

plete enterp

revolves aro

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successful

2011

2012(

153.4 168.

(96.4) (104.

(31.8) (34.0

25.2 29.6

20.3 22.7

16.4 17.6

68.4 69.8

(33.8) (45.1

315.5

364.

281.7 319.

8.9 9.3

72.8 119.

88.0 98.0

6.7 7.5

15.5 16.0

6.1

7.0

5.9 5.8

1.04 1.20

303.4 303.

olders Equity + d

5

its

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ion

rise

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and

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7/21

June 201

Selector

ACN 102

Level 3,

Telepho

What i Unlike busines

One ha

from a

payroll

softwar

Deployi

project

store a

allows

Too oft

that de

Techno

The co

benefit

Techno

chain. I

externa

differe

things

The se

market

• • • • • • •

These a

custom

• • • • • •

Selector Austr

Funds Manage

756347 AFSL 2

66 Hunter Stree

ne 612 8090 36

Enterprise Sconsumers ses require s

e develope

count keepi

to name a f

e application

ng enterpris

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large amoun

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en however,

liver perform

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of “One Vi

logy One off

n contrast

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ce that Di

ften go wro

ond point o

implement

Local Gov

State & Fe

Education

Financial S

Health De

Utilities

Managed

re markets

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Over 130

G

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Building so

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ent Limited

5316

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0 Web www.s

oftware? ho look to stems that

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ervices

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ucation instit

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ering water,

nd Quarterly N

000, Australia

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re far more

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power, port

ewsletter #30

.au

ual pieces o

complex and

are tools to

ems, supply

nesses can

er complex o

its issues. In

ss risk. This i

also allow f

nd ultimatel

ns and fail t

stness.

of One” bus

Experience”.

hat it is pre

ng German

tation side

to exploit f

stage.

he company

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built up sign

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and airport

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integrated.

meet specifi

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fact, the roll

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r interpreta

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ased SAP a

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or good com

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ificant exper

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ment, huma

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where cust

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rol all aspec

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mercial reas

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eds. They ra

n resources

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ired to not

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8/21

June 201

Selector

ACN 102

Level 3,

Telepho

• By focu

up lead

its servi

to purc

heavily

that cu Resear

Success

prepar

has ne

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all grea

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whilst

shareh

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Table 3

Year

Revenue

R&D* ($

R&D / R

Net Profi

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Selector Austr

Funds Manage

756347 AFSL 2

66 Hunter Stree

ne 612 8090 36

Managed s

sing on thes

ing market p

ce, offering t

hase on a p

on improvin

tomers expe

h & Developful compani

dness to inv

er been bac

ars spent

to

companies

ircle of com

r, obstructiv

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ment plays

tion. It is in

ir profits. Eq

elopment ex

xpense, pre

lders the im

a problem

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search and d

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756347 AFSL 2

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assessment t

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15/21

June 201

Selector

ACN 102

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756347 AFSL 2

66 Hunter Stree

ne 612 8090 36

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16/21

June 201

Selector

ACN 102

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756347 AFSL 2

66 Hunter Stree

ne 612 8090 36

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17/21

June 201

Selector

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Selector Austr

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756347 AFSL 2

66 Hunter Stree

ne 612 8090 36

ing market p

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5316

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18/21

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756347 AFSL 2

66 Hunter Stree

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nging econo

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756347 AFSL 2

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Selector June 2012 Quarterly Newsletter

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