Presentation to Investors Perth
May 2013
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Benefits of investing in BKI.ASX
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Dividends Predictable and growing fully franked
income stream.
18.5% lift in dividend payments
over the last 5 years
5 Special Dividends since listing
Franking Credits 30% tax rate already paid on
dividend income, tax credits passed
on directly to shareholders.
All Dividends Fully Franked
Grossed up Yield of 6.7%
Performance Delivering sound, long term returns
to shareholders.
9 year Total Shareholder Returns of
10.4% pa (as at 30 April 2013)
Low Cost One of the lowest cost, professionally
and actively managed equity
products in the market.
MER of 0.18%
No Performance Fees
Diversification Exposure to most sectors of the
market through well managed,
dividend paying companies.
BKI currently holds 53 companies
within the portfolio
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Benefits of investing in BKI.ASX
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Administration
Simplicity
Diversified market exposure
Easy monitoring of one shareholding
Two dividend statements per annum
All through BKI.ASX
Structure
BKI is a closed end LIC (Company),
unlike an open ended fund manager
(Managed Trust).
Not beholden to fund inflows or fund
outflows.
Not a forced seller in bear markets
Not a forced buyer in bull markets
Low turnover; no portfolio “churn”
Transparency High levels of transparency and
compliance by being a publically
listed company.
ASX Listing Rules
Continuous Disclosure
Board of Directors
AGM
Monthly NTA’s, Top 20 Investments
Annual Reports
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Net Operating Result FY2004 – FY2012
$ M
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0
5
10
15
20
25
30
2004 2005 2006 2007 2008 2009 2010 2011 2012
Net Operating Result
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Dividends Paid 2H2004 – 1H2013
Ce
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are
2 2.1 2.2 2.5 2.5 2.6 2.7
3 3 3 3 2.5 2.75 3 3
3.2 3.2 3.25
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0.5
0.5
1 0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
Ordinary Dividends Special Dividends
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Dividends + Franking Credits $
Au
stra
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Do
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Source: BKI Investment Company Limited; IRESS. An investor who spent the equivalent of $10,000 to purchase BKI shares upon listing in December 2003 would now be
receiving fully franked dividends of $709pa. The franking credits enhance the income by a further $304 (total income of $1,013). The same investment in a term deposit
(based on the cash rate) would be earning $303pa with no franking credits. Dividends have not been reinvested. Ignores capital appreciation of BKI shares.
Dividends and Franking Credits received from a $10,000 Investment from BKI’s
inception V’s Bank Quarterly Interest.
Highlights the opportunity of a fully franked dividend in a falling interest rate
environment.
0
200
400
600
800
1,000
FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013
BKI Dividend BKI Franking Interest
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Historical Grossed Up Yield Assumes a tax rate of 30%
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2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
BKI Grossed Up Dividend Yield 90 Day Bank Bill
Source: BKI Investment Company Limited; IRESS. Grossed up yield based on a tax rate of 30%; Includes FY2012 Final Ordinary Dividend of 3.20cps,
FY2013 Interim Ordinary Dividend of 3.25cps and FY2013 Interim Special Dividend of 0.50cps. Based on share price as at 30 April 2013 of $1.49.
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Source: BKI Investment Company Limited, IRESS. Portfolio Returns are measured by change in pre tax NTA and are after all
operating expenses, provision and payment of both income and capital gains tax and the reinvestment of dividends. Total Shareholder
Returns include reinvestment of dividends. Past performance is generally not indicative of future performance.
BKI Performance as at 30 April 2013
BKI Portfolio
Returns are
measured
after
all operating
expenses,
provision and
payment of
income and
capital gains
tax.
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BKI Performance 1 Year 3 Yrs 5 Yrs 7 Yrs 9 Yrsas at 30 April 2013
(pa) (pa) (pa) (pa)
S&P/ASX 300 ACC INDEX (XKOAI) 22.7% 7.0% 2.9% 4.2% 9.4%
BKI Total Shareholder Returns 28.6% 12.0% 8.1% 6.1% 10.4%
BKI Share Price Outperformance V's XKOAI 5.9% 5.0% 5.2% 1.9% 1.0%
BKI Portfolio Performance 23.2% 8.8% 6.1% 6.1% 10.0%
BKI Portfolio Outperformance V's XKOAI 0.5% 1.8% 3.2% 1.9% 0.6%For
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Source: BKI Investment Company Limited, IRESS. Total Shareholder
Returns include reinvestment of dividends. Past performance is generally
not indicative of future performance.
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28.6%
12.0%
8.1% 6.1%
10.4%
22.7%
7.0%
2.9% 4.2%
9.4%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
1 Year 3 Years (pa) 5 Years (pa) 7 Years (pa) 9 Years (pa)
BKI Total Shareholder Returns S&P/ASX 300 ACC INDEX (XKOAI)
Portfolio Performance as at 30 April 2013
BKI Portfolio Performance is measured after
all operating expenses, provision and
payment of income and capital gains tax.
23.2%
8.8%
6.1% 6.1%
10.0%
22.7%
7.0%
2.9% 4.2%
9.4%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
1 Year 3 Years (pa) 5 Years (pa) 7 Years (pa) 9 Years (pa)
BKI Portfolio Performance S&P/ASX 300 ACC INDEX (XKOAI)
Source: BKI Investment Company Limited, IRESS. Portfolio Performance
is measured by change in pre tax NTA and is after all operating expenses,
provision and payment of both income and capital gains tax and the
reinvestment of dividends. Past performance is generally not indicative of
future performance.
Total Shareholder Returns as at 30 April 2013
Total Shareholder Returns exclude the
benefit of franking credits being passed on
from BKI to Shareholders.
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BKI is a research driven, active equities manager investing for the long term in profitable,
high yielding, well managed companies. Stock selection is bottom up, focusing on the
merits of individual companies rather than market and economic trends.
BKI is focused on investing in stocks using the 5 basic fundamentals below as part of the
stock selection process:
1. Income - Dividend Yields, Franking Credits, Pay Out Ratios
2. Principal Activity - Sustainable Business Model, Competitive Advantage
3. Debt Levels - Gearing Ratios, Net Interest Coverage
4. Management and Board - Share Ownership, Board Meeting Attendance, History of
Creating Shareholder Wealth
5. Earnings and Valuations - Earnings Profiles, PE Multiples, EV/EBITDA Multiples
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Investment Process
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BKI Investment Company Limited Index
1 NAB National Australia Bank 10.2% 5.7%
2 CBA Commonwealth Bank 9.7% 8.5%
3 WBC Westpac Banking Corp. 8.1% 7.5%
4 NHC New Hope Corporation 7.4% 0.0%
5 BHP BHP Billiton Limited 6.2% 7.5%
6 TLS Telstra Corporation 5.1% 4.4%
7 WES Wesfarmers Limited 4.6% 3.1%
8 ANZ ANZ Banking Corporation 4.0% 6.3%
9 WOW Woolworths Limited 3.8% 3.2%
10 ALQ ALS Limited 2.6% 0.2%
11 AGK AGL Energy Limited 2.5% 0.6%
12 TPM TPG Telecom Limited 2.2% 0.2%
13 WPL Woodside Corporation 2.0% 2.2%
14 CCL Coca-Cola Amatil 1.8% 0.8%
15 MTS Metcash Corporation 1.7% 0.3%
16 IVC Invocare Limited 1.6% 0.1%
17 ARP ARB Corporation 1.5% 0.1%
18 APA APA Group 1.4% 0.4%
19 QBE QBE Insurance Group 1.4% 1.2%
20 ASX ASX Limited 1.1% 0.5%
Cash & Cash Equivalents 5.0% 0.0%
Total 83.9% 52.8%
Top 20 Shareholdings As at 30 April 2013
Diversification BKI’s portfolio comprises of
dividend paying, well managed
companies. Exposure to most
sectors of the market.
High Conviction Benchmark Unaware – BKI’s
long term strategy of investing
in dividend paying stocks
means the portfolio is not
aligned with an index.
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Portfolio Valuation as at 30 April 2013
$ M
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0
100
200
300
400
500
600
700
FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 Apr-13
Investment Portfolio Cash
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Management Expense Ratio
BKI Internally Managed
0.69% 0.71%
0.56%
0.46% 0.46%
0.31%
0.19% 0.18% 0.18% 0.18%
0.10%
0.20%
0.30%
0.40%
0.50%
0.60%
0.70%
0.80%
2004 2005 2006 2007 2008 2009 2010 2011 2012 1H 13
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ASX Code BKI.ASX
Listing Date December 2003
Mandate Aust Listed Equities
Investment Sectors Diversified
Benchmark S&P/ASX 300
Acc Index
Total Assets $721m
Debt Nil
Management Expense Ratio 0.18%
Performance Fee Nil
Historical Dividend Yield 4.7%
Percentage Franked 100%
Grossed Up Yield 6.7%
Dividend Distribution Frequency Half Yearly
Dividend Payout Policy 90%-95%
Dividend Reinvestment Plan Active
Share Purchase Plan Inactive
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Research Coverage Morningstar
Morgan Stanley
Bell Potter
Evans and Partners
Baillieu Holst
Approved Product List Dixon Advisory
Baillieu Holst
Morgan Stanley
Powerwrap Super
Model Portfolio Dixon Advisory
Baillieu Holst
Morgan Stanley
AIOFP
Investment Menu MLC Wrap Super
MasterKey Custom Super
Contact Tom Millner
0408 754180 or 02 9238 0522
BKI Fact Sheet www.bkilimited.com.au
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Disclaimer
This material has been prepared by BKI Investment Company Limited.
The information within this document is not intended to provide advice to investors or take into account an individual’s financial
circumstances or investment objectives. This is general investment advice only and does not constitute advice to any person. The
opinions within this document are not intended to represent recommendations to investors, they are the view of BKI Investment
Company Limited as of this date and are accordingly subject to change.
Information related to any company or security is for information purposes only and should not be interpreted as a solicitation of
offer to buy or sell any security. The information on which this presentation is based has been obtained from sources we believe
to be reliable, but we do not guarantee its accuracy or completeness.
Investors should consult their financial adviser in relation to any material within this document.
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