August saw the majority of the domestic portfolio holdings report their full year results, which were generally in line with our expectations. In general, the market struggled to achieve expected top line growth outside of the resources sector. Accordingly, high PE companies that didn’t exceed short term expectations observed aggressive share price reactions. In contrast to the broader market, the portfolios generated double digit revenue, EPS and DPS growth with a theme of continued reinvestment for long term growth. Despite some short term challenges, portfolio fundamentals remain robust and we expect them to continue to achieve above market growth over the longer term. We remain confident that the companies in the portfolios will achieve attractive rates of revenue, EPS and DPS growth over the next five years, well ahead of the broader market.
| Portfolio –
|3 years p.a.||7.6||11.3||-3.8|
|5 years p.a.||9.4||7.9||1.4|
|7 years p.a.||13.8||10.9||2.9|
|10 years p.a.||10.3||8.5||1.8|
|15 years p.a.||11.8||8.8||3.0|
|Since Inception** p.a.||11.6||9.4||2.1|
Top 5 Holdings
|Portfolio (%)||Benchmark* (%)|
* Benchmark is the S&P/ASX 300 Accumulation Index.
** Inception date 30th September 2002
^ Total Return
Past performance is not a reliable indicator of future performance
REA Group Limited (REA-AU) released its annual results for the financial year ended 30 June 2019, reporting revenue growth of 8% to $875m, EBITDA growth of 8% to $501m and EPS growth of 6% to 224.3 cents per share. The strong result continued to highlight the resilience of its business model during difficult market conditions. National listing volumes declined 8% over the year, with declines of 18% and 11% recorded in Sydney and Melbourne, respectively. Categorically, revenue growth was driven by a 16% increase in Australian Media, Data & Other (13% of revenue) to $110m, +10% in Asia (6% of revenue) to $49m, +8% in Australian Residential Depth & Subs (72% of revenue) to $630m, +2% in Australian Commercial & Developer Depth & Subs (7% of revenue) to $59m, whilst Australian Financial Services revenue declined 8% (3% of revenue) to $27m. REA-AU continued to extend its engagement lead in Australia, with 2.98x the amount of site visits, 19% growth in monthly website searches to 94m, 21% growth in monthly app launches to 29.4m and 4.7x more time spent on its app compared to its nearest competitor, Domain (DHG-AU). In Asia, REA-US’s websites were rated the number one property sites in Malaysia and Indonesia, achieving site visits growth of 56% in Malaysia and 10% in Indonesia.
CSL Limited (CSL-AU) reported its full year results for the financial year ended 30 June 2019, reporting group revenue growth of 8% to $8.5b, gross profit margin expansion of 56bps to 56% and EPS growth of 11% to $4.24 per share. Divisionally, CSL Behring’s revenue was up 8% to $7.3b, with Immunoglobulin (IG) Product revenue up 16% to $3.5b due to an increase in the usage of IG products for chronic therapies. Albumin Product revenue was up 15% to $1.0b due to strong demand from China which is expected to continue as the company benefits from its transition to its own Good Supply Practice License in China, enabling CSL-AU to own and sell products in the domestic Chinese market. Furthermore, CSL-AU’s Seqirus revenue increased 10% to $1.2b, driven by Influenza vaccine product sales growth of 19% to $799m. Management noted that they plan to open 40 new plasma collection centers and expect FY20 net profit after tax to be approximately $2.05b to $2.11b.
Hyperion named AUSTRALIAN FUND MANAGER OF THE YEAR in the Morningstar 2016 Awards, Australia.
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