A number of the global portfolio companies reported their quarterly and half year results in August, which generally met expectations and were encouraging. Many of the companies which constitute some of the largest weights in the global portfolio had particularly good results in relation to growth and continue to increase their respective value propositions. The team also continued to attend company and industry meetings to inform the investment process and ensure only the highest quality companies are held in the portfolios.
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.
|3 years p.a.||22.8||14.3||8.5|
|5 years p.a.||21.9||14.0||7.9|
Top 5 Stock Holdings
|Portfolio (%)||Benchmark* (%)|
|Alphabet Inc. Class A||9.0||0.9|
|Facebook, Inc. Class A||7.2||1.1|
|PayPal Holdings Inc||6.3||0.3|
|Mastercard Incorporated Class A||5.3||0.6|
* Inception date: 1st June 2014. Benchmark is the MSCI World Index (AUD).
Past performance is not a reliable indicator of future performance.
Ferrari NV (RACE-IT) released a market update for the second quarter ended 30 June 2019, reporting group net revenue growth of 9% to €984m, adjusted EBITDA increased 9% to €314m and EPS was up 14% to €0.96 per share. At the segment level, net revenue in Cars and Spare Parts increased 14% to €766m, Sponsorship, commercial and brand revenue increased 4% to €131m, Other revenue increased 16% to €34m, whilst Engines declined 35% to €53m due to a decrease in the sale of engines to Maserati. Shipments for the RACE-IT group totaled 2,671 units, up 208 units or +8% on Q2FY18. Most regions contributed positively to shipments, with EMEA up 11% to 1,195 units, China, Hong Kong and Taiwan up 63% to 289 units, Rest of APAC up 6% to 384 units, whilst Americas declined 5% to 803 units. Management confirmed their guidance at the top of the range and increased free cash flow guidance to €550 million.
Intuit Inc (INTU-US) released its annual results for the financial year ended 31 July 2019, reporting group revenue growth of 13% to $6.8b, gross operating margin expansion of 144bps to 27.3% and EPS growth of 16% to $5.89 per share. Divisionally, the company’s Small Business & Self-Employed division achieved revenue growth of 15% to $3.5b, operating income margin expansion of 52bps to 43.8% and operating income growth of 17% to $1.5b. Consumer revenue increased 11% to $2.8b and operating income was up 10% to $1.7b, whilst Strategic Partner achieved revenue growth of 4% to $476m, operating income margin expansion of 453bps to 66.8% and operating income growth of 12% to $318m. The company’s online ecosystem revenue increased 38% to $1.6b, whilst desktop ecosystem revenue was up 1% to $1.9b. Furthermore, Small Business & Self-Employed business metrics continued to be strong, with QuickBooks Online subscriptions increasing 33% to 4.5m subscribers, and the total number of customers increasing 26% to 5.7m during the year. Management expects revenue growth of 10% to 11% and EPS growth of 8% to 10% for FY20.
Wayfair Inc (W-US) released a market update for the second quarter ended 30 June 2019, reporting Direct Retail net revenue growth of 42% to $2.3b. Geographically, the company continues to see growth across both the U.S. and Internationally, with Direct Retail revenue up 42% to $2.0b and up 41% to $343m, respectively. Engagement levels continue to improve, with the number of active LTM customers in the company’s direct retail business increasing 39% to 17.8m, and net revenue per active customer increasing 2% to $447. During the second quarter of 2019, 68% of total orders were from repeat customers with orders from these customers increasing by 46% to 6.2m, each placing 1.86 orders at an average order value of $255. Furthermore, 54% of total orders delivered across its Direct Retail business were placed via a mobile device, compared to 49% in the second quarter of 2018.
OBJECTIVE: LONG-TERM CAPITAL GROWTH AND INCOME BY INVESTING IN HIGH QUALITY GLOBAL COMPANIES PRIMARILY LISTED WITHIN THE MSCI WORLD MARKETS AT THE TIME OF INVESTMENT.
Hyperion named AUSTRALIAN FUND MANAGER OF THE YEAR in the Morningstar 2016 Awards, Australia.
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