Hyperion Small Growth Companies Fund

Outlook

February saw most of our domestic portfolio companies release their half or full year results. The results were generally positive with the companies reporting solid sales and EPS growth. While some of the companies cited adverse macroeconomic conditions and other short-term challenges, we maintain a long-term perspective of a company’s performance and growth potential. REA-AU performed particularly well, delivering a strong result despite a backdrop of challenging domestic property market conditions, further highlighting the strong value proposition the company offers all stakeholders.

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 –
Net (%)
      Benchmark*
(%)
Excess
Performance (%)
 1 month4.16.8-2.7
 3 month4.48.0-3.6
 1 year13.33.59.8
 3 years p.a.9.313.4-4.1
 5 years p.a.9.27.71.5
 10 years p.a.17.89.48.4

 

Top 5 Stock Holdings

Portfolio (%)Benchmark* (%)
  REA Group8.7
  Wisetech Global7.41.2
  Domino’s Pizza6.8
  Technology One6.81.0
  Corporate Travel Management6.11.2

* Benchmark is the S&P/ASX Small Ordinaries Accumulation Index.
Past performance is not a reliable indicator of future performance.

Fund Review

Nick Scali Limited (NCK-AU) released a market update for the first half of FY19, reporting sales revenue growth of 10% to $141m, gross margin expansion of 21bps to 63%, and NPAT growth of 8% to $25m. During the period the company successfully launched a bedroom and bedding category across 24 stores. In addition, it opened 4 new stores during the first half of FY19 and 6 stores during FY18, all contributing to the strong result. 3 of the 4 new stores were opened across Queensland with the company opening its second store in New Zealand in the city of Hamilton. NCK-AU now expects to open a further 2 stores during the second half of FY19, taking the total store count to 57 by the end of the financial year.

Pushpay Holdings Limited (PPH-AU) released a market updated for the third quarter ending 31 December 2018, reporting total revenue growth of 35% to $28m. Annualised processing volume increased 29% to $5b, with the average revenue per customer increasing 26% to $1,548 per month. The company’s customer base was up 6% to 7,585 customers, with 56 of the 100 largest churches in the U.S. using Pushpay’s digital giving solution. Management reiterated FY19 guidance for revenue of between $97.5m to $100.5m and for the full year gross margin to be greater than 60%.

OBJECTIVE: MEDIUM TO LONG-TERM CAPITAL GROWTH AND INCOME THROUGH INVESTING IN HIGH CALIBRE AUSTRALIAN COMPANIES PRIMARILY LISTED OUTSIDE THE S&P/ASX 100 AT THE TIME OF INVESTMENT.

Hyperion named AUSTRALIAN FUND MANAGER OF THE YEAR in the Morningstar 2016 Awards, Australia.

CONTACT US
DISTRIBUTION PARTNER
Pinnacle Investment Management Limited
Tel: 1300 010 311
distribution@pinnacleinvestment.com
DOWNLOAD PDF COPY OF FUND UPDATE
DISCLAIMER – HYPERION SMALL GROWTH COMPANIES FUND
Information for financial advisors only. The Hyperion Small Growth Companies Fund (ARSN 089 548 943) (‘Fund’) is currently closed to new applications. Pinnacle Fund Services Limited (ABN 29 082 494 362 AFSL 238 371) the Responsible Entity of the Fund is not licensed to provide financial product advice. Hyperion Asset Management Limited (ABN 80 080 135 897 AFSL 238 380) is the investment manager of the Fund. You should consider the current Product Disclosure Statement (‘PDS’) in its entirety and consult your financial adviser before making an investment decision. The current PDS of the Fund can be obtained via www.hyperion.com.au or by calling Hyperion at 1300 497 374 or via email to investorservices@hyperion.com.au. Pinnacle Fund Services Limited and Hyperion believe the information contained in this communication is reliable, however its accuracy, reliability or completeness is not guaranteed. To the extent permitted by law, Hyperion and Pinnacle Fund Services Limited disclaim all liability to any person relying on the information in respect of any loss or damage (including consequential loss or damage) however caused, which may be suffered or arise directly or indirectly in respect of such information contained in this communication. Any opinions or forecasts reflect the judgment and assumptions of Hyperion and its representatives on the basis of information at the date of publication and may later change without notice. The information is not intended as a securities recommendation or statement of opinion intended to influence a person or persons in making a decision in relation to investment. This communication is for general information only. It has been prepared without taking account of any person’s objectives, financial situation or needs. Any persons relying on this information should obtain professional advice relevant to their particular circumstances, needs and investment objectives. Past performance is not a reliable indicator of future performance. Unless otherwise specified, all amounts are in AUD. All data is as at 28th February 2019 unless otherwise stated. Morningstar Awards 2016 (c). Morningstar, Inc. All Rights Reserved. Awarded to Hyperion Asset Management for Fund Manager of the Year, Domestic Equities – Large Caps Category Winner and Domestic Equities – Small Caps Category Winner, Australia.
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