Hyperion Small Growth Companies Fund

NOVEMBER 2019

Performance

Portfolio –
Net (%)
      Benchmark*
(%)
Excess
Performance (%)
 1 month 5.3 1.6 3.8
 3 month 7.2 3.7 3.5
 1 year 25.5 16.6 8.9
 3 years p.a. 13.2 11.4 1.8
 5 years p.a. 13.3 10.8 2.5
 7 years p.a. 14.9 7.3 7.6
 10 years p.a. 13.7 4.6 9.1
 15 years p.a. 13.4 5.0 8.4
 Since Inception** p.a. 15.5 7.5 8.1
 Since Inception**^ 1092.7 244.6 848.1

Top 5 Stock Holdings

Portfolio (%) Benchmark* (%)
  REA Group 10.1
  Domino’s Pizza 9.9
  Xero 7.9
  Nanosonics 7.4 0.9
  Wisetech Global 7.2

* Benchmark is the S&P/ASX Small Ordinaries Accumulation Index.
** Inception 30th September 2002
^ Total Return
Past performance is not a reliable indicator of future performance.

Fund Review

In Australia, the S&P/ASX 300 Index returned +3.2% with economic data revealing an increase in house prices during November and weaker retail trading activity and wages growth during the third quarter of 2019. Information technology (+10.6%), health care (+8.8%) and consumer staples (+8.1%) were the best performing sectors. Financials (-2.0%), utilities (-0.5%) and REITs (+2.3%) were the worst performers. Bulk commodity prices were mixed during November with gold and thermal and hard coking coal prices falling, whilst iron ore and brent oil rose. The U.S. dollar was up against most G10 currencies during the month, except against the New Zealand Dollar and Swedish Krona.

Pushpay Holdings Limited (PPH-AU) released results for the first half ended 30 September 2019, reporting total revenue growth of 30% to US$57.4m, gross profit margin expansion of 8% to 65% and net profit growth of 247% to US$6.5m. Subscription revenue was up 22% to US$15.3m and processing revenue increased 35% to US$40.8m. Total Processing Volume (TPV) increased 45% to US$2.2b, with the average revenue per customer increasing 20% to US$1,272 per month. PPH-AU’s customer base increased 7% to 7,905 customers with the proportion of medium and large customers increasing from 54% to 56%. Management reiterated guidance for the year ending 31 March 2020 of operating revenue of between US$121m to US$124m, gross margin of over 63% and TPV of between US$4.8b and US$5.0b.

Xero Limited (XRO-AU) reported results for the first half ended 30 September 2019, announcing operating revenue growth of 32% to $339m, gross margin expansion of 240bps to 85.2% and EBITDA, excluding non-cash share-based payments & impairments, was up 66% to $82m. Geographically, ANZ achieved operating revenue growth of 25% to $211m, subscribers increased by 23% to 1.2m with the Average Revenue Per User (ARPU) down 1% to $31.64 due to the weaker AUD vs NZD but offset by contributions from Hubdoc and Xero Payroll. XRO-AU’s International segment achieved operating revenue growth of 46% to $127m, with subscribers increasing by 42% to 850,000 and ARPU up 1% to $29.98. Divisionally, Core Accounting revenue, 89% of revenue, increased 29% to $301m, Platform revenue, 6% of revenue, was up 116% to $20m, WorkflowMax revenue, 3% of revenue, was up 20% to $10m and Non-recurring revenue, 2% of revenue, increased 19% to $7m. The company also announced that as part of its social and environmental impact program it will offset 100% of its carbon emissions for the year and going forward.

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.

The Fund’s Product Disclosure Statement contains more complete information on risks and fees.

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 30 November 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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