Hyperion Small Growth Companies Fund

Outlook

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 –
Net (%)
      Benchmark*
(%)
Excess
Performance (%)
 1 month 0.4 -3.9 4.3
 3 month 5.0 1.4 3.6
 1 year 4.6 0.9 3.6
 3 years p.a. 8.3 8.4 -0.2
 5 years p.a. 11.3 7.8 3.5
 7 years p.a. 15.5 7.2 8.3
 10 years p.a. 13.7 4.8 8.9
 15 years p.a. 14.0 5.6 8.4
 Since Inception** p.a. 15.3 7.4 7.9
 Since Inception**^ 1012.5 232.4 780.1

Top 5 Stock Holdings

Portfolio (%) Benchmark* (%)
  REA Group 9.9
  Nanosonics 9.3 0.9
  Wisetech Global 8.6
  Domino’s Pizza 7.0
  HUB24 7.0 0.4

* 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

Nanosonics Limited (NAN-AU) released its annual results for the financial year ended 30 June 2019, reporting revenue growth of 39% to $84.3m, profit before tax growth of 201% to $16.8m and profit after tax growth of 137% to $13.6m. Divisionally, Capital Revenue was up 28% to $32.8m, whilst its annuity-style revenue stream of Consumables & Services was up 47% to $51.5m. Geographically, revenue in North America was up 41% to $76.5m, EMEA was up 27% to $3.8m and APAC revenue increased 21% to $4m. In addition, the company’s installed base achieved global growth of 18% to 20,930 units, regionally comprised of North America +19% to 18,570 units, EMEA +21% to 880 units and APAC +6% to 1,480 units. NAN-AU expects to see continued growth of its trophon installed base across all core markets, as new guidelines continue to require High-Level Disinfection of all semi-critical ultrasound probes. The company also announced that it will continue to increase R&D investment in order to build a pipeline of new potential products with the first due to be released by the end of FY20 (subject to regulatory approval).

WiseTech Global Limited (WTC-AU) reported its full year results for the financial year ended 30 June 2019, reporting revenue growth of 57% to $348m, operating profit growth of 37% to $80m and EPS growth of 27% to 17.7 cents per share. During the year, the power and strength of WTC-AU’s CargoWise One platform was supported by its 99% recurring revenue as the company maintained an impressive annual customer attrition rate of less than 1% across its CargoWise One platform for a 7th consecutive year. Furthermore, WTC-AU continued to improve its value proposition to customers, adding over 830 internally developed product enhancements and features to its flagship CargoWise One technology platform, with 47% of its workforce contributing towards product development. The company also acquired 15 strategic assets in new geographies and adjacent technologies to accelerate future growth. WTC-AU’s product is now present in approximately 150 countries with all top 25 global freight forwarders now customers, 7 of which now exclusively use CargoWise. Management has guided FY20 revenue growth of between 26% to 32% and EBITDA growth of between 34% to 42%.

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 31st August 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.
You may know what you want to achieve with your savings in the long term but where should you invest now?
Start here
Show Buttons
Hide Buttons