BELL FINANCIAL GROUP LIMITED 21 April 2016
Market Announcements Office ASX Limited
20 Bridge Street
Sydney NSW 2000
Via ASX Online
We attach a copy of the presentation materials that will be addressed by the Executive Chairman and the Managing Director at Bell Financial Group Limited's Annual General Meeting today.
General Counsel & Company Secretary
BELL FINANCIAL GROUP ANNUAL GENERAL MEETING 21 APRIL 2016 EXECUTIVE CHAIRMAN'S ADDRESS2015 was a good year for Bell Financial Group. All our business units traded positively and that resulted in the Group reporting sharply higher earnings.
Our balance sheet is robust and we have no debt - other than the loan funding facility in our margin lending business. We declared a fully franked final dividend of 3 cents a share, making a total payout for the year of 4.5 cents a share - more than double the payout in 2014. That represents a fully franked dividend of about 7.8% and yes, we have no doubt that our share price is too low.
Our Net Profit After Tax was 174% higher to $15.9 million, struck on a 14% lift in revenue to
$178 million.
This was a particularly strong performance and it reflects the hard work of our team, the ongoing investments we continue to make in our core operations and a variety of normal market opportunities.
The Group's improved earnings were achieved against the backdrop of difficult trading conditions.
Equity markets were under pressure last year, given the concern that weakness in global growth may further deteriorate.
As well, commodity prices remain challenged and emerging markets struggled. Our retail business was particularly affected because for the first time some of the most widely held stocks on the ASX suffered big falls. Conditions this year are about the same except that now there is also growing uncertainty around the upcoming elections.
Despite these forces, the Group's wholesale division, which includes the Sydney institutional desk and the Sydney and Melbourne Equity Capital Markets desks, had a good year, boosting revenue by 50% to $41 million.
This strong performance reflected consistent demand from corporates for equity capital. That demand has continued into 2016.
Bell Direct, our online broking business, was once again named Best Online Broker by the Australian Financial Review for the third consecutive year. Elsewhere, our recently formed strategic alliance with Citi continues to develop positively.
We continue to manage our costs carefully but at the same time invest in technology that delivers improved operational performance and scale.
These investments allow us to bolt on operations with relative ease and to inject them quickly into our business. Earlier this year, we absorbed the highly successful ten-member Small Cap team led by Hugh Robertson in Melbourne who were previously with Wilson HTM.
Because business has been relatively difficult, the market is going through a rationalization and as a result we have been able to hire advisers from UBS, Morgan Stanley, BBY and Patersons.
We also recruited Richard Coppleson, the highly respected market commentator and author of the insightful daily afternoon 'Coppo Report' - a must read for investors and policy makers alike.
Despite all the challenges we remain optimistic and open to opportunities that arise from time to time. We are well positioned to take advantage of them since we are now the only Australian-owned independent business with a full service offering to institutional clients, corporate clients and retail investors.
On behalf of the Board, I would like to thank our staff and our shareholders for their contribution and support.
I now hand over to our Managing Director Alastair Provan to provide details of the performance of our various divisions.
Thank you Colin. Good morning ladies and gentlemen.
As you know the numbers we are presenting today are historical so rather than go over them in any greater detail than Colin already has, I thought I would run through the first slide quickly then talk about some parts of the business that are perhaps not so well understood but nevertheless deliver consistent earnings for the Group.
[Slide 1]
I think we are regarded as an equities house and most investors and clients have a general understanding of our structure. We have a large private client business covering the entire spectrum from small Retail to High Net Worth portfolio investors. We have a smaller but highly regarded and productive specialist institutional broking business and a professional Equity Capital Markets team.
I think most people get that.
What I think is not so well understood, and certainly not recognized in our share price, are some of the other divisions which contribute to the Group earnings and could in effect operate as standalone businesses.
[Slide 2]
The platform currently has 1,960 clients holding $2.5b in sponsored assets. The platform generated $12.1m in gross revenue and a pre-tax profit of $4.2m, up 17% on the previous year.
There are three ASX listed companies with similar platform businesses, but no earnings, yet have market capitalizations between $130m - $200m.
While today the division represents a smaller percentage of the Group's overall business than it did several years ago it has been a growth area for us in recent times generating
$13.8m in gross revenue last year with a pre-tax contribution to Group earnings of $2.1m, up 40% on the previous year.
BPC runs a very conservative loan book with an average LVR of 31% and to date has never had a bad debt.
Bell Financial Group Limited issued this content on 21 April 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 21 April 2016 02:28:04 UTC
Original Document: http://www.bellfg.com.au/pdf/2016-04-21 AGM Presentation Materials.pdf
