Annual General Meeting 2 Summary of financial results for the year - PowerPoint PPT Presentation

1 Welcome to the 2017 Annual General Meeting

2 Summary of financial results for the year ended 30 June 2017 2017 2016 change Profit $211.5 million $216.3 million -2.2% Earnings per share 30.7 cents 32.0 cents -4.1% Total dividends per share for the 31.0 cents 30.5 cents +1.6% full year Net tangible asset backing (NTA) $7.71 $7.11 +8.4% per share Management expense ratio (MER) 0.16% 0.17% -0.01% Number of shareholders 81,445 80,477 +968

3 Cash rate v Argo dividends 15 year history (excluding franking credits) 8.0% 35 31.0 30.5 29.5 28.0 7.0% 26.5 30 26.0 26.0 25.0 27.0 6.0% 30.0 25 27.0 24.0 5.0% 21.0 18.0 20 18.0 4.0% 15 3.0% 10 2.0% 1.50% 5 1.0% 0.0% 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Interim Dividend (cps) Final Dividend (cps) Cash Rate % (LHS) source: FactSet

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5 Total Returns to 30 September 2017: % per annum 12.0% 11.6% 10.1% 9.8% 9.1% 7.7% 7.0% 5.8% 4.9% 3.9% 3.3% 3.1% 1 Year 3 Years 5 Years 10 Years Share Price NTA S&P/ASX 200 acc.

6 Argo attributes A truly long-term, conservative investment philosophy An internally managed, low-cost business model with no performance fees A strong balance sheet with no debt Diversification of risk and administrative simplicity Active portfolio management offered by an experienced team in a strong and transparent corporate governance environment Fully franked, sustainably growing dividends

7 “Argo’s objective is to maximise long-term returns to shareholders through a balance of capital and dividend growth. It does this by investing in a diversified Australian equities portfolio which is actively managed in a low cost structure in a tax-aware manner. ”

8 Outlook Underlying global macroeconomics have improved despite political uncertainty Australian economy continues to grow despite some conflicting signals Market valuations look somewhat stretched Cautious approach with cash available

9 S&P/ASX 200 performance excluding dividends 7000 6500 ASX 200 6000 5500 5000 4500 4000 3500 3000 2500 2000 source: FactSet

10 S&P/ASX 200 v Accumulation Index including dividends 200 Accumulation Index 180 160 140 120 Price Index 100 80 60 40 20 0 source: FactSet

11 S&P/ASX 20 dividend growth last three financial years (FY) 200% 150% 100% 50% 0% -50% -100% FY15 FY16 FY17 source: FactSet

12 Dividend payers within the portfolio 2% 5% Grower Maintainer Cutter 35% Non-payer 58%

13 Major investment purchases during the year to 30 June 2017

14 Major investment sales during the year to 30 June 2017

15 Investment purchases since year end to 30 September 2017 Total purchases of approximately $50m, with larger purchases including:

16 Event Hospitality & Entertainment (EVT)

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18 Top 20 equity investments as at 30 September 2017 $M $M Westpac Banking Corporation 354.8 Australian United Investment Co. 123.8 ANZ Banking Group 289.0 Milton Corporation 107.4 Commonwealth Bank of Australia 241.1 Woolworths 104.2 Wesfarmers 224.8 Sydney Airport 102.8 Macquarie Group 223.5 Ramsay Health Care 89.5 BHP Billiton 217.3 APA Group 85.8 National Australia Bank 190.7 AGL Energy 85.1 Telstra Corporation 160.6 Origin Energy 82.0 Rio Tinto 157.1 Amcor 74.8 CSL 149.1 Computershare 70.9

19 Portfolio sector allocation as at 30 September 2017 5.5% 7.1% Listed Investment Companies 4.5% 7.4% Cash 3.5% Utilities 5.6% 4.3% Telecommunication Services & I.T. Property 4.0% Materials Industrials Health Care 20.3% 13.4% Other Financials Banks Energy Consumer Staples 6.0% 10.8% Consumer Discretionary 7.6%

20 Rural Funds Group (RFF) product & climatic diversification Quality agricultural exposure is hard to find in ASX-listed environment source: RFF

21 Rural Funds Group business strategy Invest across full spectrum of assets, whilst ensuring asset mix continues to fund distributions source: RFF

22 Rural Funds Group total shareholder return $29,000 June 2017: $79m Entitlement Offer $24,000 July 2016: $61m Entitlement Offer March 2016: S&P/ ASX300 inclusion $19,000 Oct 2015: $35m Entitlement Offer March 2015: $14,000 $15m Entitlement Offer $9,000 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 S&P/ASX300 A-REIT RFF All ordinaries source: RFF & IRESS. Assumes $10,000 invested July 2014 and all distributions are reinvested at the DRP price. Total return of indices as provided by S&P. Data current to 10 August 2017

23 Outlook US markets at all time highs; cautious on higher interest rates Ongoing economic growth in China is vital Banks face well-publicised head winds; increasingly stretched consumers Domestic economy will continue to grow

24 Outlook Technology change and disruption continues…

25 Executive team Jason Beddow Managing Director Andy Forster Tim Binks Andrew Hill Senior Investment Officer Chief Operating Officer Chief Financial Officer Brydie Lloyd- Colin Andrew Stephen Jo Paul Frost Roberts Whitehead Moller Mortimer Chipperfield Investment Analyst Investment Analyst Investment Analyst Investment Analyst Operations Officer Legal Officer

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