Perpetual Wholesale Ethical SRI aims to provide long-term capital growth and regular income through investment predominantly in quality shares of Australian ethical and socially responsible companies. To outperform the S&P/ASX 300 Accumulation Index (before fees and taxes) over rolling three-year periods. Perpetual researches companies of all sizes using consistent share selection criteria. Perpetual’s priority is to select those companies that represent the best investment quality and are appropriately priced. In determining investment quality, investments are carefully selected on the basis of four key investment criteria: conservative debt levels, sound management quality business and in the case of industrial shares, recurring earnings. Derivatives may be used in managing the Fund.
A feature of this Fund is that it applies Perpetual’s ESG process and values-based investment criteria. The Fund’s largest overweight positions include Insurance Australia Group Ltd, Bapcor Ltd and Healius Ltd. Conversely, the Fund’s largest underweight positions include BHP Group Ltd (not held), Commonwealth Bank of Australia and Westpac Banking Corporation (not held).
Pacific Current Group contributed strongly during the September quarter as fund managers Regal and GQG both competed to acquire the financial services business. We have owned Pacific current Group for a number of years. It is a well-established funds management boutique incubator which owns equity stakes in 15 asset managers. These boutiques include public equities, life settlements, real assets, and private equity. PAC has delivered solid earnings growth in recent years and is seeing strong net inflows across a number of its boutiques, in particular Victory Park and Aether. Prior to the bid PAC traded at a reasonable multiple of 12x next year’s earnings with a solid dividend yield of over 5%. The overweight to Premier Investments (+23.40%) strongly contributed during the September quarter. Premier like most retail has struggled with its share-price since early May as pressures on the consumer increased. Market analysts were very uncertain about just how bad FY23 & FY24 outcomes might be. PMV has long been part of our core retail investments- it is a quality business, supported by a particularly strong net cash balance sheet and overseen by engaged and experienced executive leadership personnel. The business also has future growth potential across several offshore geographies with the retail sector normalising post the widespread 2020/2021 covid restrictions. On 21st August 2023, PMV surprised the market with three separate announcements. Firstly with FY23 sales and profit guidance modestly ahead of market consensus but very reassuring nonetheless. Secondly that CEO Richard Murray has resigned effective 15 September 2023 with CFO John Bryce to act as interim CEO for the foreseeable future. Given Solomon Lew’s executive chairmanship and exceedingly strong divisional leadership and Richard’s relatively short tenure in the role, there is little for the market to be concerned with. Finally, PMV announced a strategic review is to be initiated focussing on the corporate, operating and capital structure of the various brands and businesses held by the company. Future conclusions of this review are difficult to narrow down at this time and are potentially very wide ranging including that there may be no change at all.
The overweight to Healius detracted from performance in the September quarter (-27.67%) as the market continued to speculate that the bid by smaller rival ACL could be blocked by the ACCC. Healius’ assets have attracted interest from private equity and there are activist investors on the register. With the combined value of Healius’ radiology and pathology businesses estimated to be around $2.6 billion this represents a substantial uplift from the current market capitalisation of $1.7 billion. We are encouraged with the progress Healius has made with improvements in their radiology business under new leadership. Pathology segment continues to track below what the business could achieve given in person GP visits are still around 20% below pre pandemic, which leads to lower pathology requests. We believe some of the co-pay introduction are deterring GP visits, consumers continue to defer and there are evidence that primary care screenings are being deferred. We believe GP visits and Pathology volumes will re-bound in the future and that we will start to see pathology segment margins improve from here. A2 Milk detracted from returns during the September quarter (-13.29%). A2’s FY23 results met expectations with A2 navigating the challenging China label transition well to date holding ASP in a highly competitive market. However guidance was cautious as A2 expects FY24 to be challenging as China’s birth rate hits record lows. Despite the recent softness in the share price, which trades at a fraction of the $20 per share peak in 2020, we think that a2 is fundamentally well positioned. The business has transitioned from a fast-growing start-up to an established and professional operator in recent years. The a2 brand remains strong in China with healthy lead indicators and growing market share in emerging cities. Management of inventory and pricing is sound, and we have growing confidence its investment in marketing is generating solid returns.
What is Perpetual Wholesale Ethical SRI Perpetual Wholesale Ethical SRI is an Managed Funds investment product that is benchmarked against ASX Index 200 Index and sits inside the Domestic Equity - Large Value Index. Think of a benchmark as a standard where investment performance can be measured. Typically, market indices like the ASX200 and market-segment stock indexes are used for this purpose. The Perpetual Wholesale Ethical SRI has Assets Under Management of 764.86 M with a management fee of 1.18%, a performance fee of 0 and a buy/sell spread fee of 0.15%.
How has the investment product performed recently?
The recent investment performance of the investment product shows that the Perpetual Wholesale Ethical SRI has returned 1.56% in the last month. The previous three years have returned 7.85% annualised and 14.21% each year since inception, which is when the Perpetual Wholesale Ethical SRI first started.
How is risk measured in this investment product?
There are many ways that the risk of an investment product can be measured, and each measurement provides a different insight into the risk present. They can be used on their own or together to perform a risk assessment before investing, but when comparing investments, it is common to compare like for like risk measurements to determine which investment holds the most risk. Since Perpetual Wholesale Ethical SRI first started, the Sharpe ratio is NA with an annualised volatility of 14.21%. The maximum drawdown of the investment product in the last 12 months is -6.03% and -54.07% since inception. The maximum drawdown is defined as the high-to-low decline of an investment during a particular time period.
What is the relative performance of the investment product?
Relative performance is what an asset achieves over a period of time compared to similar investments or its peers. Relative return is a measure of the asset's performance compared to the return to the other investment. The Perpetual Wholesale Ethical SRI has a 12-month excess return when compared to the Domestic Equity - Large Value Index of 0.37% and 1.96% since inception.
Does the investment product produce Alpha over its Peers?
Alpha is an investing term used to measure an investment's outperformance relative to a market benchmark or peer investment. Alpha describes the excess return generated when compared to peer investment. Perpetual Wholesale Ethical SRI has produced Alpha over the Domestic Equity - Large Value Index of NA% in the last 12 months and NA% since inception.
What are similar investment products?
For a full list of investment products in the Domestic Equity - Large Value Index category, you can click here for the Peer Investment Report.
What level of diversification will Perpetual Wholesale Ethical SRI provide?
Perpetual Wholesale Ethical SRI has a correlation coefficient of 0.93 and a beta of 1.15 when compared to the Domestic Equity - Large Value Index. Correlation measures how similarly two investments move in relation to one another. This establishes a 'correlation coefficient', which has a value between -1.0 and +1.0. A 100% correlation between two investments means that the correlation coefficient is +1. Beta in investments measures how much the price moves relative to the broader market over a period of time. If the investment moves more than the broader market, it has a beta above 1.0. If it moves less than the broader market, then the beta is less than 1.0. Investments with a high beta tend to carry more risk but have the potential to deliver higher returns.
How do I compare the investment product with its peers?
For a full quantitative report on Perpetual Wholesale Ethical SRI and its peer investments, you can click here for the Peer Investment Report.
How do I compare the Perpetual Wholesale Ethical SRI with the ASX Index 200 Index?
For a full quantitative report on Perpetual Wholesale Ethical SRI compared to the ASX Index 200 Index, you can click here.
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To sort and compare the Perpetual Wholesale Ethical SRI financial metrics, please refer to the table above.
Has the Perpetual Wholesale Ethical SRI been independently verified by SMSF Mate?
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Comments from SMSF Mates
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Performance Commentary - August 31, 2023 A feature of this Fund is that it applies Perpetual’s ESG process and values-based investment criteria. The Fund’s largest overweight positions include Healius Limited, Insurance Australia Group Ltd, and Bapcor Ltd. Conversely, the Fund’s largest underweight positions include BHP Group Ltd (not held), Commonwealth Bank of Australia, and Westpac Banking Corporation (not held).
The overweight position in motor vehicle equipment, parts, and servicing supplier Bapcor Ltd (+8.25%) contributed to relative performance. The company reported a solid FY23 result, in line with guidance. The key positive was a significant improvement in cash flow conversion through the second half as BAP was able to reduce inventory whilst maintaining strong gross margins. Management provided additional detail around their Better than Before program and remain committed to the associated return targets. The market is sceptical and appears to be pricing in very little success.
The overweight to Premier Investments (+16.14%) strongly contributed during August. Premier like most retail has struggled with its share-price since early May as pressures on the consumer increased resulting in negative industry sales, not aided by significant cost headwinds. All while cycling very strong comparative trading outcomes. Market analysts were very uncertain about just how bad FY23 & FY24 outcomes might be. PMV has long been part of our core retail investments- it is a quality business, supported by a particularly strong net cash balance sheet and overseen by engaged and experienced executive leadership personnel. The business also has future growth potential across several offshore geographies with the retail sector normalising post the widespread 2020/2021 covid restrictions. On 21st August 2023, PMV surprised the market with three separate announcements. Firstly with FY23 sales and profit guidance modestly ahead of market consensus but very reassuring nonetheless. Secondly that CEO Richard Murray has resigned effective 15 September 2023 with CFO John Bryce to act as interim CEO for the foreseeable future. Given Solomon Lew’s executive chairmanship and exceedingly strong divisional leadership and Richard’s relatively short tenure in the role, there is little for the market to be concerned with here. And finally, PMV announced a strategic review is to be initiated focussing on the corporate, operating and capital structure of the various brands and businesses held by the company. Future conclusions of this review are difficult to narrow down at this time and are potentially very wide ranging but including that there may be no change at all. The overweight position in healthcare services and hospital operator Ramsay Health Care (-12.66%) detracted from relative performance. Ramsay Health Care has announced its preliminary NPAT (net profit after tax) for the first nine months of FY23, which stands at A$235.1M. This marks an increase of 17% compared to the same period last year.. The revenue for the 9M period was A$11.24B, which is an 11% increase from the previous year. Looking ahead, the company expects a gradual recovery in earnings through FY23 and more normalised conditions in FY24. Activity levels in July indicate trends are normalising, however, nursing wage pressure is a headwind and the company is negotiating with the payors to achieve a net neutral outcome on this headwind. We feel that the Balance sheet will look much better once we see the conclusion of sale of Sime Darby. In our meeting with CEO and CFO we have imparted with the company the need to actively consider ROIC metrics in their consideration of capex deployment. We are engaging with the Chairman and head of remuneration of RHC before AGM to share with them our analysis on ROIC returns, which has been below par over the last 4 years and the need to reconsider capex deployment and their stake and investment in France. We are doing proprietary research work on mental bed capacity within Australia to come to any conclusion as to whether capex growth in this segment is the right use of shareholders capital.
A2 Milk detracted from returns during August (-10.9%). A2’s FY23 results met expectations with A2 navigating the challenging China label transition well to date holding average selling price in a highly competitive market. However guidance was cautious as A2 expects FY24 to be challenging as China’s birth rate hits record lows. Despite the recent softness in the share price, which trades at a fraction of the $20 per share peak in 2020, we think that A2 is fundamentally well positioned. The business has transitioned from a fast-growing start-up to an established and professional operator in recent years. The A2 brand remains strong in China with healthy lead indicators and growing market share in emerging cities. Management of inventory and pricing is sound, and we have growing confidence its investment in marketing is generating solid returns.
Performance Commentary - July 31, 2023 A feature of this Fund is that it applies Perpetual’s ESG process and values-based investment criteria. The Fund’s largest overweight positions include Insurance Australia Group Ltd, Healius Ltd, and Bapcor Ltd. Conversely, the Fund’s largest underweight positions include BHP Group Ltd (not held), Commonwealth Bank of Australia, and Westpac Banking Corporation (not held).
Pacific Current Group rose 37.9% over the month of July as fund managers Regal and GQG both competed to acquire the financial services business. We have owned Pacific current Group for a number of years. It is a well-established funds management boutique incubator which owns equity stakes in 15 asset managers. These boutiques include public equities, life settlements, real assets, and private equity. Earning growth has grown consistently in recent years, the company has no debt and $20m cash on its balance sheet. Prior to the bid PAC traded at a reasonable multiple of 12x next year’s earnings with a solid dividend yield of over 5%. Ooh Media rose +18.2% in July. This was in part a reversal of recent losses after the stock had fallen sharply in May. The declines came after a downgrade to earnings signalled downward pressure on gross margins as the company entered a tender renewal period. We had been trimming early in the year after a strong run in the stock. We retained a small position after the downgrade given it traded at just 13x 2023 earnings and a mere 1.2x sales which is the cheapest in its history except for COVID. This remains a quality leader in the outdoor advertising space despite recent setbacks.
The funds underweight to CSL was also a significant contributor as the stock fell -3.2% during the month. CSL continued to sell off following a profit downgrade and emerging concerns about performance of Argenx’s product Vyvgart Hytrulo (which has proven to be an effective competitor to CSL’s IVIG for the treatment of chronic inflammatory demyelinating polyneuropathy (CIDP). Amongst other things an injection of Vyvgart Hytrulo takes just 30-90 seconds vs a 1 hour infusion of IVIG. Clients are already voting with their feet and prefer Vyvgart Hytrulo where available. With CDIP making up 25% of IVIG sales for CSL we think this presents some risk to the company’s earnings.
Healius fell -9.8% in July as the market speculated that the bid by smaller rival ACL could be blocked by the ACCC. Healius’ assets have attracted interest from private equity and there are activist investors on the register. With the combined value of Healius’ radiology and pathology businesses estimated to be around $2.6 billion this represents a substantial uplift from the current market capitalisation of $1.7 billion. Brambles fell -2.4% during July. This was a small pullback after a strong run over the past year. Brambles operates the worlds largest pool of reusable pallets, crates and containers placing it at the centre of global logistics. A key event driving performance over the last year was Brambles decision not to proceed with the rollout of plastic pallets for Costco. It was estimated that Brambles would need to invest as much as $1billion developing the plastic pallets and the costs of plastic pallets were on the rise in the post covid world, particularly with the soaring cost of resin. In the end, presented with the full cost of developing the product, Costco decided not to proceed, reducing execution and operational the risks for Brambles. Brambles’ has also used its dominant position and pricing power to push through price increases to help boost profitability.
Performance Commentary - May 31, 2023 A feature of this Fund is that it applies Perpetual’s ESG process and values-based investment criteria. The Fund’s largest overweight positions include Insurance Australia Group Ltd, Healius Ltd, and Bapcor Ltd. Conversely, the Fund’s largest underweight positions include Westpac Banking Corporation (not held), BHP Group Ltd (not held), and Commonwealth Bank of Australia.
The overweight position in insurance provider Insurance Australia Group Ltd (+4.2%) contributed to relative performance. The stock finished higher after being upgraded to ‘overweight’ from ‘neutral’ at JPMorgan, with its target price increased to A$5.75 from A$5, representing a 20% upside to its price at the time of the upgrade.
The overweight position in healthcare technology solutions provider Healius (+5.7%) contributed to relative performance. During the month, the Healius Board unanimously decided to recommend that Healius shareholders reject an unsolicited, all scrip takeover offer received from ACL on 20 March 2023 (the ACL Offer). The Healius Board believes that the ACL Offer is plainly inadequate, highly conditional and highly uncertain. The Healius Board reiterated that it is not opposed to engaging in discussions with ACL, or another party, in relation to a control transaction or merger proposal that is in the best interests of Healius shareholders.
The overweight position in Helia Group (+4.4%) contributed to relative performance. The company reported during the month a substantial decline in Q1 GWP compared to the previous year. According to their Q1 trading update, the Gross Written Premium (GWP) was affected by soft new loan commitments and the First Home Guarantee scheme, and net claims incurred remain negative. However, Helia was able to achieve an NPAT of A$106.7M, which represents a significant increase from the previous year’s figure of A$17.6M. Despite the GWP decreasing to A$51.0M from A$106.4M year-over-year, they were able to achieve an underwriting result of A$81.4M, which is a decrease from A$106.6M year-over-year. Their NEP is A$94.0M, which is slightly lower than the year-ago figure of A$108.3M.
The overweight position in lighting, ceiling fans, and light globes retailer Beacon Lighting Group (-13.9%) detracted from relative performance. The stock continued to weaken during May despite the absence of any material firm-specific news releases over the month. We still see the stock as being attractively priced and trading at a significant discount to its intrinsic valuation. We continue to hold stock in an overweight position within the Fund.
The overweight position in retail outlet investment company Premier Investments Ltd (-13.9%) detracted from relative performance. The stock fell on the back of signals of a deteriorating consumer environment from Apr/May-23, as discretionary retail conditions deteriorated in April/May-23, evidenced by four listed retail updates showing sales, on average, moving from -1% y/y in January/February 2023 to -14% y/y in March-May 2023.
The overweight position in out-of-home advertising solutions provider oOh!media (-25.8%) detracted from relative performance. The stock fell sharply following a trading update during the month, reporting a 3% increase in Q1 revenues over Q1 2022, despite a significant softening in March due to a decline in the macroeconomic environment in Australia and New Zealand. The decline was attributed to a decrease in short-term in-month bookings, especially in the government spend category. However, Road and Fly (roadside billboards and airport terminal advertising) categories continued to grow strongly year on year. Overall, the Q1 results exceeded market expectations, with Q2 currently pacing slightly ahead of the previous corresponding period. Capex March YTD is on track for guidance, and the share buyback program is progressing well.
Performance Commentary - April 30, 2023 A feature of this Fund is that it applies Perpetual’s ESG process and values-based investment criteria. The Fund’s largest overweight positions include Insurance Australia Group Ltd, Healius Ltd, and Brambles Ltd. Conversely, the Fund’s largest underweight positions include CSL Ltd, BHP Group Ltd (not held), and Commonwealth Bank of Australia.
Not holding iron ore miner BHP Group (-6.0%) contributed to relative performance. A March-quarter production report shows it missed consensus estimates for copper production but produced slightly more iron ore than expected. Its nickel, met coal, and energy coal production was also lower than expected. Despite this, production guidance for FY23 remains unchanged for iron ore, metallurgical coal, and energy coal, while total copper production guidance remains unchanged, and its full-year unit cost guidance remains unchanged. The overweight position in insurance provider Insurance Australia Group Ltd (+6.2%) contributed to relative performance. The stock finished higher on speculation that IAG is in talks to acquire RACQ’s insurance business. The Australian notes that RACQ’s insurance operations were purchased for ~A$500M. However, sources indicate that RACQ may offload the division for ~A$200M. The overweight position in supply chain services provider Brambles (+6.1%) contributed to relative performance. The Firm reported sales of $9 million in its 9-month trading update after noting its pricing strategy has helped to offset cost increases across all regions, despite macroeconomic challenges and inventory optimisation by retailers and manufacturers. Brambles has also revised its FY23 guidance, projecting sales revenue growth of 14-15% and underlying profit growth of 17-19%.
Performance Commentary - March 31, 2023 A feature of this Fund is that it applies Perpetual’s ESG process and values-based investment criteria. The Fund’s largest overweight positions include Insurance Australia Group Ltd, Healius Ltd, and Brambles Ltd. Conversely, the Fund’s largest underweight positions include CSL Ltd, BHP Group Ltd (not held), and Commonwealth Bank of Australia.
The overweight position in packaging manufacturer Orora (+21.3%) contributed to relative performance. Its first-half FY2023 results beat consensus with a stronger-than-expected underlying NPAT of $108.1M and revenue of $2.26B. Orora’s FY2023 outlook remains positive, with management anticipating higher earnings despite challenging global and domestic economic conditions, currency fluctuations, and continuing impact of the Pandemic. In North America, the company expects EBIT growth for the whole year, while in Australasia, it anticipates second-half 2023 EBIT to be up on the second-half 2022.
The overweight position in out-of-home advertising solutions provider oOh!media (+28.8%) contributed to relative performance. The stock rose sharply following its first-half earnings announcement. The results exceeded market expectations with underlying NPAT $56.2M vs consensus $52.0M, revenue of $592.6M (vs consensus $597.6M), Adjusted EBITDA of $127.1M (vs consensus $125.4M), and a final dividend of 3 cents per share (vs 1 cent last year). Management advised that its March-quarter revenue is on track for an 8% year-on-year increase.
The overweight position in lenders mortgage insurance business Helia (previously Genworth Mortgage Insurance) (+18.8%) contributed to relative performance. The company delivered a strong result during February based on favourable claims outcomes. New delinquencies are still favourable, but this will ultimately deteriorate despite banks being proactive on stressed loans. Nevertheless, the company’s capital position remained strong, and we believe the firm has applied an element of conservatism to provisioning, which already allowed for a higher frequency of delinquencies.
The overweight position in household consumer products distributor GWA Group Limited (-17.4%) detracted from relative performance. The firm reported a first-half normalised NPAT of $21.3M (down 5% year-on-year). Management noted that demand in its Commercial new build and renovation segment is expected to continue, with its Commercial forward order book remaining strong (up 6.5%) in Australia since June 2022.
This is expected to drive its strategic agenda in the second half of FY2023 with a focus on profitable volume growth targeting new markets and customers, as well as continued focus on cost management.
Noy holding iron ore miner BHP Group (+6.5%) detracted from relative performance. The miner provided an update on its UK class action brought by claimants in the English High Court seeking damages for alleged losses relating to the Fundão Dam collapse in 2015. BHP reported that a further claim was filed to add ~500,000 new claimants to the British proceedings. Full details of the claims have not been received, and the amount of damages sought in the proceedings remains unspecified.
The overweight position in dairy producer a2 Milk Company (-15.6%) detracted from relative performance. The stock price fell following the completion of the company’s on-market 21.7M share buyback at an average price of NZ$6.87/share. The buyback equated to 2.9% of the issued capital with a total consideration of ~NZ$149M. The stock was subsequently downgraded to ‘hold’ from ‘buy’ at Bell Potter after the buyback, with its target price cut to A$6.80 from A$7.65.
Performance Commentary - September 30, 2022 A feature of this Fund is that it invests in a screened universe enforced by strict ethical and socially responsible (SRI) investment criteria. The Fund’s largest overweight positions include Insurance Australia Group Ltd, Bapcor Ltd, and Brambles Ltd. Conversely, the Fund’s largest underweight positions include CSL Ltd (not held), BHP Group Ltd (not held), and Commonwealth Bank of Australia.
The overweight position in salary packaging, vehicle leasing, and administration services provider McMillan Shakespeare (+32.2%) contributed to relative performance. The stock rose sharply upon release of its full-year financial results, reporting normalised revenue of $594.3M, up 9.2% compared to the prior corresponding period (pcp). Statutory NPAT grew by 15.2% on the pcp to $70.3M, and its final dividend was increased by 154%. Going forward, McMillian announced that it will return between 70% and 100% of underlying profit to shareholders in the form of dividends, up from 66% in the pcp.
The overweight position in lender’s mortgage insurance provider Genworth Mortgage Insurance Australia Ltd (+23.4%) contributed to relative performance. The company reported a first-half underlying NPAT of $134.3M (vs $76.4M last year) and a statutory NPAT of $18.9M (vs $59.4M last year), which included unrealised mark-to-market investment losses of $162.1M. Management also provided its second-half guidance, including $375-435M of premiums written (vs prior guidance of $315-375M), indicating that while net incurred claims are expected to begin normalising, it will take some time for changes in the economy to flow through to delinquencies.
The overweight position in insurance provider Insurance Australia Group Ltd (+6.7%) contributed to relative performance. The stock rallied hard late in the quarter to recover most of its earlier losses incurred leading up to the release of its preliminary full-year financial results. While IAG’s growth of 5.7% was in line with its mid-single digit growth guidance, its reported insurance profit margin came in at 7.4%, down 6.1% year-on-year and missing its 10% to 12% guidance. Management blamed the miss on its net natural peril costs of $1.119B, which were $354M above the original allowance of $765M. However, it is confident that FY2023 will be a much stronger year for the company.
Performance Commentary - August 31, 2022 A feature of this Fund is that it invests in a screened universe enforced by strict ethical and socially responsible (SRI) investment criteria. The Fund’s largest overweight positions include Insurance Australia Group Ltd, Bapcor Ltd, and Brambles Ltd. Conversely, the Fund’s largest underweight positions include CSL Ltd (not held), BHP Group Ltd (not held), and Commonwealth Bank of Australia.
The overweight position in Australia and New Zealand media and online publishing company HT&E (+17.3%) contributed to relative performance. The stock price rose throughout the month on the back of its stronger-than-expected financial results. Management reported a first-half NPAT of $26.4M vs $16.3M from last year, beating consensus of $20.9M. Revenue of $172.0M was broadly in line with consensus, and Adjusted EBITDA of $48.5M beat consensus of $47.5M. HT&E also declared a fully franked interim dividend of 5 cents per share, up 43% from its FY21 interim dividend.
The overweight position in salary packaging, vehicle leasing, and administration services provider McMillan Shakespeare (+16.1%) contributed to relative performance. The stock rose sharply upon release of its full-year financial results, reporting normalised revenue of $594.3M, up 9.2% compared to the prior corresponding period (pcp). Statutory NPAT grew by 15.2% on the pcp to $70.3M, and its final dividend was increased by 154%. Going forward, McMillian announced that it will return between 70% and 100% of underlying profit to shareholders in the form of dividends, up from 66% in the pcp.
The overweight position in dairy producer A2 Milk Company (+22.2%) contributed to relative performance. During the month, the company reported a 19.8% increase in its full-year FY2022 revenue to NZ$1.446.2M, leading to a 42.3% jump in net profit after tax to NZ$114.7M and beating the market consensus estimate of NZ$113.9M. This was driven mainly by double-digit infant formula sales growth from both its China and English label products, reflecting A2’s significant increase in marketing investment, which prompted further gains in brand health metrics and record market shares. Investors were further pleased with the announcement of a NZ$150M on-market share buyback.
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