Ansell designs, develops, manufacturers and markets a wide range of hand and arm protection solutions (a.k.a. gloves), clothing and condoms. It is essentially an industrial materials business that transforms natural rubber latex and synthetic latex into these value added products. The business has an interesting combination of cyclical and defensive exposures. Ansell is a leading player (#1 or #2) in all its key market segments and generates a very healthy return on invested capital.
ARB is Australia’s largest manufacturer and distributor of 4×4 accessories. The company’s key strength is its product leadership, with ARB-branded products enjoying a material price premium to competitors. This has been established through a prolonged R&D focus which has resulted in ARB having the best products. ARB products are distributed through a network of its own stores in Australia, and a network of distributors around the world that sees it export to more than 100 countries.
Aristocrat is a leading global provider of gaming machines and software to casinos and pubs & clubs. Aristocrat has applied its expertise in innovating and designing new games to the digital online gaming market. Digital online gaming is now a key focus for Aristocrat and presents a large opportunity for the company which should help drive revenue growth for many years.
Austbrokers operates a general insurance broking network focused on the SME market. The business is based on a “owner-driver” model and has multiple avenues for future growth: via acquisition (industry is consolidating), achieving synergies from the network structure and cross sell/up sell of existing client base.
Brambles is a supply-chain logistics company operating in more than 50 countries. The Group specialises in the pooling of unit-load equipment and associated services, focusing on the outsourced management of pallets, crates and containers.
Carsales owns a network of classified advertising websites in Australia. Carsales’ main website, www.carsales.com.au, is the leading automotive classifieds website in Australia. Carsales is a strong business with attractive growth prospects and interesting global options.
Commonwealth Bank of Australia operates a leading banking franchise in both Australia and New Zealand and has a strong presence in all spheres of retail and business banking. CBA has built a very profitable portfolio of assets and positioned itself to benefit from key growth areas in the Australian economy. The bank also enjoys an enviable scale advantage in gathering deposits, allowing it an important source of stable and low-cost funding.
Credit Corp purchases and then collects, on its own account, portfolios of defaulted debt. These are primarily bought from banks. In more recent time the company has diversified, leveraging its understanding of the sub-prime market to provide consumer credit. It also has a fledgling US purchased debt ledger (PDL) operation.
CSL is a leader in the growing global plasma therapies market, and has a superb record of maintaining healthy returns while delivering strong earnings growth. CSL’s therapies address severe autoimmune and nerve degeneration conditions, drug trials for which are typically difficult to conduct given the significant challenges in patient recruitment. This gives existing companies with approved therapies a tremendous intellectual property advantage, which is evident in the very long product life-cycles over which CSL enjoys positive financial returns.
Domino’s Pizza is a true Australian growth stock with significant opportunities to increase its store numbers, improve sales growth in existing stores, and to expand profit margins. By customising both its pizza and service offering, Domino’s has grown from 178 stores in 2001 to over 1400 stores at December 2014.
Ingenia Communities is a retirement living operator focussed on the value end of the market. The business has had a tumultuous past (like many Australian property companies). Under the leadership of CEO Simon Owen (appointed Nov-09) it has refocused on its core proposition, sold non-core assets, cut debt and during FY12 internalised its management. We know Simon well as he was CEO of Aevum, a previous successful portfolio investment.
Link is the largest provider of fund administration services to Australia’s superannuation industry and is the second largest Australasian share registry and leading provider of shareholder management and analytics. It has recently acquired a major asset services business that operates in the UK and Europe providing Link with a new growth opportunity. Link has a number of qualities that we like including scale advantages, defensive, recurring revenues and opportunity for growth.
NAB is one of the four major Australian banks. Having exited less profitable UK and Insurance businesses, NAB enjoys attractive options in terms of expanding its valuable Australasian franchise.
Nanosonics owns intellectual property and has developed applications for point of use disinfection and sterilisation technologies. These technologies have a number of core benefits compared to existing approaches and can be applied to a variety of markets. Nanosonics' advantage is based on its unique patented technologies, and the company's ability to apply these technologies to well identified market opportunities.
Next DC is Australia’s leading independent data centre operator with a nationwide network of facilitie. NEXTDC provides enterprise-class colocation services to local and international organisations. They have a focus on sustainability and renewable energy.
Ooh! Media is a leading Out Of Home advertising company with a dominant share in the Retailing sector. The company sells advertising opportunities on its wide network of signs and digital screens, allowing advertisers to reach consumers in new and exciting ways.
PWR specialises in manufacturing cooling solutions for global high end motorsport teams such as Formula One, NASCAR and Formula E. PWR is recognised as a world leader when it comes to high performance cooling and it has used its expertise to win a number of contracts to provide cooling solutions for high-priced limited run supercar manufacturers such as Aston Martin and Porsche. The company has a culture of innovation and invests a meaningful proportion of its revenues back into researching and developing new cooling solutions each year. We think this not only keeps PWR at the forefront of its existing markets but has the potential to broaden PWR’s customer base to include companies in other industries.
ResMed is a global leader in the treatment of sleep-disordered breathing conditions like obstructive sleep apnea (OSA). The company provides a range of treatment options for patients with these conditions including CPAP flow generators and consumables. The firm is a leader in a global oligopoly with competitors Respironics and New Zealand's Fisher & Paykel Healthcare.
Rio Tinto is among the most competitive mining companies in the world, with particularly advantageous positions in iron ore, bauxite & aluminium and copper markets. Rio Tinto has some of the best quality mining assets on a global basis, giving it sustainable cost advantages over many of its peers which provides it with a strong platform to perform well through the commodity price cycle.
SEEK is the largest global online employment marketplace. Operating across Australia, New Zealand, South East Asia, China, Brazil, Mexico, Bangladesh and Africa, SEEK's employment marketplaces are exposed to approximately 2.6 billion people & more than 20% of global GDP.
Sonic Healthcare is a leading global provider of medical diagnostic services. The combination of an ageing population, an increasing focus on preventative medicine and more effective diagnostic tests drives Sonic's substantial long-term growth opportunity. Regulated medical prices are typically set to allow small independent companies to make a reasonable profit, which allows Sonic to achieve significant additional profitability from its substantial scale. More people with more access to and a greater need for healthcare services present Sonic with profitable growth prospects.
Technology One (TNO) is one of Australia's largest ERP companies, with a significant presence in Government, Health and Education sectors. TNE offers a fully integrated service, which encompasses software development, sales, implementation and consulting. TNE argues the model of providing both product and consulting solutions delivers superior client outcomes.
Westpac is Australia's oldest bank and corporation. It operates a leading bank franchise in both Australia and New Zealand and has a strong presence in all spheres of retail and business banking. Westpac has a formidable stable of brands supporting its top tier position in both deposit gathering and lending.
Wisetech Global Ltd. develops cloud-based software solutions for the international and domestic logistics industries. Its activities include development, sale, and implementation of software solutions that enable logistics service providers to facilitate the movement and storage of goods and information domestically and internationally. The company was founded by Maree McDonald Isaacs and Richard John White on August 2, 1994 and is headquartered in Sydney, Australia.
Portfolio holdings summary as at 31 August 2019
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