Spheria Emerging Companies Limited (ASX:SEC)

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Overview

Spheria Emerging Companies Limited (the Company, ASX: SEC) is a listed investment company (LIC) that provides investors with access to an actively managed, Australian and New Zealand small and micro companies portfolio, designed for investors seeking capital growth and portfolio diversification.

Spheria Asset Management Pty Ltd (the Manager, Spheria), is the appointed investment manager and is a specialist team with a proven track record of navigating opportunities at the small end of the market.

Company Facts

Name value
Investment Manager Spheria Asset Mangement Pty Limited
ASX Code SEC
Share Price $1.790
Inception Date 30 November 2017
Listing Date 5 December 2017
Benchmark S&P / ASX Small Ordinaries Accumulation Index
Dividends Paid Quarterly
Management Fee 1.00% (plus GST) per annum1
Performance Fee 20% (plus GST) of the Portfolio's outperformance2
Market Capitalisation $107.1m

1 Calculated daily and paid at the end of each month in arrears
2 Against the Benchmark over each 6-month period subject to a high-water mark mechanism

Latest Monthly ReportDownload Prospectus

The Spheria Emerging Companies Limited (ASX: SEC) received a ‘Recommended’ rating from Zenith Investment Partners (March 2023)1 and 'Recommended' rating from Lonsec Research (September 2023)2.

ASX Announcements

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Latest News

SEC Results FY23

• FY23 net profit after tax of $9.6m
• Company Performance of +9.6%, +1.2% compared to benchmark4 of +8.4% (+2.6% p.a. to benchmark since inception)
• Total quarterly dividends declared for the year of 9.3 cents per share (fully franked)1
• Includes increased quarterly dividend target of 1.25% of post-tax NTA for June 2023 equivalent to 2.8 cents per share
• Trailing dividend yield equal to 4.9%2 (7.0%3 including franking)
• On-market share buy-back commenced in June 2023

1Comprising September 22 quarter dividend of 2.1 cents (paid 3 November 2022), December 22 quarter dividend of 2.2 cents (paid 6 February 2023), March 23 quarter dividend of 2.2 cents (paid 8 May 2023), and June 23 quarter dividend of 2.8 cents (paid 7 August 2023).
2Trailing dividend yield based on total quarterly dividends of 9.3 cents, calculated on share price as at 30 June 2023 of $1.90.
3Trailing dividend yield including franking credits based on total quarterly dividends of 9.3 cents, calculated on share price as at 30 June 2023 of $1.90, using 30% tax rate.
4S&P/ASX Small Ordinaries Accumulation Index.

Share Price

ASX:SEC

20 min delayed price

Pre-Tax NTA

colFundDailyDate colFundDailyLICNTAPerShare
07 December 2023 2.135

Investment Managers

Marcus Burns

Portfolio Manager

Marcus is a co-founder of Spheria and has been a Portfolio Manager since Spheria's inception in April 2016. He has managed Australian, European and global equity portfolios out of Australia and London through volatile market cycles for over 20 years. Marcus has an established track record generating strong investment portfolio returns for investors. He worked alongside his Co-Portfolio Manager Matthew Booker at Schroders since the beginning of 2013 and co-managed the Australian small and micro-cap portfolios with Matthew. These funds generated double digit returns above benchmark during this timeframe.

Matthew Booker

Portfolio Manager

Matthew is a co-founder of Spheria Asset Management and a portfolio manager with research responsibilities. He has managed small company portfolios through volatile market cycles for over 16 years and has established a significant track record for generating returns that have exceeded portfolio benchmarks. Prior to co-founding Spheria, Mr Booker worked at Concord Capital and then Schroders, managing the smaller companies fund as well as the micro-cap product at Schroders. Mr Booker is an Associate of the Institute of Actuaries of Australia and a Fellow of FINSIA. He has over 25 years of financial markets experience.

Adam Lund

Head of Trading / Analyst

Adam Lund is a co-founder of Spheria and is the Head of Trading with investment research and portfolio construction responsibilities. Adam has over 12 years experience in funds management and spent 5 years as an equities and derivatives trader at Schroders Investment Management Australia. At Schroders, Adam worked closely with Spheria co-founders, Matthew Booker and Marcus Burns.

Performance

1 Calculated as the Company’s investment portfolio performance after fees excluding tax on realised and unrealised gains/losses and other earnings, and after company expenses.
2 Benchmark is the S&P/ASX Small Ordinaries Accumulation Index.
3 Inception date is 30th November 2017. Past performance is not a reliable indicator of future performance. All p.a. returns are annualised.

Latest Monthly Report

Latest Monthly Report

Other Reports

Historical Monthly ReportsLatest Results PresentationLatest Annual Report

Dividend History

Details of the Company’s dividends since inception, including this latest dividend, are as follows:

Source: Spheria Emerging Companies

Dividend Reinvestment Plan

The Company has put in place a dividend reinvestment plan (DRP) which has been operating from the payment of the March 2022 quarterly dividend.

The DRP has been designed so that participants will always receive the lowest reinvestment price possible, without their reinvestment diluting the post-tax NTA of those shareholders who choose not to participate in the DRP.

When the Company’s share price is greater than or equal to its post-tax NTA per share, dividends are paid as newly issued shares in the Company. If the Company’s share price is above its post-tax NTA per share on the dividend ex-date, participating shareholders will be issued new shares at the greater of the share price (less such discount as the Board may determine for the relevant dividend) or the post-tax NTA value per share of the Company on dividend ex-date.

If the Company’s share price is less than its post-tax NTA per share on the ex-date, cash available for distribution as dividends on shares subject to the DRP will be used to acquire the Company’s shares on-market in accordance with the terms set out in the DRP. These acquired shares will be distributed to shareholders participating in the DRP.

Shareholders who would like to participate in the DRP can enrol at: https://investor.automic.com.au or alternatively please contact the Company’s share registry, Automic, for assistance on 1300 902 587 (in Australia) / +61 2 7208 4521 (International).

Dividend Reinvestment Plan Booklet and Rules

Latest Updates

2023 Annual General Meeting

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View the AGM Presentation.

SEC results FY23 Webinar

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Watch the Full-Yearly FY23 Results Webinar.
Full Year 2023 results

Full year FY23 Results

| Company Updates (ASX: SEC) | No Comments
View the Full year FY23 Results.

Latest Insights from the Manager

Small Caps In Focus: Marcus Burns

| Videos & Podcasts | No Comments
Marcus Burns shares small cap investing insights in this 3-minute video.
Digging into Mine Rehabilitation: Underestimated Costs & Risks

Digging into Mine Rehabilitation: Underestimated Costs & Risks

| Articles | No Comments
Exploring the underestimated rehabilitation expenses in mining.

We will enter a period of lower inflation from FY24 and beyond

| Videos & Podcasts | No Comments
In this Livewire Live 2023 presentation Marcus Burns (Portfolio Manager) discusses why he believes we will enter a period of lower inflation from FY24 and beyond.

Board & Governance

Board of Directors

Jonathan Trollip

Chairman

Jonathan Trollip is a non-executive director with over 34 years of commercial, corporate, governance, legal and transaction experience. Prior to becoming a professional non-executive director, he worked as a principal of Meridian International Capital Limited for over 20 years, and before that, he was a Partner with law firm Herbert Smith Freehills. In the philanthropy area, he is chairman of Science for Wildlife Limited and a director of The Watarrka Foundation and the Pinnacle Charitable Foundation. Jonathan has a B.Arts, post graduate degrees in Economics and Law and is a Fellow of the Australian Institute of Company Directors.

Lorraine Berends

Independent Director

Lorraine Berends has worked in the financial services industry for over 40 years and possesses extensive experience in both investment management and superannuation. Before moving to a non-executive career in 2014, she worked for 15 years with US-based investment manager Marvin & Palmer Associates. Lorraine contributed extensively to industry associations throughout her executive career, serving on the boards of the Investment Management Consultants Association (IMCA australia, now the CIMA Society of Australia) for 13 years (7 as Chair) and the Association of Superannuation Funds Australia (ASFA) for 12 years (3 as Chair). Lorraine has been awarded Life Membership of both IMCA australia and ASFA. Lorraine holds a BSc from Monash University, is a Fellow of the Actuaries Institute and a Fellow of ASFA.

Matthew Booker

Director

Matthew is a co-founder of Spheria Asset Management and a portfolio manager with research responsibilities. He has managed small company portfolios through volatile market cycles for over 16 years and has established a significant track record for generating returns that have exceeded portfolio benchmarks. Prior to co-founding Spheria, Mr Booker worked at Concord Capital and then Schroders, managing the smaller companies fund as well as the micro-cap product at Schroders. Mr Booker is an Associate of the Institute of Actuaries of Australia and a Fellow of FINSIA. He has over 25 years of financial markets experience.

Chris Meyer

Alternate Director

Chris is Director of Listed Products at Pinnacle Investment Management Group Limited (Pinnacle) and responsible for driving the listed products business including in excess of $5bn of funds under management (FUM) across active ETFs and listed closed end funds (LICs and LITs). He is also a director of the Australian Listed Investment Companies and Trust Association.

Prior to joining Pinnacle in 2018, Chris was the CEO of RMI Investment Managers since 2015 where he built an asset management business by partnering with ten independent boutique asset management businesses in South Africa, collectively managing $10bn of FUM.

Chris was also previously the founder and CEO of RMB Morgan Stanley since 2006, successfully leading the company to be the number one institutional equity business in South Africa and an Executive Director in Morgan Stanley’s US equity research team where he analysed the US brokerage, asset management and stock exchange industries.

Chris is a Chartered Financial Analyst and a Business Science honours graduate of the University of Cape Town.

Corporate Governance

Corporate Governance Statement
Corporate Governance Charter
Whistleblower Policy

How to Invest

Spheria Emerging Companies Limited is an investment company listed on the ASX under ticker: SEC.

This means you can buy and sell shares in SEC through your online trading account or via your broker or licensed adviser in the same way that you trade shares in other ASX-listed companies.

You can view your SEC shareholding alongside any other direct shareholding you have.

Platform Availability

You can also invest in SEC on the below Platforms. Platforms provide investors with consolidated and centralised reporting (including administration, tax, and distribution) by bundling together a range of managed funds as one single product. If the Company is not available on your preferred platform, please contact us. Please check with your platform for minimum investment requirements and fees.

AMP North

Asgard

BT Panorama

CFS FirstWrap

HUB24

Insignia eXpand

Macquarie Wrap

Netwealth

Shareholder Enquiries

For information regarding investor shareholdings, please contact the Share Registry.

Share Registrar: Automic
Address: Level 5, 126 Phillip Street, Sydney NSW 2000
GPO Box 5193, Sydney NSW 2001
Local Australian number: 1300 902 587
International number: +61 2 7208 4521
Email: hello@automic.com.au

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Distribution of meeting-related documents and annual reports to shareholders

Shareholders who would like to receive meeting-related documents such as notices of meeting and annual reports in physical form must notify SEC’s share registry (Automic) online at https://investor.automic.com.au/ or by phone on 1300 902 587 (within Australia)​ or +61 2 7208 4521 (outside Australia). Shareholders who do not wish to receive annual reports or would like to receive meeting-related documents and annual reports in electronic form may also make their elections online or by phone.

In addition to any elections, shareholders may also make an ad hoc request for a particular document1 to be sent in physical or electronic form.

Shareholders who do not notify Automic of their election and have provided a valid email address to Automic will receive meeting-related documents and annual reports in electronic form.

Any elections made by shareholders before 1 April 2022 will continue to apply unless SEC or Automic advise otherwise.

1a document that relates to a meeting of the members; a document that relates to a resolution to be considered by the members without a meeting; a report mentioned in s314 of the Corporations Act, including a financial report, directors report and auditor’s report; a notice of members rights provided under s 110K of the Corporations Act; or a document prescribed by the Corporations Regulations 2001 (Cth).

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Disclaimer

Spheria Emerging Companies Limited (the Company, ASX: SEC) is a listed investment company (LIC) that provides investors with access to an actively managed, Australian and New Zealand small and micro companies portfolio, designed for investors seeking capital growth and portfolio diversification.It is a confined capacity investment strategy that identifies smaller companies where the present value of cash flows can be reasonably determined and they are assessed to be trading at a discount to their intrinsic value.The smaller companies universe is more volatile and higher risk. An experienced investment manager in the small company end of the market is paramount to success, for this reason there are only a small number of listed investment companies offering access to a diversified small companies investment portfolio.Spheria Asset Management Pty Ltd (the Manager, Spheria), is the appointed investment manager and is a specialist team with a track record of navigating the higher risk opportunities at the small end of the market.

1 The Zenith Investment Partners (ABN 27 103 132 672, AFS Licence 226872) (“Zenith”) rating (assigned March 2023) referred to in this piece is limited to “General Advice” (s766B Corporations Act 2001) for Wholesale clients only. This advice has been prepared without taking into account the objectives, financial situation or needs of any individual, including target markets of financial products, where applicable, and is subject to change at any time without prior notice. It is not a specific recommendation to purchase, sell or hold the relevant product(s). Investors should seek independent financial advice before making an investment decision and should consider the appropriateness of this advice in light of their own objectives, financial situation and needs. Investors should obtain a copy of, and consider the PDS or offer document before making any decision and refer to the full Zenith Product Assessment available on the Zenith website. Past performance is not an indication of future performance. Zenith usually charges the product issuer, fund manager or related party to conduct Product Assessments. Full details regarding Zenith’s methodology, ratings definitions and regulatory compliance are available on our Product Assessments and at Fund Research Regulatory Guidelines.

2 The rating issued (Spheria Emerging Companies Limited rating issued September 2023) is published by Lonsec Research Pty Ltd (‘Lonsec’) (ABN 11 151 658 561, AFSL 421 445). Ratings are general advice only, and have been prepared without taking account of your objectives, financial situation or needs. Consider your personal circumstances, read the product disclosure statement and seek independent financial advice before investing. The rating is not a recommendation to purchase, sell or hold any product. Past performance information is not indicative of future performance. Ratings are subject to change without notice and Lonsec assumes no obligation to update. Lonsec uses objective criteria and receives a fee from the Fund Manager. Visit lonsec.com.au for ratings information and to access the full report. © 2022 Lonsec. All rights reserved.