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About The Company
AMCIL was established in 1996 as a thematic investor focussed particularly on the media and telecommunications sectors in Australia and New Zealand. During 2002 the Board came to the view that structural changes had occurred in the media and telecommunications industries since 1996 which affected the viability and vitality of a specialist investor concentrating only on the themes of media and telecommunications. At that point, the Board recommended to shareholders that the Company’s investments be progressively sold and the capital returned to shareholders. One of the key aims of this was to unlock for shareholders the value in the Company’s portfolio which was not then being reflected in the Company’s share price. Shareholders approved this initiative and the Board proceeded to sell down the portfolio.
As this process was nearing completion in late 2003, the Board developed a new proposal to shareholders to recapitalise the Company. This recapitalisation took place at a point at which all of the Company’s previous capital had been repaid to shareholders with the exception of approximately $2.9 million. The recapitalisation successfully raised $41 million, with the new shares being allotted in late January 2004. In addition, 81.5 million options exercisable for ordinary shares at 50 cents per share were issued, expiring on 28 February 2007.
Corporate Objective
The Company's corporate objective is to provide shareholders with attractive returns through strong capital growth in the portfolio over the medium to long term with the generation of dividend income as a subordinate, but nevertheless important, objective.
Depending on the profit from year to year the dividends paid by the Company will maximise the distribution of franking credits. It would not be our normal practice to distribute realised capital gains unless franking credits have been generated. As a result, AMCIL’s dividends may vary over time.
Approach to Investing
The investment philosophy is built on taking a medium to longer term view of value, which means we aim to buy and hold individual stocks over the long term based on selection criteria which, in summary, include:
• Formulation and execution of business strategy of the company and its
underlying business value;
• Key financial indicators, including prospective price earnings relative to projected growth,
sustainability of earnings and dividend yield (including franking) and balance sheet position
including gearing, interest cover and cash flow; and
• Corporate governance practices, including sound and well constructed boards.
• AMCIL also has access to lines of credit, which allows the Company on a limited basis to gear its
balance sheet when appropriate investment returns are available to enhance shareholder
returns. In addition, the Company also uses options written against its trading portfolio
to generate additional income.
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