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COMPANY HALF-YEAR RESULTSPLATO INCOME MAXIMISER LIMITEDASX: PL8

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Disclaimer

Note: Past performance is not a reliable indicator of future performance. This communication has been prepared by Plato Income Maximiser Limited ABN 63 616 746 215 (PL8). Nothing contained in this communication constitutes investment, legal, business, taxation or other advice. This communication is for general information only. The information in this communication does not take into account your investment objectives, financial situation or particular needs. Plato Investment Management Limited AFSL 504616 ABN 77 120 730 136 (‘Plato’), is the investment manager of Plato Income Maximiser Limited. Any opinions or forecasts reflect the judgment and assumptions of Plato, PL8 and its representatives on the basis of information at the date of publication and may later change without notice. The information is not intended as a securities recommendation or statement of opinion intended to influence a person or persons in making a decision in relation to investment. Past performance is for illustrative purposes and is not indicative of future performance. To the maximum extent permitted by law, none of Plato and PL8, its related bodies corporate, shareholders or respective directors, officers, employees, agents or advisors, nor any other person accepts any liability, including, without limitation, any liability arising out of fault or negligence for any loss arising from the use of information contained in this communication.

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Agenda

01PL8 investment strategy and performance

02Market update

03Questions

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PL8 investment strategy and performance

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PL8 investment portfolio performance

Including Franking

Half-Year 12 MonthsSince

Inception p.a.**

(28/4/2017)

Portfolio 2.9% 24.2% 10.5%

S&P/ASX200 Tax Exempt 3.8% 25.4% 10.8%

Active -0.9% -1.2% -0.3%

PERFORMANCE TO 31 DECEMBER 2019 AFTER FEES AND COSTS*

*Inclusive of the net impact of GST and Reduced Input Tax Credits. Past performance is not a reliable indicator of future performance. **Annualised from Inception date: 28 April 2017

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Longer term performancePLATO AUSTRALIAN SHARES INCOME FUND PERFORMANCE TO 31 DECEMBER 2019 AFTER FEES

Plato Aust. Shares Income Fund v S&P/ ASX200 Accumulation Series (incl. Franking Credits)

Source: Plato, IRESS

0.80

1.30

1.80

2.30

2.80

3.30

Sep-2011 Sep-2012 Sep-2013 Sep-2014 Sep-2015 Sep-2016 Sep-2017 Sep-2018 Sep-2019

Plato Australian Shares Income Fund Total Net Return (incl. Franking Credits)

S&P/ASX 200 Franking Credit Adjusted Daily Total Return Index (Tax Exempt)For

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PL8 delivering strong comparable returns

1.2CASH

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

RBA Cash Rate S&P/ASX 200 PL8

4.2 5.5

0.0FRANKING 1.6 2.3

12 MONTH REALISED YIELD*

Source: Plato. *to 31 December 2019, excluding the 3c special dividend in May 2019

Past performance is not a reliable indicator of future performance.

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Delivering consistent monthly incomePLUS 3 CENT SPECIAL DIVIDEND PAID MAY 2019

Only Australian LIC paying monthly fully franked dividends

Source: Plato. While monthly income has been consistent since April 2018, this may change in the future. The declaration of dividends by the company is at the full discretion of the board (unlike trusts where income must be fully distributed each financial year).

0.0c

0.1c

0.2c

0.3c

0.4c

0.5c

0.6c

MONTHLY DIVIDENDS PAID

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PL8 NTA performance breakdown for 1HFY20PRE-TAX NTA PER PL8 SHARE*

Source: Plato. *Excludes franking credits.

$1.05

$1.07

$1.09

$1.11

$1.13

$1.15

Pre-tax NTA1 Jul 2019

Portfolioperformance

Company expenses Dividends paid Pre-tax NTA31 Dec 2019

$1.106

+ $0.013 - $0.001 - $0.030

$1.088

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$0.80

$0.90

$1.00

$1.10

$1.20

$1.30

May-17 Aug-17 Nov-17 Feb-18 May-18 Aug-18 Nov-18 Feb-19 May-19 Aug-19 Nov-19 Feb-20

Share Price Net Tangible Assets (NTA)

Price has closely tracked NTAPL8 PRICE VERSUS NTA SINCE LISTING

Source: Plato, IRESS. Past performance is illustrative only and not indicative of future performance.

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Market Update

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Cash rates are very low for “an extended period”OFFICIAL RBA CASH RATE EXPECTATIONS

“It is reasonable to expect that an extended period of low interest rates will be required in Australia ...”Philip Lowe, RBA Governor: Monetary Policy Decision 3 September 2019.

Source: Macquarie Macro Strategy January 2019

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Safe assets lose you moneyNEGATIVE REAL RATES OF RETURN

Safe options = going backwards!*

-$60,000

-$40,000

-$20,000

$-

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

1981

1982

1983

1984

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1987

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1989

1990

1991

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1997

1998

1999

200

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1

200

2

200

3

200

4

200

5

200

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200

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200

9

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

Real Earnings on $1m

Real Overnight Real 1 Yr TD Real 10 Yr Bond

*Depending on your risk profile. Source: Plato, RBA

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Don’t forget the franking!S&P/ASX 300 1 JULY 2005 TO 31 DECEMBER 2019

2.9% p.a. price, 7.5% accumulation, 9.1% p.a. including frankingTotal returns 52%, 185% and 251% respectively

$-

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

Jul-2

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Jul-2

010

Jul-2

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Jul-2

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Jul-2

014

Jul-2

015

Jul-2

016

Jul-2

017

Jul-2

018

Jul-2

019

ASX300 Price ASX300 Accum ASX300 Accum + Franking

Source: S&P, Plato

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Tax effective buy-backs are very advantageous

• A$443M OFF MARKET BUYBACK – 5.1% OF SHARES ON ISSUE

• WORTH 12% FOR PENSIONERS, 85% SCALE BACK, 5.2BPS AFTER TAX AT PORTFOLIO LEVEL

QANTAS BUYBACK – WORTH 12% AFTER TAX FOR ZERO TAX INVESTORS

Highlights value of franking credits

Source: Plato, Qantas announcement 4/11/2019. * market price on the 4/11/2019. May not be suitable depending on your circumstances. Investors should seek their own tax advice.

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Big Aussie income stocks doing it tough!

“…Australia is poorly diversified”

6 STOCKS ACCOUNT FOR NEARLY HALF OF ALL DIVIDENDS

% of Gross Dividend Income 2019

BHP CBA Westpac NAB ANZ Rio Tinto Other

0.60

0.70

0.80

0.90

1.00

1.10

1.20

Price Performance

ASX200 Telstra Big 4 Banks

Source: Plato, IRESS, S&P200

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Largest Contributors to Income YEAR TO 31 DECEMBER 2019

Top 10 Contributors to Excess Income(Last 12mths) Investment Reasoning

Stock Excess Income(%)

Return(%)

Capital(%)

Income(%) Yield Run up Value Momentum Reasoning

Commonwealth 0.40 18.9 10.4 8.5 Bank Rotation

Westpac 0.32 6.7 -3.2 9.9 Bank Rotation

BHP 0.31 27.6 13.7 13.9 Increased yield, good total return, benefiting from high iron ore prices

NAB 0.30 12.2 2.3 9.9 Bank Rotation

Rio Tinto 0.28 44.3 28.0 16.3 Increased yield, good total return, benefiting from high iron ore prices

ANZ 0.28 9.6 0.7 8.9 Bank Rotation

Wesfarmers 0.24 40.8 28.5 12.3 Pay good stable yield, paid special dividend in February 2019

Macquarie 0.13 33.5 26.9 6.6 Paid good stable yield

Alumina 0.09 16.2 0.0 16.2 Paid high yield, particularly in Feb-19

Woolworths 0.08 27.9 22.9 5.0 Paid good stable yield

Off-mkt Buybacks (Caltex/Woolworths/McMillan Shakespeare/Qantas)

1.44 Extra Income and Total Return

Source: Plato

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Largest Contributors to Active PerformanceYEAR TO 31 DECEMBER 2019

Top 10 Contributors To Active Performance (Last 12mths) Investment Reasoning

StockActive

Performance(%)

Return(%)

Capital(%)

Income(%) Yield Run up Value Momentum Reasoning

Magellan Financial 0.50 152.3 141.9 10.4

Good business momentum and price sentiment, benefiting from good investment performance and fund inflows.

BHP Billiton 0.36 27.6 13.7 13.9 Good business momentum and price sentiment at reasonable price, benefiting from increase in iron ore prices.

FortescueMetals 0.28 194.0 155.1 38.9

Good business momentum and price sentiment at reasonable price, benefiting from increase in iron ore prices.

Aristocrat Leisure 0.23 57.8 54.1 3.7

Good business momentum and price sentiment at reasonable price, benefiting from good performance of its land-based and digital gaming platforms.

CSR 0.22 73.6 61.9 11.7 Good business momentum and price sentiment at reasonable price, benefiting from rebound in Australian housing.

Wesfarmers 0.22 40.8 28.5 12.3 Good business momentum and price sentiment at reasonable price, benefiting from rebound in Australian housing. Paid special dividend in Feb-19 after spinning out Coles.

Macquarie 0.19 33.5 26.9 6.6 Good business momentum and price sentiment at reasonable price, benefiting from strong global markets.

Scentre 0.18 4.3 -1.8 6.1 Underweight, suffering from a challenging retail environment affecting rents.

Beach Petroleum 0.17 88.7 86.6 2.1

Good business momentum and price sentiment at reasonable price, benefiting from increase in oil price.

AMP 0.16 -19.6 -21.9 2.3 Underweight, suffering after royal commission troubles.

Source: Plato

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Dividend TrapsYEAR TO 31 DECEMBER 2019

Dividend Traps Investment Reasoning

Stock Date of Divd Div’d Cut(%)

Return(%) Yield Runup Value Momentum Reasoning

AMP 27-Feb-19 -72% -0.2 Poor business momentum, suffering after royal commission troubles.

Lend Lease 1-Mar-19 -65% 2.6 Poor business momentum, suffering after reporting problems in its engineering business and weakening housing market.

Pact Group 1-Mar-19 -100% -21.8 Poor value and business momentum, cut its dividend to zero after its business is under sustained pressure.

Adelaide Brighton 1-Mar-19 -8% -0.6 Poor business momentum, suffering from weakening housing market.

Nufarm Apr-19 -100% -41.5 Poor value and business momentum, cut its dividend to zero after its business is under sustained pressure.

AMP Aug-19 -100% -20.7 Poor business momentum, suffering after royal commission troubles.

Blackmores 27-Aug-19 -55% -25.4 Poor business momentum, suffering from poor sales into Asian market.

Adelaide Brighton Sep-19 -100% -27.9 Poor business momentum, suffering from weakening housing market.

Source: Plato

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Winning by not losing - avoiding dividend trapsAMP UP TO 15% GROSS HISTORICAL YIELD

AMP

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

0.00

1.00

2.00

3.00

4.00

5.00

6.00

Jan-2018 Mar-2018 May-2018 Jul-2018 Sep-2018 Nov-2018 Jan-2019 Mar-2019 May-2019 Jul-2019 Sep-2019 Nov-2019

His

toric

al Y

ield

(%)

Pric

e

Price (LHS) Historical Gross Yield (RHS)

Source: Plato, Iress

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Update on results season February 2020

• Strong results from JB Hi Fi in retail, Resmedand CSL, iron ore miners

• Solid CBA result, dividend maintained, only bank not to cut so far in this cycle

• Dividends were flat including specials, whilst normal dividends rose nearly 10%. Note ALP franking policy conducive to specials in 2019. Median growth 0% either way.

• Covid 19 is starting to impact future earnings

– Blackmores, Treasury Wines, Cochlear, tourism, oil stocks

SIMILAR THEMES TO AUGUST 2019

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

Including Specials Excluding Specials

Change in Dividend pcp

Average Median*

Source: Plato, Iress, S&P200. Past performance is not illustrative of future performance. *Medians = 0%

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Questions THANK YOU

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