• Marcus Bogdan

Sold Insurance Australia Group (IAG)

Recent changes to the Australian Equities Income Portfolio

Sold Insurance Australia Group (IAG) In July 2019 we materially reduced our shareholding in IAG at $8.54 (today’s share price $7.10) as we believed that the potential for outperformance was adequately factored into its share price. We continued hold a smaller weighting in IAG primarily due to its attractive dividend yield.

Blackmore Capital sold the balance of IAG earlier this week following the announcement that the FY20 insurance margin would be in the range of 14.5% to 16.5%, a mid-point reduction of c.8.8% due primarily to an increase in the allowance for peril costs. Further, IAG announced an $80m post-tax provision for over-charging NRMA customers since 2014. Given the deterioration in the outlook and quality of earnings we divested our position.

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Blackmore Capital Pty Ltd (ABN 72 622 402 895) (Blackmore Capital) is a Corporate Authorised Representative (CAR) of Artesian Venture Partners Pty Ltd (AFSL 284492)