ACN 161 106 510


Key Dates
Year at a Glance
Board of Directors
Chair's Message
Letter from the Chair
Investment Manager’s Review
NCC Core Investments
Investing with NAOS Asset Management
Our Values
Our Investment Beliefs
Our Investment Process
NAOS Qualitative Information Sources
Our ESG Process
Our Investee Companies and Their ESG Journey
Our Team
Shareholder Communications
NAOS Giving Back
Corporate Governance Statement
Download the Annual Report

Acknowledgement of Country

We acknowledge the Traditional Owners of Country throughout Australia and recognise their continuing connection to lands, waters and communities. We pay our respect to Aboriginal and Torres Strait Islander cultures; and to Elders past and present.



Tuesday 14 November 2023

NAOS Emerging Opportunities Company Limited advises that its Annual General Meeting (AGM) will be held at 10.00 am (AEDT) on Tuesday 14 November 2023 at The Fullerton Hotel, No. 1 Martin Place, Sydney NSW 2000.

Further details relating to the AGM will be advised in the Notice of Meeting to be sent to all shareholders and released to the ASX immediately after dispatch.

In accordance with the ASX Listing Rules, valid nominations for the position of Director are required to be lodged at the registered office of the Company no later than 5.00 pm (AEST) on 19 September 2023.


Ex-Dividend Date:
Wednesday 4 October 2023
Record Date: 
Thursday 5 October 2023
Last Date for DRP Election: 
Friday 6 October 2023
Payment Date:
Friday 27 October 2023


The NAOS Investor Roadshow will be coming to a city near you this October. Join us as the investment team discusses its investment philosophy and process and provides an outlook on the market. We will also highlight a selection of stocks that are held within our Listed Investment Companies (LICs).

We invite you to come along with a guest, meet us in person, and understand more about NAOS Asset Management (NAOS) and our LICs. Register today to secure your seat.

Thursday 12 October
10.30 am–12.00 pm

Mayfair Hotel
45 King William Street
Adelaide SA 5000

Tuesday 24 October
10.30 am–12.00 pm

Hyatt Hotel Canberra
120 Commonwealth Avenue
Canberra ACT 2600

Tuesday 17 October
10.30 am–12.00 pm

The Westin Melbourne
205 Collins Street
Melbourne VIC 3000

Tuesday 24 October
11.00 am–12.30 pm

InterContinental Perth
City Centre
815 Hay Street
Perth WA 6000

Thursday 19 October
10.30 am–12.00 pm

Customs House
399 Queen Street
Brisbane QLD 4000

Thursday 26 October
10.30 am–12.00 pm

Australian Museum
1 William Street
Sydney NSW 2010

Monday 23 October
10.30 am–12.00 pm

Rydges Newcastle
Wharf Road and
Merewether Street
Newcastle NSW 2300

Visit for more information.

NAOS Emerging Opportunities
Company Limited

NAOS Emerging Opportunities Company Limited (ASX: NCC) seeks to provide long-term, concentrated exposure to Australian public and private emerging companies while providing a sustainable, growing stream of dividends franked to the maximum extent possible, and long-term investment performance above the Benchmark Index, being the S&P/ASX Small Ordinaries Accumulation Index (XSOAI).

Key Highlights

7.50 cps

FY23 Dividend (50% franked)

10 years

of Increasing or Stable Dividend


FY23 Dividend Yield (50% franked)

+4.32% p.a.

Investment Portfolio Outperformance to Benchmark Since Inception


Pre-Tax Net Tangible Assets per Share


Post-Tax Net Tangible Assets per Share


FY23 Dividend (cents per share)

7.50 cents

50% Franked Dividend Yield


Share Price


Shares on Issue


Convertible Note Price (ASX: NCCGA)


Convertible Notes on Issue


Directors’ Shareholding (number of shares)


Profits Reserve (cents per share)

37.8 cents


NCC Investment
Portfolio Performance*
S&P/ASX Small Ordinaries Accumulation Index
Performance Relative
to Benchmark
1 Year
3 Years (p.a.)
5 Years (p.a.)
10 Years (p.a.)
Inception (p.a.)
Inception (Total Return)

*Investment Portfolio Performance is post all operating expenses before fees, taxes, interest, initial IPO commissions and all subsequent capital-raising costs. Performance has not been grossed up for franking credits received by shareholders. Since inception (p.a. and Total Return), includes part-performance for the month of February 2013. Returns compounded for periods greater than 12 months.


SARAH Williams

Independent Chair
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Independent Director
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CHAIR'S Message


Independent Chair

Letter from the Chair

Dear fellow shareholders, 

On behalf of the Board, welcome to the Annual Report of NAOS Emerging Opportunities Company Limited for the financial year ended 30 June 2023. I would like to thank all shareholders for your continued support and welcome all new shareholders.

For the financial year ending 30 June 2023 (FY23), the Company recorded an after-tax loss of $0.46 million (FY22: after-tax loss of $12.80 million). I am pleased to announce the Board has declared a final dividend of 3.75 cents per share, partially franked at 50%. This brings the dividends paid for the year to 7.50 cents per share, partially franked at 50%. This represents a 11.03% net dividend yield, based on the 30 June 2023 share price of $0.68. The Company has now declared a total of 72.50 cents per share in dividends since its inception in 2013.

NCC Dividend History

The Board aims to provide shareholders with a sustainable, growing stream of dividends, franked to the maximum extent possible while also maintaining sufficient profit reserves to enable the Company to pay dividends during periods such as this financial year, where it has been more difficult to generate significant performance. The profit reserve balance at 30 June 2023 was $27.5 million, or 37.8 cents per share.

FY23 has been a year of rapid macroeconomic change. The Reserve Bank of Australia commenced the second most rapid rise in interest rates in history, triggering revaluations in every asset class, from equities, to property and bonds. Investors across financial markets have keenly felt this change, as the increase in the risk-free rate has seen many investors either reduce their allocation to equities or transition their portfolios to larger, more liquid businesses, which are generally perceived as lower risk. This has seen investor appetite for many small-cap industrial companies decrease significantly. Through FY23, financial pressures for these businesses have been their highest in a few decades, while the jobs market has remained very tight, with both employment and participation rates at record highs.

An equally noticeable shift during FY23 impacting many businesses has been a change in consumer preferences, particularly away from discretionary spending, against a backdrop of the termination of government COVID-19 stimulus and the increasing cost to service household debt. Despite these changes, the Company remains focused on providing long-term, concentrated exposure to emerging businesses, which have the ability to grow their market share and earnings power through difficult periods in the economic cycle. Against this backdrop, the NCC Investment Portfolio delivered a return of +0.34% for the financial year, compared to the benchmark S&P/ASX Small Ordinaries Accumulation Index, which returned +8.45%.

NCC Pre-Tax NTA Performance

The pre-tax Net Tangible Asset (NTA) backing per share of the Company decreased from $0.90 to $0.81 over the financial year. The performance of the Investment Portfolio increased NTA per share by 1.13 cents over the year. 7.50 cents per share was paid to shareholders in franked dividends, and management fees and interest expense on the convertible notes decreased the NTA by 1.55 cents per share and 1.42 cents per share respectively.

Total Shareholder Return (TSR), which measures the change in the share price together with dividends paid over the period, was –9.99%. This measure does not include the benefit of franking credits received by shareholders through franked dividends. The share price discount to the pre-tax NTA of the Company moved from –7.78% in FY22 to –16.05% at the end of FY23, with the share price closing at $0.68.

The Board remains committed to closing this discount through a range of initiatives, including the following:

Differentiated and Consistent Investment Strategy – The Company will continue to follow its investment strategy and there will be no significant deviation from this strategy over the long term, ensuring that all shareholders understand what the Company is aiming to provide. The Board believes the strategy is unique and differentiated, with little scope for it to be replicated.

Alignment: The Directors as well as the staff of the Investment Manager have increased their ownership of NCC shares significantly since inception and will endeavour to continue to do so, ensuring strong alignment with all shareholders. As at the end of the financial year, Directors own a total of 5.63 million NCC shares.

Dividends: The Company will continue to focus on delivering a sustainable, growing stream of dividends, franked to the maximum extent possible while maintaining an adequate profit reserve balance.

No Dilutionary Share Issues: The Company will not issue shares below the post-tax NTA per share of the Company as the Board does not believe this to be in the best interests of shareholders. For example, for those shareholders who participated in the Dividend Reinvestment Plan (DRP) it is important to note the Company did not issue shares at a discount to NTA, but instead acquired shares on market to ensure this capital management activity was completed without any potential dilution for existing shareholders.

Shareholder Communications: The Company places a high priority on providing shareholders with timely, regular updates on the Company’s performance and investment philosophy, and the performance of the underlying businesses held in the Investment Portfolio. These updates are delivered in the form of monthly NTA and portfolio updates, a new Quarterly Investment Report, quarterly Investor Update Webinars, and regular investment news and insights, as well as an annual Investor Roadshow.

While the current macro environment may continue to prove challenging for emerging companies as we move through FY24, the Board believes the NAOS investment philosophy will continue to generate strong performance for shareholders over the longer term.

On behalf of the Board of Directors, I would like to thank the staff of the Investment Manager for their efforts over the course of the financial year.

Sarah Williams
Independent Chair

22 August 2023


Managing Director
and Chief Investment Officer,
NAOS Asset Management Limited

Investment Manager's Review

Dear fellow shareholders, 

For the financial year ending 30 June 2023 (FY23), the NCC Investment Portfolio returned +0.34%, compared to the benchmark S&P/ASX Small Ordinaries Accumulation Index (XSOAI), which increased by +8.45%, in another challenging year for emerging equities. This brings Investment Portfolio performance since inception to +9.00% p.a., outperforming the XSOAI return of +4.68% p.a. over the past 10 years and 5 months.

Was it Really Transitory?

It felt like the term most frequently used (and often misused) during the last 12 months was ‘transitory’. However, as investors persisted through FY23, the use of the word gradually declined to the point where it seemed to have almost vanished from everyone’s vocabulary. FY23 taught us an important lesson: certain macro movements and events, such as inflation, interest rate rises, labour shortages and even wars have proven to be anything but transitory. None of the aforementioned factors have shown any signs of reversing soon. The graph below illustrates that valuation compression has not subsided, and the recent stabilisation of price-to-earnings (P/E) valuations for industrial businesses within the S&P/ASX 200 can be attributed more to the slowing or declining earnings of these businesses rather than stock prices moving higher.

S&P/ASX 200 – Valuation (Price to Earnings)

Source: FactSet

The actions of the Reserve Bank of Australia (RBA) in raising interest rates to combat persistently high inflation has resulted in lower risk, or risk-free investments, providing increasingly acceptable returns for investors, particularly when compared to numerous equity investments. When this tightening cycle commenced in FY22 there was a noticeable shift among investors, who began reassessing their overall exposure to equities due to the availability of alternative, risk-free returns, and equity markets consequently experienced declines, especially in sectors with inflated or irrational valuations.

Over the last 12 months, interest rate rises and inflationary pressures have continued to generate the most headlines, and their impact has extended into the wider economy, with the effects keenly felt by the consumer, businesses and asset prices. Labour shortages also continue to be a significant challenge in the post-COVID environment, with many businesses desperate to hire staff, as shown in the graph below.

Job Vacancies – Australia

Source: FactSet

These various factors have led to a significant increase in uncertainty around the earnings trajectories of many listed businesses, particularly retail and consumer discretionary stocks. Towards the end of FY23, several companies provided trading updates confirming that the current macro environment was now adversely impacting their operations in a significant manner. Such examples included retailers Universal Store Holdings (ASX: UNI), Michael Hill International (ASX: MHJ), City Chic Collective (ASX: CCX), Dusk Group (ASX: DSK) and Baby Bunting (ASX: BBN).

Arguably, the investing environment we face today was last experienced more than a decade ago. During that period, interest rates offered a reasonable return, businesses with negative cash flows were not valued on revenue multiples, and economic cycles occurred. Admittedly, economic cycles can bring with them short-term pain for investors and businesses alike, but they can also bring extraordinary opportunities. The two following graphs highlight how depressed the current opportunity set is within emerging companies. The first graph compares the price performance of small-cap industrial businesses relative to their larger peers over the past three years, highlighting that small-cap industrials have underperformed their larger peers by 20% on a peak-to-trough analysis or by 10% over the three-year period.

When we review the data over a longer period (in this case, since June 2001 as shown in the second graph below), the underperformance is significantly more pronounced, with the discount of emerging industrial businesses to their larger counterparts at its widest level, even when factoring in the global financial crisis (GFC) and the tech wreck period in the early 2000s. Price movements can often be indiscriminate, but one thing the share price movements of emerging businesses taught us during both the GFC and the COVID-19 pandemic, was that investing in quality, proven and well-funded businesses during such times can yield fantastic returns. Another important lesson learned is that picking share price lows is a futile exercise, especially when investing in large dollar amounts, and while there may be short-term pain in some cases, we firmly believe the long-term gains will be significantly outsized for many emerging businesses.

S&P/ASX Small Industrials Relative to S&P/ASX 200 Industrials – 2020 to 2023

Source: FactSet

S&P/ASX Small Industrials Relative to S&P/ASX 200 Industrials – 22-Year History

Source: FactSet

Events of Significance

In my experience of over 16 years in investing, one thing that has become abundantly clear is that share price movements are typically the culmination of a series of prior events related to the business and accompanied by a considerable amount of hard work. With this in mind, I highlight below several events that transpired in FY23, which, in our view, have the potential to generate outsized shareholder returns in the coming years.

MitchCap Secures $270 Million in Financing

As the first unlisted investment in NCC, we have high hopes for MitchCap and to date, we remain highly impressed with the management team of the business and are very positive on the outlook for the business over the long term.

Profitably growing a financing business is never an easy task and in today’s higher interest rate environment, it has clearly become much harder. In our view, the fact that MitchCap has secured a substantial financing package (inclusive of senior debt, mezzanine financing and equity), demonstrates the strength of the business model and highlights the growth opportunities that lie ahead. This financing package (with $275 million of lending facilities – up from $150 million) provides the business with the financial scale to continue to grow its network of dealers (marine, caravan, RV and agricultural equipment) aggressively. For context, MitchCap was founded in FY19 and as at the end of FY23, it now has over 250 dealerships nationwide and 50 original equipment manufacturers (OEMs) on its network. To enable MitchCap to continue on this growth trajectory, a growing funding capability is required to enable the business to service both existing and new customers without compromising the customer experience. We believe this new financing structure gives the business ample capacity to increase dealership numbers to approximately 600 over the next two years, and solidify its position as Australia’s leading provider of commercial distribution financing, excluding auto dealerships.

Financing businesses are not for every investor due to the inherent credit risk involved, but we believe MitchCap ticks many of the boxes we look for in a business within this sector. It deals with business customers, offers an essential service to its customers, has implemented best-in-class asset tracking, and operates in a field with limited competition. While we are sure FY24 will not be all smooth sailing; the key metrics of the business should continue to point in the right direction. Over time, we believe MitchCap has the potential to establish itself as an industry-leading financial services player, generating significant recurring cash profits.

COG Financial Services Novated Leasing Expansion

In March 2023, COG Financial Services Limited (ASX: COG) completed its acquisition of Paywise, a Western Australia-based salary packaging and novated lease provider. As part of this transaction, COG also entered into an agreement with workers compensation provider EML Group, to acquire 18% of the combined COG novated leasing and salary packaging business.

Following the acquisition of Paywise, the novated leasing segment of COG will now account for over 20% of the group’s earnings, while the remaining earnings will be derived from finance broking and aggregation, insurance broking and funds management. This acquisition provides the novated leasing division of COG with the necessary scale, technology and personnel to compete in an industry that has become highly concentrated and dominated by players like Smartgroup (ASX: SIQ) and McMillan Shakespeare (ASX: MMS). Given the concentrated nature of the industry, we believe there is ample room for further competition. Additionally, with EML Group now a minority owner of the group and a customer base consisting of government departments, corporations and unions, which could all potentially benefit from a novated leasing product, it opens up numerous additional opportunities for COG to pursue.

Another key strategic aspect of this acquisition for COG is our belief that Australia is on the verge of a period of high churn as businesses and consumers transition to electric vehicles (EVs), as shown in the graph below. This is due to the significant technological advancements we have seen in EVs, together with recently announced government subsidies for people who acquire an EV (below a specific amount), through novated leasing. The graph below outlines the small but increasing percentage of EVs as a proportion of total vehicle sales. Furthermore, in a recent (May 23) SIQ presentation, the company stated that in Q1 CY23, ~24% of all quotes were for an EV, compared with ~2% for the corresponding quarter in CY22.

Electric Vehicles as Percentage of Total Vehicle Sales

Source: Statista

While we do not envisage novated leasing ever accounting for more than 50% of COG’s earnings profile, it adds valuable diversification to the business. Similar to the other divisions within COG, it operates with relatively low capital requirements, has highly repetitive processes, and is exposed to favourable industry trends.

Saunders International Limited – Acquisition of Automation IT and Significant Project Wins

For at least the last three years, it has felt like a transformational year for Saunders International Limited (ASX: SND), and while FY23 may not appear to be as decisive, we still believe it was a year where SND continued its transition into a diversified contracting business of substantial scale.

SND has continued to expand its operations in the automation of control systems by acquiring Automation IT, a Queensland-based company. Prior to this acquisition, we estimate that SND had approximately 20 engineers dedicated to automation services. With the integration of Automation IT, this division will now have over 50 engineers and is projected to contribute more than 15% of SND’s EBIT in FY24. Only two years ago, this division within SND was non-existent so it is testament to the capabilities of Managing Director Mark Benson and his team, who have been able to effectively scale this division in SND with minimal capital investment. Longer term, this division should continue to grow at a significant rate as there is increasing demand for these skills from clients and industries, including the Department of Defence, health care, data centres and property developments. We believe small and medium-sized project work is dominated by unlisted business Sage Automation, but with SND’s increased scale and advantage of being a well-capitalised, publicly listed business, it should in theory provide a genuine competitive threat.

Another noteworthy development for SND during the year was its ability to secure contracts of greater scale and refill its order book as the substantial Caymus contract ($165 million) winds down. Among the notable contracts secured by SND are the storage tank work for the new Western Sydney International Airport (valued at $44 million), and the BP Kwinana Renewable Fuels Project (valued at $42 million). While both contracts are much smaller than the Caymus contract won in 2022, they still represent the second-and-third largest contracts that SND has ever secured. SND has also continued to diversify its earnings by securing a wide variety of contracts across tank construction, bridge work, tank maintenance, automation and plant shutdowns. Although FY23 may not have panned out perfectly, in our view, it was still a pivotal year if SND is to reach its ambitious targets over the next 3–5 years.

FY23 Notable Investment Portfolio Contributors and Detractors


Big River Industries Limited (ASX: BRI)

BRI has been a fixture in the NCC Investment Portfolio for approximately seven years. At the time we first invested, BRI was a business with revenue of $120 million and less than $9 million of EBITDA, operating across nine sites. Based on FY23 market expectations, revenue is expected to exceed $450 million and EBITDA >$50 million, supported by a disciplined acquisition strategy and organic growth. BRI has expanded its presence to 26 sites throughout Australia and New Zealand. FY23 has seen BRI benefit from a number of factors, including price inflation, scarcity of supply, and increased demand driven by government stimulus, which assisted the business in achieving record margins in the first half of the financial year.

From an industry point of view, newspaper headlines have done a good job in painting a negative picture for mortgagors and house builders across the country given the RBA’s record pace of interest rate rises. However, as the Housing Industry Association (HIA) graph below shows, there is a structural shortage of housing in Australia. This shortage is forecast to remain for the next decade, thus providing a significant tailwind for both BRI and the broader construction industry.

Estimated Supply & Demand Balance – Total Dwellings Australia

Source: HIA

In our view, the returns provided to shareholders thus far have been driven purely by earnings growth and increased dividend payments rather than a re-rate in the company’s valuation multiple. BRI currently trades at a price-to-earnings (P/E) multiple of less than nine times, which we consider to be a modest valuation for a business of BRI’s current scale and the growth potential that exists within a fragmented market. Over the longer term we believe BRI has the potential to be a a $1 billion-revenue business with EBITDA of >$100 million, and as this transformation occurs (and liquidity improves), we anticipate the valuation multiple to re-rate accordingly, similar to what occurred in an adjacent industry with a comparable business, Reece (ASX: REH).

Saunders International Limited (ASX: SND)

Over the past three years, SND has been the largest contributor to NCC’s Investment Portfolio performance, and FY23 maintained this trend, albeit at a more moderate level. We anticipated FY23 to be a year of consolidation and project execution for SND, considering its recent rapid revenue growth together with the expected completion of the largest contract ever awarded to the company, the $160 million project Caymus contract.

However, FY23 had its challenges for SND, as highlighted by the termination by convenience on project Caymus, which was at an advanced stage of completion. While it is disappointing that SND will not be able to complete the project as initially intended, it demonstrates SND’s ability to successfully tender, win, and execute large engineering, procurement and construction (EPC) contracts.

Despite the setback, SND has managed to secure two significant new contracts valued at over $40 million each. This has helped maintain a relatively stable order book value, even after the loss of the remainder of project Caymus. Additionally, management has focused on diversifying the company’s revenue streams, both organically and through acquisitions, as exemplified by the acquisition of Automation IT late in FY23. As a result, we believe the percentage of group earnings related to automation services will be close to 20%, compared to 0% just two years ago.

SND, like many contracting businesses, faces challenges such as labour shortages, client contract demands, and variability in raw material prices. However, the demand environment remains extremely strong, and if projects require high-level specifications and cost-effective completion, we believe SND will continue to secure its fair share of profitable work.


Associate Global Partners (ASX: APL)

As a distributor of both equity and debt investment management products, given the current investing environment it is no surprise that APL was a negative contributor to the NCC Investment Portfolio in FY23.

The significant increase in cash rates that has resulted in the availability of genuine risk-free alternatives for investors, contributed to Funds Under Management (FUM) falling organically by –37% from their peak in Dec 21, but this decrease was offset somewhat by an acquisition late in FY23. As with all funds management businesses the cost base is relatively fixed, so the effect on free cash flow is significant as revenue falls.

While market movements and investor sentiment to equities are beyond APL’s control, we believe a number of positive strategic events that occurred in FY23 position APL well when market sentiment turns. The first of these was the partnership with Woodbridge Capital, an investor in first mortgage secured debt investments within Australia and New Zealand. Over the past five years there has been a surge in the number of debt-focused fund managers, with several notable success stories such as Qualitas (ASX: QAL) and Metrics (part of the Pinnacle Group, ASX: PNI). APL already partners with a first-rate global manager in WCM International, so it is imperative that as it expands its product offerings to encompass debt, Australian equities and alternatives, it partners with top-tier managers that it can then cross-sell to its investor base. We believe the partnership with Woodbridge is a step in the right direction to executing on this strategy. Secondly, APL acquired a small fund distribution business that focuses wholly on institutional clients (as opposed to APL, which is solely focused on retail and wholesale clients). The acquisition will not be financially material but it does add a capability to introduce funds to institutional clients, if required, and provide a complete offering. APL has faced a long and challenging journey thus far, but when the demand for equities returns, there is great potential in owning a fund manager, especially one on the cusp of scale.

BTC health Limited (ASX: BTC)

Over the past two to three years the smallest sized companies have proved to be the biggest handbrake on the performance of the NCC Investment Portfolio, with BTC being the epitome of that. Despite having positive attributes, such as exposure to favourable industry dynamics in healthcare equipment distribution, a CEO who has created significant value in his previous roles, and a management team with substantial equity ownership, BTC has not lived up to expectations. FY23 further emphasised this underwhelming performance.

One of the key issues with BTC has been the slow expansion of its product portfolio, leading to a high level of concentration risk with a single large product manufacturer. This risk became evident when the manufacturer decided to discontinue supplying these devices to the Australian market, affecting BTC and other distributors.

We have taken swift action, although not as quickly as desired, to protect the remaining value of our investment by seeking the appointment of NAOS representative Brendan York to the BTC Board, which has led to significant changes at BTC. The ability of the BTC team to restore value for shareholders remains to be seen, but we remain confident we will maximise value for our shareholders over the next 12–36 months, and conclude what has been a very disappointing investment.

FY24 Outlook

As we move into FY24, the prevailing sense of uncertainty has led to very little conviction among the investment community as well as many business leaders. In our experience, uncertainty generally leads to lower valuations, especially for emerging businesses. However, when taking a step back and applying a small dose of objectivity and rationalisation, it becomes evident for a number of areas within the economy that while the wheels may indeed slow, they will continue to turn. Over time, it is not unreasonable to expect that these sectors will regain momentum and, consequently, valuations will also increase.

I use this analogy as we want all our investments to be exposed to industries that will grow over time, as we have found this not only greatly reduces the risk of entering into a poor investment, but also increases the probability of the investment generating outsized positive returns over the long term. We believe many, if not all, of our core investments have exposure to industries with significant tailwinds that include:

  • shortage of detached housing and multi-residential dwellings (Big River Industries);
  • reducing the infrastructure project backlog (Saunders, COG Financial Services & Big River Industries);
  • overhaul and renewal of Australia’s Defence infrastructure (Saunders International);
  • transition to renewable energy products (BSA Limited);
  • continued investment by SMEs to transition to modern systems (Ordermentum).

One other thematic we also believe will come to the forefront over the next 12–18 months, will be the advantage public businesses will have relative to their private counterparts given the challenging macroeconomic conditions that are likely to persist. Numerous industries are dominated by private businesses that have founders from the baby-boomer generation. Many of these founders will be approaching decisions regarding succession or potential expansion opportunities. Both pathways can be fraught with financial risk and a level of uncertainty, which can lead a founder to seek the sale of an entire business so as to provide certainty to all parties involved. SND, COG, and BRI have already made strategic acquisitions in this regard, and we expect them to continue pursuing such opportunities. Furthermore, we expect some of the other core NCC investments to pursue similar opportunities if they make financial and strategic sense.

FY24 may well prove to be another turbulent year for emerging equities, but we remain steadfast in our commitment to providing our shareholders with exposure to businesses that are led by capable and aligned management teams, are not overly reliant on capital, maintain strong balance sheets for financial flexibility, and have significant exposure to industries with long-term growth potential. We firmly believe the long-term future of all of our investee companies to be bright, and although the next 12 months may see further share price volatility, we fully expect these businesses to emerge from FY24 in improved strategic and financial positions.

Lastly, I want to address a key factor that has been a significant drag to NCC’s investment performance over the past 12–36 months: the exposure to very small businesses with a market capitalisation of less than $50 million. Even with the best intentions, these businesses often lack the personnel and financial resources to withstand various negative factors that can significantly impact the long-term prospects of a business such as delays, economic factors and regulatory changes, to name but a few. While they may successfully address these challenges, the time it takes to achieve a favourable outcome is often too long and the subsequent opportunity cost for NCC, too great. As a result, we will look to significantly reduce our exposure to the very smallest businesses in the market and instead, focus on businesses with a market capitalisation of approximately $100 million or more, of which the majority of the NCC Investment Portfolio currently comprises, as this is where we have historically been able to generate solid returns over the past decade.

The entire team is acutely aware of the trust you have placed in us to manage your capital and we greatly appreciate your ongoing support.

Kind regards,

Sebastian Evans
Managing Director and Chief Investment Officer
NAOS Asset Management Limited 

NCC Core Investments



Big River Industries Limited (BRI) is a leading manufacturer and distributor of value-added timber and building material products in Australia and New Zealand. BRI has gained scale in recent years through the acquisition of bolt-on businesses to diversify its product offering and expand its geographical network, which now sits at 26 sites. BRI operates in the commercial sector, with customers using BRI products in real estate developments (detached and multi-residential), commercial construction projects and civil construction, among others. BRI has over 9,000 active trading accounts, serviced by ~640 staff members. BRI achieved $409 million in revenue in FY22.



COG Financial Services Limited (COG) is Australia’s leading aggregator of finance brokers and equipment-leasing services to small and medium-sized enterprises (SMEs). COG’s operations are spread across three complementary business divisions: Finance Broking & Aggregation (FB&A), Lending & Funds Management, and Novated Leasing, which service the financial needs of the SMEs nationwide. At 1HFY23, COG had ~21% market share of the Australian Asset Finance Broking market, with the COG network financing $6.7 billion in assets for SMEs in FY22. COG has been highly acquisitive in recent years, acquiring finance brokers, insurance brokers, as well as fund management and novated leasing businesses.

Saunders International Limited


Saunders International Limited (SND) has expertise in engineering and construction projects, having worked across Australia for over 70 years. Today, SND has over 400 employees, who work on projects in the Energy, Water, Power, Defence, Resource and Infrastructure sectors. The projects SND executes are of critical importance to its clients in federal/state governments and the private sector. Clients of SND include Western Sydney Airport, NSW Government (Bridges Program), BP and the Australian Defence Force.



BSA is a technical services business, with a national network of over 350 skilled employees. The core business of BSA manages close to 4,000 jobs daily across many industries, including energy, EVs and, most notably, across multiple technologies within the telecommunications industry. BSA’s client base includes National Broadband Network (NBN), Vector, Intellihub and Foxtel.



MitchCap Pty Ltd is a provider of distribution floorplan finance to Australian and New Zealand dealerships within the caravan, marine, agricultural and bicycle industries. Founded in 2019, MitchCap solves a capital-intensive pain point for equipment dealerships, through financial solutions that can improve dealer profitability and capital efficiency while also lowering risk for equipment manufacturers.



Ordermentum Pty Ltd is a two-sided ordering, payments and insights platform widely used in the hospitality industry. The B2B ordering and payments platform connects hospitality venues (including cafes, restaurants, clubs and pubs) across Australia with suppliers, helping to improve business efficiencies, grow sales and drive profitability for both suppliers and venues.



Associate Global Partners Limited is an independent, multi-boutique asset management firm. They partner with leading investment managers to provide a contemporary marketing and distribution platform that offers access to the retail, wholesale and institutional investment market in Australia. As at the end of June 2023, total Funds Under Management (FUM) was $1.239 billion. With over 40 years of combined experience across business strategy, distribution, marketing, operations and compliance, its team promotes and supports a range of strategies across multiple asset classes.


NAOS Asset Management is a specialist fund manager providing concentrated exposure to quality public and private emerging companies.

NAOS takes a concentrated, long-term approach to investing and aims to work collaboratively with businesses rather than being a passive shareholder. NAOS seeks to invest in businesses with established moats and significant exposure to structural industry tailwinds, which are run by proven, aligned and transparent management teams that have a clear understanding of how to compound capital.

We look to build large investments in businesses and from time to time will seek board representation or look to appoint highly regarded independent directors. Importantly, NAOS, its Directors and staff are significant shareholders in the NAOS LICs, ensuring strong alignment with all shareholders.

NAOS is B Corp Certified. As a B Corp in the financial services industry, we are counted among businesses that are leading a global movement for an inclusive, equitable and regenerative economy.

NAOS launched its first LIC in 2013 with 400 shareholders. Today, NAOS manages approximately $300 million across three LIC vehicles and one private investment fund, for more than 7,000 shareholders.


Encourage independent thinking

Rather than follow the crowd, we prefer to pave the way with innovation and provide a better outcome for our stakeholders. We have a disciplined investment process and do not get caught up in the hype and noise of the market.

Do one thing and do it really, really well

At NAOS, we focus on providing concentrated exposure to quality public and private emerging companies – and we strive to be the best at this.

Tell it like it is

At NAOS, we are honest and transparent. We continue to exist due to the earned trust of our shareholders.

Have the right people in the right environment

Each NAOS employee has been specifically chosen for their unique ability, proven experience and willingness to learn. At NAOS, we have created an inclusive work culture and one that supports all our employees.

Be invested and aligned

As NAOS Directors and employees, we have a significant interest in NAOS’ investment strategies. This means we are invested alongside our shareholders, creating a strong alignment of interests.

Have a long-term perspective

We believe in investing in businesses where the earnings today are not a fair reflection of what the same business may earn over the longer term. Prior to investing in a business, we ask ourselves: Do we want to own this business forever?

Act responsibly

We are responsible for investing our fellow shareholders’ funds and we do not take this responsibility lightly. At NAOS we seek to always act responsibly and diligently in all matters – from our investment choices through to our shareholder communications.

Be an owner

NAOS employees strive to make NAOS a success by taking ownership of their tasks and responsibilities. In addition, NAOS Asset Management Limited is majority owned by employees and Directors.

Give back

As a company, we have committed to pledge 1% of our revenue, time and knowledge to movements and missions that matter. We want to make a difference and aim to contribute to economic, social and environmental change.

Our Investment Beliefs


We believe in investing in businesses where the earnings today are not a fair reflection of what the same business will earn over the longer term. Ultimately, this earnings growth can be driven by many factors, including revenue growth, margin growth, cost cutting, acquisitions and even share buybacks. The result is earnings growth over a long-term investment horizon, even if the business was perceived to be a value-type business at the time of the initial investment.


Excessive diversification, or holding too many investments, may be detrimental to overall portfolio performance. We believe it is better to approach each investment decision with conviction. In our view, to balance risk and performance most favourably, the ideal number of quality companies in each portfolio would generally be zero to 20.


As investors who are willing to maintain perspective by taking a patient and disciplined approach, we believe we will be rewarded over the long term. If our investment thesis holds true, we persist. Many of our core investments have been held for three or more years, where management execution has been consistent and the value proposition is still apparent.


We believe in backing people who are proven and aligned with their shareholders. One of the most fundamental factors consistent across the majority of company success stories in our investment universe is a high-quality, proven management team with ‘skin in the game’. NAOS Directors and employees are significant holders of shares on issue across our strategies, so the interests of our shareholders are well aligned with our own.


This means we are not forced holders of stocks with large index weightings that we are not convinced are attractive investment propositions. We actively manage each investment to ensure the best outcome for our shareholders and only invest in companies that we believe will provide excellent, sustainable, long-term returns.


With the big four banks making up a large proportion of total domestic equity holdings for the self-managed superannuation funds (SMSF) investor group, many Australian investors are at risk of being overexposed to one sector and may be missing out on opportunities to invest in quality companies in industries such as media, advertising, agriculture or building materials. Australian listed industrial companies outside the ASX 200 are our core focus and we believe the LICs we manage provide pure access to these companies, which may be lesser known by the broader investment community.


We believe in taking advantage of inefficient markets. The perceived risk associated with low liquidity (or difficulty buying or selling large positions) combined with investor short-termism, presents an opportunity to act based purely on the long-term value proposition where the majority may lose patience and move on. Illiquidity is often caused by aligned founders or management having significant holdings in a company. The NAOS LICs benefit from a closed-end structure, which means they do not suffer ‘redemption risk’ and we can focus on finding quality, undervalued businesses regardless of their liquidity profile.


As an investment manager, NAOS recognises and accepts its duty to act responsibly and in the best interests of shareholders. We believe that a high standard of business conduct and a responsible approach to environmental, social and governance (ESG) factors is associated with a sustainable business model over the longer term. This benefits not only shareholders, but also the broader economy. NAOS is a signatory to the United Nations-supported Principles for Responsible Investment (PRI) and is guided by these principles in incorporating ESG into its investment practices. NAOS is also B Corp certified.


At NAOS we seek to work collaboratively with businesses and their respective management teams. We are often the largest shareholder in the businesses we invest in, and from time to time we will seek board representation either via an independent or a non-independent representative. This approach allows us to supportively engage with the boards and/or management teams of our portfolio holdings and maximise the potential for our invested capital to compound at a satisfactory rate over the long term.

Examples of constructive engagement where the NAOS investment team looks to add value include:

  • growth capital if/when required;
  • messaging and communications;
  • capital management decisions;
  • company strategy;
  • board composition.

Our Investment Process


The NAOS investment team undertakes fundamental analysis on potential and current investments.
Some examples of key focus areas include:



BSA completed the NAOS ESG questionnaire during FY23.

BSA Limited

>8 years

NAOS first invested

$43 million

BSA’s market capitalisation as at 30 June 2023
BSA is a technical services business, with a national network of more than 350 skilled employees.


  • Female employees have increased from 20% to 28% of total employees.
  • All employees have access to a new Health and Wellbeing hub and an Employee Assistance Plan (EAP), which provides on-demand access to wellbeing materials, webinars, training and information.


  • Environmental risks are managed under the ISO 14001 international standard and through various Health Safety and Environment (HSE) risk registers.
  • BSA completes an annual management review of its HSE policy and environmental performance.
  • BSA is currently in the early stages of measuring carbon emissions and carbon footprint.
  • The company has instigated an external third-party review. This will determine future commitments for the use of renewable energy.
  • An internal project is currently underway to acquire ESG tracking and reporting software.
  • Procedures are in place via the Hazardous Substances Management Procedure to ensure hazardous chemicals are registered and safely stored, used and handled.


  • BSA continues to focus on diversity and inclusion. Four consistent key approaches include:
  • creating a workplace culture that embraces and respects diversity and inclusion;
  • addressing gender diversity in all areas of the organisation;
  • improving overall diversity recruitment; and
  • committing to a series of transparent checks and balances.
  • The company is committed to continual engagement with the communities in which it works, through local training and employment opportunities, as well as Indigenous and community support through sponsorships and charity fundraisers.
  • Completion of the Health and Safety Index marks the third time BSA has partnered with FEFO Consulting to complete this workforce engagement survey, which was completed in FY21, FY22 and in June FY23.
  • As a primary risk to the business, various initiatives have been implemented to tackle the risk of modern slavery in its supply chain, including training for all employees at induction and a refresher course every two years thereafter.


  • The Board has employed a third party to assess its current carbon footprint and to advise on strategies for improvement. Potential environmental incidents are required to be tabled for discussion at Board level.
  • KPIs set for senior leaders nominate the diversity targets of the company.
  • Equal Employment Opportunity training.
  • Mental Health First Aider training.
  • BSA Leave Group Standard and Parental Leave Standard implemented.

Areas for improvement:

  • Provide environmental sustainability metrics where possible. Measurement will assist with developing ESG sustainability strategies.
  • The alignment of ESG/sustainability strategies and Sustainable Development Goals framework.
  • The creation of an environmental section on the website or in the annual report to publicly highlight initiatives and progress.
  • Evaluation and management of the risk of modern slavery to continue until all existing suppliers are graded as performing well in this area.
  • A fair remuneration policy is yet to be formalised.
  • Pursue a majority of independent directors for the Board and committees as a priority.
“Our commitment to Diversity & Inclusion is reflected in our company values, which are our guiding principles and essential to our success.”

(Excerpt from BSA’s FY22 Annual Report)

Our Team

Sebastian Evans

Chief Investment Officer and Managing Director

Sebastian is a Director of NAOS Emerging Opportunities Company Limited (ASX: NCC), NAOS Small Cap Opportunities Company Limited (ASX: NSC), NAOS Ex-50 Opportunities Company Limited (ASX: NAC), and has held the positions of Chief Investment Officer (CIO) and Managing Director of NAOS Asset Management Limited, the Investment Manager, since 2010. Sebastian is the CIO across all investment strategies.

Sebastian holds a Master of Applied Finance (MAppFin) majoring in investment management as well as a Bachelor of Commerce majoring in finance and international business, a Graduate Diploma in Management from the Australian Graduate School of Management (AGSM) and a Diploma in Financial Services.

Sebastian Evans

Chief Investment Officer and Managing Director
View Biography

Robert Miller

Portfolio Manager

Robert joined NAOS in September 2009 as an investment analyst. Robert has been a portfolio manager since November 2014 and is currently Portfolio Manager across all NAOS LICs: NAOS Emerging Opportunities Company Limited (ASX: NCC), NAOS Small Cap Opportunities Company Limited (ASX: NSC), and NAOS Ex-50 Opportunities Company Limited (ASX: NAC), and the NAOS Private Opportunities Fund. Robert is also a non-executive director of Ordermentum Pty Ltd.

Robert holds a Bachelor of Business from the University of Technology, Sydney, and a Master of Applied Finance (MAppFin) from the Financial Services Institute of Australasia/Kaplan.

Robert Miller

Portfolio Manager
View Biography

Brendan York

Portfolio Manager

Brendan joined NAOS in July 2021 as a portfolio manager. Brendan is also a non-executive director of Big River Industries Limited (ASX: BRI), BSA Limited (ASX: BSA), Saunders International Limited (ASX: SND), Wingara AG Limited (ASX: WNR), BTC health Limited (ASX: BTC) and MitchCap Pty Ltd.

Brendan has over 19 years’ finance, accounting and M&A experience. Most recently, Brendan had a 15-year career with ASX-listed marketing services business Enero Group Limited, initially in finance roles and ultimately as CFO and Company Secretary for a nine-year period. Prior to that, Brendan spent four years at KPMG.

Brendan is a chartered accountant and holds a Bachelor of Business Administration and a Bachelor of Commerce from Macquarie University.

Brendan York

Portfolio Manager
View Biography

Jared Tilley

Senior Investment Analyst

Jared joined NAOS in April 2021 as Senior Investment Analyst. Jared has over 16 years’ financial services experience. Most recently Jared was an investment analyst at Contact Asset Management and prior to that he spent nine years at Colonial First State.

Jared holds a Bachelor of Commerce majoring in accounting and finance from the University of Notre Dame, Sydney, and is a CFA Charterholder.

Jared Tilley

Senior Investment Analyst
View Biography

Nelson de Mestre

Associate Analyst

Nelson joined NAOS as an associate analyst in July 2020. He has a Bachelor of Commerce from the University of Sydney.

Nelson de Mestre

Associate Analyst
View Biography

Julie Coventry

ESG Officer

Julie joined NAOS in November 2012 as Compliance Officer and in January 2021, commenced the role of ESG Officer.

Prior to joining NAOS, Julie worked within compliance and performance teams at BZW Investment Management, Commonwealth Bank, Colonial First State, and QBE.

Julie holds a Bachelor of Business majoring in finance and economics from the University of Technology, Sydney, and she also holds a Graduate Diploma in Applied Finance and Investment from the Securities Institute of Australia.

Julie Coventry

ESG Officer
View Biography

Richard Preedy

Chief Financial and Operating Officer

Richard joined NAOS in October 2015 as Chief Financial and Operating Officer. Richard has over 16 years’ financial services experience in the UK and Australia, beginning his career in London with Deloitte & Touche before relocating to Sydney in 2013.

Richard holds a Bachelor of Arts (Hons) in Business Management from the University of Sheffield, is a qualified chartered accountant and is a member of the Governance Institute of Australia.

Richard Preedy

Chief Financial and Operating Officer
View Biography

Rajiv Sharma

Head of Legal & Compliance

Rajiv is Head of Legal and Compliance at NAOS and holds a Bachelor of Laws (First Class Honours), a Bachelor of Business (accounting major) and a Graduate Diploma in Legal Practice from the University of Technology, Sydney.

Rajiv has over 13 years’ experience, having most recently held senior legal roles at Custom Fleet, part of Element Fleet Management (TSX: EFN), and also at Magellan Financial Group (ASX: MFG). He has also previously worked at law firms Johnson Winter & Slattery, and Clayton Utz.

Rajiv is a member of the Law Society of New South Wales, an Associate of the Governance Institute of Australia, and is admitted to the Supreme Court of New South Wales and the High Court of Australia.

Rajiv Sharma

Head of Legal & Compliance
View Biography

Angela Zammit

Marketing & Communications Manager

Angela joined NAOS in May 2020 in the capacity of Marketing and Communications Manager.

Prior to joining NAOS, Angela held marketing roles for companies in both Australia and the UK, including SAI Global, American Express, Citibank, and Arete Marketing.

Angela holds a Bachelor of Communications majoring in advertising and marketing from the University of Canberra.

Angela Zammit

Marketing & Communications Manager
View Biography

Shareholder Communications

NAOS Asset Management is committed to keeping all shareholders up to date. We endeavour to produce timely updates and relevant communications throughout the financial year. We also welcome shareholder feedback, so please email any feedback or suggestions to

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NAOS Giving Back

To be caretakers of the next generation we must actively support positive change. Supporting our commitment to ESG issues, NAOS Asset Management (the management company) donates 1% of recurring revenue to the community and the environment.

NAOS is proud to be supporting:

Corporate Governance Statement

The Board of NAOS Emerging Opportunities Company Limited is committed to achieving and demonstrating the highest standards of corporate governance. As such, the Company has adopted what it believes to be appropriate corporate governance policies and practices having regard to its size and the nature of its activities.

The Board has adopted the ASX Corporate Governance Principles and Recommendations, which are complemented by the Company’s core principles of honesty and integrity. The corporate governance policies and practices adopted by the Board are outlined in the Corporate Governance section of the Company’s website