Wam Income Maximiser Limited · ASX:WMX
Wam Income Maximiser — Wilson Asset Management — Investor Presentation (May 2017)
39 slides from Wam Income Maximiser's investor presentation, May 2017
Slide 1: Slide 1
Slide 2: May 2017 Shareholder Presentation
May 2017 Shareholder Presentation
Slide 3: Disclaimer
Disclaimer This presentation has been prepared by MAM Pty Ltd and Wilson Asset Management (International) Pty Ltd (Wilson Asset Management) for use in conjunction with a verbal presentation and should be read in that context. This presentation Information for the graphs, charts and quoted indices co
Slide 4: Agenda
Agenda 1. Wilson Asset Management 3. Investment portfolio and our listed investment companies – What worked – What didn’t work 2. Market and investment insights – What we like – Market overview and outlook – Investment themes and trends 4. Questions Page 4
Slide 5: About us: Investing in opportunities. For you. For good.
About us Investing in opportunities. For you. For good. 1 Page 5
Slide 6: About us
About us Independent boutique fund manager – Five LICs and over $2 billion in shareholder capital for 48,000 retail shareholders – Eight investment professionals with combined investment experience of more than 100 years – Proven investment approach – Committed to philanthropic and advocacy Winner o
Slide 7: Investment and management team
Investment and management team Geoff Wilson Kate Thorley Chris Stott Matthew Haupt Martin Hickson Chairman Chief Executive Officer Chief Investment Officer Portfolio Manager Head of Trading & Portfolio Manager & Portfolio Manager Oscar Oberg John Ayoub Tobias Yao Martyn McCathie James McNamara Senio
Slide 8: Wilson Asset Management investment universe
Wilson Asset Management investment universe Focus on ASX listed small-to-mid-cap industrial Focus on ASX listed small-to-mid-cap industrial companies companies Research-driven process Research and market-driven processes Focus on ASX top 200 listed companies Focus on ASX listed small-to-mid-cap indu
Slide 9: WAM Capital: gross assets and performance
Gross assets One-year total shareholder return $1,184.3m 17.9% Fully franked annualised Portfolio performance (p.a. since August 1999) dividend yield* 6.4% 17.7% As at 30 April 2017 Page 9 *As at 12 May 2017
Slide 10: WAM Leaders: gross assets and performance
Gross assets Options exercised* $480.4m 14.3% Fully franked interim Portfolio performance (p.a. since May 2016) dividend 1.0 cent 11.5% As at 30 April 2017 Page 10 *As at 09 May 2017
Slide 11: WAM Research: gross assets and performance
Gross assets One-year total shareholder return $225.2m 21.8% Fully franked annualised Portfolio performance (p.a. since July 2010) dividend yield* 6.3% 18.8% As at 30 April 2017 Page 11 *As at 12 May 2017
Slide 12: WAM Active: gross assets and performance
Gross assets One-year total shareholder return $40.4m 16.6% Fully franked annualised Portfolio performance (p.a. since January 2008) dividend yield* 4.8% 12.7% As at 30 April 2017 Page 12 *As at 12 May 2017
Slide 13: Raising up to $75 million at NTA
Century Australia Investments Limited Raising up to $75 million at NTA – Open to new investors and two $20 million priority allocations to existing CYA shareholders and WAM Capital, WAM Leaders, WAM Research and WAM Active shareholders – Diversified exposure to a portfolio of listed companies focuse
Slide 14: Strong track record
WAM Microcap Limited Strong track record – Strong track record of performance in micro-cap companies delivered over almost 20 years – We have created WAM Microcap to provide direct exposure to these types of opportunities – Companies we have invested in as micro-caps over the last decade include: Pa
Slide 15: WAM Microcap: $121m priority
WAM Microcap Limited $121m priority – Exposure to undervalued micro-cap growth companies listed on the ASX with a market cap of less than $300m – $1.10 issue price to raise up to $154m through the issue of up to 140 million shares with no options – Priority closes 5 June 2017 and offer closes 14 Jun
Slide 16: Market and investment insights
Market and investment insights 2 Page 16
Slide 17: Market outlook
Market outlook Page 17
Slide 18: On the ground feedback
Market outlook On the ground feedback – Messages from Canberra – Recent out of cycle interest rate increases by the major banks have slowed the economy – “Economy remains patchy, much the same as the last three to five years” – “The consumer remains fragile” – Some companies continue to excel in thi
Slide 19: Housing market has peaked
The Australian economy Housing market has peaked Page 19
Slide 20: Housing market has peaked
The Australian economy Housing market has peaked Australian housing market has peaked and growth is slowing Official cash rate remains low, banks continue to raise interest rates independently Regulators acting to address banks’ capital requirements and create more resilience in the sector Persisten
Slide 21: Private residential building approvals (monthly)
Private residential building approvals (monthly) Page 21 Source: Australian Bureau of Statistics
Slide 22: Household debt-income up to record high, but interest paid dropped to a 13-year low
Household debt-income up to record high, but interest paid dropped to a 13-year low 18 225 % of household disposable income % of household disposable income 16 200 Downturns record high! 14 Household interest payments (LHS) 175 Household debt (RHS) 12 150 f* 10 125 8 100 6 75 4 50 2 25 * UBS forecas
Slide 23: Mining recovery
The Australian economy Mining recovery Page 23
Slide 24: Mining recovery
The Australian economy Mining recovery Mining stocks have bottomed over the last 12-18 months Global growth improving Chinese stimulus Investment exposure: selectively investing in mining and mining services companies Investment exposure: Page 24
Slide 25: Macroeconomic environment
The global economy Macroeconomic environment Page 25
Slide 26: Macroeconomic environment
The global economy Macroeconomic environment Global macroeconomic environment is the strongest it has been since the GFC Global leading indicators at an all time high Inflection point: sentiment is high, earnings growth returning What does it mean for Australia? Page 26
Slide 27: Investment themes and trends
Investment themes and trends Page 27
Slide 28: Australian consumers
01 Australian consumers Page 28
Slide 29: Australian consumers
01 Australian consumers Amazon market entry by end of 2017 Potential to put downward pressure on retailers profitability We estimate $5bn in additional costs to consumers over the next 12 months from interest rates, utility bills, healthcare and petrol costs Disposable income is back at GFC levels I
Slide 30: Private health insurance affordability
02 Private health insurance affordability Page 30
Slide 31: Private health insurance affordability
02 Private health insurance affordability Low cost brands NIB (ASX: NHF) and ahm (ASX: MPL) growing market shares at a rapid rate Premiums are up 4-5% p.a. Consumers downgrading their level of cover Investment exposure: Page 31
Slide 32: Telco sector under transition
03 Telco sector under transition Page 32
Slide 33: Telco sector under transition
03 Telco sector under transition Lower margins for internet service providers (ISPs) under NBN From 1.2 million premises ready for services in 2017 to 9.1 million in Dec 2018 Increased competition in the mobile segment imminent Investment exposure: Page 33
Slide 34: Top holdings
Top holdings Company ASX Code Owned by Challenger Limited* CGF WAM, WLE, WAX Woolworths Limited^ WOW WAM, WLE, WAA Hunter Hall Global Value Limited^ HHV WAM, WAA AUB Group Limited* AUB WAM, WLE, WAX Automotive Holdings Group Limited* AHG WAM, WLE, WAX Eclipx Group Limited* ECX WAM, WLE, WAX Computer
Slide 35: What worked: Research-driven
What worked: Research-driven Sold majority at Bought again at $19.65 Credit Corp Group Limited (ASX: CCP) $21 $17.20 $20 Why it rated $19 – Strong growth in consumer loan book $18 $17 – Continued growth in debt ledgers $16 – Productivity improvements $15 Started buying at – Strong management team $1
Slide 36: What didn't work: Research-driven
What didn’t work: Research-driven Ardent Leisure Group (ASX: AAD) $3.00 Why it rated $2.80 – Growth underpinned by US Main Event division $2.60 Started buying at – Catalyst: Asset sales $2.40 $1.84 Sold at $1.67 $2.20 Why it didn’t work $2.00 – US Main Event division underperformed – Dreamworld trag
Slide 37: What we like: Research-driven
What we like: Research-driven iSelect Limited (ASX: ISU) $2.10 Started buying at Background $2.05 $1.90 – Largest comparison website in Australia $2.00 – New CEO reinvigorating the business $1.95 – Improved cash flow conversion $1.90 $1.85 Catalysts $1.80 – Non-health insurance verticals driving $1.
Slide 38: What we like: Market-driven
What we like: Market-driven Woolworths Limited (ASX: WOW) $28 $27 Background Started buying at – Largest supermarket chain in AUS and NZ $26 $23.41 – Underperformance to Coles $25 – New management team $24 Catalysts – Divestments of Masters and petrol business $23 – Earnings momentum $22 – Store opt
Slide 39: Join more than 26,000 weekly readers
Join more than 26,000 weekly readers Subscribe to our investment insights and market updates at: wilsonassetmanagement.com.au
Wilson Asset Management — Investor Presentation (May 2017) on 6ix