WAM Capital Ltd. · ASX:WAM
WAM Capital — Investor Presentation (June 2009)
34 slides from WAM Capital's investor presentation, Jun 4, 2009
Slide 1: WAM Capital Limited Presentation May/June 2009
WAM CAPITAL LIMITED For personal use only (WAM) A.B.N. 34 086 587 395 PRESENTATION MAY/JUNE 2009 1
Slide 2: Objectives
OBJECTIVES For personal use only • High Real Rate of Return • Preserve Capital • Strong Dividend Flow 2
Slide 3: Performance
PERFORMANCE For personal use only at 30 April 2009 WAM All Ord Outperformance Small Ord Outperformance Capital* Financial -10% -27% +17% -35% +25% YTD 3 Year -2% -18% +16% -28% +26% * Gross performance is the change in the portfolio before all expenses, fees and taxes 3
Slide 4: Dividends
For personal use only DIVIDENDS 4
Slide 5: How Do We Pay Dividends?
HOW DO WE PAY For personal use only DIVIDENDS? • April 30 pre-tax NTA 133.13c • FY2009 current losses $10.6m (or 10.4c) • Need a return of over 8.4% as at April 30 2009 to commence paying a dividend 5
Slide 6: Dividends
DIVIDENDS For personal use only • Need a profit to pay a dividend • Dividends are only payable from retained earnings or current year year’s s profits of the company. • Excess franking credits 6
Slide 7: Dividends
DIVIDENDS For personal use only • Two types of listed investment company (LIC) - Investor - Trader • Traders d profit fi iis iimpacteddb by changes in the value of the portfolio either i h positive i i or negative i • A company can only pay dividends from profit 7
Slide 8: Price, NTA & Share
For personal use only PRICE 8 NTA & SHARE
Slide 9: Discount to NTA
DISCOUNT TO NTA For personal use only As at 30 April 2009 Cents Discount Pre-tax Pre tax NTA 133 1* 133.1 26 4% 26.4% After-tax NTA 130.7* 25.0% Share Price 98.0** * Includes 11.4 cents per share in tax assets ** As at close of trading 3 June 2009 9
Slide 10: What Drives the Share Price
WHAT DRIVES THE For personal use only SHARE PRICE 1. Performance 2. Market Relevance • Size • Liquidity q y • Track record • Years in business 3. Yield 4. Regulatory environment 5. Supply and demand 10
Slide 11: Performance History
PERFORMANCE HISTORY For personal use only 600 550 500 450 400 % Perrformance 350 300 250 200 150 100 50 - -50 August 1999 - April 2009 WAM Capital Ltd Gross Portfolio before all expenses, fees, taxes and dividends All Ordinaries Accumulation Index 11
Slide 12: NTA & Share Price History
NTA & SHARE PRICE HISTORY For personal use only 2.10 1.90 1.70 1.50 1 30 1.30 1.10 0.90 0.70 0.50 NTA After-tax Share price 12
Slide 13: WAM Capital Premium/Discount to NTA
WAM CAPITAL For personal use only PREMIUM/DISCOUNT TO NTA 40.00% 30.00% 20.00% 10.00% 0.00% -10.00% -20.00% -30.00% -40.00% 13
Slide 14: Australian Foundation Investment Company Premium/Discount
For personal use only AUSTRALIAN FOUNDATION INVESTMENT COMPANY LIMITED Share Price to Net Asset Backing - Premium/Discount Prem/Disc April 2009 30% 20% 10% 0% -10% -20% Price/NTA Prem/Disc BEFORE provision for tax on unrealised gains Price/NTA Prem/Disc AFTER provision for tax on unrealised gains -3
Slide 15: Stock Selection
For personal use only STOCK SELECTION 15
Slide 16: Portfolio Structure
PORTFOLIO STRUCTURE For personal use only As at As at 28 February 2009 31 May 2009 $m % % $m % % Research 16 47% 26 31% Trading 18 53% 58 69% Long Portfolio 34 100% 30% 84 100% 64% Sh t Portfolio Short P tf li - - - - Fixed Interest and Cash 82 70% 48 36% Gross Assets 116 100% 132 100% 16
Slide 17: Top Stocks
TOP 10 STOCKS For personal use only as at 31 May 2009 % Change FY09 P/E Market % off Gross Average Code Company Ratio Value $m Assets Cost RKN Reckon Ltd 12.1 $5.6 4% +63% LNN Lion Nathan Ltd 20.5 $4.4 3% -0% MMS McMillan Shakespeare Ltd 9.1 $3.3 3% +34% MCP McPhersons Ltd 4.0 $2.8 2% +46% PBG Pacif
Slide 18: RCG Corporation (RCG)
RCG Corporation (RCG) For personal use only • $0.14 $0 14 cash vs current share price $0.29. RCG Corporation vs S&P/ASX All Ordinaries Index • New format stores $0.60 8000 7000 s Index $0.50 6000 $0 40 $0.40 S&P/ASX All Ordinaries 5000 • Acquisitions Price $0.30 4000 3000 $0.20 2000 • Experienced ma
Slide 19: Fantastic Holdings (FAN)
Fantastic Holdings g For personal use only (FAN) • Furniture retailer 5 brands Fantastic Furniture vs S&P/ASX All Ordinaries Index • Approaching 110 stores $5.00 8000 $4.50 7000 es Index $4.00 6000 $3.50 • Recent acq acquisitions isitions look to 5000 SX All Ordinarie $3.00 Price drive 2009/2010 ear
Slide 20: Fantastic Holdings: Housing affordability is improving
Fantastic Holdings g For personal use only (FAN) H Housing i affordability ff d bilit isi improving i i 000's 000's 45 12 Housing g finance for existing g homes ex refi (LHS) ( ) 11 40 Housing finance for new homes (RHS) 10 35 9 30 8 25 7 20 6 15 5 10 4 Jun-85 Jun-87 Jun-89 Jun-91 Jun-93 Jun-95 Jun-
Slide 21: Fantastic Holdings: First home buyers entering the market
Fantastic Holdings g For personal use only (FAN) Fi First home h buyers b are now entering i the h market k % of All Dwellings Financed % of All Dwellings Financed 28 28 First home buyers First-home Average 26 26 24 FHOG trebled for 24 new homes (Nov 08) 22 22 20 20 18 18 16 16 14 14 FHOG grant intr
Slide 22: Pacific Brands (PBG)
Pacific Brands For personal use only (PBG) • Over 200 brands in portfolio Pacific Brands vs S&P/ASX All Ordinaries Index i.e Bonds $4.00 8000 • Recent equity raising has P/ASX All Ordinaries Index $3.50 7000 improved p gearing, g g, debt facilities $3.00 6000 renewed $2.50 5000 Price $2.00 4000 $1.5
Slide 23: Markets
For personal use only MARKETS 23
Slide 24: S&P/ASX Small Ordinaries Index: March 2003 to May 2009
For personal use only S&P / ASX Small Ordinaries Index: 1 March 2003 to 31 May 2009 4500 4000 3500 3000 2500 2000 1500 1000 500 0 24
Slide 25: S&P/ASX All Ordinaries Index: March 2003 to May 2009
For personal use only S&P / ASX All Ordinaries Index: 1 March 2003 to 31 May 2009 8000 7000 6000 5000 4000 3000 2000 1000 0 25
Slide 26: S&P/ASX Small Industrials Index: March 2003 to May 2009
S&P / ASX Small Industrials Index: For personal use only 1 March 2003 to 31 May 2009 4500 4000 3500 3000 2500 2000 1500 1000 500 0 26
Slide 27: S&P/ASX Industrials Index: March 2003 to May 2009
For personal use only S&P / ASX Industrials Index: 1 March 2003 to 31 May 2009 8000 7000 6000 5000 4000 3000 2000 1000 0 27
Slide 28: Recovery Phases - Major Market Falls - Daily Moves
For personal use only Recovery Phases - Major Market Falls - Daily Moves Index rebased to 100 at 1931 1974 1982 1987 1991 2008 150 ASX200 Mar10(F): 4460 ASX200 Dec09(F): 4370 140 ASX200 Jun09(F): 4010 130 120 110 100 90 0 50 100 150 200 250 300 350 Days from market Source: IRESS, GSJBW Research 28
Slide 29: S&P500 Industrial: Valuation of Equities Relative to Bonds
For personal use only 0 0.5 1 1.5 2 2.5 Apr-87 Oct-87 Apr-88 Oct-88 Apr-89 Oct-89 Apr-90 Oct-90 Apr-91 Oct-91 Apr-92 Oct-92 Apr-93 EQUITIES RELATIVELY UNDERVALUED Oct-93 EQUITIES RELATIVELY OVERVALUED Apr-94 Oct-94 Apr-95 Oct-95 Apr-96 Oct-96 Apr-97 Oct-97 Apr-98 Oct-98 MULTIPLE OF BOND YIELD TO EQU
Slide 30: ASX200 Industrial: Valuation of Equities Relative to Bonds
For personal use only 0.4 0.6 06 0.8 1 1.2 1.4 1.6 Au ug-90 Fe eb-91 Au ug-91 Fe eb-92 Average Au ug-92 Fe eb-93 -1 Std Dev Au ug-93 Fe eb-94 Au ug-94 Fe eb-95 EQUITIES RELATIVELY OVERVALUED EQUITIES RELATIVELY UNDERVALUED Au ug-95 Fe eb-96 Au ug-96 Fe eb-97 Au ug-97 Fe eb-98 Au ug-98 Fe eb-99 MULTI
Slide 31: For personal use only
24% 5 O Rolling 10yr based on lowest daily closing price 20% 4 16% + 12% 4 fe) 8% - 4h 0% - EE Nov 20 4% 1895 1907 1919 1931 1943 1949 1952 1955 1958 1961 1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 Note: 1895 - 1946 based on year-end prices, 1947 onwards based on quar
Slide 32: Shareholder Communication
SHAREHOLDER For personal use only COMMUNICATION Website updated www wilsonassetmanagement com au www.wilsonassetmanagement.com.au Audio cast - fortnightly Presentations Investor Report 32
Slide 33: Questions?
For personal use only QUESTIONS? 33
Slide 34: Disclaimer
Disclaimer For personal use only This presentation has been prepared for use in conjunction with a verbal presentation and should be read in that context. Information for the graphs, charts and quoted indices contained in this presentation has been sourced from IRESS Market Technology and WAM Capita