WAM Capital Ltd. · ASX:WAM
WAM Capital — Investor Presentation (November 2009)
35 slides from WAM Capital's investor presentation, Nov 18, 2009
Slide 1: WAM Capital Limited Presentation November/December 2009
WAM CAPITAL LIMITED (WAM) For personal use only A.B.N. 34 086 587 395 PRESENTATION NOVEMBER/DECEMBER 2009
Slide 2: Summary
For personal use only Summary WAM invests in Australian equities. It has a unique investment style broadly separated into 50% longer term research investments and 50% trading positions. The company’s main objective is to preserve capital and deliver a rising stream of fully franked dividends to its
Slide 3: Management's Competitive Advantage
Management’s Competitive Advantage For personal use only The Wilson Asset Management team offers investors the following advantages: 1. A flat structure that delivers quick decision making; 2. A nimble investment process due to the relatively small funds under management; 3. Closed end funds avoidin
Slide 4: Objectives
For personal use only Objectives High Real Rate of Return Preserve Capital Strong Dividend Flow 4
Slide 5: Performance at October 2009
Performance at 31 October 2009 For personal use only Small WAM All Ords Outperformance Ords Outperformance Capital* Accum Accum Financial +27% +19% +8% +20% +7% YTD 3 Year +23% -1.4% +24% -12% +35% * Gross portfolio is the change in the portfolio before all expenses, fees and taxes 5
Slide 6: Performance at October 2009
Performance at 31 October 2009 For personal use only All Ords. Annualised Gross Portfolio* Accumulation Outperformance performance Index 1 year +43.2% +22.4% +20.8% 3 years +7.2% -0.5% +7.7% 5 years +12.7% +8.7% +4.0% 7 years +16.0% +11.0% +5.0% Since inception +19.9% +8.8% +11.1% * The change in th
Slide 7: Dividends
For personal use only DIVIDENDS 7
Slide 8: How do we pay Dividends?
How do we pay Dividends? For personal use only ¾ Dividends are only payable from retained earnings or current year’s profits of the company ¾ Excess franking credits ¾ October 31 pre-tax NTA 159.36c ¾ FY2010 current retained earnings $14.0m (or 13.5c) 8
Slide 9: Dividends
For personal use only Dividends Cents 18 16 14 12 10 8 6 4 2 0 Ordinary Special Equal Access Share Buy-Back 9
Slide 10: NTA and Share Price
For personal use only NTA and SHARE PRICE 10
Slide 11: NTA and Share Price
For personal use only NTA and Share Price As at 31 October 2009 Cents Discount Pre-tax NTA 159.4c 17.2% After-tax NTA 156.3c 15.6% Share Price 132.0c * * As at close of trading 17 November 2009 11
Slide 12: Performance History August 1999 - October 2009
For personal use only Performance History August 1999 - October 2009 600 550 500 450 400 % Performance 350 300 250 200 150 100 50 - -50 WAM Capital Ltd Gross Portfolio before all expenses, fees, taxes and dividends All Ordinaries Accumulation Index 12
Slide 13: NTA & Share Price History
For personal use only NTA & Share Price History 2.10 1.90 1.70 1.50 1.30 1.10 0.90 0.70 0.50 Net Tangible Assets (NTA) After-tax Share price 13
Slide 14: WAM Capital Premium/Discount to NTA
WAM Capital Premium/Discount to NTA For personal use only 30.00% 20.00% 10.00% 0.00% -10.00% -20.00% -30.00% -40.00% 14
Slide 15: Stock Selection
For personal use only Stock Selection 15
Slide 16: Portfolio Structure
For personal use only Portfolio Structure As at As at 28 February 2009 31 October 2009 $m % % $m % % Research 16 47% 52 44% Trading 18 53% 66 56% Long Portfolio 34 100% 29% 118 100% 70% Short Portfolio - - (1) - Fixed Interest and Cash 82 71% 51 30% Gross Assets 116 100% 168 100% 16
Slide 17: Top Stocks as at October 2009
Top 10 Stocks as at 31 October 2009 For personal use only % FY10 Market % of Change P/E Value Gross Average Code Company Ratio $m Assets Cost RKN Reckon Ltd 14.1 $7.4 4% 119% MCP McPherson’s Ltd 8.1 $4.0 2% 165% ORL OrotonGroup Ltd 11.9 $3.2 2% 91% MMS McMillan Shakespeare Ltd 11.6* $3.2 2% 89% TLS
Slide 18: Best Performing Stocks
Best Performing Stocks 16 months to 31 October 2009 For personal use only Unrealised/Realised Code Company % Gains MCP McPherson's Ltd $3.4m +164% RKN Reckon Ltd $3.0m +120% MMS McMillan Shakespeare Ltd $2.1m +89% RHG RHG Ltd $2.0m +238% PBG Pacific Brands Ltd $2.0m +100% 18
Slide 19: Worst Performing Stocks
Worst Performing Stocks 16 months to 31 October 2009 For personal use only Unrealised/Realised Code Company % Gains HFA HFA Holdings Ltd -$2.7m -95% HAP HFA Accelerator Plus Ltd -$1.3m -67% MLB Melbourne IT Ltd -$1.2m -3% IDM Industrial Minerals Corporation Ltd -$1.1m -76% NOD Nomad Building Solutio
Slide 20: REA Group (REA)
For personal use only REA Group (REA) REA Group Limited • Online businesses – first mover advantage $8.00 $7.00 $6.00 • Non core UK operations $5.00 Price $4.00 $3.00 • Market leader, quasi duopoly $2.00 structure in Australia $1.00 $- 2003 2004 2005 2006 2007 2008 2009 REA share price • Cheapest li
Slide 21: SP Telemedia (SOT)
For personal use only SP Telemedia (SOT) SP Telemedia • Subscriber growth $1.70 $1.50 • New products $1.30 $1.10 Price $0.90 • Merger and acquisition $0.70 activity – Pipe Networks $0.50 $0.30 $0.10 Jan08 May08 Sep08 Jan09 May09 Sep09 • Cash flow and valuation SOT share price 21
Slide 22: Markets
For personal use only MARKETS 22
Slide 23: Dow Jones Industrial Index - Monthly
Dow Jones Industrial Index – Monthly For personal use only 23
Slide 24: All Ordinaries Index 1968-1982: 1970's Bear Market
All Ordinaries Index – Monthly: 1968-1982 (Logarithmic) For personal use only “1970’s Bear Market” - Australia 24
Slide 25: Dow Jones Industrial Index 1968-1982: 1970's Bear Market
Dow Jones Industrial Index– Monthly: 1968-1982 (Logarithmic) For personal use only “1970’s Bear Market” - US 25
Slide 26: All Ordinaries Index 1982-1994: 1987 Crash & Bear Market
All Ordinaries Index – Monthly: 1982-1994 (Logarithmic) For personal use only “1987 Crash & Bear Market” - Australia 26
Slide 27: All Ordinaries Index - Monthly (Logarithmic)
All Ordinaries Index – Monthly: (Logarithmic) For personal use only 27
Slide 28: Australia All Ordinaries Index: years
Australia All Ordinaries Index: 10 years For personal use only 28
Slide 29: US S&P Index years
US S&P 500 Index 10 years For personal use only 29
Slide 30: ASX300 Prospective PER
ASX300 Prospective PER Rolling 12 Months Forward For personal use only 22 20 18 +1 Std Dev 16 Average: 15.1 14 -1 Std Dev 12 10 8 Aug-90 Aug-91 Aug-92 Aug-93 Aug-94 Aug-95 Aug-96 Aug-97 Aug-98 Aug-99 Aug-00 Aug-01 Aug-02 Aug-03 Aug-04 Aug-05 Aug-06 Aug-07 Aug-08 Aug-09 Source: GSJBW Research estimat
Slide 31: ASX200 Industrials Prospective PER
ASX200 Industrials Prospective PER For personal use only Rolling 12 Months Forward 22 20 18 16 Average: 14.5 14 Average: 13.9 12 10 8 Aug-89Aug-90Aug-91Aug-92Aug-93Aug-94Aug-95Aug-96Aug-97Aug-98Aug-99Aug-00Aug-01Aug-02Aug-03Aug-04Aug-05Aug-06Aug-07Aug-08Aug-09 7 Source: GSJBW Research estimates 31
Slide 32: Valuation of Equities relative to Bonds
All Industrials Valuation of Equities relative to Bonds For personal use only MULTIPLE OF BOND YIELD TO EQUITY EARNINGS YIELDS MULTIPLE 1.6 EQUITIES RELATIVELY OVERVALUED 1.4 1.2 +1 Std Dev 1.0 Average 0.8 -1 Std Dev 0.6 EQUITIES RELATIVELY UNDERVALUED 0.4 Feb-88 Feb-89 Feb-90 Feb-91 Feb-92 Feb-93 F
Slide 33: Shareholder Communication
Shareholder Communication For personal use only Website updated www.wilsonassetmanagement.com.au Audio cast Presentations Investor Report Monthly Investment Update & NTA 33
Slide 34: Questions?
For personal use only QUESTIONS? 34
Slide 35: Disclaimer
Disclaimer This presentation has been prepared for use in conjunction with a verbal presentation and should be read in that context. For personal use only Information for the graphs, charts and quoted indices contained in this presentation has been sourced from IRESS Market Technology and WAM Capita