WAM Active Ltd. · ASX:WAA
WAM Active — Investor Presentation (May 2011)
27 slides from WAM Active's investor presentation, May 19, 2011
Slide 1: WAM Active Limited (WAA) Investor Presentation May 2011
WAM Active Limited (WAA) Investor Presentation May 2011 For personal use only 1
Slide 2: Small Cap Value
Small Cap Value For personal use only *Source – The New York Times 2
Slide 3: Mid to Small Cap Sector Benefits
Mid to Small Cap Sector Benefits For personal use only • Small cap value has outperformed all other sectors* • Under researched – the market valuation is inefficient • Access to management - ability to build strong relationships • Life cycle of the business – ability to grow at a faster rate than la
Slide 4: LIC Structure Benefits
LIC Structure Benefits For personal use only Listed Investment Company’s are very attractive investment vehicles • Studies show LICs outperform managed funds* • Closed pool of capital – never forced seller or buyer • Provide consistent flow of fully franked dividends • Lower MER compared to managed
Slide 5: Our Experienced Team
Our Experienced Team Geoff Wilson - Chairman and Portfolio Manager For personal use only • • Chris Stott - CIO and Portfolio Manager, previously Head of Research • Kate Thorley - CEO of Wilson Asset Management. Kate was previously our CFO and remains Company Secretary for WAM, WAX and WAA. • Matthew
Slide 6: Investment Process
Investment Process “Market Driven” For personal use only We scour the market for trading opportunities. These could include participating in: ¾ initial public offerings ¾ placements ¾ block trades ¾ rights issues ¾ corporate transactions (such as takeovers, mergers, schemes of arrangements, corporat
Slide 7: Business Model
Business Model For personal use only Small to medium Listed Company Investment focus LIC + Experienced Structure team benefits Investment + Flexible + Tight cost Process Mandate control Superior long term = performance record 7
Slide 8: Our Funds
Our Funds For personal use only WAM Capital (WAM) WAM Active WAM (WAA) Research (WAX) Market Research Driven Driven 8
Slide 9: Performance
Performance Financial Year to Date to 30 April 2011 For personal use only Gross Portfolio 15.9% Pre-tax NTA per share growth plus dividends 6.8% Share price growth plus dividends 15.4% 9
Slide 10: Performance since Inception
Performance since Inception For personal use only WAA +15.0% p.a. – outperformed by 18.8% p.a. over 3.25 years 80 60 40 20 ‐ ‐20 ‐40 ‐60 WAA Gross Portfolio All Ordinaries Accumulation Index 10
Slide 11: Top Stocks as at May 2011
Top 10 Stocks as at 17 May 2011 For personal use only % Gross Company Assets SGI Signature Capital Investments Ltd 5.2% MSF Maryborough Sugar Factory Ltd (The) 2.8% TLS Telstra Corporation Ltd 2.8% AUN Austar United Communications Ltd 2.7% CCP Credit Corp Group Ltd 2.6% WTF Wotif.com Holdings Ltd 1.
Slide 12: Village Roadshow Ltd (VRL) Long Trade
Village Roadshow Ltd (VRL) Long Trade For personal use only • Pricing environment more attractive • Selling assets to pay down debt • Corporate overhead restructure • Capital management • PE: 8x 12
Slide 13: Leighton Holdings Ltd (LEI) Short Sale
Leighton Holdings Ltd (LEI) Short Sale For personal use only • Large profit downgrade, profit of $480m to loss of $427m • 1 for 9 rights issue to raise $757m • Institutional bookbuild of rights, price of $24.50 • Believed stock would be under pressure 13
Slide 14: RHG Ltd Update
RHG Ltd Update For personal use only • We took action because we believed our capital was at risk • RHG action was the exception and not the rule • Our focus is to manage shareholders money • We actively pursued a change of the Board to protect the value of our investment, to keep the company listed
Slide 15: Dividends
Dividends For personal use only cents per share 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 2008/09 2009/10 2010/11* Ordinary fully franked dividend * Annualised interim dividend 15
Slide 16: Dividends
Dividends For personal use only • The Board is committed to paying an increasing stream of fully franked dividends • Government reform in June 2010 has changed the way dividends are paid • Dividends paid if the company is solvent • WAM Active has franking credits of 8.3 cents per share as of 30 Apri
Slide 17: Capital Management
Capital Management For personal use only • Board’s focus is to grow the market capitalisation to $100m within 5 years continues • 288,792 WAA options exercised since April 2010 for $332,420 • The balance of WAA Options 15,200,427 lapsed 30 April 2011 17
Slide 18: Market Outlook
For personal use only Market Outlook 18
Slide 19: Australian Retail Sales
Australian Retail Sales For personal use only Source: Macquarie Research, May 2011 19
Slide 20: Private Sector Credit Growth
Private Sector Credit Growth For personal use only Source: Macquarie Research, May 2011 20
Slide 21: S&P/ASX Performance
S&P/ASX 200 Performance For personal use only Source: Goldman Sachs May 2011 21
Slide 22: Analyst EPS Forecasts
Analyst EPS Forecasts For personal use only Source: Macquarie Research, May 2011 22
Slide 23: Current Issues
Current Issues For personal use only ¾ Australian Dollar ¾ Carbon Tax ¾ Interest Rates ¾ Australian Housing Market ¾ China 23
Slide 24: Shareholder Communications
Shareholder Communications For personal use only ¾ New Website – WAMFunds.com.au ¾ Media – Sky Business, Switzer, CNBC, Newspapers ¾ Research Reports – Bell Potter, Patersons & Independent Research Reports ¾ Audio casts – Monthly ¾ Subscribe for weekly emails ¾ Bi-annual presentations 24
Slide 25: WAM in the Community
WAM in the Community Our people are passionate about the well-being of our customers and the wider community because helping others is part of our culture. As part of For personal use only the WAM in the Community Program, we recently donated to the QLD Premier Disaster Relief Appeal. We have also p
Slide 26: WAM Active Limited (WAA)
WAM Active Limited (WAA) Investor Presentation May 2011 For personal use only 26
Slide 27: 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, Macquarie Res