WAM Capital Ltd. · ASX:WAM
WAM Capital — Investor Presentation (November 2010)
30 slides from WAM Capital's investor presentation, Nov 17, 2010
Slide 1: WAM Capital Limited Presentation November 2010
WAM CAPITAL LIMITED For personal use only (WAM) A.B.N. 34 086 587 395 Presentation November 2010 1
Slide 2: What is WAM Capital
What is WAM Capital For personal use only • An dynamic investor in listed Australian equities • Two distinct styles: 1. Research Driven (700+ company meetings per annum) 2. Market Driven (participated in 169 capital raisings in 2009/10 and 77 in the last 4 months) • Concentrates on small to medium i
Slide 3: Objectives
Objectives For personal use only • To payout a consistent and growing stream of fully franked dividends • To achieve capital growth with minimum risk • Preserve shareholders capital 3
Slide 4: What the WAM Group delivers
What the WAM Group delivers For personal use only • Quick decision making • Bottom up approach • S Staying very close l to the h market k and d investee companies • Strong risk adjusted returns • Significant market experience • Closed end fund - avoiding being forced seller and buyer att inappropria
Slide 5: Risk Profile – Low
Risk Profile – Low For personal use only • Average net cash position of Percentage 29.76% over the last 11 years in Cash • Cash was 30.1% in Oct 2009, 70.0% cash 44.4% at Oct 2010 60.0% • Highly g y diversified with purchased positions of 3%, 50.0% 2%, 1% or less 40.0% • A low exposure p to the reso
Slide 6: Markets
For personal use only Markets 6
Slide 7: Index since 1936 – S&P/ASX All Ordinaries
For personal use only 40 80 160 320 640 1280 2560 5120 10240 1936 1938 1940 1942 1944 1946 Source: Macquarie Securities 1948 1949 1951 1953 1955 1957 1959 1961 1963 1965 1967 Index since 1936 1969 1970 1972 1974 1976 1978 1980 1982 S&P/ASX All Ordinaries 1984 1986 1988 1990 1991 1993 1995 1997 1999
Slide 8: S&P/ASX All Ordinaries Chart – months to November 2010
S&P/ASX All Ordinaries Chart - 12 months to 12 November 2010 For personal use only 5100 5000 4900 4800 4700 4600 4500 4400 4300 4200 Nov‐09 Dec‐09 Jan‐10 Feb‐10 Mar‐10 Apr‐10 May‐10 Jun‐10 Jul‐10 Aug‐10 Sep‐10 Oct‐10 8
Slide 9: ASX 300 Prospective PER
For personal use only 8 10 12 14 16 18 20 22 Aug-9 90 Dec-9 90 Apr-9 91 Aug-9 91 Dec-9 91 Apr-9 92 Aug-9 92 Dec-9 92 Apr-9 93 Aug-9 93 Dec-9 93 Apr-9 94 Aug-9 94 Source: GS&PA Research estimates Dec-9 94 Apr-9 95 Aug-9 95 Dec-9 95 Apr-9 96 Aug-9 96 +1 Std Dev Dec-9 96 Apr-9 97 Aug-9 97 Dec-9 97 Apr-
Slide 10: Financial Highlights
For personal use only Financial i i l Highlights 10
Slide 11: Summary of Results
Summary of Results For personal use only Key Factors FY10 FY09 $m $m • Portfolio performance FY09 -3.2% (All Ords Accum Index -22.2%) FY10 +29.8% (All Ords Accum Index +13.8%) Income 40.5 ((4.8)) • Dividends Di id d & di distributions t ib ti received i d iincreased d 28% Operating profit after • In
Slide 12: Performance at October 2010
Performance at 31 October 2010 For personal use only S&P/ASX Annualised All Ordinaries Gross Portfolio* Outperformance performance Accumulation Index 1 year +12.2% +5.9% +6.3% 3 years +1.9% -7.4% +9.3% 5 years +12.4% +5.7% +6.6% 10 years +17.3% +8.2% +9.0% Since inception +19.2% +8.6% +10.7% * The c
Slide 13: Financial Year to Date Return to October 2010
Financial Year to Date Return to 31 October 2010 For personal use only Gross Portfolio* +10.1% Pre-tax NTA per share growth plus dividends +9.8% Share price growth plus dividends +20.2% * The change in the portfolio before all expenses, fees and taxes. 13
Slide 14: LIC Comparison – Post tax NTA plus dividends, 1 year
LIC Comparison – Post tax NTA p plus dividends For personal use only TOTAL RETURN - 1 YEAR 15 10 5 (%) 0 -5 -10 -15 WAM IBC BKI CIN XAOAI ALR AMH CHO DJW AFI AUI MLT MIR WHF DUI ARG TGG PMC Source: Quantitative Research Report – Patersons Securities Limited 14
Slide 15: LIC Comparison – Compound return, 10 years
LIC Comparison – Post tax NTA plus dividends For personal use only COMPOUND RETURN - 10 YEARS (P.A.) 14 12 WAM returns not adjusted for option issues 10 8 (% P.A.) 6 4 2 0 CIN WAM AUI AFI ARG MLT CHO DUI XAOAI ALR DJW PMC WHF IBC TGG -2 Source: Quantitative Research Report – Patersons Securities Lim
Slide 16: Dividends
For personal use only Dividends 16
Slide 17: Dividends
Dividends For personal use only • Government reform in June 2010 - has changed the way dividends are paid • Dividends no longer affected by unrealised movements in value of the portfolio • Dividends can be paid if the company is solvent • WAM has franking credits which allows it to pay 3.52 cents pe
Slide 18: Dividends – Minimum annual yield of 8% pa
Dividends For personal use only Minimum annual yield of 8% pa on IPO price over last 11 years Cents per Share 18 16 14 12 10 8 6 4 2 0 Ordinary Dividends Special Dividends Equal Access Share Buy‐Back Source: ASX 18
Slide 19: LIC Comparison – Historical dividend growth rates
LIC Comparison – Historical 10 y yr Dividend Growth Rates For personal use only Compound Dividend Growth Years (% p.a.) ) WAM Capital Ltd WAM 9.9 10 Mirrabooka Investments Ltd MIR 9.7 8 Diversified United Investment Ltd DUI 8.4 10 Australian United Investment Company Ltd AUI 7.9 10 Carlton Investmen
Slide 20: Stock Selection
For personal use only Stock Selection 20
Slide 21: Top Stocks as at October 2010
Top 20 Stocks as at 31 October 2010 For personal use only % Gross % Gross Company Company Portfolio Portfolio 1 AWB Ltd* 7.1% 11 Blackmores Ltd^ 1.2% 2 Reckon Ltd^ 5.0% 12 OrotonGroup Ltd^ 1.2% 3 McMillan Shakespeare Ltd^ 3.7% 13 Macquarie Telecom Group Ltd^ 1.1% 4 RHG Ltd* 2.3% 14 IRESS Market Tech
Slide 22: Amcom Limited - AMM
Amcom Limited - AMM For personal use only • T Telecommunications l i ti service i Amcom provider $0.40 • Owners of own fibre networks $0.35 $0.30 • Industry consolidation $0.25 Price $0.20 • P/E 10x, 10x EPS growth +20% $0.15 $0.10 $0.05 $- $ 2007 2008 2009 2010 AMM share price 22
Slide 23: IPGA Limited - IPP
IPGA Limited - IPP For personal use only • O Online li reall estate t t portal t l in i Asia A i IPGA Limited iproperty.com $0.50 • Ex realestate.com Management team $0.40 • Profitability in 2011-2012 $0.30 Price P $0.20 • Well funded from recent capital raising $0.10 $ $- 2007 2008 2009 2010 IPP sh
Slide 24: Outlook
For personal use only Outlook 24
Slide 25: Current Issues
Current Issues For personal use only ¾ QR National ¾ Westfield Demerger ¾ Interest Rates and Banks ¾ Telstra and National Broadband Network ¾ ASX Takeover 25
Slide 26: Looking Ahead
Looking Ahead For personal use only ¾ Portfolio well positioned ¾ Confident of opportunities ahead ¾ Increase in M&A Activity ¾ Significant number of discounted capital raisings ¾ Positioned for extreme valuation opportunities ¾ Ripoll Review 26
Slide 27: WAMI in the Community
WAMI in the Community For personal use only Wilson Asset Management proudly support the following organisations: 27
Slide 28: Shareholder Communication
Shareholder Communication For personal use only Website www wilsonassetmanagement com au www.wilsonassetmanagement.com.au Media (Sky Business / CNBC / Newspapers Audio casts - fortnightly Presentations – twice a year Investor Newsletters – twice a year Monthly Investment Update & NTA ann
Slide 29: Questions?
For personal use only Questions? 29
Slide 30: Disclaimer
For personal use only Disclaimer 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 T h l Technology and d WA