WAM Active Ltd. · ASX:WAA
WAM Active — Investor Presentation (November 2010)
30 slides from WAM Active's investor presentation, Nov 17, 2010
Slide 1: WAM Active Limited Presentation November 2010
WAM ACTIVE LIMITED For personal use only (WAA) A.B.N. 49 126 420 719 Presentation November 2010 1
Slide 2: What is WAM Active
What is WAM Active For personal use only • An active investor in listed Australian equities • High turnover, actively managed portfolio • Concentrates on: – Corporate transactions – Capital raisings (participated in 169 capital raisings in 2009/10 and 77 in the last 4 months) – Block trades – Discou
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 • To grow the funds under management 3
Slide 4: What the WAM Group delivers
What the WAM Group delivers For personal use only • Quick decision making • Bottom up approach • Staying y g very y close to the market and investee companies p • Strong risk adjusted returns • Significant market experience • Closed end fund avoiding being forced seller and buyer at inappropriate ti
Slide 5: Risk Profile
Risk Profile For personal use only • Reverts to cash if no trades identified. The fund has averaged 58% of cash since Percentage g in Cash listing 100.0% • Cash was 30.7% in Oct 2009, 90.0% cash 59.4% in Oct 2010 80.0% • Usual purchased positions 6%, 70.0% 4%, 2% or less 60.0% • Use stop losses 50 0
Slide 6: Markets
For personal use only Markets 6
Slide 7: Index since 1936
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-90 Jan-91 Jun-91 Nov-91 Apr-92 Sep-92 Feb-93 Jul-93 Dec-93 May-94 Source: GS&PA Research estimates Oct-94 Mar-95 Aug-95 Jan-96 Jun-96 +1 Std Dev Nov-96 Apr-97 Sep-97 Feb-98 Jul-98 Dec-98 -1 Std Dev May-99 Oct-99 Mar-00 Aug-00 Jan-01 Average: 15.0 Roll
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 FY10 FY09 Key Factors $m $m • Portfolio performance FY09 +9.6% (All Ords Accum Index - 22.2%) Income 4.3 1.7 FY10 +22.7% (All Ords Accum Index +13.8%) • Dividends Di id d & di distributions t ib ti received i d iincreased d 54% Operating profit 2.1 0.6 after
Slide 12: Performance – Attribution
Performance – Attribution For personal use only Contribution to Return on Total Capital Trade Type Performance Deployed Block trades at discount 4.3% 17.6% IPO/Capital / raising 29.2% 8.4% Takeover 2.5% 6.3% Oversold position/trading/asset allocation 23.1% 2.6% Sh t Selling Short S lli 10 2% 10.2% 1
Slide 13: 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 +1.7% +5.9% -4.2% 2 years +25.5% +13.9% +11.7% Since inception +14.2% -6.2% +20.4% 13
Slide 14: Financial Year to Date Return
Financial Year to Date Return to 31 October 2010 For personal use only Gross Portfolio* +5.9% Pre-tax NTA per share growth plus dividends +0.7%** Share price growth plus dividends +7.2% * The change in the portfolio before all expenses, fees and taxes ** After the payment of 3.4 3 4 cents of tax in
Slide 15: Performance
Performance For personal use only % 60.0 40.0 20.0 0.0 -20.0 -40.0 -60.0 WAM Active Limited - Gross Portfolio before all expenses, fees, taxes and dividends S&P/ASX All Ordinaries O di i Accumulation A l ti Index I d 15
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 movement in value of the portfolio • Dividends can be paid if the company is solvent • WAA has franking credits of 8.84 8 84 cents per share as of 31 October 20
Slide 18: Dividends
Dividends For personal use only cents per share 7.0 6.0 5.0 4.0 3.0 2.0 10 1.0 0.0 18
Slide 19: Option Issue
For personal use only Option Issue 19
Slide 20: Option Issue
Option Issue For personal use only • 1 for 1 option issue strike price at $1 $1.15, 15 expires 30 April 2011 (ASX:WAAO) • NTA before tax as at the end of October $1.14 • Looking to increase the size of the fund • Expect future capital management 20
Slide 21: Stock Selection
For personal use only Stock Selection 21
Slide 22: Trafalgar Corporate - TGP
Trafalgar Corporate - TGP For personal use only • Property development and funds management business Trafalgar Corporate • NTA $1.54 as at 30 June 2010 $3.50 $3.00 • Strategic realisation of assets $2.50 underway. $2.00 Price $1.50 • Distributions to commence once $1.00 debt <$40m $0.50 $- 2005 2006
Slide 23: Equinox Minerals and Citadel Resources Group
Equinox Minerals and Citadel Resources Group For personal use only • Takeover Arbitrage • Offer: 10.5 cents cash and 1 Equinox share for every 14.3 Citadel shares • Buy Citadel and short Equinox • Annualised Return: 14% 23
Slide 24: Outlook
For personal use only Outlook 24
Slide 25: Current Issues
Current Issues For personal use only ¾ QR National Float 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 Media (Sky Business / CNBC / Newspapers) Audio A di casts t - fortnightly f t i htl Presentations – twice a year Investor Newsletters – twice a year Monthly Investment Update & NTA announcements We v
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 Technology and WAM Capita