WAM Research Ltd. · ASX:WAX
WAM Research — Investor Presentation (November 2013)
46 slides from WAM Research's investor presentation, Nov 14, 2013
Slide 1: Investor Presentation
For personal use only Investor Presentation Perth, November 2013
Slide 2: Agenda
Agenda For personal use only • WAM Capital Limited • WAM Research Limited • WAM Active Limited • About Wilson Asset Management • Investment Portfolio • Market Overview and Outlook • Investor Communications • Wilson Asset Management in the Community
Slide 3: WAM Capital Limited
For personal use only WAM Capital Limited (ASX: WAM)
Slide 4: Recent Highlights
Recent Highlights For personal use only +9.1% 6.4% +31% Growth in full year Fully franked Investment Portfolio dividend to 12.0 cents dividend yield* performance** per share fully franked 169% 50% 137% Increase in Increase in Total Increase in shareholders Shareholders’ Equity** Shareholder Return**
Slide 5: Dividend Growth
Dividend Growth For personal use only • FY2013 fully franked dividend of 12.0 cents per share, up 9.1% • Annualised FY2013 fully franked dividend yield 6.4% • Capacity to pay future dividends • Dividend Reinvestment Plan (DRP) operated at 2.5% discount • Board committed to paying increasing stream o
Slide 6: Dividend Growth
Dividend Growth For personal use only WAM Capital dividends since inception Cents per share 18.0 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0 Ordinary fully franked dividend Special fully franked dividend Equal access share buy-back
Slide 7: Outperformance
Outperformance For personal use only Since Performance at Fin 3 Yrs 5 Yrs 10 Yrs Inception 31 October 2013 6 Mths YTD 1 Yr % pa % pa % pa % pa WAM Investment 12.7% 16.4% 31.2% 16.8% 20.7% 14.3% 18.7% Portfolio* S&P/ASX All Ordinaries 7.2% 15.1% 24.7% 9.3% 11.1% 9.7% 8.7% Accumulation Index Outperfor
Slide 8: Outperformance
Outperformance For personal use only Index re-based 1,200 1,000 WAM Portfolio up 80.3% above pre- 800 GFC peak 600 400 Index up 2.5% from pre-GFC peak 200 - WAM Investment Portfolio before all expenses, fees & taxes S&P/ASX All Ordinaries Accumulation Index
Slide 9: Capital Management
Capital Management For personal use only • Raised $24.7m through DRP Shortfall Placement • Oversubscribed by 67% • Placement NTA accretive • Capitalising on strong market demand • Shareholder benefits of increased capital base • reduced fixed administration costs (as % of assets) • increased liquidi
Slide 10: WAM Research Limited
For personal use only WAM Research Limited (ASX: WAX)
Slide 11: Recent Highlights
Recent Highlights For personal use only +7.7% 6.0% +38% Growth in full year Fully franked Investment Portfolio dividend to 7.0 cents per dividend yield* performance** share fully franked 18% 1 for 2 51% Increase in Bonus Option Issue Increase in Total Shareholders’ Equity** announced 28 October Shar
Slide 12: Dividend Growth
Dividend Growth For personal use only • FY2013 fully franked dividend of 7.0 cents per share, up 7.7% • Annualised FY2013 fully franked dividend yield 6.0% • Capacity to pay future dividends • Dividend Reinvestment Plan (DRP) operated at 2.5% discount • Board committed to paying increasing stream of
Slide 13: Dividend Growth
Dividend Growth For personal use only WAM Research dividends since inception Cents per share 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 Special fully franked dividend Ordinary fully franked dividend
Slide 14: Outperformance
Outperformance For personal use only Since change in investment strategy Performance at Fin 3 Yrs (July 2010) 31 October 2013 6 Mths YTD 1 Yr % pa % pa WAX Investment 15.0% 17.8% 37.8% 20.1% 21.0% Portfolio* S&P/ASX All Ordinaries 7.2% 15.1% 24.7% 9.3% 11.8% Accumulation Index Outperformance +7.8% +
Slide 15: Outperformance
Outperformance For personal use only Index re-based 600 500 400 300 200 100 - WAX Investment Portfolio before all expenses, fees & taxes S&P/ASX All Ordinaries Accumulation Index *Investment performance since revised investment process July 2010
Slide 16: Capital Management
Capital Management For personal use only • 1 for 2 Bonus Option Issue announced 28 October 2013 • Exercise price: $1.20 Exercise by: 17 June 2015 • Shares will trade ex option entitlement on 28 November 2013 • Recently raised $16.5m through DRP Shortfall Placement • Placement NTA accretive • Capital
Slide 17: WAM Active Limited
For personal use only WAM Active Limited (ASX: WAA)
Slide 18: Recent Highlights
Recent Highlights For personal use only +5.6% 7.7% +25% Growth in full year Fully franked Investment Portfolio dividend to 9.5 cents per dividend yield* performance** share fully franked 41% 69% 62% Increase in Total Increase in Increase in shareholders Shareholder Return** Shareholders’ Equity** to
Slide 19: Dividend Growth
Dividend Growth For personal use only • FY2013 fully franked dividend of 9.5 cents per share, up 5.6% • Annualised FY2013 fully franked dividend yield 7.7% • Capacity to pay future dividends • Dividend Reinvestment Plan (DRP) operated at 2.5% discount • Board committed to delivering a regular income
Slide 20: Dividend Growth
Dividend Growth For personal use only WAM Active dividends since inception Cents per share 10.0 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 2011/12 2012/13 Fully franked dividends
Slide 21: Positive Performance
Positive Performance For personal use only Since Performance at Fin 3 Yrs 5 Yrs Inception 31 October 2013 6 Mths YTD 1 Yr % pa % pa % pa WAA Investment 10.9% 15.9% 25.3% 14.1% 18.6% 14.1% Portfolio* S&P/ASX All Ordinaries 7.2% 15.1% 24.7% 9.3% 11.1% 1.5% Accumulation Index Outperformance +3.7% +0.8%
Slide 22: Positive Performance
Positive Performance For personal use only Index re-based 100 80 60 40 20 0 -20 -40 -60 WAA Investment Portfolio before all expenses, fees & taxes S&P/ASX All Ordinaries Accumulation Index UBS Bank Bill Index
Slide 23: Capital Management
Capital Management For personal use only • 88% of Options exercised to date - raising $16m • Last day to exercise options: 12 December 2013 • Last day to trade options: 5 December 2013 (ASX: WAAO) • Strategy to grow WAM Active gross assets to $100m (currently $38m) • Shareholder benefits of increase
Slide 24: About Wilson Asset Management
For personal use only About Wilson Asset Management
Slide 25: Experienced Team
Experienced Team For personal use only Geoff Wilson Martin Hickson B Sc GMQ FAICD FFinsia B Bus B Comp Chairman / Senior Equity Analyst / Portfolio Manager Dealer Kate Thorley Matthew Haupt B Com CPA Grad Dip ACG CFA B Com Grad Dip App Fin Chief Executive Officer / Equity Analyst Company Secretary C
Slide 26: Investment Approach
Investment Approach For personal use only Research Research Driven & Market Market Driven Investment Strategy Investment Strategy Driven Identifying Exploiting market undervalued growth mis-pricing companies opportunities
Slide 27: Our LICs
Our LICs For personal use only Gross assets* $622.2m $138.4m $37.7m Share price* $1.88 $1.175 $1.24 Pre tax NTA* $1.83 $1.11 $1.12 Growth in dividends 9.1% 7.7% 5.6% Fully Franked 6.4% 6.0% 7.7% Dividend Yield* *As at 31 October 2013
Slide 28: Investment Portfolio
For personal use only Investment Portfolio
Slide 29: Top Research Driven Holdings
Top 10 Research Driven Holdings* For personal use only ASX Code Company SGH Slater & Gordon Limited NEA Nearmap Limited AHE Automotive Holdings Group Limited NXT NEXTDC Limited MTU M2 Telecommunications Group Limited SFW SFG Australia Limited RCR RCR Tomlinson Limited CSV CSG Limited GWA GWA Group L
Slide 30: Top Market Driven Holdings
Top 10 Market Driven Holdings* For personal use only ASX Code Company CLO Clough Limited GNC Graincorp Limited FKP FKP Property Group CYA Century Australia Investments Limited HIL Hills Holdings Limited WIC Westoz Investment Company Limited IPE ING Private Equity Access Limited ELI Emerging Leaders
Slide 31: Top Contributors and Detractors
Top Contributors and Detractors* For personal use only Research Driven Contributors Detractors NEA Nearmap Ltd NXT NEXTDC Limited IPP iProperty Group Limited UGL UGL Limited RCR RCR Tomlinson Limited TEN Ten Network Holdings Limited Market Driven Contributors Detractors HIL Hills Holdings Limited MM
Slide 32: Research Driven Investee Company: Nearmap Limited (NEA)
Research Driven Investee Company Nearmap Limited (NEA) For personal use only Overview • Provider of detailed geospatial map technology to public/private sectors Background • Introduced pay wall in November 2012 (service previously free) • Exploring further opportunities in existing markets and other
Slide 33: Research Driven Investee Company: Slater & Gordon Limited (SGH)
Research Driven Investee Company For personal use only Slater & Gordon Limited (SGH) Overview • Large consumer law firm with 70 Australian offices and 12 UK offices with 1200 staff Background • Reforms implemented in April 2013 changing how claims management companies allocate work to law firms Cata
Slide 34: Market Driven Investee Company: Graincorp Limited (GNC)
Market Driven Investee Company For personal use only Graincorp Limited (GNC) Overview • Australian grains handling and logistics business Background • Currently subject to takeover offer by American Archer Daniels Midland Company (ADM) and subject to Government approval • Investment provides average
Slide 35: Market Driven Investee Company: FKP Property Group (FKP)
Market Driven Investee Company For personal use only FKP Property Group (FKP) Overview • Retirement living operator and developer Background • Previously trading at a 66% discount to NTA Catalyst • Meeting with FKP management during August reporting season. New CEO set out plan for reducing discount
Slide 36: Market Overview and Outlook
For personal use only Market Overview and Outlook
Slide 37: Current Market Themes
Current Market Themes For personal use only Employment Strong housing participation rate market falling Continued US Tech company economic renaissance recovery New government Small caps providing underperforming companies due to weak certainty resource stocks
Slide 38: Strong Housing Market
Strong Housing Market For personal use only
Slide 39: Market Outlook
Market Outlook For personal use only P/E multiples M&A activity to Strong IPO activity expanding - continue in 2014 earnings weak Interest rates to remain low by Australian dollar QE tapering in historical to weaken early 2014 standards
Slide 40: P/E multiples expanding
P/E multiples expanding For personal use only The S&P/ASX Small Industrials Source: Macquarie Securities Group
Slide 41: Investor Communications
For personal use only Investor Communications
Slide 42: Investor Communication
Investor Communication For personal use only Weekly emails Half yearly Half yearly Half & full year including market national investor investor financial results update presentations newsletters Monthly NTA Website Media Industry announcement wamfunds.com.au conferences & investment update
Slide 43: Wilson Asset Management in the Community
For personal use only Wilson Asset Management in the Community
Slide 44: Community Investment
Community Investment For personal use only All donations are made by Wilson Asset Management (the investment manager) and/or its staff, not the listed entities.
Slide 45: 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, Veritas Secur
Slide 46: For personal use only
For personal use only Investor Presentation Perth, November 2013