WAM Research Ltd. · ASX:WAX
WAM Research — Investor Presentation (May 2014)
45 slides from WAM Research's investor presentation, May 23, 2014
Slide 1: Investor Presentation
For personal use only Investor Presentation Brisbane, May 2014
Slide 2: Agenda
Agenda For personal use only • Market Overview and Outlook • About Wilson Asset Management • Investment Portfolio • WAM Capital Limited • WAM Research Limited • WAM Active Limited • Investor Communications • Wilson Asset Management in the Community 2
Slide 3: Levelling the playing field
Levelling the playing field For personal use only “In our view, the regime for placements $170b the sum of capital raised over the last 10 to wholesale investors years from wholesale investors through private placements is unequitable and defies logic… Wholesale investors 7.8% have the ability to th
Slide 4: Market Overview and Outlook
For personal use only Market Overview and Outlook 4
Slide 5: Current Market Outlook
Current Market Outlook For personal use only Tech bubble Very strong bursting? housing market PE ratios above Tough Budget to historical average impact growth US recovery China slowdown underway 5
Slide 6: US second best market recovery
US second best market recovery For personal use only Source: Bloomberg and Deltec International Group 6
Slide 7: US market reaches new highs
US market reaches new highs For personal use only Nasdaq Composite Index 6000 5000 4000 3000 2000 1000 0 Source: IRESS 7
Slide 8: China: low growth outlook
China: low growth outlook For personal use only • New economic reforms for slower sustainable growth • 2014 GDP target 7.5% versus 10 year average of 10.5% • Property prices falling • Liquidity issues emerging • The ‘War on Pollution’ to impact short term growth • Shadow banking risks 8
Slide 9: The 'War on Pollution'
The ‘War on Pollution’ For personal use only Source: From Wilson Asset Management’s recent trip to China 9
Slide 10: Wenzhou
Wenzhou For personal use only Source: From Wilson Asset Management’s recent trip to China 10
Slide 11: About Wilson Asset Management
For personal use only About Wilson Asset Management 11
Slide 12: 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 13: Investment approach
Investment approach For personal use only Research Driven Market Driven Investment Strategy Investment Strategy Identifying undervalued growth Exploiting market mis-pricing companies opportunities • Bottom-up stock picking • Short term arbitrages and mis- pricings: • Extensive research of companies
Slide 14: Our LICs
Our LICs For personal use only ASX: WAM ASX: WAX ASX: WAA Gross assets* $609m $151m $37m Share price* $1.95 $1.16 $1.31 Pre tax NTA* $1.78 $1.07 $1.05 Premium to NTA* 9% 8% 24% Fully franked 6.7% 6.5% 7.4% dividend yield** Research Driven / Research Driven Market Driven Investment approach Market Dr
Slide 15: Our LICs trading at premiums to NTA
Our LICs trading at premiums to NTA For personal use only “…for the past two 30% WAM Capital Premium/Discount to NTA 20% years, the sector as a 10% 0% whole has been -10% -20% undergoing a -30% -40% significant re-rating 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Slide 16: Investment portfolio
For personal use only Investment portfolio 16
Slide 17: Top Research Driven Holdings
Top 10 Research Driven Holdings* For personal use only ASX Code Company DNA Donaco International Limited SGH Slater & Gordon Limited AAD Ardent Leisure Group DLX DuluxGroup Limited AHE Automotive Holdings Group Limited TNE Technology One Limited Held in WAM Capital FXJ Fairfax Media Limited and NEA
Slide 18: Top Market Driven Holdings
Top 10 Market Driven Holdings* For personal use only ASX Code Company CBAPA CBA Perpetual Exc Resale Listed Sec – PERLS IV CYA Century Australia Investments Limited ANZPB ANZ Convertible Preference Share – CPS2 WIC Westoz Investment Company Limited HIL Hills Limited Held in WAM Capital IPE IPE Limit
Slide 19: Top Contributors and Detractors
Top Contributors and Detractors* For personal use only Research Driven Investment Strategy Contributors % Detractors % IPP iProperty Group Limited 7.9 NXT NEXTDC Limited -2.3 VOC Vocus Communications 6.0 UGL UGL Limited -1.2 Limited SGH Slater & Gordon Limited 5.9 PGH Pact Group Holdings -0.9 Limite
Slide 20: Research Driven Investee Company: Seymour Whyte
Research Driven Investee Company For personal use only Seymour Whyte Limited (SWL) Overview • Est 1987, provides construction services to transport, resources and utilities sectors across Australia. Majority of work is in QLD Background • New CEO appointed in July 2012 (ex UGL Limited and Thiess) •
Slide 21: Market Driven Investee Company: Macquarie Atlas Roads
Market Driven Investee Company For personal use only Macquarie Atlas Roads Group (MQA) Overview • Toll road operator with assets in France and the USA Background • A spin-off from the former Macquarie Infrastructure Fund in 2010 Catalysts • Improving credit rating and reduced cost of funding • Exten
Slide 22: WAM Capital Limited
For personal use only WAM Capital Limited (ASX: WAM) 22
Slide 23: Recent Highlights
Recent Highlights For personal use only 13.0c 6.7% +14.4% Fully franked annualised Fully franked Investment Portfolio interim dividend, up 8.3% dividend yield* performance** 21% +28% 15 year Increase in Total Shareholder Track record Shareholders’ Equity** Return** *As at 30 April 2014 **12 months t
Slide 24: 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 *Annualised interim dividend 24
Slide 25: Outperformance
Outperformance For personal use only Performance at Since 30 April 2014 (% pa) 1 Yr 3 Yrs 5 Yrs 10 Yrs Inception WAM Investment 14.4% 13.3% 20.0% 13.7% 18.1% Portfolio* S&P/ASX All Ordinaries 10.4% 8.4% 12.5% 9.4% 8.6% Accumulation Index Outperformance +4.0% +4.9% +7.5% +4.3% +9.5% *Investment perfo
Slide 26: Outperformance
Outperformance For personal use only Index re-based 1,200 1,000 WAM Portfolio +83.3% above pre- 800 GFC peak 600 400 Index +10.0% from pre-GFC peak 200 - WAM Investment Portfolio before expenses, fees & taxes S&P/ASX All Ordinaries Accumulation Index 26
Slide 27: Long term returns
Long term returns For personal use only $10,000 invested in 1999 WAM Capital $91,466 versus the market $33,886 $100,000 WAM Capital Ltd All Ordinaries Accum Index $90,000 $91,466 $80,000 $70,000 $60,000 $50,000 $40,000 $33,886 $30,000 $20,000 $10,000 $0 Date 2000 2001 2002 2003 2004 2005 2006 2007 2
Slide 28: WAM Research Limited
For personal use only WAM Research Limited (ASX: WAX) 28
Slide 29: Recent Highlights
Recent Highlights For personal use only 7.5c 6.5% +17.1% Fully franked annualised Fully franked Investment Portfolio interim dividend, up 7.1% dividend yield* performance** 19% +22.6% 7.5% pa Increase in Total Shareholder Outperformance of Shareholders’ Equity** Return** market since investment stra
Slide 30: 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 Ordinary fully franked dividend Special fully franked dividend *Annualised interim dividend 30
Slide 31: Outperformance
Outperformance For personal use only Since change in investment Performance at strategy 30 April 2014 (% pa) 1 Yr 2 Yrs 3 Yrs (July 2010) WAX Investment 17.1% 24.0% 16.2% 18.5% Portfolio* S&P/ASX All Ordinaries 10.4% 15.6% 8.4% 11.0% Accumulation Index Outperformance +6.7% +8.4% +7.8% +7.5% *Investm
Slide 32: Outperformance
Outperformance For personal use only Index re-based 100 80 60 40 20 - (20) WAX Investment Portfolio before all expenses, fees & taxes S&P/ASX All Ordinaries Accumulation Index Investment performance since revised investment process July 2010 32
Slide 33: 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 • Options trading at: $0.035* (ASX: WAXO) • Share price: $1.14* (ASX: WAX) *As at 19 May 2014 33
Slide 34: WAM Active Limited
For personal use only WAM Active Limited (ASX: WAA) 34
Slide 35: Recent Highlights
Recent Highlights For personal use only 9.6c 7.4% +12.8% Fully franked annualised Fully franked Investment Portfolio interim dividend dividend yield* performance** 28% +33% 38.2% Increase in Total Shareholder % cash currently held by Shareholders’ Equity** Return** investment portfolio* *As at 30 Ap
Slide 36: Dividend Growth
Dividend Growth For personal use only WAM Active Dividends since Inception Cents per share 12.0 10.0 8.0 6.0 4.0 2.0 0.0 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14* Fully franked dividends *Annualised interim dividend 36
Slide 37: Positive Performance
Positive Performance For personal use only Performance at Since 30 April 2014 (% pa) 1 Yr 3 Yrs 5 Yrs Inception WAA Investment 12.8% 11.4% 17.0% 13.3% Portfolio* S&P/ASX All Ordinaries 10.4% 8.4% 12.5% 1.8% Accumulation Index Outperformance +2.4% +3.0% +4.5% +11.5% UBS Bank Bill Index (cash) 2.7% 3.
Slide 38: Positive Performance
Positive Performance For personal use only Index re-based 120 100 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 38
Slide 39: Investor Communications
For personal use only Investor Communications 39
Slide 40: Investor Communication
Investor Communication For personal use only Weekly emails Half yearly Investor Half & full year including market national investor newsletters financial results update presentations Monthly NTA Website Media Industry announcement wamfunds.com.au conferences & investment update and independent resea
Slide 41: Wilson Asset Management in the Community
For personal use only Wilson Asset Management in the Community 41
Slide 42: 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. 42
Slide 43: 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, WAM Capital L
Slide 44: Contact us
For personal use only Contact us info@wamfunds.com.au phone (02) 9247 6755 | fax (02) 9247 6855 www.wamfunds.com.au 44
Slide 45: For personal use only
For personal use only Investor Presentation Brisbane, May 2014