WAM Active Ltd. · ASX:WAA
WAM Active — Investor Presentation (June 2009)
31 slides from WAM Active's investor presentation, Jun 4, 2009
Slide 1: WAM Active Limited Presentation May/June 2009
WAM ACTIVE LIMITED For personal use only (WAA) A.B.N. 49 126 420 719 PRESENTATION MAY/JUNE 2009 1
Slide 2: What Is It?
WHAT IS IT? For personal use only • Trader ade for o tax ta purposes pu poses • High g turnover,, actively y managed g fund • Concentrates on: – Corporate transactions – Capital raising – Block trades – Discount to assets arbitrage – Franking credit arbitrage – Short selling securities 2
Slide 3: Objectives
OBJECTIVES For personal use only • Derive an absolute return over the long term • Deliver investors an income stream in the form of fully y franked dividends • Preserve the capital of the Company 3
Slide 4: Performance
PERFORMANCE For personal use only 10 0 -10 -20 -30 -40 -50 WAM Active Ltd - Gross Portfolio before all expenses, fees, taxes and dividends All Ordinaries Accumulation Index 4
Slide 5: Performance Since Inception to April 2009
PERFORMANCE For personal use only Si Since Inception to 30 April p 2009 WAM Active Gross Performance* +0.5% All Ordinaries Accumulation Index -37.8% Outperformance p +38.3% 5 * The change in the portfolio before all expenses, fees and taxes
Slide 6: Dividends
For personal use only DIVIDENDS 6
Slide 7: Dividends
DIVIDENDS For personal use only • Intension is to pay an increasing fully franked dividend stream over time. time • Dividends are only payable from retained earnings or current year’s profits of the company. 7
Slide 8: Dividends: Investor vs Trader LICs
DIVIDENDS For personal use only • Two types yp of Listed Investment Company p y - Investor - Trader • Traders profit is impacted by changes in the value of the portfolio either positive or negative g • A company p y can only y pay p y dividends from profit 8
Slide 9: NTA & Share Price
For personal use only PRICE 9 NTA & SHARE
Slide 10: Discount to NTA
DISCOUNT TO NTA For personal use only As at 30 April 2009 Cents Discount Pre-tax Pre tax NTA 99 6* 99.6 19 7% 19.7% After-tax NTA 97.2* 17.7% Share Price 80.0** * Includes 4.2 cents per share in tax assets ** As at close of trading 3 June 2009 10
Slide 11: What Drives the Share Price
WHAT DRIVES THE For personal use only SHARE PRICE 1. Performance 2. Market Relevance • Size • Liquidity q y • Track record • Years in business 3. Yield 4. Regulatory environment 5. Supply and demand 11
Slide 12: NTA & Share Price History
NTA & SHARE PRICE HISTORY For personal use only 1.05 1.00 0.95 0.90 0.85 0.80 0 75 0.75 0.70 0.65 12 NTA After-tax Share price
Slide 13: Share Price to Net Asset Backing - Premium/Discount
For personal use only AUSTRALIAN FOUNDATION INVESTMENT COMPANY LIMITED Sh Share P Price i to t Net N t Asset A t Backing B ki - Premium/Discount P i /Di t Prem/Disc April 2009 30% 20% 10% 0% -10% -20% Price/NTA Prem/Disc BEFORE provision for tax on unrealised gains Price/NTA Prem/Disc AFTER provisio
Slide 14: Stock Selection
For personal use only STOCK SELECTION 14
Slide 15: Portfolio Structure
PORTFOLIO STRUCTURE For personal use only As at 31 May 2009 Investment Type $m % Listed Equities 12.53 77.4% Term Deposits and Cash 3.66 22.6% Total Long Portfolio 16.19 100.0% Total Short Portfolio (0.10) 100.0% No. Ordinary Shares on issue 15 400 101 15,400,101 Options on issue ($1 expire 17-06-09
Slide 16: Top Trading Stocks
TOP 10 TRADING STOCKS as att 3 June J 2009 For personal use only % of Long g Code Company Market Value $ Portfolio LNN Lion Nathan Ltd 996,183 6.13% MCP McPherson’s McPherson s Ltd 707 258 707,258 4 35% 4.35% PBG Pacific Brands Ltd 568,594 3.5% FBU Fletcher Building Ltd 439,450 2.7% CEY Centennial C
Slide 17: Fletcher Building (FBU)
Fletcher Building g For personal use only (FBU) • Diversified building materials business Fletcher Building vs S&P/ASX All Ordinaries Index $14.00 8000 • Recent equity raising has es Index $12.00 7000 improved p g gearing g $10.00 6000 ASX All Ordinarie 5000 $8.00 Price 4000 $6.00 • Discount to peer
Slide 18: Fletcher Building (FBU): NZ Housing Consents
Fletcher Building g For personal use only (FBU) NZ house sales pointing to turnaround in housing consents 36,000 140,000 120 000 120,000 30,000 100,000 24,000 80,000 18,000 60,000 12,000 40,000 6,000 20,000 0 0 Dwelling consents (LTM) House sales (LTM adv 5 mths - RHS) 18 Source: Macquarie Securitie
Slide 19: Fletcher Building (FBU): NZ House Sales vs Share Price
Fletcher Building g For personal use only (FBU) NZ house sales vs FBU share price NZ house sales (LN) FBU total return index (LN) Lead:1 month Lag: Lag:5 0 months months Nov-08 trough ?? Apr 96 Nov 96 Jun 97 Aug 98 Oct 99 Dec 00 Jul 01 Feb 02 Apr 03 Nov 03 Jun 04 Aug 05 Oct 06 Dec 07 Jul 08 Feb 09 J
Slide 20: Market
For personal use only MARKET 20
Slide 21: S&P/ASX Small Ordinaries Index: March 2003 to May 2009
For personal use only S&P / ASX Small Ordinaries Index: 1 March 2003 to 31 May 2009 4500 4000 3500 3000 2500 2000 1500 1000 500 0 21
Slide 22: S&P/ASX All Ordinaries Index: March 2003 to May 2009
For personal use only S&P / ASX All Ordinaries Index: 1 March 2003 to 31 May 2009 8000 7000 6000 5000 4000 3000 2000 1000 0 22
Slide 23: S&P/ASX Small Industrials Index
S&P / ASX Small Industrials Index: For personal use only 1 March 2003 to 31 May 2009 4500 4000 3500 3000 2500 2000 1500 1000 500 0 23
Slide 24: S&P/ASX Industrials Index
For personal use only S&P / ASX Industrials Index: 1 March 2003 to 31 May 2009 8000 7000 6000 5000 4000 3000 2000 1000 0 24
Slide 25: S&P500 Industrial: Valuation of Equities Relative to Bonds
For personal use only 0 1 2 0.5 1.5 15 2.5 Apr-87 Oct-87 Apr-88 Oct-88 Apr-89 Oct-89 Apr-90 Oct-90 Apr-91 Oct-91 Apr-92 EQUITIES RELATIVELY OVERVALUED Oct-92 EQUITIES RELATIVELY UNDERVALUED Apr-93 Oct-93 Apr-94 Oct-94 Apr-95 Oct-95 Apr-96 Oct-96 Apr-97 Oct-97 MULTIPLE OF BOND YIELD TO EQUITY EARNING
Slide 26: ASX200 Industrial: Valuation of Equities Relative to Bonds
For personal use only ASX200 Industrial - VALUATION OF EQUITIES RELATIVE TO BONDS: Source: GSJBW Research estimates MULTIPLE OF BOND YIELD TO EQUITY EARNINGS YIELDS 1.6 EQUITIES RELATIVELY OVERVALUED 1.4 1.2 +1 Std Dev Average 1 0.8 -1 Std Dev 0.6 EQUITIES RELATIVELY UNDERVALUED 0.4 Aug-90 Aug-91 Au
Slide 27: Recovery Phases - Major Market Falls
For personal use only Recovery Phases - Major Market Falls - Daily Moves Index rebased to 100 at 1931 1974 1982 1987 1991 2008 150 ASX200 Mar10(F): 4460 ASX200 Dec09(F): 4370 140 ASX200 Jun09(F): 4010 130 120 110 100 90 0 50 100 150 200 250 300 350 Days from market 27 Source: IRESS, GSJBW Research
Slide 28: For personal use only
a © Rolling 10yr based on lowest daily closing price 20% 4 16% + 12% 4 8% 4 4% - 0% 4 TT a a Nov 20 4% 1895 1907 1919 1931 1943 1949 1952 1955 1958 1961 1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 Note: 1895 - 1946 based on year-end prices, 1947 onwards based on quarte
Slide 29: Shareholder Communication
SHAREHOLDER For personal use only COMMUNICATION Website updated www wilsonassetmanagement com au www.wilsonassetmanagement.com.au Audio cast - fortnightly Presentations Investor Report 29
Slide 30: Questions?
For personal use only QUESTIONS? 30
Slide 31: 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 and WAM Capita