WAM Capital Ltd. · ASX:WAM
WAM Capital — Investor Presentation (June 2008)
32 slides from WAM Capital's investor presentation, June 2008
Slide 1: Presentation May/June 2008
W AM CAPI TAL LI M I TED A.B.N. 34 086 587 395 PRESENTATION MAY/JUNE 2008
Slide 2: WAM Capital Ltd Objectives
W AM CAPI TAL LTD OBJECTI VES H igh Re a l Ra t e of Re t u r n Pr e se r ve Ca pit a l St r on g D ivide n d Flow
Slide 3: Performance History
PERFORM AN CE H I STORY 600 550 500 450 % Pe rform a n ce 400 350 300 250 200 150 100 50 - (50) A u g u st 1 9 9 9 - A p ril 2 0 0 8 W A M C a p it a l L t d - G r o s s P o r t f o lio b e f o r e a ll e x p e n s e s , f e e s , t a x e s a n d d iv id e n d s A ll O r d in a r ie s A c c u m u la
Slide 4: Dividends
D I VI D EN D S 18 16 14 12 ce n t s 10 Sp e cia l per sh a re 8 O rd in a ry 6 4 2 0 8 0 1 2 3 4 5 6 7 0 0 0 0 0 0 0 0 0 / / / / / / / / / 7 9 0 1 2 3 4 5 6 0 9 0 0 0 0 0 0 0 0 9 0 0 0 0 0 0 0 2 1 2 2 2 2 2 2 2 * * Interim dividend
Slide 5: Net assets and equity
a s a t 3 1 D e ce m be r 2 0 0 7 ( be for e t h e m a r k e t dow n t u r n ) Net Assets $181,401,509 Shareholder's Equity $150,393,568 Unrealised Capital Profits Reserve $9,061,254 Retained Earnings $20,038,516 Current Year Earnings $1,908,171 Total Equity $181,401,509
Slide 6: Portfolio Structure
PORTFOLI O STRUCTURE As at 31 As at As at December 2007 31 March 2008 22 May 2008 $m % % $m % % $m % % Research 49 41% 37 46% 41 38% Trading 70 59% 43 54% 65 62% Long Portfolio 119 100% 62% 80 100% 52% 106 100% 66% Short Portfolio - - - - (0.6) - 1% Fixed Interest and Cash 72 38% 74 48% 54 34% Gross
Slide 7: Discount to NTA
D I SCOUN T TO N TA As a t 3 0 Apr il 2 0 0 8 Ce n t s D iscou n t Pr e - t a x N TA 149.6* 11% Aft e r - t a x N TA 146.9* 9% Sh a r e Pr ice 133.0** * Aft e r t h e pa ym e nt of a 8 .0 0 ce n t int e r im fu lly fr a n k e d divide n d * * As a t close of t r a din g 2 3 M a y 2 0 0 8 , a ft e r
Slide 8: Top 10 Trading Stocks
TOP 1 0 TRAD I N G STOCKS % % of Change Market Gross Average Code Company Value $m Assets Cost NAB National Australia Bank Ltd $4.16 2.6% 8% ANZ ANZ Banking Group Ltd $2.67 1.7% - 4% LEI Leighton Holdings Ltd $2.50 1.6% 22% QBE QBE Insurance Group Ltd $2.25 1.4% 6% ADG Adtrans Group Ltd $2.23 1.4% -
Slide 9: Top 10 Research Stocks
TOP 1 0 RESEARCH STOCKS % % of Change Market Gross Average Code Company Value $m Assets Cost RKN Reckon Ltd $6.96 4.4% 65% MLB Melbourne IT Ltd $4.66 2.9% 80% HFA HFA Holdings Ltd $3.02 1.9% - 37% PGA Photon Group Ltd $2.77 1.7% 14% MMS McMillan Shakespeare Ltd $2.75 1.7% 68% SSM Service Stream Ltd
Slide 10: Best Performing Stocks
BEST PERFORM I N G STOCKS Ja n u a r y t o Apr il 2 0 0 8 Unrealised / Realised % * Code Company Gains DXL Dyno Nobel Ltd $444,187 34% SYB Sym bion H e a lt h Lt d $371,003 5% Eve r e st Ba bcock & Br ow n EBI Alternative Inv Trust $287,548 12% DYNPA D yn o N obe l SPS Tr u st $222,383 11% CGG Cit a
Slide 11: Worst Performing Stocks
W ORST PERFORM I N G STOCKS Ja n u a r y t o Apr il 2 0 0 8 Unrealised/ Realised % * Code Company Losses MCU M it ch e ll Com m . Gr ou p Lt d ($1,197,844) - 37% WTP Watpac Ltd ($1,332,991) - 42% HFA HFA Holdings Ltd ($1,441,516) - 43% RTN Rattoon Holdings Ltd ($1,549,606) - 50% PGA Photon Group Ltd
Slide 12: Research Ranking Process
RESEARCH RAN KI N G PROCESS Ea ch com pa n y is r a n k e d on : - M a n a ge m e n t - Ea r n in gs Gr ow t h - Va lu a t ion - I n du st r y Posit ion Em ph a sis is a lso pla ce d on a com pa n y s fr e e ca sh flow a n d r e t ur n on e qu it y. I de n t ify a ca t a lyst or e ve n t .
Slide 13: Reckon Limited
Re ck on Lim it e d Accou n t in g soft w a r e provider and distributor Reckon vs S&P/ASX All Ordinaries Index Strong market position $1.60 8000 and experienced 7000 S&P/ASX All Ordinaries Index management $1.20 6000 5000 Price $0.80 4000 Consistent performer 3000 t h r ou gh cycle s a n d ch e a p
Slide 14: Reckon Ratings Template
Re ck on Ra t ings Te m pla t e P & L STATEMENT 2007 2008 2009 2010 1H09 Revenue 55.3 63.1 68.2 73.0 34.1 Revenue growth n/a 14.1% 8.1% 7.0% n/a EBITDA 16.5 19.3 21.2 22.7 10.6 EBIT 12.7 15.0 16.9 18.5 8.5 NPAT 9.9 11.5 13.3 14.6 6.7 EPS 7.46 8.66 10.02 11.00 EPS growth n/a 16.2% 15.7% 9.8% DPS 5.50
Slide 15: Rating Ranking
RATING RANKING 1. MANAGEMENT 8 16.0 2. EPS GROWTH 15.9 3. EPS / PE 11.9 4. POSITION IN INDUSTRY 7 7 TOTAL 50.8
Slide 16: Melbourne IT
M e lbou r n e I T Online solutions provider Melbourne IT vs S&P/ASX All Ordinaries Index 8000 Experienced $4.00 management team, 7000 S&P/ASX All Ordinaries Index strong balance sheet $3.00 6000 5000 Price 4000 $2.00 Recent acquisitions look 3000 to drive 2009/2010 $1.00 2000 earnings 1000 $- 0 200
Slide 17: Melbourne IT Ratings Template
M e lbou r n e I T Ra t ings Te m pla t e P & L STATEMENT 2007 2008 2009 2010 1H08 Revenue 153.6 174.1 190.2 202.8 84.5 Revenue growth n/a 13.3% 9.2% 6.6% n/a EBITDA 27.0 30.8 32.3 33.5 14.5 EBIT 20.1 23.5 24.7 25.4 11.4 NPAT 13.9 17.5 20.0 22.2 8.6 EPS 18.10 22.79 26.04 28.91 EPS growth n/a 25.9% 1
Slide 18: Rating Ranking
RATING RANKING 1. MANAGEMENT 8 16.0 2. EPS GROWTH 20.1 3. EPS / PE 14.9 4. POSITION IN INDUSTRY 7 7 TOTAL 58.0
Slide 19: Everest Babcock & Brown Alternative Investment Trust
Eve r e st Ba bcock & Br ow n Alt e r n a t ive I n v Tr u st Everest Babcock & Brown vs S&P/ASX All Ordinaries Tr a din g a t 4 0 % discou n t Index to NTA $3.90 $3.70 Tw o ove r se a s H e dge Fu n ds $3.50 on register. $3.30 Price $3.10 $2.90 Ope s Pr im e se lldow n $ 2 .5 0 $2.70 $2.50 $2.30 Ja
Slide 20: All Ordinaries
All Or din a r ie s 1 March 2003 - 19 May 2008 8000 7000 6000 5000 4000 3000 2000 1000 0 March September March September March September March September March September March 2003 2003 2004 2004 2005 2005 2006 2006 2007 2007 2008
Slide 21: Small Industrials
Sm a ll I ndust r ia ls 1 March 2003 to 19 May 2008 4500 4000 3500 3000 2500 2000 1500 1000 500 0 March September March September March September March September March September March 2003 2003 2004 2004 2005 2005 2006 2006 2007 2007 2008
Slide 22: Small Resources
Sm a ll Re sou r ce s 1 March 2003 - 19 May 2008 8000 7000 6000 5000 4000 3000 2000 1000 0 March September March September March September March September March September March 2003 2003 2004 2004 2005 2005 2006 2006 2007 2007 2008
Slide 23: Industrials
I ndust r ia ls 1 March 2003 to 19 May 2008 8000 7000 6000 5000 4000 3000 2000 1000 0 March September March September March September March September March September March 2003 2003 2004 2004 2005 2005 2006 2006 2007 2007 2008
Slide 24: Financials
Fina ncia ls 1 March 2003 to 19 May 2008 8000 7000 6000 5000 4000 3000 2000 1000 0 March September March September March September March September March September March 2003 2003 2004 2004 2005 2005 2006 2006 2007 2007 2008
Slide 25: Market Indices
M a r k e t I ndicie s 1 March 2003 to 19 May 2008 600 Small Resources Resources 500 Small Ordinaries All Ordinaries Industrials 400 Small Industrials Financials 300 200 100 0 March September March September March September March September March September March 2003 2003 2004 2004 2005 2005 2006 200
Slide 26: WPL / Large Industrials ex Fin - Relative PER
W PL/ LARGE I N D USTRI ALS EX FI N ( M ED I AN ) - Relative PER Pr ospe ct ive GSJBW W PL PER ( Pr e G/ w ill) v's La r ge I n du st r ia ls e x Fin ( M e dia n ) Current PER WPL (08e) 24.33 Large Industrials ex Fin (Median) (08e) 15.32 P r e m / D isc ( % ) PER Relative(%): 58.9 1 3 5 .0 8 5 .0 +1
Slide 27: Historical Oil Price
H ist or ica l Oil Pr ice 140 120 100 80 Oil price 60 40 20 0 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Slide 28: ANZ / Large Industrials ex Fin - Relative PER
AN Z/ LARGE I N D USTRI ALS EX FI N ( M ED I AN ) - Relative PER Pr ospe ct ive GSJBW AN Z PER ( Pr e G/ w ill) v's La r ge I n du st r ia ls ex Fin (Median) Current PER ANZ (09e) 9.04 Large Industrials ex Fin (Median) (09e) 14.38 Pr e m / D isc ( % ) PER Relative(%): -37.1 -10.0 -15.0 -20.0 +1 StDe
Slide 29: NAB / Large Industrials ex Fin - Relative PER
N AB/ LARGE I N D USTRI ALS EX FI N ( M ED I AN ) - Relative PER Pr ospe ct ive GSJBW N AB PER ( Pr e G/ w ill) v's La r ge I n du st r ia ls e x Fin ( M e dia n ) Current PER NAB (09e) 9.95 Large Industrials ex Fin (Median) (09e) 14.38 Pr e m / D isc ( % ) PER Relative(%): -30.8 - 1 0 .0 +1 StDev :
Slide 30: All Industrials - Valuation of Equities Relative to Bonds
ALL INDUSTRIALS - VALUATI ON OF EQUI TI ES RELATI VE TO BON D S: M ULTI PLE OF BON D YI ELD TO EQUI TY EARN I N GS YIELDS M ULTIPLE 1.6 EQUITIES RELATIVELY OVERVALUED 1.5 1.4 1.3 +1 Std Dev 1.2 1.1 Average 1.0 0.9 -1 Std Dev 0.8 0.7 EQUITIES RELATIVELY UNDERVALUED 0.6 88 89 90 91 92 93 94 95 96 97 9
Slide 31: Source: Google
Source: Google
Slide 32: Questions?
QUESTIONS?