For personal use only Investor Presentation. Brisbane, May 2014

Transcription

1 Investor Presentation Brisbane, May 2014

2 Agenda 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

3 Levelling the playing field In our view, the regime for placements to wholesale investors is unequitable and defies logic Wholesale investors have the ability to realise a profit on placements at the expense of retail investors. Wilson Asset Management submission to the Financial System Inquiry $170b the sum of capital raised over the last 10 years from wholesale investors through private placements 7.8% the average discount price of private placements to wholesale investors $13b the amount wholesale investors have been advantaged over retail investors 3

4 Market Overview and Outlook 4

5 Current Market Outlook Tech bubble bursting? Very strong housing market PE ratios above historical average Tough Budget to impact growth China slowdown US recovery underway 5

6 US second best market recovery Source: Bloomberg and Deltec International Group 6

7 US market reaches new highs 6000 Nasdaq Composite Index Source: IRESS 7

8 China: low growth outlook 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

9 The War on Pollution Source: From Wilson Asset Management s recent trip to China 9

10 Wenzhou Source: From Wilson Asset Management s recent trip to China 10

11 About Wilson Asset Management 11

12 Experienced Team Geoff Wilson B Sc GMQ FAICD FFinsia Chairman / Portfolio Manager Kate Thorley B Com CPA Grad Dip ACG Chief Executive Officer / Company Secretary Chris Stott B Bus Grad Dip App Fin Chief Investment Officer / Portfolio Manager Martin Hickson B Bus B Comp Senior Equity Analyst / Dealer Matthew Haupt CFA B Com Grad Dip App Fin Equity Analyst Mark Tobin BBS MEconSc ACCA Equity Analyst 12

13 Investment approach Research Driven Investment Strategy Market Driven Investment Strategy Identifying undervalued growth companies Bottom-up stock picking Extensive research of companies (1,000 + company meetings / year) Rigorous rating process applied Catalyst must be identified Investment portfolio turns over approx. 0.5x / year Exploiting market mis-pricing opportunities Short term arbitrages and mispricings: o IPOs o Placements o Takeovers o Discount to NTA plays o Block trades o Market themes and trends Active trading investment portfolio turns over approx. 6x / year Flexibility to hold cash if no investment opportunities are identified 13

14 Our LICs 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 dividend yield ** 6.7% 6.5% 7.4% Investment approach Research Driven / Market Driven Research Driven Market Driven * As at 30 April 2014 **Annualised interim dividend as at 30 April

15 Our LICs trading at premiums to NTA for the past two years, the sector as a whole has been undergoing a significant re-rating with the overwhelming majority of LICs enjoying either a significant narrowing of their discounts or conversely, an increase in their existing premiums. Zenith Investment Partners, May % 20% 30% 20% WAM Research Premium/Discount to NTA 10% 0% -10% -20% -30% -40% % 20% 10% 0% -10% -20% WAM Capital Premium/Discount to NTA 10% 0% -10% -20% -30% -40% WAM Active Premium/Discount to NTA -30%

16 Investment portfolio 16

17 Top 10 Research Driven Holdings * ASX Code DNA SGH AAD DLX AHE TNE FXJ NEA ENE CSV *As at 30 April 2014 Company Donaco International Limited Slater & Gordon Limited Ardent Leisure Group DuluxGroup Limited Automotive Holdings Group Limited Technology One Limited Fairfax Media Limited Nearmap Limited Energy Developments Limited CSG Limited Held in WAM Capital and WAM Research 17

18 Top 10 Market Driven Holdings * 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 IPE CSR MQA Hills Limited IPE Limited CSR Limited Macquarie Atlas Roads Group Held in WAM Capital and WAM Active DJS BHP David Jones Limited BHP Billiton Limited *As at 30 April

19 Top Contributors and Detractors * Research Driven Investment Strategy Contributors % Detractors % IPP iproperty Group Limited 7.9 NXT NEXTDC Limited -2.3 VOC Vocus Communications 6.0 Limited UGL UGL Limited -1.2 SGH Slater & Gordon Limited 5.9 PGH Pact Group Holdings Limited -0.9 Market Driven Investment Strategy Contributors % Detractors % AOG Aveo Group 7.7 GNC Graincorp Limited HIL Hills Limited 6.0 TSE Transfield Services Limited -3.1 CSR CSR Limited 4.3 MMS * WAM Capital FY2014 McMillan Shakespeare Limited

20 Research Driven Investee Company 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) Earnings stability and resolved some low margin and loss making contracts Catalysts State and Federal governments increasing infrastructure spend Integration of Rob Carr acquisition Outlook Push into NSW should drive growth in coming years Great exposure to the increase in government infrastructure investment $ Commenced buying at $

21 Market Driven Investee Company 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 Extension of management rights for toll road Potential value in residual asset portfolio Outlook Well managed strategic long term assets with strong management team $ Commenced buying at $

22 WAM Capital Limited (ASX: WAM) 22

23 Recent Highlights 13.0c Fully franked annualised interim dividend, up 8.3% 6.7% Fully franked dividend yield * +14.4% Investment Portfolio performance ** 21% Increase in Shareholders Equity ** *As at 30 April 2014 **12 months to 30 April % Total Shareholder Return ** 15 year Track record 23

24 Dividend Growth WAM Capital Dividends since Inception Cents per share Ordinary fully franked dividend Special fully franked dividend Equal access share buy-back * Annualised interim dividend 24

25 Outperformance Performance at 30 April 2014 (% pa) 1 Yr 3 Yrs 5 Yrs 10 Yrs Since Inception WAM Investment Portfolio * 14.4% 13.3% 20.0% 13.7% 18.1% S&P/ASX All Ordinaries Accumulation Index 10.4% 8.4% 12.5% 9.4% 8.6% Outperformance +4.0% +4.9% +7.5% +4.3% +9.5% * Investment performance and Index returns are before expenses, fees and taxes 25

26 Outperformance Index re-based 1,200 1, WAM Portfolio +83.3% above pre- GFC peak Index +10.0% from pre-gfc peak - WAM Investment Portfolio before expenses, fees & taxes S&P/ASX All Ordinaries Accumulation Index 26

27 Long term returns $10,000 invested in 1999 WAM Capital $91,466 versus the market $33,886 $100,000 $90,000 WAM Capital Ltd All Ordinaries Accum Index $91,466 $80,000 $70,000 $60,000 $50,000 $40,000 $33,886 $30,000 $20,000 $10,000 $0 Date * Assumes reinvestment of dividends 27

28 WAM Research Limited (ASX: WAX) 28

29 Recent Highlights 7.5c Fully franked annualised interim dividend, up 7.1% 6.5% Fully franked dividend yield* +17.1% Investment Portfolio performance** 19% Increase in Shareholders Equity** *As at 30 April 2014 **12 months to 30 April % Total Shareholder Return** 7.5% pa Outperformance of market since investment strategy changed in

30 Dividend Growth WAM Research Dividends since Inception Cents per share *Annualised interim dividend Ordinary fully franked dividend Special fully franked dividend 30

31 Outperformance Performance at 30 April 2014 (% pa) 1 Yr 2 Yrs 3 Yrs Since change in investment strategy (July 2010) WAX Investment Portfolio * 17.1% 24.0% 16.2% 18.5% S&P/ASX All Ordinaries Accumulation Index 10.4% 15.6% 8.4% 11.0% Outperformance +6.7% +8.4% +7.8% +7.5% * Investment performance and Index returns are before expenses, fees and taxes 31

32 Outperformance Index re-based (20) WAX Investment Portfolio before all expenses, fees & taxes S&P/ASX All Ordinaries Accumulation Index Investment performance since revised investment process July

33 Capital Management 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

34 WAM Active Limited (ASX: WAA) 34

35 Recent Highlights 9.6c Fully franked annualised interim dividend 7.4% Fully franked dividend yield* +12.8% Investment Portfolio performance** 28% Increase in Shareholders Equity** *As at 30 April 2014 **12 months to 30 April % Total Shareholder Return** 38.2% % cash currently held by investment portfolio* 35

36 Dividend Growth Cents per share WAM Active Dividends since Inception / / / / / /14* *Annualised interim dividend Fully franked dividends 36

37 Positive Performance Performance at 30 April 2014 (% pa) 1 Yr 3 Yrs 5 Yrs Since Inception WAA Investment Portfolio * 12.8% 11.4% 17.0% 13.3% S&P/ASX All Ordinaries Accumulation Index 10.4% 8.4% 12.5% 1.8% Outperformance +2.4% +3.0% +4.5% +11.5% UBS Bank Bill Index (cash) 2.7% 3.7% 3.9% 4.5% Outperformance +10.1% +7.7% +13.1% +8.8% * Investment performance and Index returns are before expenses, fees and taxes 37

38 Positive Performance Index re-based WAA Investment Portfolio before all expenses, fees & taxes S&P/ASX All Ordinaries Accumulation Index UBS Bank Bill Index 38

39 Investor Communications 39

40 Investor Communication Weekly s including market update Half yearly national investor presentations Investor newsletters Half & full year financial results Monthly NTA announcement & investment update Website wamfunds.com.au Media Industry conferences and independent research 40

41 Wilson Asset Management in the Community 41

42 Community Investment All donations are made by Wilson Asset Management (the investment manager) and/or its staff, not the listed entities. 42

43 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 Ltd, WAM Research Ltd and WAM Active Ltd unless otherwise stated. The information in this presentation is only intended for Australian residents. The purpose of this presentation is to provide information only and the contents of the presentation does not purport to provide investment advice. We strongly suggest that investors consult a financial adviser prior to making any investment decision. The presentation does not take into account the investment objectives, financial situation or particular needs of any person and should not be used as the basis for making investment, financial or other decisions. The information is selective and may not be complete or accurate for your particular purposes and should not be construed as a recommendation to invest in any particular investment or security, or Fund offered by Wilson Asset Management. The information provided in the presentation is given in good faith and is believed to be accurate at the time of compilation. Neither Wilson Asset Management, WAM Capital Ltd, WAM Research Ltd and WAM Active Ltd nor its directors or employees make any representation or warranty as to the accuracy, reliability, timeliness or completeness of the information. To the extent permissible by law, Wilson Asset Management, WAM Capital Ltd, WAM Research Ltd and WAM Active Ltd and its director and employees disclaim all liability (whether arising in contract, tort, negligence or otherwise) for any error, omission, loss or damage (whether direct, indirect, consequential or otherwise). Performance figures quoted in the report are past performance. Past performance is not an indicator of future performance. Neither Wilson Asset Management, WAM Capital Ltd, WAM Research Ltd and WAM Active Ltd nor its directors or employees guarantee or make any representation as to the performance of the Funds, the maintenance or repayment of capital, the price at which shares may trade or any particular rate of return. 43

44 Contact us phone (02) fax (02)

45 Investor Presentation Brisbane, May 2014