For personal use only. WAM Capital Limited (WAM)

Transcription

1 WAM Capital Limited (WAM)

2 Executive summary Investment Portfolio has outperformed by 7.5% financial year to 31 March 2012 Average equity weighting 58% 10% increase in fully franked interim dividend to 5.5 cents per share Annualised fully franked dividend yield 6.9%* Bonus Option issue on a 1 for 1 basis ASX Code: WAMO Exercise at $1.60 at any time from now to 31 July 2013 Cautiously optimistic on Australian equity market * Based on 3 May closing price 2

3 Option issue Bonus option issue on a 1 for 1 basis Exercise price: $1.60 Can exercise at any time up until 31 July 2013 Options trade on the ASX under the code WAMO 3

4 Option issue Frequently asked questions Why? Create value for all shareholders Increase size of Company - making it more relevant Continue to grow the Company Lower the Company s management expense ratio (MER) How will the money be invested? In accordance with the existing investment process: Market Driven Research Driven 4

5 Consistent outperformance Performance as at 31 March 2012 WAM Investment Portfolio 1 Yr % 3 Yrs %pa 5 Yrs %pa 10 Yrs %pa Since Inception %pa (Aug-99) +3.2% +22.5% +6.1% +13.5% +18.1% S&P/ASX All Ordinaries Accumulation Index -6.2% +12.3% -1.8% +7.1% +7.5% Outperformance +9.4% +10.2% +7.9% +6.4% +10.6% 5

6 Performance Financial Year 31 March 2012 WAM Investment Portfolio +6.0% WAM Pre-tax NTA per share growth plus dividends +3.2% WAM Share price growth plus dividends +10.2% S&P/ASX All Ordinaries Accumulation Index -1.5% 6

7 Outperformance since inception WAM Capital outperformed the market by 10.6% p.a. over 12½ years Index re-based WAM Capital Ltd - Investment Portfolio (before all expenses, fees, taxes and dividends) S&P/ASX All Ordinaries Accumulation Index 7

8 Premium / Discount to NTA 30% 20% 10% Discount / Premium 0% 10% 20% 30% 40% * * To 20 April

9 Dividend growth Cents per share Ordinary Fully Franked Dividend Special Fully Franked Dividend Equal Access Share Buy-Back * Annualised interim dividend 9

10 Discussion - some recent portfolio changes New Stocks Webjet Limited (WEB) Ethane Pipeline Income Fund (EPX) Flexigroup Limited (FXL) Disposals STW Communications Group Limited (SGN) Macquarie Telecom Group Limited (MAQ) Coal & Allied Industries Limited (CNA) 10

11 Contributors / Detractors Best Performing Stocks Financial Year to 31 March 2012 Company Strategy Unrealised/ Realised Gains SGI Signature Capital Investments Ltd Market Driven $1,412,041 AGI Ainsworth Game Technology Ltd Research Driven $1,077,752 BRG Breville Group Ltd Research Driven $1,040,702 Worst Performing Stocks Financial Year to 31 March 2012 Company Strategy Unrealised/ Realised Losses CAF Centrepoint Alliance Ltd Research Driven ($863,385) SYM Symex Holdings Ltd Market Driven ($775,326) AUN Austar United Communications Ltd Market Driven ($711,944) 11

12 Top 10 Research Driven stocks as at 31 March 2012 Company % Gross Assets RKN Reckon Limited 2.6% BRG Breville Group Limited 2.1% MMS McMillan Shakespeare Limited 1.7% COF Coffey International Limited 1.4% SKE Skilled Group Limited 1.3% AMM Amcom Telecommunications Limited 1.2% WEB Webjet Limited 1.1% RCR RCR Tomlinson Limited 1.0% IPP iproperty Group Limited 1.0% MYS MyState Limited 1.0% 12

13 Ainsworth Game Technology Ltd (AGI) - Research Driven Identified opportunity through broker network Face to face management meeting at the company s head office in Silverwater Company rated highly on our models Identified catalyst earnings surprise Current P/E 13x growing at 50% 13

14 Top 10 Market Driven stocks as at 31 March 2012 Company % Gross Assets ELI Emerging Leaders Investments Limited 2.4% IBC Ironbark Capital Limited 1.6% CCQ Contango Capital Partners Limited 1.6% CBAPB CBA Perpetual Exc Resale Listed Sec-PERLS IV 1.4% CTN Contango Microcap Limited 1.2% ILF ING Real Estate Community Living Group 1.2% RHG RHG Limited 1.2% EPX Ethane Pipeline Income Fund 1.1% AIX Australian Infrastructure Fund 1.1% SDG Sunland Group Limited 1.1% 14

15 Market Driven facts Financial Year to 20 April 2012 Turnover of invested equity: 6.8 times or 680% Number of trades: 2,183 Individual stocks traded: 254 Takeovers: 37 Placements: 53 Short Sales: 24 15

16 Clarius Group Limited (CND) Market Driven Idea generated from industry contact Followed company for years Stock started to trade below NTA which is comprised of cash and receivables Current share price: $0.41 vs NTA $0.41. No debt. Free option on a recovery as downside protected by NTA 16

17 Did you know?.. Apple Inc. Member of G20? Market Capitalisation US$600bn. P/E ratio: 13x Net Cash: $US100bn Annualised revenue: US$184bn. Annualised profit US$52bn One third the size of Australia s GDP Five times the size of BHP Billiton Larger than Poland, Belgium and Norway s total GDP 17

18 Apple Inc. Key metrics relative to Country GDPs Rank Country GDP (2011 US$bn) Rank Country GDP (2011 US$bn) 1 United States 15, Saudi Arabia China 6, Apple Market Cap Japan 5, Poland Germany 3, Belgium France 2, Taiwan Province of China Brazil 2, Norway United Kingdom 2, Islamic Republic of Iran Italy 2, Argentina Russia 1, Austria India 1, South Africa Canada 1, United Arab Emirates Spain 1, Denmark Australia 1, Thailand Mexico 1, Columbia Korea 1, Greece Netherlands Venezuela Indonesia Finland Turkey Singapore Switzerland Malaysia Sweden Nigeria

19 Looking ahead Further interest rate cuts US economic recovery to continue Global deleveraging cycle to continue Cautiously optimistic on the Australian equity market 19

20 Looking Ahead Forward P/E for the Australian market Global deleveraging to continue Interest rate cuts positive for equity markets Industrial stocks cheap on a historical basis Expect continued merger and acquisition activity in Australia with balance sheets in good shape *Source: Merrill Lynch 20

21 Summary Investment team continue to apply rigorous investment process that will identify opportunities and deliver performance Board is focused on delivering a rising stream of fully franked dividends Cautiously optimistic on Australian equity market 21

22 Questions 22

23 Additional Information 23

24 Who is Wilson Asset Management? The WAM Group is the fund manager of three listed investment companies and one unlisted fund, with funds under management of approximately $340 million. 3 Listed Funds: WAM Capital Ltd (ASX: WAM) WAM Research Ltd (ASX: WAX) WAM Active Ltd (ASX: WAA) Focus on listed industrial companies on the ASX Concentrates on growth companies predominantly in the small to mid cap area of the market 24

25 What Wilson Asset Quick decision making Bottom up approach Staying very close to the market and investee companies Strong risk adjusted returns Significant market experience Closed end fund - avoiding being forced seller and buyer at inappropriate times Actively managed portfolio Management delivers 25

26 The Team Geoff Wilson Kate Thorley Chris Stott Matt Haupt Martin Hickson Mark Tobin Linda Vo Lillie Johnson Mary-Ann Baldock - Chairman / Portfolio Manager - CEO & Company Secretary - CIO / Portfolio Manager - Equity Analyst - Analyst / Dealer - Assistant Analyst - Senior Financial Accountant - Accountant - Office Manager 26

27 Our Business Model Investment Focus Growth Companies LIC Structure Benefits + Experienced Team Investment Process + Flexible + Mandate Tight Cost Control = Superior Long Term Performance Record 27

28 Our Funds WAM Capital (WAM) WAM Research (WAX) WAM Active (WAA) Research Driven Market Driven 28

29 Superior returns from growth companies We buy growth companies that trade on low price to earnings multiples (P/E) We buy when we can identify a catalyst that will increase the valuation We find these opportunities are more prevalent in the small to mid cap industrials sector 29

30 Mid to small cap sector benefits Small cap value has outperformed all other sectors * Under researched Access to management - ability to build strong relationships Life cycle of the business - ability to grow at a faster rate than larger companies Higher risk and higher returns More takeover activity * Source Ibbotson Associates 30

31 Smaller and more rewarding *Source The New York Times 31

32 LICs are superior investment Listed Investment Companies are very attractive investment vehicles LICs have outperformed the market ^ Studies show LICs outperform managed funds *^ Closed pool of capital never forced seller or buyer Provide consistent flow of fully franked dividends Lower MER compared to managed funds Provide opportunities can trade at a premium/discount to assets Trades on the ASX which provides intra-day liquidity vehicles ^ Australian Study: Morgan Stanly Smith Barney * UK Study: Collins Stewart 32

33 LICs outperform the share market over the long term * Source: Morgan Stanley Smith Barney 33

34 WAM Funds outperformance vs ASX LIC Index *Source: Iress 34

35 Investment objectives The investment objectives of WAM Capital are: To deliver a rising stream of fully franked dividends; To provide capital growth; and To preserve capital. 35

36 Robust investment process Research Driven Identify Company Undertake Detailed Research Visit with Management 800+ companies p.a. Rank the Company (WAM s unique rating template) Catalyst identified or occurs Buy or short sell shares 36

37 Investment process Market Driven We scour the market for opportunities: Initial public offerings Capital raisings Block trades Oversold position Takeovers Listed Investment Companies (LIC) discount to net tangible assets (NTA) Stocks trading at a discount to their NTA Earnings momentum / surprise Short selling Market themes and trends 37

38 External research coverage Research Houses covering listed investment companies & WAM Capital: - Bell Potter Securities - Morgan Stanley Smith Barney - Zenith Partners - Independent Investment Research - APAM LIC Research - Evans & Partners - JBWere - Morningstar - E.L.&C. Baillieu The Company is on the approved product list of the Association of Independently Owned Financial Planners (AIOFP), and the Company is listed on BT SuperWrap and BT Investment Wrap platforms. 38

39 Investor communications Website wamfunds.com.au Subscribe for weekly s includes market update Audio casts Monthly Media Sky Business, Switzer, CNBC, Newspapers, Industry Magazines Half yearly Investor Newsletters Half yearly Results and Media Release Attend and present at industry conferences ASX, AIA, ASA 39

40 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, Credit Suisse Strategy, Morgan Stanley Smith Barney, Merrill Lynch, Ibbotson Associates, The New York Times, Collins Stewart, 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. 40