WAM ACTIVE LIMITED — Annual Report 2009

Jul 27, 2009

WAM ACTIVE LIMITED

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A.B.N. 49 126 420 719
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28 July 2009

MEDIA RELEASE

WAA outperforms the market by 26.7%

WAM ACTIVE LIMITED RESULTS FOR YEAR ENDED 30 JUNE 2009

• Pre tax net tangible assets increased 4.5% from 99.82 cents a share to 104.27 cents a share, outperforming the All Ordinaries Accumulation Index by 26.7%.

• After tax net tangible assets increased 4.0% from 99.42 cents a share to 103.37 cents a share.

• Gross portfolio increased 9.6% for the 12 months to 30 June 2009, outperforming the All Ordinaries Accumulation Index by 31.8%

• Earnings per share of 4.16 cents for the year.

• Final dividend of 2.0 cents a share fully franked.

WAM ACTIVE LIMITED

WAM Active Limited (WAA) today announced a 596% increase in profit before tax for the year ended 30 June 2009 to $825,647, and an increase of 592% in after tax profit to $641,196. The gross value of the portfolio appreciated by 9.6%, a strong result given the All Ordinaries Accumulation Index fell 22.2% over the same year.

As at 30 June 2009, 71.0% was invested in equities while 29.0% of the portfolio was held in cash and fixed interest and 0.1% of the portfolio was sold short. Top contributors for the period included McPherson’s Limited (MCP), RHG Limited (RHG) and Pacific Brands Limited (PBG). Stocks that detracted from performance include Australand Property Group (ALZ), National Australia Bank Limited (NAB) and Macquarie Group Limited (MQG).

INVESTMENT OBJECTIVES AND PROCESS

The investment objectives of WAA are as follows:

• preserve capital over most periods of time;

• provide investors with a positive return, after fees over most periods of time; and

• deliver investors a regular income stream in the form of fully franked dividends.

To achieve these objectives, WAA aims to take advantage of relative short term arbitrages and mispricings in the Australian equities market, rather than investing in any individual companies or portfolio of companies for a prolonged period of time. This is referred to as a “market driven process.”

PORTFOLIO STRATEGY

Our trading strategy during the year has been centred on takeover arbitrages, trading capital raisings or oversold positions and looking for short selling opportunities. All of these opportunities exist in the current market.

During the 12 months we increased our exposure to the market from 21.9% as at 30 June 2008 to 71.0% at 30 June 2009. In the year to 30 June 2009 trading turnover was $90.9m or 524.4% of assets.

MARKET OUTLOOK

The All Ordinaries Accumulation Index fell 22.2% for the year ended 30 June 2009, registering its second financial year fall in succession. This is the first back to back decline in Australian equities in more than a decade. Despite the market rallying strongly in the last four months of the financial year, it was unable to avoid a significant decline. The sudden upward movement in share prices from March 6 caught many market participants off guard. The catalyst for the change in direction was an improvement in leading economic indicators around the globe, particularly in the US and China.

Despite this sharp rebound, the Australian sharemarket remains 40% below its peak on November 1, 2007. We believe equity markets will continue to move higher throughout the remainder of the calendar year 2009. The next hurdle for investors to overcome will be the spectre of rising interest rates, both market and official rates. Increasing rates are a traditional negative for equities and could see a difficult 2010 for investors.

NET ASSET BACKING

The net tangible assets (NTA) on listing in January 2008 were 98.4 cents per share.

Below is a table of the company’s position as at 30 June 2009:

NTA before tax*	104.27c**
NTA after tax	103.37c**

• This figure excludes tax assets of 3.1 cents per share in tax assets.

** These figures are before the provision for the fully franked dividend of 2.0 cents per share paid on 20/07/09.

DIVIDENDS

On 20 July 2009 the Directors paid a fully franked final dividend of 2.0 cents per share.

The board is committed to paying an increasing stream of fully franked dividends to shareholders over time. Any amount can only be paid if the Company has sufficient profits and franking credits.

PORTFOLIO ASSET ALLOCATION AS AT 30 JUNE 2009

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LONG PORTFOLIO SECTOR ALLOCATION AS AT 30 JUNE 2009

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For further information please contact Mr Geoff Wilson or Mr Matthew Kidman on (02) 9247 6755

Level 11, 139 Macquarie Street, Sydney NSW 2000 | GPO Box 4658 Sydney NSW 2001 | ABN 49 126 420 719 Phone 02 9247 6755 | Fax 02 9247 6855 | info@wami.com.au | www.wilsonassetmanagement.com.au