WAM ACTIVE LIMITED — Earnings Release 2013

Aug 11, 2013

ASX Announcement/Media Release

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WAM ACTIVE REPORTS FULL YEAR NET PROFIT – UP 280% FULL YEAR FULLY FRANKED DIVIDEND 9.5 CENTS

Highlights:

• Operating profit after tax of $1.5m, up 280.0%

• Shareholders equity increased from $17.4m to $27.7m, up 59.2%

• Investment portfolio increased 15.4%

• Average equity weighting 66.1%

• Fully franked final dividend declared of 4.75 cents per share, up 5.6%

• Options issue raised $10.5m to date

• Since inception, outperformance of market by 13.0%

WAM Active Limited (ASX: WAA) (‘WAM Active’ or the ‘Company’) today announces an operating profit after tax of $1.5 million for the year to 30 June 2013, an increase of 280.0% over the previous corresponding period. The investment portfolio increased 15.4% for FY2013 and shareholders equity grew to $27.7 million, up 59.2% on the prior year.

The significant increase in the Company’s profit result reflects the change in the value and size of the investment portfolio in part due to the option issue.

The Company also announces a fully franked final dividend of 4.75 cents per share, an increase of 5.6% on the previous corresponding period, bringing the total dividend for FY2013 to 9.5 cents per share.

WAM Active Chairman Geoff Wilson said: “WAM Active has delivered a pleasing result, with the investment portfolio increasing 15.4% with an average equity weighting of 66.1% for the year. WAM Active has again provided shareholders a fully franked final dividend, an increase of 5.6% on last year and representing an annualised fully franked dividend yield of 8.0%.”

“The Company has effectively applied its proven investment approach providing investors with exposure to an active trading style capitalising on short term market mis-pricings and arbitrages,” said Mr Wilson.

Investment portfolio performance

WAM Active’s investment portfolio increased 15.4% for the 12 months to 30 June 2013. Gross assets increased from $17.6 million to $28.4 million, up 62.0% on the previous corresponding period.

Throughout the period, WAM Active maintained an average equity weighting of 66.1% and an average cash weighting of 33.9%. The Company’s maximum equity weighting was 91.7% as at 31 January 2013 and minimum equity weighting was 52.1% as at 31 August 2012. The equity component of the investment portfolio turned over 4.9 times and traded in 296 stocks.

Chief Investment Officer Chris Stott said: “The investment portfolio delivered a sound performance in FY2013 as a result of the strategy’s low correlation to equity markets and high cash weighting.”

Level 11, 139 Macquarie Street, Sydney NSW 2000 | GPO Box 4658 Sydney NSW 2001 | ABN 34 086 587 395 Phone 02 9247 6755 | Fax 02 9247 6855 | info@wamfunds.com.au | www.wamfunds.com.au

“Over the last 12 months, WAM Active participated in several initial public offerings (IPOs) and in FY2014 we anticipate we will find further investment opportunities in the IPO market. Lower interest rates and an improving economy should lead to an increase in corporate activity in the second half of FY2014. WAM Active maintains the advantage of a flexible mandate, which allows the investment team to quickly capitalise on opportunities as they arise” said Mr Stott.

Performance as at 30 June 2013	1 Year %	3 Yrs %pa	5 Yrs %pa	Since Inception (Jan-08) %pa
WAM Active Investment Portfolio S&P/ASX All Ordinaries Accumulation Index Outperformance UBS Bank Bill Index Outperformance*	15.4% 20.7% -5.3% 3.3% +12.1%	10.7% 8.0% +2.7% 4.3% +6.4%	12.8% 2.2% +10.6% 4.5% +8.3%	12.0% -1.0% +13.0% 4.8% +7.2%

As WAM Active is an absolute return fund, it is not benchmarked against an equity index. The above table provides the performance of the investment portfolio against the Index as a point of reference. The UBS Bank Bill Index performance over the same period is also provided given the Company’s absolute return focus.

Holdings that contributed significantly to this year’s performance include:. The investment portfolio’s top performing stocks for the year were: Ingenia Communities Limited (INA), Clough Limited (CLO), RHG Limited (RHG), Sunland Group Limited (SDG) and Myer Holdings Limited (MYR).

Fully franked dividends

The Board has resolved to pay a fully franked final dividend of 4.75 cents per share, an increase of 5.6% on the previous corresponding period bringing the total dividend for the year to 9.5 cents per share. The final dividend will be paid on 4 October 2013 and will trade ex on 23 September 2013.

The dividend reinvestment plan will operate at a 2.5% discount.

The Board is committed to paying an increasing stream of fully franked dividends to shareholders, provided the Company has sufficient profit reserves, franking credits and it is within prudent business practices. Dividends are paid on a six-monthly basis and the dividend reinvestment plan is available to shareholders for the final dividend.

*Investment performance is before expenses, fees and taxes.

Level 11, 139 Macquarie Street, Sydney NSW 2000 | GPO Box 4658 Sydney NSW 2001 | ABN 34 086 587 395 Phone 02 9247 6755 | Fax 02 9247 6855 | info@wamfunds.com.au | www.wamfunds.com.au

WAM Active Dividends

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Options issue

In May 2012, the Board announced a bonus one-for-one issue of options to acquire ordinary shares in the capital of the Company for an exercise price of $1.08. Options trade on the Australian Securities Exchange (‘ASX’) under the code ‘WAAO’. Optionholders can exercise or sell their options, in full or in part. The last day to exercise options is 12 December 2013 and the last day to buy or sell options is 5 December 2013. If optionholders take no action, their options will expire with no value on 12 December 2013.

To date 9,702,828 (59.5%) options had been exercised for a total consideration of $10.5 million.

The objectives of the options issue are to increase shareholder value by continuing to grow the Company’s assets and increase the liquidity of WAM Active shares. The proceeds from the options issue have been, and will be, invested in accordance with WAM Active’s disciplined investment process focused on delivering the highest possible return while taking the minimum amount of risk.

Equity market outlook

The S&P/ASX All Ordinaries Accumulation Index closed the year up 20.7%, its strongest annual performance since the onset of the Global Financial Crisis. Markets globally have been volatile and we expect volatility to reduce in the current financial year. Much of Europe remains troubled by high unemployment and ongoing sovereign debt crises and we expect below-average growth from the region for many years. Positive signs continue to emerge from the United States that an economic recovery is underway following a deep and prolonged recession. While still expanding, data out of China indicates a slower pace of economic growth with the new regime indicating they will tighten monetary conditions over the medium term.

Australia’s economy has been flagging in calendar year 2013 with political uncertainty dampening business and consumer confidence and delaying major expenditure decisions. Reflecting the poorer trading conditions, numerous companies have announced profit downgrades in recent months with softer economic conditions making it difficult for businesses to grow earnings.

While we expect weak economic conditions for the near term, we remain optimistic about the longer term outlook for the Australian economy which is supported by strong underlying fundamentals. With improving macro-economic conditions overseas, an increased availability of funding and stronger company balance sheets, corporate activity in Australia is showing signs of life after several years. In FY2014, we expect this trend to gather momentum and provide a number of investment opportunities, including IPOs and

Level 11, 139 Macquarie Street, Sydney NSW 2000 | GPO Box 4658 Sydney NSW 2001 | ABN 34 086 587 395 Phone 02 9247 6755 | Fax 02 9247 6855 | info@wamfunds.com.au | www.wamfunds.com.au

takeovers. We continue to see opportunities to invest in Listed Investment Companies (LICs), although their discount to NTA has narrowed in recent months. Over the year ahead, we also anticipate there will be select investment opportunities to short sell companies given the Australian economy remains subdued. The softer Australian dollar will continue to have a positive impact on many businesses and generates investment opportunities in a number of sectors including tourism, manufacturing and those with an export focus. In the mining services sector, we believe there are deep value opportunities. However, we expect the full benefits of the softer dollar and near record-low interest rates will not be felt until after the federal election in September.

Company outlook

With a 47.7% portfolio cash weighting as at 30 June 2013, no debt and a flexible and proven investment approach, WAM Active is well positioned to capitalise on opportunities in the market as they arise. The investment team is confident current market conditions will provide opportunities to deploy a range of active investment strategies including takeover arbitrage, initial public offerings and placements. We believe that WAM Active can continue to find trading opportunities irrespective of market conditions.

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For further information:

Geoff Wilson Kate Thorley Chris Stott Meredith Hemsley Chairman Chief Executive Officer Chief Investment Officer Corporate Affairs 02 9247 6755 02 9258 4908 02 9258 4906 02 9258 4902

About WAM Active

WAM Active Limited (ASX: WAA) is a Listed Investment Company managed by MAM Pty Limited. Listed in January 2008, WAA provides investors with exposure to an active trading style with the aim of achieving a sound return with a low correlation to traditional markets. WAA’s investment objectives are to: deliver a regular income stream via fully franked dividends; provide a positive return with low volatility, after fees, over most periods of time; and to preserve capital.

For more information visit: www.wamfunds.com.au

Level 11, 139 Macquarie Street, Sydney NSW 2000 | GPO Box 4658 Sydney NSW 2001 | ABN 34 086 587 395 Phone 02 9247 6755 | Fax 02 9247 6855 | info@wamfunds.com.au | www.wamfunds.com.au