WAM ACTIVE LIMITED — Earnings Release 2014

Aug 4, 2014

WAM Active Limited (WAA) ASX Announcement/Media Release 5 August 2014

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WAM Active full year profit up 129.4% Fully franked full year dividend of 9.6 cents per share

Highlights

• Operating profit before tax of $4.1m, up 129.4%

• Total shareholder return 35.1%

• Fully franked full year dividend of 9.6 cents per share

WAM Active Limited (ASX: WAA) (‘WAM Active’ or the ‘Company’) today announces an increase of 129.4% in operating profit before tax to $4.1 million and an increase of 111.5% in operating profit after tax to $3.2 million for the year to 30 June 2014. The investment portfolio returned 19.4% for FY2014 and shareholders equity grew to $36.4 million, up 31.6% on the prior year.

The increase in the Company’s profit reflects the change in the value and size of the investment portfolio, which outperformed the S&P/ASX All Ordinaries Accumulation Index over the period.

The Company announces a fully franked final dividend of 4.8 cents per share, bringing the total dividend for FY2014 to 9.6 cents per share.

WAM Active Chairman Geoff Wilson said: “WAM Active has continued to deliver a strong result for shareholders. Since listing in 2008, the Company has effectively applied an investment approach which provides investors with exposure to active trading strategies.”

Chief Executive Officer, Kate Thorley, said: “The Company has continued to grow through performance and the exercise of options. Gross assets increased 33.0% to 37.8 million and shareholders equity increased 31.6% to $36.4 million.”

Performance at		3 Yrs	5 Yrs	Since inception
30 June 2014	1 Yr	%pa	%pa	%pa(Jan-08)
WAA Investment Portfolio*	19.4%	13.3%	14.7%	13.1%
S&P/ASX All Ordinaries Accumulation Index	17.6%	9.7%	11.0%	1.6%
Outperformance	+1.8%	+3.6%	+3.7%	+11.5%
UBS Bank Bill Index(Cash)	2.7%	3.6%	3.9%	4.4%
Outperformance	+16.7%	+9.7%	+10.8%	+8.7%

*Investment performance and Index returns are before expenses, fees and taxes.

Investment portfolio performance

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 S&P/ASX All Ordinaries Accumulation Index and the UBS Bank Bill Index as points of reference.

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WAM Active Limited (WAA) ASX Announcement/Media Release 5 August 2014

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WAM Active’s investment portfolio increased 19.4% for the 12 months to 30 June 2014. The portfolio’s top performing stocks were: Aveo Group (AOG), Hills Limited (HIL), and Macquarie Atlas Roads Group (MQA).

Chief Investment Officer, Chris Stott, said: “The Company’s investment portfolio delivered a solid result in FY2014 due to its flexible investment approach, which allows us the ability to take advantage of various trading strategies. A heightened level of corporate activity created further investment opportunities during the year.”

Fully franked dividends

The Board has resolved to pay a fully franked final dividend of 4.8 cents per share, bringing the total dividend for the year to 9.6 cents per share. The final dividend will be paid on 24 October 2014 and will trade ex on 13 October 2014.

The dividend reinvestment plan will operate at a 5.0% discount for the final dividend.

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.

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Cents per share WAM Active’s Dividends since Inception
12.0
10.0
8.0
6.0
4.0
2.0
0.0
2008/09 2009/10 2010/11 2011/12 2012/13 2013/14
Fully franked dividends
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Equity market outlook

Domestically, we expect interest rates to remain low in the short to medium term, and this will eventually have a positive impact on Australia’s economic growth. The May Federal Budget has thwarted recent growth with consumer confidence dipping below GFC levels.

Globally, the US economy remains in recovery mode six years post recession, with the housing market very strong and the US share-market continuing to hit record highs. The economic recovery will continue to improve but much will depend on how the US market reacts to interest rate increases in 2015.

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WAM Active Limited (WAA) ASX Announcement/Media Release 5 August 2014

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The outlook for European economies remains mixed. Continuing high unemployment in several regions, including Spain and Greece, is likely to result in Europe’s economic growth remaining well below trend for many years.

Chinese authorities have forecast 7.5% economic growth for the 2014 calendar year which restores the country’s growth to a more sustainable level.

“Low interest rates, strong company balance sheets and subdued domestic growth is expected to lead to accelerated mergers and acquisitions activity over the coming year,” said Mr Stott.

Company outlook

With a cash weighting of 46.5% as at 30 June 2014, 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 are confident current market conditions will provide opportunities to deploy a range of active investment strategies including takeover arbitrage, initial public offerings and placements.

Top holdings (as at 30 June 2014)

Code	Company	Market Value as % Gross Assets
CBAPA	CBA Perpetual Exc Resale Listed Sec - PERLS V	4.3%
CYA	CenturyAustralia Investments Limited	4.3%
MQA	Macquarie Atlas Roads Group	4.0%
WIC	Westoz Investment Company Limited	3.5%
IPE	IPE Limited	3.3%
HIL	Hills Limited	3.3%
CGF	Challenger Limited	3.2%
CYG	CoventryGroupLimited	2.2%
CCP	Credit Corp Group Limited	2.2%
MYR	Myer Holdings Limited	2.1%
GMA	Genworth Mortgage Insurance Australia Limited	2.1%
HHV	Hunter Hall Global Value Limited	2.0%
IBC	Ironbark Capital Limited	1.8%
WBCPB	WBC Stapled Preferred SecurityII	1.7%
TWE	Treasury Wine Estates Limited	1.4%
SDG	Sunland GroupLimited	1.4%
IVC	Invocare Limited	1.2%
CTN	Contango Microcap Limited	1.2%
CCL	Coca-Cola Amatil Limited	1.1%
GJT	Galileo Japan Trust	1.0%

Ends

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WAM Active Limited (WAA) ASX Announcement/Media Release 5 August 2014

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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

For further information, please contact:

Geoff Wilson Chairman/ Portfolio Manager 02 9247 6755 0412 242 712

Judith Buchan Head of Corporate Affairs 02 9258 4909 0411 597 326

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