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WAM ACTIVE LIMITED — Interim / Quarterly Report 2013
Sep 13, 2012
66032_rns_2012-09-13_1516fef6-c6f3-4fc9-82d6-d8b3b2ee1b8f.pdf
Interim / Quarterly Report
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WAM ACTIVE LIMITED (WAA) ABN 49 126 420 719 INVESTMENT UPDATE & NET TANGIBLE ASSETS REPORT AUGUST 2012
Company overview
WAM Active Limited (WAA) is a listed investment company that provides investors exposure to an active trading style with the aim of achieving a sound return with a low correlation to traditional markets.
Investment objective
The investment objectives are to deliver investors a growing income stream in the form of fully franked dividends and to preserve capital in both the short term and long term.
Outperformance against sharemarket
Since inception, the WAA investment portfolio has outperformed the overall sharemarket – its strong performance against the S&P/ASX All Ordinaries Accumulation Index is set out in the table below. The investment performance is before expenses, fees and taxes.
| Performance as at 31 August 2012 |
1 Mth % |
6 Mths % |
Fin YTD % |
1 Year % |
2 Yrs %pa |
3 Yrs %pa |
Since Inception (Jan-08) %pa |
|---|---|---|---|---|---|---|---|
| WAA Investment Portfolio S&P/ASX All Ordinaries Accumulation Index Outperformance |
+2.0% +2.1% -0.1% |
+3.9% +1.1% +2.8% |
+3.3% +5.9% -2.6% |
+10.2% +4.0% +6.2% |
+9.3% +3.3% +6.0% |
+8.1% +3.1% +5.0% |
+11.6% -3.9% +15.5% |
NTA figures
The following Net Tangible Asset (NTA) figures are before the payment of a fully franked final dividend of 4.5 cents per share payable on the 19 October 2012. The figures below have not been adjusted for the 16,138,981 remaining options on issue with an exercise price of $1.08 per share.
with an exercise price of $1.08 per share. |
|
|---|---|
| NTA before tax | 108.62c |
| NTA after tax and before tax on unrealised gains | 110.32c* |
| NTA after tax | 108.34c** |
- Includes tax assets of 1.70 cents per share.
**Includes the net effect of 1.70 cents of tax assets and 1.98 cents of deferred tax liabilities.
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WAM Active Limited| ABN 49 126 420 719 Phone 02 9247 6755 | Fax 02 9247 6855 | [email protected] | www.wamfunds.com.au
Market outlook
The S&P/ASX All Ordinaries Accumulation Index finished up 2.1% for August continuing its good start to the new financial year. Comments from ECB president Mario Draghi that policymakers would do “whatever it takes” to preserve the Eurozone saw markets trade higher.
Reporting season downbeat
Reporting season was generally good with results better than the markets low expectations. However, FY13 earnings expectations by equity analysts were downgraded by 4%. Outlook and guidance statements provided by companies during reporting season were generally downbeat. Companies highlighted the tough operating environment in sectors exposed to mining, housing and the consumer.
Mining slowdown
BHP Billiton announced that its Olympic Dam mine expansion and Outer Harbour developments have been postponed for the time being. Falling commodity prices and prohibitive development costs in Australia were cited as some of the reasons for not progressing. Drilling services provider, Boart Longyear downgraded its FY12 earnings by 20% due to poor future sales visibility. This company is normally a lead indicator for many listed peers exposed to the mining sector. Fortescue Metals has lowered its capital expenditure budget for FY13 and highlighted some asset sales. This was in response to the plummeting iron ore price which was down 24% for the month. All of this suggests a moderating of growth in the resources sector and possible further earnings downgrades for mining services stocks in FY13. Share prices in mining services companies have already moved lower in anticipation of this occurring.
Although we are conservative in our outlook for equity markets in 2013, volatile equity markets can provide profitable opportunities. Thus we continue to research thoroughly and meet with company management teams to identify such opportunities.
Dividends – 4.5 cents per share fully franked final
On 10 August 2012, the Board announced a fully franked FY2012 final dividend of 4.5 cents per share. This was a 12.5% increase on the previous year’s dividend.
| � | Dividend ex date | 8 October 2012 |
|---|---|---|
| � | Dividend record date | 12 October 2012 |
| � | DRP election date | 12 October 2012 |
| � | Dividend payment date | 19 October 2012 |
| � | Last day for Option holders to exercise options in | |
| order to be eligible for the dividend | 5 October 2012 |
The Board is committed to paying an increasing stream of fully franked dividends to shareholders provided the Company has sufficient franking credits and it is within prudent business practices. It must also comply with Government legislation and the ATO’s interpretation of a company’s ability to pay franked dividends. Dividends are paid on a six-monthly basis. Dividend payments will also be made with consideration to cash flow, cash holdings and available franking credits.
The dividend re-investment plan will operate at a 2.5% discount to the weighted average market price of shares sold on the ASX on the books closing date (12 October 2012) and the three trading days preceding that date.
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WAM Active Limited| ABN 49 126 420 719 Phone 02 9247 6755 | Fax 02 9247 6855 | [email protected] | www.wamfunds.com.au
Dividends (continued)
To participate in the dividend re-investment plan, please send your election form to our share registrar no later than 12 October 2012. Option holders are required to exercise their options by Friday 5 October to participate in the 4.5 cent final fully franked dividend.
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Option issue – 1 for 1 bonus issue
On 4 May 2012, the Board announced a 1 for 1 bonus issue of options to acquire ordinary shares in the capital of the Company. The options were allotted to shareholders on 25 June 2012. The options have an exercise price of $1.08 per share and can be exercised at any time on or before 12 December 2013. The options are currently trading on the ASX under the code WAAO.
As at 31 August 2012, 170,964 options have been exercised for a total consideration of $184,641 with a remaining balance of outstanding options being 16,138,981.
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WAM Active Limited| ABN 49 126 420 719 Phone 02 9247 6755 | Fax 02 9247 6855 | [email protected] | www.wamfunds.com.au
Portfolio structure
| As at 31 July 2012 | As at 31 July 2012 | As at 31 Aug 2012 | As at 31 Aug 2012 | ||
|---|---|---|---|---|---|
| Investment Type | $m % |
$m % |
|||
| Listed Equities | 7.6 | 42.0% | 9.7 | 52.1% | |
| Fixed Interest and Cash | 10.4 | 58.0% | 9.0 | 47.9% | |
| Total Long Portfolio | 18.0 | 100.0% | 18.7 | 100.0% | |
| Total Short Portfolio | (0.2) | (1.1%) | (0.5) | (2.8%) | |
| Total Fund Size | $17.8m | $18.2m | |||
| No. | No. | ||||
| Total ordinary shares on issue | 16,318,305 | 16,480,909 | |||
| Total options on issue | 16,301,585 | 16,138,981 |
At 31 Aug 2012 the major securities held in the portfolio were as follows:
| Code | Company | Market Value $ |
Market Value as % Gross Assets |
|---|---|---|---|
| CBAPB | CBA Perpetual Exc Resale Listed Sec - PERLS IV | 708,600 | 3.8% |
| ALS | Alesco Corporation Limited | 583,229 | 3.1% |
| CYG | CoventryGroupLimited | 580,595 | 3.1% |
| CCQ | Contango Capital Partners Limited | 580,254 | 3.1% |
| INA | Ingenia Communities Group | 555,738 | 3.0% |
| SDG | Sunland GroupLimited | 514,745 | 2.7% |
| RHG | RHG Limited | 472,749 | 2.5% |
| CIF | Challenger Infrastructure Fund | 422,956 | 2.3% |
| LWB | Little World Beverages Limited | 409,500 | 2.2% |
| SVW | Seven GroupHoldings Limited | 406,455 | 2.2% |
| GLG | Gerard LightingGroupLimited | 377,598 | 2.0% |
| CRZ | Carsales.Com Limited | 377,104 | 2.0% |
| PRV | Premium Investors Limited | 374,992 | 2.0% |
| CLO | Clough Limited | 345,501 | 1.8% |
| FRI | Finbar GroupLimited | 312,559 | 1.7% |
| SHV | Select Harvests Limited | 293,688 | 1.6% |
| CND | Clarius GroupLimited | 194,614 | 1.0% |
| TGP | Trafalgar Corporate Group | 187,004 | 1.0% |
| GFF | Goodman Fielder Limited | 173,160 | 0.9% |
| NBL | Noni B Limited | 167,048 | 0.9% |
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WAM Active Limited| ABN 49 126 420 719 Phone 02 9247 6755 | Fax 02 9247 6855 | [email protected] | www.wamfunds.com.au
Portfolio structure – sector allocation
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Performance – yearly comparison to S&P/ASX All Ordinaries Accumulation Index
Set out below is the performance of WAA’s investment portfolio since listing to 31 August 2012 on a financial year basis. The performance data is before all expenses, fees and taxes and is used as a guide to how the Company’s investment portfolio has performed against the S&P/ASX All Ordinaries Accumulation Index which is also a before tax and expenses measure.
| Financial Year | WAA Investment Portfolio |
S&P/ASX All Ordinaries Accumulation Index |
Outperformance |
|---|---|---|---|
| 2007/2008 2008/2009 2009/2010 2010/2011 2011/2012 2012/2013 YTD |
+2.2% +9.6% +22.7% +11.5% +5.5% +3.3% |
-15.2% -22.2% +13.8% +12.2% -7.0% +5.9% |
+17.4% +31.8% +8.9% -0.7% +12.5% -2.6% |
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WAM Active Limited| ABN 49 126 420 719 Phone 02 9247 6755 | Fax 02 9247 6855 | [email protected] | www.wamfunds.com.au
Performance - monthly comparison
The table below shows the month by month investment performance of WAA against the S&P/ASX All Ordinaries Accumulation Index.
| Jan 08 | Feb 08 | Mar 08 | Apr 08 | May 08 | Jun 08 | Jul 08 | |
|---|---|---|---|---|---|---|---|
| Investment Portfolio* | +0.3% | +1.2% | +0.5% | +1.6% | +2.4% | -3.7% | -1.1% |
| All Ords Accum. | -11.2% | +0.3% | -4.1% | +4.6% | +2.5% | -7.3% | -5.2% |
| Aug 08 | Sep 08 | Oct 08 | Nov 08 | Dec 08 | Jan 09 | Feb 09 | |
| Investment Portfolio* | +0.1% | -3.8% | -5.3% | -5.2% | +3.4% | -1.9% | +0.6% |
| All Ords Accum. | +4.0% | -10.6% | -13.9% | -7.2% | -0.1% | -4.9% | -4.3% |
| Mar 09 | Apr 09 | May 09 | Jun 09 | July 09 | Aug 09 | Sep 09 | |
| Investment Portfolio* | +4.5% | +7.6% | +5.0% | +6.2% | +9.6% | +7.5% | +6.2% |
| All Ords Accum. | +8.1% | +6.1% | +2.2% | +3.9% | +7.7% | +6.5% | +6.0% |
| Oct 09 | Nov 09 | Dec 09 | Jan 10 | Feb 10 | Mar 10 | Apr 10 | |
| Investment Portfolio* | +2.1% | +0.3% | +1.0% | -3.6% | +0.0% | +2.9% | +0.4% |
| All Ords Accum. | -1.9% | +1.9% | +3.7% | -5.8% | +1.8% | +5.8% | -1.2% |
| May 10 | Jun 10 | Jul 10 | Aug 10 | Sep 10 | Oct 10 | Nov 10 | |
| Investment Portfolio* | -4.0% | -0.9% | +1.6% | +0.1% | +2.7% | +1.3% | +2.3% |
| All Ords Accum. | -7.6% | -2.6% | +4.2% | -0.7% | +5.0% | +2.2% | -0.7% |
| Dec 10 | Jan 11 | Feb 11 | Mar 11 | Apr 11 | May 11 | Jun 11 | |
| Investment Portfolio* | +3.6% | +0.7% | -0.3% | +0.4% | +2.5% | -1.6% | -2.3% |
| All Ords Accum. | +3.8% | +0.1% | +2.2% | +0.6% | -0.6% | -1.9% | -2.4% |
| Jul 11 | Aug 11 | Sep 11 | Oct 11 | Nov 11 | Dec 11 | Jan 12 | |
| Investment Portfolio* | +0.0% | -1.2% | +0.7% | +2.1% | -0.4% | -1.0% | +1.0% |
| All Ords Accum. | -3.4% | -2.0% | -6.3% | +7.2% | -3.4% | -1.6% | +5.2% |
| Feb 12 | Mar 12 | Apr 12 | May 12 | Jun 12 | Jul 12 | Aug 12 | |
| Investment Portfolio* | +3.5% | +1.1% | +0.0% | -1.6% | +1.1% | +1.2% | +2.0% |
| All Ords Accum. | +2.4% | +1.2% | +1.1% | -6.9% | +0.3% | +3.7% | +2.1% |
| Since Inception |
|||||||
| Investment Portfolio* | +66.9% | ||||||
| All Ords Accum. | -17.0% |
*The change in the portfolio before all expenses, fees and taxes.
For more information
Please contact Geoff Wilson, Chris Stott or Kate Thorley.
Wilson Asset Management Level 11, 139 Macquarie Street, Sydney NSW 2000 GPO Box 4658 Sydney NSW 2001
Phone 02 9247 6755 Fax 02 9247 6855 [email protected]
www.wamfunds.com.au
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WAM Active Limited| ABN 49 126 420 719 Phone 02 9247 6755 | Fax 02 9247 6855 | [email protected] | www.wamfunds.com.au