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WAM CAPITAL LIMITED — Net Asset Value 2011
Jun 9, 2011
66036_rns_2011-06-09_7efd0ef1-4958-428a-8591-a215b0d18e8b.pdf
Net Asset Value
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WAM CAPITAL LTD (WAM) ABN 34 086 587 395 INVESTMENT UPDATE & NTA – MAY 2011
WAM Capital Limited (WAM) is an investor in listed Australian equities. The investment objectives are to deliver a rising stream of fully franked dividends, to provide capital growth and to preserve capital. WAM concentrates predominately on small to medium industrial companies.
Since inception in August 1999 WAM has outperformed the overall share market. WAM’s portfolio (before all fees, costs, taxes and dividends) has increased by 692.4% compared to a 160.6% increase in the S&P/ASX All Ordinaries Accumulation Index.
| Performance as at 31 May 2011 |
1 Mth % |
6 Mths % |
Fin Ytd % |
1 Yr % |
3 Yrs %pa |
5 Yrs %pa |
10 Yrs %pa |
Since Inception %pa (Aug-99) |
|---|---|---|---|---|---|---|---|---|
| WAM Capital Limited S&P/ASX All Ordinaries Accumulation Index Outperformance* |
-1.4% -1.9% +0.5% |
+7.2% +4.2% +3.0% |
+20.8% +14.9% +5.9% |
+21.6% +11.9% +9.7% |
+11.8% -1.9% +13.7% |
+11.1% +3.5% +7.6% |
+17.4% +8.0% +9.4% |
+19.1% +8.4% +10.7% |
*The change in the gross portfolio before all expenses, fees and taxes.
The following NTA figures are after the payment of a 5.0 cent per share fully franked interim dividend which was paid on the 11 March 2011.
| NTA before tax | 172.31c |
|---|---|
| NTA after tax and before tax on unrealised gains | 171.28c |
| NTA after tax | 165.62c |
Market Outlook
The Australian equity market continued its downward trend in May with the S&P/ASX All Ordinaries Accumulation Index finishing down 1.9%. Commodity prices remained weaker as concerns emerged over Chinese growth from the monetary policy tightening in that market of the last 6-12 months. The Small Resources Index here in Australia is now down 18% from its recent peak in February 2011 at the time of writing.
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Market Outlook (continued)
Questions are also now being asked whether the US economic recovery remains on track given the raft of soft economic data we have seen in recent times. The conclusion of the Federal Reserve’s quantitative easing program in coming weeks will provide a good test for equity markets.
In Australia, the RBA continues to see upside to interest rates to combat medium term inflation risks driven by our two speed economy. Further interest rate hikes in Australia will dampen growth expectations for the small industrials over the next 12 months. We note current market forecasts of >15% EPS growth in this sector looks too high. We remain cautious on the Australian equity market and continue to research for individual stock opportunities as they arise.
Dividends
On 11 March 2011 the company paid a fully franked interim dividend of 5.0 cents per share. This is a 25% increase on the interim dividend last year.
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. Dividends are paid on a six-monthly basis. Government legislation introduced in June 2010 now enables companies to pay dividends if the company is deemed solvent. Dividend payments will not be reliant on reported profit and retained earnings as it was previously. Rather it will be with consideration to cash flow, cash holdings and available franking credits. Essentially, WAM Capital will always be in a position to pay dividends providing it is solvent.
Portfolio Structure
As at 31 May 2011, listed securities made up 59.8% of the portfolio, while fixed interest and cash made up the remaining 40.2%. We continue to focus on companies with strong earnings per share growth, trading on attractive earnings multiples, are well positioned in growth industries and have proven management. We continue to heavily research companies that meet this profile, with over 700 company visits a year.
| As at 30 Apr 2011 | As at 30 Apr 2011 | As at 31 May 2011 | As at 31 May 2011 | ||
|---|---|---|---|---|---|
| Investment Type | $m % |
$m % |
|||
| Listed Equities | 124.3 | 65.0% | 110.2 | 59.8% | |
| Fixed Interest and Cash | 66.8 | 35.0% | 74.2 | 40.2% | |
| Long Portfolio | 191.1 | 100.0% | 184.4 | 100.0% | |
| Short Portfolio | (5.0) | (1.0) | |||
| Total Fund Size | $186.1m | $183.4m | |||
| No. | No. | ||||
| Total ordinary shares on issue |
105,063,158 | 105,063,158 |
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At 31 May 2011 the major securities held in the portfolio were:
| Code | Company | Market Value $ |
Market Value as % Gross Assets |
|---|---|---|---|
| RKN | Reckon Limited | 7,142,700 | 3.9% |
| SGI | Signature Capital Investments Limited | 5,024,633 | 2.7% |
| ELI | Emerging Leaders Investments Limited | 4,941,094 | 2.7% |
| MMS | McMillan Shakespeare Limited | 4,665,749 | 2.5% |
| AUN | Austar United Communications Limited | 3,758,164 | 2.0% |
| MYS | Mystate Limited | 3,069,960 | 1.7% |
| SGN | STW Communications Group Limited | 2,914,465 | 1.6% |
| TLS | Telstra Corporation Limited | 2,726,456 | 1.5% |
| MSF | Maryborough Sugar Factory Limited (The) | 2,655,678 | 1.4% |
| BRG | Breville Group Limited | 2,522,141 | 1.4% |
| SPL | Starpharma Holdings Limited | 2,338,400 | 1.3% |
| CCP | Credit Corp Group Limited | 2,320,018 | 1.3% |
| MAQ | Macquarie Telecom Group Limited | 2,176,529 | 1.2% |
| ARP | ARB Corporation Limited | 2,015,983 | 1.1% |
| SKE | Skilled Group Limited | 1,894,038 | 1.0% |
| AAD | Ardent Leisure Group | 1,886,135 | 1.0% |
| NVT | Navitas Limited | 1,876,558 | 1.0% |
| BHP | BHP Billiton Limited | 1,804,032 | 1.0% |
| ANZ | ANZ Banking Group Limited | 1,796,469 | 1.0% |
| WBC | Westpac Banking Corporation | 1,785,006 | 1.0% |
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Portfolio Structure – Gross Asset Allocation
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Long Portfolio Structure – Sector Allocation
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Performance
Set out below is the performance of WAM since listing to 31 May 2011 on a financial year basis. The performance data excludes 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 | Gross Portfolio* |
S&P/ASX All Ordinaries Accumulation Index |
Outperformance |
|---|---|---|---|
| 1999/2000 2000/2001 2001/2002 2002/2003 2003/2004 2004/2005 2005/2006 2006/2007 2007/2008 2008/2009 2009/2010 YTD 2010/2011 |
+33.3% +30.2% +32.7% +12.3% +27.3% +13.9% +27.4% +44.1% -23.0% -3.0% +29.8% +20.8% |
+11.3% +8.9% -4.5% -1.1% +22.4% +24.8% +24.2% +30.3% -12.1% -22.2% +13.8% +14.9% |
+22.0% +21.3% +37.2% +13.4% +4.9% -10.9% +3.2% +13.8% -10.9% +19.2% +16.0% +5.9% |
*The change in the portfolio before all expenses, fees and taxes.
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Monthly Performance Table
Aug 99 |
Sep 99 |
Oct 99 | Nov 99 | Dec 99 | Jan 00 | Feb 00 | Mar 00 | |
|---|---|---|---|---|---|---|---|---|
| Gross Portfolio* | +1.4% | +5.1% | +4.1% | +11.0% | +4.9% | -2.0% | +5.4% | +5.3% |
| All Ordinaries Accum. | -2.5% | -1.2% | +0.5% | +5.4% | +5.6% | -0.7% | +1.9% | +0.5% |
| Apr 00 | May 00 | Jun 00 | Jul 00 | Aug 00 | Sep 00 | Oct 00 | Nov 00 | |
| Gross Portfolio* | -5.7% | -2.9% | +3.6% | +2.9% | +5.2% | -0.7% | +2.5% | +1.9% |
| All Ordinaries Accum. | -1.5% | -1.3% | +7.7% | -1.3% | +1.7% | +0.2% | -1.1% | +1.1% |
| Dec 00 | Jan 01 | Feb 01 | Mar 01 | Apr 01 | May 01 | Jun 01 | July 01 | |
| Gross Portfolio* | +0.1% | +1.7% | -0.2% | -3.7% | +3.9% | +6.7% | +6.9% | -1.0% |
| All Ordinaries Accum. | -2.0% | +4.4% | -0.2% | -4.8% | +5.7% | +1.6% | +3.8% | -4.5% |
| Aug 01 | Sep 01 | Oct 01 | Nov 01 | Dec 01 | Jan 02 | Feb 02 | Mar 02 | |
| Gross Portfolio* | +4.6% | -2.9% | +8.6% | +3.8% | +3.3% | +7.0% | +3.1% | +4.9% |
| All Ordinaries Accum. | -1.3% | -6.7% | +6.8% | +3.4% | +2.7% | +1.3% | -1.1% | +0.8% |
| **Apr 02 ** | **May 02 ** | **Jun 02 ** | Jul 02 | **Aug 02 ** | **Sep 02 ** | **Oct 02 ** | **Nov 02 ** | |
| Gross Portfolio* | -0.4% | +0.7% | -2.2% | -3.0% | +3.9% | -1.1% | +1.1% | +1.6% |
| All Ordinaries Accum. | -1.8% | +0.9% | -4.4% | -4.1% | +1.8% | -4.1% | +2.6% | +1.5% |
| Dec 02 | Jan 03 | Feb 03 | Mar 03 | Apr 03 | May 03 | Jun 03 | Jul 03 | |
| Gross Portfolio* | +1.5% | +1.3% | -1.7% | -0.4% | +3.8% | +1.5% | +3.5% | +3.6% |
| All Ordinaries Accum. | -1.5% | -1.3% | -5.1% | +3.4% | +4.4% | +0.5% | +1.3% | +3.6% |
| Aug 03 | Sept 03 | Oct 03 | Nov 03 | Dec 03 | Jan 04 | Feb 04 | Mar 04 | |
| Gross Portfolio* | +5.2% | +3.7% | +5.4% | -0.7% | +3.6% | +2.5% | +2.7% | +0.1% |
| All Ordinaries Accum. | +3.5% | -0.1% | +3.5% | -2.1% | +3.7% | -0.7% | +3.1% | +2.0% |
| Apr 04 | May 04 | Jun 04 | Jul 04 | Aug 04 | Sep 04 | Oct 04 | Nov 04 | |
| Gross Portfolio* | -1.3% | -0.8% | +1.0% | +2.4% | +1.2% | +2.5% | +2.9% | +3.3% |
| All Ordinaries Accum. | -0.1% | +1.6% | +2.7% | +0.6% | +1.1% | +3.8% | +3.1% | +4.6% |
| Dec 04 | Jan 05 | Feb 05 | Mar 05 | Apr 05 | May 05 | Jun 05 | Jul 05 | |
| Gross Portfolio* | +0.7% | +2.7% | -0.2% | -0.8% | -4.2% | +0.0% | +2.8% | +2.2% |
| All Ordinaries Accum. | +3.0% | +1.3% | +1.8% | -0.7% | -3.8% | +3.4% | +4.5% | +2.8% |
| Aug 05 | Sep 05 | Oct 05 | Nov 05 | Dec 05 | Jan 06 | Feb 06 | Mar 06 | |
| Gross Portfolio* | +4.0% | +2.7% | +0.1% | +3.1% | +0.8% | +1.6% | +4.9% | +5.3% |
| All Ordinaries Accum. | +2.2% | +4.8% | -3.8% | +4.4% | +3.0% | +3.7% | +0.7% | +4.8% |
| Apr 06 | May 06 | Jun 06 | Jul 06 | Aug 06 | Sep 06 | Oct 06 | Nov 06 | |
| Gross Portfolio* | +2.1% | -2.3% | +0.5% | +0.4% | +3.4% | +2.4% | +4.7% | +3.6% |
| All Ordinaries Accum. | +2.4% | -4.3% | +1.9% | -1.5% | +3.2% | +1.3% | +4.8% | +2.5% |
| Dec 06 | Jan 07 | Feb 07 | Mar 07 | Apr 07 | May 07 | Jun 07 | Jul 07 | |
| Gross Portfolio* | +6.1% | +3.8% | +0.4% | +1.9% | +2.6% | +4.7% | +3.3% | +0.3% |
| All Ordinaries Accum. | +3.6% | +2.0% | +1.6% | +3.3% | +3.0% | +3.2% | -0.1% | -1.9% |
| Aug 07 | Sep 07 | Oct 07 | Nov 07 | Dec 07 | Jan 08 | Feb 08 | Mar 08 | |
| Gross Portfolio* | -4.2% | +1.7% | +3.1% | -4.8% | -1.1% | -9.5% | -1.3% | -5.3% |
| All Ordinaries Accum. | +1.7% | +5.8% | +3.1% | -2.4% | -2.4% | -11.2% | +0.3% | -4.1% |
| Apr 08 | May 08 | Jun 08 | Jul 08 | Aug 08 | Sep 08 | Oct 08 | Nov 08 | |
| Gross Portfolio* | +1.7% | +2.3% | -7.9% | -1.6% | +1.7% | -5.3% | -9.2% | -5.6% |
| All Ordinaries Accum. | +4.6% | +2.4% | -7.3% | -5.2% | +4.0% | -10.6% | -13.9% | -7.2% |
| Dec 08 | Jan 09 | Feb 09 | Mar 09 | Apr 09 | May 09 | Jun 09 | Jul 09 | |
| Gross Portfolio* | +3.1% | -1.5% | +1.1% | +2.6% | +5.2% | +3.6% | +4.1% | +8.2% |
| All Ordinaries Accum. | -0.1% | -4.9% | -4.3% | +8.1% | +6.1% | +2.2% | +3.9% | +7.7% |
| Aug 09 | Sep 09 | Oct 09 | Nov 09 | Dec 09 | Jan 10 | Feb 10 | Mar 10 | |
| Gross Portfolio* | +7.6% | +6.9% | +2.3% | +0.6% | +1.6% | -2.4% | -0.5% | +3.7% |
| All Ordinaries Accum. | +6.5% | +6.1% | -1.9% | +1.9% | +3.7% | -5.9% | +1.8% | +5.8% |
| Apr 10 | May 10 | Jun 10 | Jul 10 | Aug 10 | Sept 10 | Oct 10 | Nov 10 | |
| Gross Portfolio* | +0.8% | -2.4% | +0.7% | +2.5% | +1.5% | +4.4% | +1.4% | +2.3% |
| All Ordinaries Accum. | -1.2% | -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 | Since inception |
|
| Gross Portfolio* | +3.7% | +1.4% | +2.1% | +0.1% | +1.2% | -1.4% | +692.4% | |
| All Ordinaries Accum. | +3.8% | +0.1% | +2.2% | +0.6% | -0.6% | -1.9% | +160.6% |
*The change in the portfolio before all expenses, fees and taxes.
For further information please contact Geoff Wilson, Matthew Kidman Chris Stott or Martin Hickson. 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 | [email protected] | www.wamfunds.com.au
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