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WAM CAPITAL LIMITED — Net Asset Value 2012
Feb 13, 2012
66036_rns_2012-02-13_c4e03e7a-2726-459d-bdb3-2104761c5e68.pdf
Net Asset Value
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WAM CAPITAL LTD (WAM) ABN 34 086 587 395 INVESTMENT UPDATE & NTA – JANUARY 2012
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 on identifying undervalued growth companies; these are generally found in the small to medium size industrial sector.
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 667.8% compared to a 141.9% increase in the S&P/ASX All Ordinaries Accumulation Index.
| Performance as at 31 January 2012 |
1 Mth % |
6 Mths % |
Fin Ytd % |
1 Year % |
3 Yrs %pa |
5 Yrs %pa |
10 Yrs %pa |
Since Inception %pa (Aug-99) |
|---|---|---|---|---|---|---|---|---|
| WAM Capital S&P/ASX All Ordinaries Accumulation Index Outperformance* |
+1.6% +5.2% -3.6% |
-0.9% -1.6% +0.7% |
-0.7% -4.9% +4.2% |
-1.2% -6.9% +5.7% |
+21.3% +12.2% +9.1% |
+5.2% -1.5% +6.7% |
+13.7% +6.7% +7.0% |
+17.7% +7.3% +10.4% |
*The change in the gross portfolio before all expenses, fees and taxes.
The NTA numbers below are before the payment of a 5.5 cent per share fully franked interim dividend which is due to be paid on 23 March 2012. The shares traded ex dividend on 9 March 2012.
| NTA before tax | 159.55c |
|---|---|
| NTA after tax and before tax on unrealised gains | 160.42c* |
| NTA after tax | 156.80c** |
*Includes tax assets of 0.87 cents per share
**Includes the net effect of 0.87 cents of tax assets and 3.62 cents of deferred tax liabilities
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Market Outlook
January was a positive month for equity markets with the S&P/ASX All Ordinaries Accumulation Index up 5.2%. Global equity markets performed well primarily on the back of the near 500bn Euro lending programme before Christmas which saw demand for European sovereign debt increase markedly in January. This increased demand saw debt auctions being completed at lower yields than those of comparable auctions in December. A possible resolution to the Greece situation also buoyed equity markets both here in Australia and abroad.
Australia’s CPI came through in line with market consensus showing that inflation is well within the RBA’s target band of 2-3%. This coupled with the outlook in Europe, drove the RBA to leave rates unchanged in February. However, with all of the big 4 banks increasing their rates independently in February, the RBA decision and commentary in March will be carefully watched to gauge the RBA’s reaction to these independent moves by the banks.
While the Australian reporting season does not kick off in earnest until mid-February, we are expecting more negative earnings surprises than positive ones. We expect anaemic earnings growth for the industrial stocks reporting in the coming weeks.
We are cautiously optimistic on the outlook for equity markets in 2012. Key items of focus will remain the European economy and the slowly improving US economy. We continue to research heavily for future investment opportunities while maintaining higher than average cash weightings across all portfolios.
Dividends
On 1 February 2012, the Board announced an interim dividend of 5.5 cents per share fully franked to be paid on 23 March 2012. The shares will trade ex dividend on 9 March 2012. This is a 10% increase on the prior year’s interim dividend.
The dividend reinvestment plan will operate with a 2.5% discount. The current share price ($1.58 being closing price 13 February 2012) is trading at 1.0% discount to the 31 January 2012 pre-tax NTA. To participate in the dividend reinvestment plan, please send your election to our share registrar no later than 16 March 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.
Government legislation introduced in June 2010 now enables companies to pay dividends if the company is deemed solvent. Dividend payments will be made 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.
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Portfolio Structure
As at 31 January 2012, listed securities made up 57.2% of the portfolio, while fixed interest and cash made up the remaining 42.8%. 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 research heavily in an attempt to identify companies that meet this profile, with over 750 company visits a year.
| As at 31 December 2011 | As at 31 December 2011 | As at 31 January 2012 | As at 31 January 2012 | ||
|---|---|---|---|---|---|
| Investment Type | $m % |
$m % |
|||
| Listed Equities | 79.0 | 46.8% | 97.3 | 57.2% | |
| Fixed Interest and Cash | 89.8 | 53.2% | 72.8 | 42.8% | |
| Long Portfolio | 168.8 | 100.0% | 170.1 | 100.0% | |
| Short Portfolio | (1.3) | (0.5) | |||
| Total Fund Size | $167.5m | $169.6m | |||
| No. | No. | ||||
| Total ordinary shares on issue |
105,899,497 | 105,899,497 |
At 31 January 2012 the major securities held in the portfolio were:
| Code | Company | Market Value $ |
Market Value as % Gross Assets |
|---|---|---|---|
| RKN | Reckon Limited | 6,855,627 | 4.0% |
| ELI | EmergingLeaders Investments Limited | 4,375,224 | 2.6% |
| MMS | McMillan Shakespeare Limited | 3,182,029 | 1.9% |
| MYS | Mystate Limited | 2,809,822 | 1.7% |
| CCQ | Contango Capital Partners Limited | 2,662,495 | 1.6% |
| BRG | Breville GroupLimited | 2,408,905 | 1.4% |
| BHP | BHP Billiton Limited | 2,385,227 | 1.4% |
| RHG | RHG Limited | 2,225,130 | 1.3% |
| MSF | Maryborough Sugar FactoryLimited(The) | 2,053,101 | 1.2% |
| SDG | Sunland GroupLimited | 1,894,919 | 1.1% |
| RCR | RCR Tomlinson Limited | 1,760,523 | 1.0% |
| LEI | Leighton Holdings Limited | 1,733,820 | 1.0% |
| CGF | Challenger Limited | 1,700,816 | 1.0% |
| TOL | Toll Holdings Limited | 1,698,596 | 1.0% |
| RIO | Rio Tinto Limited | 1,688,887 | 1.0% |
| COF | CoffeyInternational Limited | 1,644,605 | 1.0% |
| SGN | STW Communications GroupLimited | 1,584,936 | 0.9% |
| EPX | Ethane Pipeline Income Fund | 1,560,730 | 0.9% |
| CIW | Clime Investment Management Limited | 1,480,843 | 0.9% |
| AMM | Amcom Telecommunications Limited | 1,473,324 | 0.9% |
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Portfolio Structure – Gross Asset Allocation
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Portfolio Structure – Sector Allocation
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Performance
Set out below is the performance of WAM since listing to 31 January 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 | 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 2010/2011 YTD 2011/2012 |
+33.3% +30.2% +32.7% +12.3% +27.3% +13.9% +27.4% +44.1% -23.0% -3.0% +29.8% +17.9% -0.7% |
+11.3% +8.9% -4.5% -1.1% +22.4% +24.8% +24.2% +30.3% -12.1% -22.2% +13.8% +12.2% -4.9% |
+22.0% +21.3% +37.2% +13.4% +4.9% -10.9% +3.2% +13.8% -10.9% +19.2% +16.0% +5.7% +4.2% |
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Monthly Performance Table
| Aug 99 | Sep 99 | Oct 99 | Nov 99 | Dec 99 | Jan 00 | Feb 00 | Mar 00 | Apr 00 | |
|---|---|---|---|---|---|---|---|---|---|
| WAM Capital* | +1.4% | +5.1% | +4.1% | +11.0% | +4.9% | -2.0% | +5.4% | +5.3% | -5.7% |
| All Ordinaries Accum. | -2.5% | -1.2% | +0.5% | +5.4% | +5.6% | -0.7% | +1.9% | +0.5% | -1.5% |
| May 00 | Jun 00 | Jul 00 | Aug 00 | Sep 00 | Oct 00 | Nov 00 | Dec 00 | Jan 01 | |
| WAM Capital* | -2.9% | +3.6% | +2.9% | +5.2% | -0.7% | +2.5% | +1.9% | +0.1% | +1.7% |
| All Ordinaries Accum. | -1.3% | +7.7% | -1.3% | +1.7% | +0.2% | -1.1% | +1.1% | -2.0% | +4.4% |
| Feb 01 | Mar 01 | Apr 01 | May 01 | Jun 01 | July 01 | Aug 01 | Sep 01 | Oct 01 | |
| WAM Capital* | -0.2% | -3.7% | +3.9% | +6.7% | +6.9% | -1.0% | +4.6% | -2.9% | +8.6% |
| All Ordinaries Accum. | -0.2% | -4.8% | +5.7% | +1.6% | +3.8% | -4.5% | -1.3% | -6.7% | +6.8% |
| Nov 01 | Dec 01 | Jan 02 | Feb 02 | Mar 02 | Apr 02 | May 02 | Jun 02 | Jul 02 | |
| WAM Capital* | +3.8% | +3.3% | +7.0% | +3.1% | +4.9% | -0.4% | +0.7% | -2.2% | -3.0% |
| All Ordinaries Accum. | +3.4% | +2.7% | +1.3% | -1.1% | +0.8% | -1.8% | +0.9% | -4.4% | -4.1% |
| **Aug 02 ** | **Sep 02 ** | **Oct 02 ** | **Nov 02 ** | **Dec 02 ** | Jan 03 | Feb 03 | Mar 03 | Apr 03 | |
| WAM Capital* | +3.9% | -1.1% | +1.1% | +1.6% | +1.5% | +1.3% | -1.7% | -0.4% | +3.8% |
| All Ordinaries Accum. | +1.8% | -4.1% | +2.6% | +1.5% | -1.5% | -1.3% | -5.1% | +3.4% | +4.4% |
| May 03 | Jun 03 | Jul 03 | Aug 03 | Sept 03 | Oct 03 | Nov 03 | Dec 03 | Jan 04 | |
| WAM Capital* | +1.5% | +3.5% | +3.6% | +5.2% | +3.7% | +5.4% | -0.7% | +3.6% | +2.5% |
| All Ordinaries Accum. | +0.5% | +1.3% | +3.6% | +3.5% | -0.1% | +3.5% | -2.1% | +3.7% | -0.7% |
| Feb 04 | Mar 04 | Apr 04 | May 04 | Jun 04 | Jul 04 | Aug 04 | Sep 04 | Oct 04 | |
| WAM Capital* | +2.7% | +0.1% | -1.3% | -0.8% | +1.0% | +2.4% | +1.2% | +2.5% | +2.9% |
| All Ordinaries Accum. | +3.1% | +2.0% | -0.1% | +1.6% | +2.7% | +0.6% | +1.1% | +3.8% | +3.1% |
| Nov 04 | Dec 04 | Jan 05 | Feb 05 | Mar 05 | Apr 05 | May 05 | Jun 05 | Jul 05 | |
| WAM Capital* | +3.3% | +0.7% | +2.7% | -0.2% | -0.8% | -4.2% | +0.0% | +2.8% | +2.2% |
| All Ordinaries Accum. | +4.6% | +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 | Apr 06 | |
| WAM Capital* | +4.0% | +2.7% | +0.1% | +3.1% | +0.8% | +1.6% | +4.9% | +5.3% | +2.1% |
| All Ordinaries Accum. | +2.2% | +4.8% | -3.8% | +4.4% | +3.0% | +3.7% | +0.7% | +4.8% | +2.4% |
| May 06 | Jun 06 | Jul 06 | Aug 06 | Sep 06 | Oct 06 | Nov 06 | Dec 06 | Jan 07 | |
| WAM Capital* | -2.3% | +0.5% | +0.4% | +3.4% | +2.4% | +4.7% | +3.6% | +6.1% | +3.8% |
| All Ordinaries Accum. | -4.3% | +1.9% | -1.5% | +3.2% | +1.3% | +4.8% | +2.5% | +3.6% | +2.0% |
| Feb 07 | Mar 07 | Apr 07 | May 07 | Jun 07 | Jul 07 | Aug 07 | Sep 07 | Oct 07 | |
| WAM Capital* | +0.4% | +1.9% | +2.6% | +4.7% | +3.3% | +0.3% | -4.2% | +1.7% | +3.1% |
| All Ordinaries Accum. | +1.6% | +3.3% | +3.0% | +3.2% | -0.1% | -1.9% | +1.7% | +5.8% | +3.1% |
| Nov 07 | Dec 07 | Jan 08 | Feb 08 | Mar 08 | Apr 08 | May 08 | Jun 08 | Jul 08 | |
| WAM Capital* | -4.8% | -1.1% | -9.5% | -1.3% | -5.3% | +1.7% | +2.3% | -7.9% | -1.6% |
| All Ordinaries Accum. | -2.4% | -2.4% | -11.2% | +0.3% | -4.1% | +4.6% | +2.4% | -7.3% | -5.2% |
| Aug 08 | Sep 08 | Oct 08 | Nov 08 | Dec 08 | Jan 09 | Feb 09 | Mar 09 | Apr 09 | |
| WAM Capital* | +1.7% | -5.3% | -9.2% | -5.6% | +3.1% | -1.5% | +1.1% | +2.6% | +5.2% |
| All Ordinaries Accum. | +4.0% | -10.6% | -13.9% | -7.2% | -0.1% | -4.9% | -4.3% | +8.1% | +6.1% |
| May 09 | Jun 09 | Jul 09 | Aug 09 | Sep 09 | Oct 09 | Nov 09 | Dec 09 | Jan 10 | |
| WAM Capital* | +3.6% | +4.1% | +8.2% | +7.6% | +6.9% | +2.3% | +0.6% | +1.6% | -2.4% |
| All Ordinaries Accum. | +2.2% | +3.9% | +7.7% | +6.5% | +6.1% | -1.9% | +1.9% | +3.7% | -5.9% |
| Feb 10 | Mar 10 | Apr 10 | May 10 | Jun 10 | Jul 10 | Aug 10 | Sept 10 | Oct 10 | |
| WAM Capital* | -0.5% | +3.7% | +0.8% | -2.4% | +0.7% | +2.5% | +1.5% | +4.4% | +1.4% |
| All Ordinaries Accum. | +1.8% | +5.8% | -1.2% | -7.6% | -2.6% | +4.2% | -0.7% | +5.0% | +2.2% |
| Nov 10 | Dec 10 | Jan 11 | Feb 11 | Mar 11 | Apr 11 | May 11 | Jun 11 | Jul 11 | |
| WAM Capital* | +2.3% | +3.7% | +1.4% | +2.1% | +0.1% | +1.2% | -1.4% | -2.4% | +0.2% |
| All Ordinaries Accum. | -0.7% | +3.8% | +0.1% | +2.2% | +0.6% | -0.6% | -1.9% | -2.4% | -3.4% |
| Aug 11 | Sept 11 | Oct 11 | Nov 11 | Dec 11 | Jan 12 | Feb 12 | Mar 12 | Since inception |
|
| WAM Capital* | -1.8% | -0.8% | +2.6% | -1.3% | -1.2% | +1.6% | 667.8% | ||
| All Ordinaries Accum. | -2.0% | -6.3% | +7.2% | -3.4% | -1.6% | +5.2% | 141.9% | ||
*The change in the portfolio before all expenses, fees and taxes
For further information please contact Geoff Wilson or Chris Stott.
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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