WAM CAPITAL LIMITED — Net Asset Value 2014

Jan 13, 2014

Investment Update & Net Tangible Assets Report

AS AT 31 DECEMBER 2013

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Performance

Performance
							Since
Performance at		Fin		3 Yrs	5 Yrs	10 Yrs	Inception %pa
31 December 2013	1 Mth	YTD	1 Yr	%pa	%pa	%pa	(Aug-99)
WAM Investment Portfolio*	-0.5%	14.2%	22.8%	13.8%	20.9%	13.7%	18.3%
S&P/ASX All Ordinaries Accumulation Index Outperformance	0.9% -1.4%	14.6% -0.4%	19.7% +3.1%	8.0% +5.8%	12.7% +8.2%	9.4% +4.3%	8.6% +9.7%

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

Net Tangible Assets (NTA) figures

NTA before tax	179.45c
NTA after tax and before tax on unrealised gains
	181.61c*
NTA after tax	176.08c*

*Includes 3.2 cents of tax assets resulting from the merger with Premium Investors.

Market overview

After the market’s poor start to December, the forecast ‘Christmas Rally’ bore out with the S&P/ASX All Ordinaries Accumulation Index (‘Index’) closing up 0.9% for the month. The market’s December gains added to its overall strong performance in calendar year 2013 with the Index up 19.7% for the year. The 2013 calendar year marked the Index’s biggest one year rise since calendar year 2009.

In December, local and international markets maintained their strong appetite for Initial Public Offerings (‘IPOs’) with 33 companies listing on the Australian Securities Exchange (‘ASX’) raising $18.5 billion. A total of 61 companies floated on the ASX in calendar year 2013 to raise a total of $56.9 billion - an increase of 17.8% on the previous year. We expect that the surge in IPOs will be followed by an increase in corporate Merger and Acquisition activity in Australia in 2014. Our forecast is contingent on clear signals that economic activity is picking up and so providing company boards with greater confidence in the underlying strength of their businesses.

We remain quite cautious in our outlook for the year ahead and anticipate a more subdued performance for Australian and global equity markets. The main reason for this view is that over the last 12 to 18 months company price to earnings (P/E) multiples have expanded significantly while earnings growth has remained anaemic. We will be more positive in our outlook for the market once we start to see a growth in earnings – a thematic we will be watching carefully during next month’s reporting season.

WAM Capital Limited

WAM Capital Limited
ASX Code	WAM
Listed	Aug 1999
Gross assets	$604.8m
Market cap	$658.2m
Share price	$1.96
NTA before tax	$1.79
Shares on issue Fully franked dividends (FY2013)	335,818,987 12.0c
Dividend yield	6.1%

Investment objectives

• Deliver investors a rising stream of fully franked dividends

• Provide capital growth

• Preserve capital

Company overview

WAM Capital Limited (ASX: WAM), one of Australia’s leading Listed Investment Companies, is managed by Wilson Asset Management. Listed in August 1999, WAM provides investors with exposure to an actively managed diversified portfolio of undervalued growth companies, which are generally small-to-medium sized industrial companies listed on the Australian Securities Exchange. WAM also provides exposure to relative value arbitrages and market mispricing opportunities.

Investment & Management Team

Geoff Wilson Chairman/Portfolio Manager

Kate Thorley Chief Executive Officer/ Company Secretary

Chris Stott Chief Investment Officer/ Portfolio Manager

Martin Hickson Senior Equity Analyst/Dealer

Matthew Haupt Equity Analyst

Mark Tobin Equity Analyst

Meredith Hemsley Corporate Affairs

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Investment Update & Net Tangible Assets Report

AS AT 31 DECEMBER 2013

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Diversified portfolio

Diversified portfolio
November 2013 Investment Type $m %	December 2013
	$m %
Listed Equities 433.2 70.4	363.8 59.8
Fixed Interest & Cash 182.3 29.6
	244.4 40.2
Long Portfolio 615.5 100.0%
	608.2 100.0%
Short Portfolio (3.2) (0.5)
	(3.4) (0.6)
Gross Assets $612.3m	$604.8m*
Total shares on issue 335,818,987
	335,818,987

~~*~~ This is after the payment of $4.6 million of tax during the month.

Top holdings

Code	Company	Market Value as % Gross Assets
AOG	Aveo Group Limited(formerly FKP Property Group)	3.4%
CYA	Century Australia Investments Limited	2.1%
SGH	Slater & Gordon Limited	1.9%
WIC	Westoz Investment Company Limited	1.8%
AHE	Automotive Holdings Group Limited	1.6%
MQG	Macquarie Group Limited	1.6%
NEA IPE	Nearmap Limited ING Private Equity Access Limited	1.4% 1.4%
HIL	Hills Holdings Limited	1.4%
ELI	Emerging Leaders Investments Limited	1.3%
BKW	Brickworks Limited	1.3%
NXT	NEXTDC Limited	1.2%
SGN CSR	STW Communications Group Limited CSR Limited	1.2% 1.2%
CYG	Coventry Group Limited	1.1%
GWA JBH	GWA Group Limited JB Hi-Fi Limited	1.1% 1.1%
MQA	Macquarie Atlas Roads Group	1.1%
DJS	David Jones Limited	1.1%
CSV	CSG Limited	1.1%

Sector allocation

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19.8%
40.2%
13.4%
-0.6%
0.3%
0.7% 11.6%
2.1%
2.6%
3.1% 6.2%
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Financials: 19.8% Consumer Discretionary: 13.4% Industrials: 11.6% Information Technology: 6.2% Materials: 3.1% Telecommunication Services: 2.6% Consumer Staples: 2.1% Health Care: 0.7% Energy: 0.3% Short stock: - 0.6% Cash and Fixed Interest: 40.2%

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AS AT 31 DECEMBER 2013

Investment Update & Net Tangible Assets Report

Dividend growth

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The Board is committed to paying an increasing stream of fully franked dividends to shareholders, provided the Company has sufficient profit reserves and 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 both the interim and final dividend.

WAM Capital dividends since inception

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Cents per share
18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
Ordinary fully franked dividend Special fully franked dividend Equal access share buy-back
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On 18 October 2013, the Company paid a fully franked final dividend of 6.0 cents per share, an increase of 9.1% on the previous corresponding period. The final dividend brings the total dividend for FY2013 to 12.0 cents per share and represents a fully franked annual dividend yield of 6.1%, based on the last closing price.

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