WAM RESEARCH LIMITED — Net Asset Value 2015

Dec 10, 2015

AS AT 30 NOVEMBER 2015

Investment Update & Net Tangible Assets Report

Performance

Performance at		Fin			3 Yrs	5 Yrs	Since change in investment strategy
30 November 2015	1 Mth	YTD	6 Mths	1 Yr	%pa	%pa	(Jul-10) %pa
WAX Investment Portfolio* S&P/ASX All	2.2%	13.7%	11.2%	25.7%	24.6%	19.5%	20.1%
Ordinaries	-0.7%	-2.1%	-7.4%	3.1%	9.5%	6.8%	8.2%
Accumulation Index
Outperformance	+2.9%	+15.8%	+18.6%	+22.6%	+15.1%	+12.7%	11.9%

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

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WAM Research Limited

ASX Code	WAX
Listed	Aug 2003
Gross assets	$210.8m
Market cap	$218.5m
Share price	$1.265
NTA before tax	$1.19
Shares on issue	172,768,120
Fully franked dividends (FY2015)	8.0c
Dividendyield	6.3%

Net Tangible Assets (NTA) figures

Investment objectives

Net Tangible Assets (NTA) figures
NTA before tax 118.70c
NTA after tax and before tax on unrealised gains 117.09c
NTA after tax 116.97c

These figures are after the payment of $130k (0.08 cents per share) in tax during the month.

• Provide a rising stream of fully franked dividends

• Achieve a high real rate of return, comprising both income and capital growth within risk parameters acceptable to the Directors

Company overview

Market overview

After recording strong gains in October, the Australian equity market fell slightly in November dragged lower in part by resource companies impacted by falling commodity prices and a weak Australian dollar. The S&P/ASX All Ordinaries Accumulation Index ended the month down 0.7%. The Australian sharemarket has traded in a 20% range over the last 12 months and as we approach the end of the year looks likely to close 2015 flat.

Overall economic conditions are good. Latest labour force figures showed unemployment dropped from 6.2% to 5.9% and levels of employment surged. While capital expenditure fell sharply due to the slow-down in the mining sector, business confidence remains robust, buoyed by the ‘Turnbull Effect’. In our view, companies are now more likely to authorise capital expenditure in the months ahead. In his statement on monetary policy, the Reserve Bank of Australia Governor noted: “the prospects for an improvement in economic conditions had firmed a little over recent months.”

Strong retail trade figures recently released reflect solid consumer confidence and we expect good trading conditions over the Christmas period which will benefit Australian retailers.

We maintain conservative levels of cash in the investment portfolio which gives us the opportunity to capitalise on various opportunities as they arise in the market while allowing us to preserve capital.

WAM Research Limited (ASX: WAX) is a Listed Investment Company managed by Wilson Asset Management Group. Listed in August 2003, WAM Research provides investors with exposure to a diversified portfolio of undervalued growth companies, which are generally smallto-medium sized industrial companies listed on the Australian Securities Exchange.

Investment & Management Team

Geoff Wilson Chairman/Portfolio Manager

Kate Thorley Chief Executive Officer/ Company Secretary

Chris Stott Chief Investment Officer/ Portfolio Manager

Matthew Haupt Portfolio Manager

Martin Hickson Senior Equity Analyst/Dealer

Tobias Yao Equity Analyst

James McNamara Communications Manager

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Investment Update & Net Tangible Assets Report AS AT 30 NOVEMBER 2015

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Diversified portfolio

Diversified portfolio
October 2015 Investment Type $m %	November 2015
	$m %
Listed Equities $126.8 60.4	$126.9 60.2
Fixed Interest & Cash $83.1 39.6
	$83.9 39.8
Gross Assets $209.9m 100.0
	$210.8m* 100.0
Total shares on issue 172,768,120	172,768,120

~~*~~ This figure is after the payment of $130k (0.08 cents per share) in tax during the month.

Sector allocation

Top holdings

Code	Company	Market Value $	Market Value as % Gross Assets
ASB	Austal Limited	9,156,707	4.3%
SIQ	Smartgroup Corporation Limited	8,097,805	3.8%
ECX	Eclipx GroupLimited	7,635,457	3.6%
IPH	IPH Limited	7,253,845	3.4%
A2M	The A2 Milk CompanyLimited	6,092,556	2.9%
CSV	CSG Limited	5,902,604	2.8%
MTR	Mantra Group Limited	5,547,593	2.6%
AAD	Ardent Leisure Group	5,445,278	2.6%
RCG FXL	RCG CorpLimited FlexiGroupLimited	5,424,942 4,200,639	2.6% 2.0%
TRS	The Reject ShopLimited	4,069,287	1.9%
AHG BBN	Automotive Group Holdings Limited Baby Bunting Group Limited	4,068,520 4,062,101	1.9% 1.9%
CKF	Collins Foods Limited	3,957,728	1.9%
AHD	Amalgamated Holdings Limited	3,656,207	1.7%
SXL	Southern Cross Media GroupLimited	3,429,572	1.6%
BLX	Beacon LightingGroupLimited	3,340,852	1.6%
PME	Pro Medicus Limited	3,173,137	1.5%
APE	AP Eagers Limited	2,342,222	1.1%
CCP	Credit Corp Group Limited	2,230,226	1.1%

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24.5%
39.8%
15.3%
1.2%
1.9% 8.4%
3.0%
5.9%
Consumer Discretionary: 24.5%
Industrials: 15.3%
Financials: 8.4%
Information Technology: 5.9%
Consumer Staples: 3.0%
Health Care: 1.9%
Telecommunication Services: 1.2%
Cash and Fixed Interest: 39.8%
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Investment Update & Net Tangible Assets Report AS AT 30 NOVEMBER 2015

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. The Company’s ability to generate franking credits is dependent upon the receipt of franked dividends from investments and the payment of tax. Dividends are usually paid on a six-monthly basis and the dividend reinvestment plan is available to shareholders for both the interim and final dividend.

WAM Research dividends since inception

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Cents per share
9.0
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
Ordinary fully franked dividend Special fully franked dividend
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On 23 October 2015, the Company paid a fully franked final dividend of 4.0 cents per share. This brings the full year fully franked dividend to 8.0 cents per share, an increase of 6.7% on the previous corresponding period.

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