WAM RESEARCH LIMITED — Net Asset Value 2015

Apr 9, 2015

AS AT 31 MARCH 2015

Investment Update & Net Tangible Assets Report

Performance

Performance
						Since change in
Performance at 31 March 2015 WAX Investment Portfolio S&P/ASX All Ordinaries Accumulation Index Outperformance*	1 Mth 1.9% 0.0% +1.9%	6 Mths 12.4% 13.0% -0.6%	Fin YTD 22.1% 12.7% +9.4%	1 Yr 21.1% 13.2% +7.9%	3 Yrs %pa 23.7% 14.7% +9.0%	investment strategy (Jul-10) %pa 19.8% 11.4% +8.4%

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

Net Tangible Assets (NTA) figures

Net Tangible Assets (NTA) figures
NTA before tax 120.07c
NTA after tax and before tax on unrealised gains 117.31c
NTA after tax 117.15c

• The above figures have not been adjusted for the remaining options on issue.

WAX Options

If you are a WAM Research optionholder and you exercise your options before 13 May 2015 , you will be entitled to receive the 4.0 cents per share fully franked interim dividend.

Should you have any further queries about exercising your options, please call Mary-Ann on (02) 9258 4998.

Market overview

While the first quarter of 2015 was the best for the S&P/ASX All Ordinaries Accumulations Index in 24 years, gaining approximately 10.2%, it remained flat in the month of March. The subdued performance in March was largely in response to the Reserve Bank of Australia’s decision to hold the cash rate at 2.25%. Weak data from China and continuing downward pressure on base metal and oil prices caused some turbulence during the month.

Domestic data presented few surprises with the market’s negative expectations largely proven accurate. In particular, employment, consumer confidence and housing finance approval figures released this month all painted a grim picture of the Australian economy. Australia’s performance against global equity markets was mixed, as the commencement of quantitative easing in Europe led to a rally in its markets. In the United States, the S&P500 has more than tripled from its low in March 2009, driven by three rounds of stimulus by the Federal Reserve.

Our outlook for the remainder of the year is mixed as we believe valuations are full, notwithstanding the likelihood of further rate cuts. The market is experiencing increasing initial public offering activity and we are actively monitoring and participating in value opportunities as they arise.

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WAM Research Limited

WAM Research Limited
ASX Code	WAX
Listed	Aug 2003
Gross assets	$178.0m
Market cap	$178.6m
Share price	$1.23
NTA before tax	$1.20
Shares on issue	145,185,417
Options on issue	64,085,421
Fully franked annualised interim dividend (FY2015)	8.0c
Dividendyield	6.5%

Investment objectives

• 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

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

Martin Hickson Senior Equity Analyst/Dealer

Matthew Haupt Senior Equity Analyst

Tobias Yao Equity Analyst

James McNamara Communications Manager

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AS AT 31 MARCH 2015

Investment Update & Net Tangible Assets Report

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Diversified portfolio

Diversified portfolio
February 2015 Investment Type $m %	March 2015
	$m %
Listed Equities 110.9 64.3	104.3 58.6
Fixed Interest & Cash 61.5 35.7
	73.7 41.4
Gross Assets $172.4m 100.0%
	$178.0m 100.0%
Total shares on issue 143,789,954	145,185,417
Total options on issue 65,480,884	64,085,421

~~*~~ This is after payment of 0.76 cents in tax paid during the month.

Top holdings

Code	Company	Market Value $	Market Value as % Gross Assets
TPM	TPG Telecom Limited	6,435,735	3.6%
ASB	Austal Limited	6,033,298	3.4%
SGH	Slater & Gordon Limited	5,904,319	3.3%
RFG	Retail Food Group Limited	5,384,478	3.0%
IPH	IPH Limited	5,093,444	2.9%
ENE	Energy Developments Limited	4,872,922	2.7%
AHD	Amalgamated Holdings Limited	4,658,878	2.6%
ISU	iSelect Limited	4,526,014	2.5%
CSV CCP	CSG Limited Credit Corp Group Limited	4,153,405 4,026,036	2.3% 2.3%
MTR	Mantra Group Limited	3,958,528	2.2%
ECX CTD	Eclipx Group Limited Corporate Travel Management Limited	3,525,001 3,496,888	2.0% 2.0%
SGM	Sims Metal Management Limited	3,278,990	1.8%
SIQ CMG	Smartgroup Corporation Limited Chandler Macleod Group Limited	2,900,019 2,756,751	1.6% 1.5%
ISD	iSentia Group Limited	2,340,138	1.3%
APE	AP Eagers Limited	2,290,585	1.3%
CIW	Clime Investment Management Limited	2,104,581	1.2%
TGA	Thorn Group Limited	1,976,641	1.1%

Sector allocation

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21.0%
41.4%
14.9%
0.6%
1.4%
5.8%
1.9%
2.7% 5.7%
4.6%
Consumer Discretionary: 21.0%
Industrials: 14.9%
Financials: 5.8%
Information Technology: 5.7%
Telecommunication Services: 4.6%
Utilities: 2.7%
Materials: 1.9%
Health Care: 1.4%
Consumer Staples: 0.6%
Cash and Fixed Interest: 41.4%
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Dividend growth

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
Annualised interim dividend
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On 27 January 2015, the Company announced a fully franked interim dividend of 4.0 cents per share, an increase of 6.7% on the previous corresponding period.

The dividend reinvestment plan (DRP) will operate at a 2.5% discount for the interim dividend. To participate in the DRP, shareholders should send their DRP Election Form to the Company’s share registrar (Boardroom) no later than 21 May 2015. Option holders are required to exercise their options by 13 May 2015 to be eligible for the 4.0 cent fully franked interim dividend.

Key dividend dates

Key dividend dates
Ex date:	18 May 2015
Record date:	20 May 2015
Last election date for DRP:	21 May 2015
Payment date:	28 May 2015
Last day for Option holders to
exercise options in order to be eligible for the dividend: 13 May 2015

Bonus Option Issue

On 28 October 2013, the Company announced a one for two bonus option issue (‘Bonus Option Issue’) to all WAM Research shareholders to acquire ordinary shares in the Company. The options have an exercise price of $1.20 per share and can be exercised at any time on or before 17 June 2015.

As at 31 March 2015, 4,863,470 options had been exercised for a total consideration of $5,836,164, with the remaining balance of outstanding options being 64,085,421.

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Upcoming investor presentations

Date	City	Location	Time
Tuesday 19 May 2015	Sydney	Wesley Conference Centre Wesley Theatre 220 Pitt Street	9.30am – 11.20am
Wednesday 20 May2015	Adelaide	The Playford 120 North Terrace	9.30am – 11.20am
Friday 22 May 2015	Brisbane	Brisbane Convention & Exhibition Centre Cnr Merivale & Glenelg Street South Bank	9.30am – 11.20am
Tuesday 26 May2015	Melbourne	Rydges Hotel 186 Exhibition St	9.30am – 11.20am
Thursday 28 May 2015	Canberra	Belconnen Premier Hotel 110 Benjamin Way Belconnen	9.30am – 11.20am
Thursday 4 June 2015	Perth	Rydges Hotel 815 Hay Street	9.30am – 11.20am

If you wish to attend one of our investor presentations, please RSVP by email to info@wamfunds.com.au or call Mary-Ann on (02) 9258 4998.

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