WAM RESEARCH LIMITED — Net Asset Value 2015

Mar 10, 2015

Investment Update & Net Tangible Assets Report AS AT 28 FEBRUARY 2015

==> picture [123 x 87] intentionally omitted <==

Performance

Performance
Performance at			Fin		3 Yrs	Since change in investment strategy
28 February 2015	1 Mth	6 Mths	YTD	1 Yr	%pa	(Jul-10) %pa
WAX Investment Portfolio*	6.6%	11.2%	19.8%	21.1%	24.4%	19.7%
S&P/ASX All Ordinaries Accumulation Index	7.0%	7.1%	12.7%	13.6%	15.2%	11.6%
Outperformance	-0.4%	+4.1%	+7.1%	+7.5%	+9.2%	+8.1%

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

Net Tangible Assets (NTA) figures

WAM Research Limited

WAM Research Limited
ASX Code	WAX
Listed	Aug 2003
Gross assets	$172.4m
Market cap	$176.1m
Share price	$1.225
NTA before tax	$1.18
Shares on issue	143,789,954
Options on issue	65,480,884
Fully franked annualised interim dividend (FY2015)	8.0c
Dividendyield	6.5%

Investment objectives

Net Tangible Assets (NTA) figures
NTA before tax 117.94c
NTA after tax and before tax on unrealised gains 115.50c
NTA after tax 115.32c

• The above figures are after the payment of 0.76 cents in tax during the month and have not been adjusted for the remaining options on issue.

Market overview

The S&P/ASX All Ordinaries Accumulation Index continued its strong start to 2015 to close up 7% in February. The market rally was sparked by the Reserve Bank of Australia’s surprise decision to reduce the cash rate to 2.25%. Our expectation is that interest rates will be reduced again during the remainder of 2015 which will have a positive impact on Australian economic growth which is waning.

Domestic earnings season revealed little change in the environment domestically for many companies, with weak revenues and a focus on costs. Interest in expansion was also still limited and the emphasis on distributing earnings remained, with more companies lifting dividends. Corporate earnings continued to be weak, in particular in the resources sector which is adjusting to the end of the mining boom. Companies linked to the strong residential housing sector delivered strong results as expected, in particular companies exposed to the Sydney housing market.

In addition to low interest rates both domestically and globally, we expect four drivers will continue to define the Australian equities market throughout the remainder of 2015: global quantitative easing, a falling Australian dollar, a low oil price and corporate earnings. Overall, we remain cautious and are well positioned to capitalise on opportunities as they arise.

• 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

1 of 3

AS AT 28 FEBRUARY 2015

Investment Update & Net Tangible Assets Report

==> picture [123 x 87] intentionally omitted <==

Diversified portfolio

Diversified portfolio
January 2015 Investment Type $m %	February 2015
	$m %
Listed Equities 99.3 60.9	110.9 64.3
Fixed Interest & Cash 63.7 39.1
	61.5 35.7
Gross Assets $163.0m 100.0%
	$172.4m* 100.0%
Total shares on issue 142,369,025	143,789,954
Total options on issue 66,901,813	65,480,884

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

Top holdings

Sector allocation

Top	holdings			Sector alloca		ion
Code	Company	Market Value $	Market Value as % Gross Assets
SGH	Slater & Gordon Limited	5,760,934	3.3%
RFG	Retail Food Group Limited	5,697,345	3.3%
CSV	CSG Limited	5,691,565	3.3%		23.9%
CTD	Corporate Travel Management Limited	5,688,839	3.3%	35.7%
IPH	IPH Limited	5,653,399	3.3%
ASB TPM AHD	Austal Limited TPG Telecom Limited Amalgamated Holdings Limited	5,149,576 5,072,063 4,686,546	3.0% 2.9% 2.7%	1.9% 1.5% 0.7%		17.5%
MTR VED	Mantra Group Limited Veda Group Limited	4,318,477 4,097,654	2.5% 2.4%	9.1% 4.4% 2.9% 2.4%
ISU	iSelect Limited	4,088,698	2.4%
ENE	Energy Developments Limited	4,060,192	2.4%	Consumer Discretionary:		23.9%
CCP	Credit Corp Group Limited	3,797,341	2.2%	Industrials: 17.5%
ISD	iSentia Group Limited	3,490,222	2.0%	Information Technology:	9.1%
SIQ	Smartgroup Corporation Limited	3,443,131	2.0%	Financials: 4.4%
AAD	Ardent Leisure Group	3,285,614	1.9%	Telecommunication Services: 2.9%
SGM CMG ALU	Sims Metal Management Limited Chandler Macleod Group Limited Altium Limited	3,202,390 2,688,808 2,539,539	1.9% 1.6% 1.5%	Utilities: 2.4% Materials: 1.9% Health Care: 1.5% Consumer Staples: 0.7%
CIW	Clime Investment Management Limited	2,379,675	1.4%	Cash and Fixed Interest:		35.7%

2 of 3

Investment Update & Net Tangible Assets Report AS AT 28 FEBRUARY 2015

==> picture [123 x 87] intentionally omitted <==

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

==> picture [520 x 250] intentionally omitted <==

----- Start of picture text -----

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
----- End of picture text -----*

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 28 February 2015, 3,468,007 options had been exercised for a total consideration of $4,161,608, with the remaining balance of outstanding options being 65,480,884.

3 of 3