WAM RESEARCH LIMITED — Net Asset Value 2015

Feb 11, 2015

Investment Update & Net Tangible Assets Report AS AT 31 JANUARY 2015

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Performance

Performance at			Fin		3 Yrs	Since change in investment strategy
31 January 2015	1 Mth	6 Mths	YTD	1 Yr	%pa	(Jul-10) %pa
WAX Investment Portfolio*	0.7%	9.9%	12.4%	15.9%	23.7%	18.4%
S&P/ASX All Ordinaries Accumulation Index	3.0%	0.8%	5.4%	11.3%	13.5%	10.2%
Outperformance	-2.3%	+9.1%	+7.0%	+4.6%	+10.2%	+8.2%

• 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	$163.0m
Market cap	$170.1m
Share price	$1.195
NTA before tax	$1.11
Shares on issue	142,369,025
Options on issue	66,901,813
Fully franked annualised interim dividend (FY2015)	8.0c
Dividendyield	6.7%

Investment objectives

NTA before tax
	111.32c
NTA after tax and before tax on unrealised gains	110.29c
NTA after tax	110.08c

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

Market overview

The Australian equity market closed up 3.0% this month, after rallying 5.2% in the last two weeks of January. This was mainly driven by the European Central Bank's announcement of further stimulus. The quantitative easing programme will see the ECB buy over €1 trillion of government bonds until September 2016, an announcement that came at the top end of market expectations.

Locally, the CPI figure announced 28 January was weaker than expected, which contributed to the Reserve Bank of Australia’s decision to reduce the cash rate to 2.25% in February. As expected, this has been positive for equity markets where at the time of writing the market has rallied 12% since mid December.

As we enter into corporate earnings season, we will be meeting with over 100 companies to get a updated understanding of their businesses and the broad economic conditions, which will help shape our decision making for the year ahead. We expect to see the positive impact of the looser monetary policy on company earnings and the wider economy in the later part of 2015. Our investment portfolio remains well positioned to take advantage of 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

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AS AT 31 JANUARY 2015

Investment Update & Net Tangible Assets Report

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Diversified portfolio

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|---|---|---|---|---|
|December 2014|January 2015|
|Investment Type|$m|%|$m|%|
|Listed Equities|98.4|60.8|99.3|60.9|
|Fixed Interest & Cash|63.5|39.2|63.7|39.1|
|Gross Assets|$161.9m|100.0%|$163.0m|100.0%|
|Total shares on issue|142,301,329|142,369,025|
|Total options on issue|66,969,509|66,901,813|

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~~*~~ This is after payment of the FY2014 fully franked final 3.75 cent dividend and 1.77 cents in tax paid during the month. 0.1 cents in tax during the

Top holdings

Sector allocation

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||||||
|---|---|---|---|---|
|Market Value|Market Value as|
|Code|Company|
|$|% Gross Assets|
|SGH|Slater & Gordon Limited|5,151,790|3.2%|
|ASB|Austal Limited|5,086,139|3.1%|
|CSV|CSG Limited|5,059,169|3.1%|21.2%|
|CCP|Credit Corp Group Limited|4,415,966|2.7%|
|39.1%|
|IPH|IPH Limited|4,408,976|2.7%|
|RFG|Retail Food Group Limited|4,404,948|2.7%|
|MTR|Mantra Group Limited|4,230,886|2.6%|17.2%|
|0.8%|
|AHD|Amalgamated Holdings Limited|4,162,558|2.6%|
|1.0%|
|CTD|Corporate Travel Management Limited|4,030,451|2.5%|2.0%|
|2.0%|
|NVT|Navitas Limited|3,541,107|2.2%|10.0%|
|2.1%|
|4.6%|
|ENE|Energy Developments Limited|3,411,155|2.1%|
|VED|Veda Group Limited|3,371,464|2.1%|
|TPM|TPG Telecom Limited|3,358,469|2.1%|Consumer Discretionary: 21.2%|
|Industrials: 17.2%|
|ISU|iSelect Limited|3,348,802|2.1%|
|Information Technology: 10.0%|
|SIQ|Smartgroup Corporation Limited|3,027,871|1.9%|Financials: 4.6%|
|ISD|iSentia Group Limited|3,011,525|1.8%|Utilities: 2.1%|
|ALU|Altium Limited|2,778,546|1.7%|Telecommunication Services: 2.0%|
|Health Care: 2.0%|
|CIW|Clime Investment Management Limited|2,480,225|1.5%|
|Consumer Staples: 1.0%|
|IFM|Infomedia Limited|2,413,312|1.5%|
|Materials: 0.8%|
|CMG|Chandler Macleod Group Limited|2,182,927|1.3%|
|Cash and Fixed Interest: 39.1%|

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Investment Update & Net Tangible Assets Report AS AT 31 JANUARY 2015

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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 January 2015, 2,047,078 options had been exercised for a total consideration of $2,456,494, with the remaining balance of outstanding options being 66,901,813.

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