WAM RESEARCH LIMITED — Net Asset Value 2016

Aug 10, 2016

Investment Update & Net Tangible Assets Report AS AT 31 JULY 2016

Performance

Performance
						Since change in
Performance at				3 Yrs	5 Yrs	investment strategy
31 July 2016	1 Mth	6 Mths	1 Yr	%pa	%pa	(Jul-10) %pa
WAX Investment Portfolio* S&P/ASX All Ordinaries Accumulation Index	5.0% 6.3%	12.9% 14.1%	26.2% 4.0%	22.8% 8.5%	21.9% 9.4%	20.6% 9.1%
Outperformance	-1.3%	-1.2%	+22.2%	+14.3%	+12.5%	+11.5%

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

Net Tangible Assets (NTA) figures

Net Tangible Assets (NTA) figures
NTA before tax	125.92c*
NTA after tax and before tax on unrealised gains	124.08c
NTA after tax	123.96c

~~*~~ This is after the payment and provision for tax of $6.2m (3.5 cents per share) for the 2016 financial year.

Market overview

The S&P/ASX All Ordinaries Accumulation Index posted strong gains during the month, to finish July up 6.3%, the best month since October 2011.

After an unpromising start to the month due to concerns over the European economy post Brexit, global markets rallied following better than expected economic data out of the United States along with quarterly results which also beat expectations.

Locally, ratings agency Standard & Poor's lowered Australia’s credit rating outlook citing an unresolved federal election result and high levels of external and household debt as areas of concern. Political uncertainty eased after the Coalition claimed the requisite majority in the lower house to form government later in the month. The Reserve Bank of Australia released its July minutes, reinforcing its easing bias and has since reduced the cash rate to an all time record low of 1.5% in early August.

We continue to find investment opportunities and our current cash weightings ensure we are well positioned to seize these opportunities as and when they arise. Over the coming weeks we will meet with over 100 companies as part of the semi annual company reporting season. Traditionally this period presents several new investment ideas which we will seek to capitalise on.

Final dividend key dates – 4.25 cents fully franked

The key dates are:

The key dates are:
Ex date:	17 October 2016
Record date: Last election date for DRP: Payment date:	18 October 2016 20 October 2016 28 October 2016

==> picture [142 x 105] intentionally omitted <==

WAM Research Limited

ASX Code	WAX
Listed	Aug 2003
Gross assets	$235.2m
Market cap	$249.1m
Share price	$1.43
NTA before tax	$1.26
Shares on issue	174,169,283
Fully franked dividends (FY2016)	8.5c
Dividendyield	5.9%

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.

Wilson Asset Management Investment & Management Team

Geoff Wilson Portfolio Manager

Kate Thorley Chief Executive Officer

Chris Stott Chief Investment Officer/ Portfolio Manager

Matthew Haupt Portfolio Manager

Martin Hickson Senior Equity Analyst/Dealer

Tobias Yao Senior Equity Analyst

John Ayoub Senior Equity Analyst

Oscar Oberg Equity Analyst

1 of 3

AS AT 31 JULY 2016

Investment Update & Net Tangible Assets Report

Diversified portfolio

==> picture [142 x 105] intentionally omitted <==

Diversified portfolio
June 2016 Investment Type $m %	July 2016
	$m %
Listed Equities $162.7 72.5	$175.1 74.4
Fixed Interest & Cash $61.7 27.5	$60.1 25.6
Gross Assets $224.4m 100.0	$235.2m 100.0
Total shares on issue 174,169,283	174,169,283

Top holdings

Code	Company	Market Value $	Market Value as % Gross Assets
SIQ	Smartgroup Corporation Limited	11,674,758	5.0%
RCG	RCG Corp Limited	10,480,125	4.5%
NCK	Nick Scali Limited	8,225,908	3.5%
AAD	Ardent Leisure Group	8,174,302	3.5%
CCP	Credit Corp Group Limited	7,952,419	3.4%
RWC	Reliance Worldwide Corporation Pty Limited	7,844,823	3.3%
VTG	Vita Group Limited	7,194,033	3.1%
ECX	Eclipx Group Limited	6,938,539	3.0%
CL1	Class Limited	6,884,810	2.9%
SGF	SG Fleet Group Limited	6,807,941	2.9%
SXL	Southern Cross Media Group Limited	6,438,117	2.7%
SDF	Steadfast Group Limited	6,125,324	2.6%
PME	Pro Medicus Limited	5,786,270	2.5%
TRS MYX	The Reject Shop Limited Mayne Pharma Group Limited	5,491,942 5,268,680	2.3% 2.2%
PSI	PSC Insurance Group Limited	5,193,216	2.2%
VOC	Vocus Communications Limited	4,782,872	2.0%
HLO	Helloworld Limited	4,283,172	1.8%
ONE	Oneview Healthcare PLC	3,646,714	1.6%
CVW	ClearView Wealth Limited	3,324,648	1.4%

Sector allocation

==> picture [160 x 158] intentionally omitted <==

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

25.6% 28.1%
3.5%
3.9%
17.9%
7.3%
13.7%
----- End of picture text -----

Consumer Discretionary: 28.1% Industrials: 17.9% Financials: 13.7% Health Care: 7.3% Information Technology: 3.9% Telecommunication Services: 3.5% Cash and Fixed Interest: 25.6%

2 of 3

Investment Update & Net Tangible Assets Report AS AT 31 JULY 2016

Dividend growth

==> picture [142 x 105] intentionally omitted <==

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 [469 x 241] 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
----- End of picture text -----

On 8 August 2016, the Company announced a fully franked final dividend of 4.25 cents per share. This brings the full year dividend to 8.5 cents per share, an increase of 6.3% on the previous corresponding period.

The dividend reinvestment plan (DRP) will operate at a 2.5% discount for the final dividend. To participate in the DRP, shareholders should send their DRP Election Form to the Company’s share registrar (Boardroom) no later than 20 October 2016.

Key dividend dates

Ex date: 17 October 2016 Record date: 18 October 2016 Last election date for DRP: 20 October 2016 Payment date: 28 October 2016

3 of 3