Ann: Becoming a substantial holder , page-7

MM

I have found myself pondering WHG a great deal the last month.

I think your 8% dividend yield is a given at the current SP.

The problem currently is that the market is basically pricing WHG as a fixed interest proxy, ie not factoring in any growth in the topline. However with the focus on capital management, and the highly cash generative nature of the business I see this temporary lack of growth as less of an issue.

I like the arrangement with Macquarie to repurchase the convertible notes as a first order capital management exercise to avoid any future EPS dilution. Under the repurchase schedule 10m are scheduled for purchase by 1 July 11, so this will also reduce our interest expense in the current half year.

Looking a little further out once the remaining 15m notes have been purchased, a share buyback/and or special dividend (WHG has a healthy franking credit balance)becomes very likely in lieu of some aquisition program.

I am quite confident that any acquisition will be strenuously tested to ensure that it will be earnings accretive.

It is managed very conservatively and I can think of a lot worse places to place some capital. I am patiently waiting to see if the market provides an absolutely no brainer price to add to my holding. The current SP is attractive but I still feel there may be a chance for a very brief dip closer to .90.