WAM Capital (WAM) investor relations material

Executive summary

• Interim results for four managed funds were presented, with a focus on WAM Capital, WAM Microcap, and WAM Research, highlighting the challenging environment for small caps since October due to macroeconomic and geopolitical factors.

• Operating profit before tax was $30.2 million, down from $208.7 million in the prior year period, with after-tax profit at $24.1 million versus $149.8 million year-over-year.

• Investment portfolio increased 2.0% over six months, underperforming the S&P/ASX All Ordinaries Accumulation Index (4.4%) and S&P/ASX Small Ordinaries Accumulation Index (17.4%).

• Total shareholder return (TSR) was 22.6% for the half year, driven by share price premium to NTA and franked dividends.

• Despite market headwinds, management remains optimistic about long-term opportunities, citing strong company fundamentals and balance sheets.

Financial highlights

• Net realised and unrealised gains on investments were $26.6 million, down from $224.5 million year-over-year.

• Earnings per share were 2.13 cents, compared to 13.43 cents in the prior year period.

• Cash and cash equivalents increased to $205.4 million from $167.8 million at June 2025.

• WAM Active outperformed strongly, aided by resource sector exposure and recent capital raising.

• Profits reserve after interim dividend payment stands at 13.4 cents per share, covering 0.9 years of annual dividends.

Outlook and guidance

• Interim dividend of 7.75 cents per share, partially franked at 60%, declared for payment in May 2026.

• Management expects the current premium to NTA to persist until the next dividend, with potential for contraction thereafter.

• Portfolio managers expect continued challenges for small-cap industrials due to higher interest rates and market volatility.

• Confident in capturing future opportunities as market conditions evolve and holdings deliver earnings growth.

• Dividend sustainability depends on generating additional profits reserves and franking credits.