WAM Capital (WAM) H1 2025 earnings summary

Executive summary

• WAM Capital, WAM Research, WAM Microcap, and WAM Active all delivered strong investment portfolio performance, significantly outperforming benchmarks over the past 12 months and half-year, with WAM Capital up 33% and a 14.9% half-year return.

• Profit reserves have been rebuilt to their highest levels since September 2021, supporting future dividends, and all funds are now trading at a premium to NTA after previously trading at discounts.

• Interim dividends were declared across all funds, with high franking and attractive annualised yields.

• The Founders Fund was launched, enhancing access to management and founder insights, expected to benefit existing portfolios.

Financial highlights

• WAM Capital achieved a 14.9% portfolio return for the half-year, outperforming the S&P/ASX Small Ordinaries Accumulation Index by 9.4%, and a 30.2% return for calendar 2024.

• WAM Research delivered a 21.3% half-year return, outperforming by 15.8%.

• WAM Microcap posted a 14.4% half-year return, outperforming by 8.9%.

• Operating profit before tax rose 40.3% to $208.7 million; after-tax profit increased 40.6% to $149.8 million for the half-year.

• Dividends increased for WAM Microcap from AUD 0.0525 to AUD 0.053.

Outlook and guidance

• All funds continued strong year-to-date performance as of 31 January 2025, with WAM Research leading at +26.6%.

• Management expects continued volatility but sees opportunities in high-quality, undervalued growth companies, especially as interest rate cuts are anticipated.

• M&A activity is expected to increase, especially from private equity, as market conditions stabilize.

• To maintain the current high dividend, the portfolio must achieve approximately 15% annual growth before expenses, fees, and taxes.