Wam Leaders (WLE) H2 2024 earnings summary

Executive summary

• Portfolio delivered a 2.8% return for FY2024, underperforming the S&P/ASX 200 due to defensive positioning and select detractors, but since inception in May 2016, annualized return is 12.5%, outperforming the index by 3.6% per annum.

• Fully franked full year dividend increased to 9.2 cents per share for FY2024, representing a 7.2% yield on recent share price.

• Profits reserve at 30 June 2024 covers 3.2 years of dividends, supporting ongoing payments.

• Merger with QV Equities Limited was completed, accretive to NTA and franking account, adding over 3,000 shareholders.

Financial highlights

• Pre-tax NTA per share at 30 June 2024 was $1.34, declining from $1.43 over the year.

• Operating profit before tax was $20.2 million; after tax, $22.3 million.

• Total dividends paid since inception reached 48.75 cents per share.

• Grossed-up dividend yield stands at 10.3%.

Outlook and guidance

• Market expected to shift focus from rate hikes to rate cuts, with uncertainty between soft and hard landing scenarios; Australia faces moderate recession pressures, while US rates are expected to decline from 5.33% in July 2024 to below 3% by July 2025.

• Management expects improved performance driven by turnarounds in key holdings and moderation in overvalued sectors.

• Dividend guidance remains consistent, focusing on maintaining a high fully franked yield.