Wam Leaders (WLE) H2 2025 earnings summary

Executive summary

• Investment portfolio delivered 11.8% annualized performance since inception in May 2016, outperforming the S&P/ASX 200 Accumulation Index by 2.4% as of 30 June 2025, but underperformed in FY25 with a 5.9% return due to underweight positions in momentum stocks and Australian banks.

• Fully franked full-year dividend increased to 9.4 cps (total 58.05 cps since inception, 82.9 cps including franking credits), with a final dividend of 4.7 cps for FY2025.

• Portfolio rebounded strongly in FY26, up 7.9% YTD versus 5.5% for the index, with sector diversification and overweight positions in Rio Tinto, Spark New Zealand, Orora, WiseTech Global, and Insurance Australia Group.

• Portfolio construction has shifted to capitalize on changing market dynamics, with legacy underperformers removed and a focus on quality, earnings resilience, and growth.

• Strategic underweight to momentum-driven stocks and loss on The Star Entertainment Group impacted FY25 performance, but July 2025 saw a turnaround.

Financial highlights

• Fully franked dividend yield at 7.1%, grossed-up yield at 10.1% based on recent share prices.

• Pre-tax NTA per share at 30 June 2025 is $1.29, with recent momentum and a positive outlook for further increases.

• Operating profit before tax was $79.0 million; after tax $64.0 million for FY2025.

• Year-to-date portfolio performance at 31 August 2025 is 7.9%, with a since-inception annualized return of 12.5%.

• Profits reserve at 30 June 2025 was 24.7 cps before final dividend payment, providing 2.6 years of dividend coverage.

Outlook and guidance

• Short-term market turbulence expected due to global liquidity tightening, with improved liquidity and equity market conditions anticipated in late 2025.

• Market is considered expensive, with moderate earnings downgrades expected and leverage suppressing bond yields.

• Portfolio positioned defensively for near-term volatility, with increased cash weighting and readiness to add risk as liquidity improves.

• Expectation of further stimulus in China in Q4, supporting commodities and resources sector.

• Management expects to benefit from market inflection and unwinding of momentum trade.