WAM Microcap (WMI) H1 2025 earnings summary

Executive summary

• Investment portfolio delivered a 31.7% return in the twelve months to 31 December 2024, outperforming the S&P/ASX Small Ordinaries Accumulation Index by 23.3%.

• Operating profit before tax rose to $45.1M for H1 FY2025, up from $12.6M year-over-year, with after-tax profit at $32.5M versus $9.5M, representing a 240.6% increase.

• Fully franked interim dividend increased to 5.3 cents per share, payable 30 April 2025, with 92.5 cps in fully franked dividends paid since inception.

• Profit reserves rebuilt, providing visibility for dividends across funds; all four funds now trade at a premium to NTA after previously trading at discounts.

• Reporting season was highly volatile, with over 60% of small/mid-cap companies falling in February; portfolio balance and stock selection were key to outperformance.

Financial highlights

• Six-month portfolio performance to 31 December 2024 was 14.4%, outperforming the index by 8.9%.

• Pre-tax NTA at 31 January 2025 was $1.47 per share; after-tax NTA reached $1.43 per share at December 2024.

• Net realised and unrealised gains on investments and FX totaled $49.9M, up from $11.3M year-over-year.

• Basic and diluted EPS was 11.72c, up from 4.51c year-over-year.

• Dividends paid during the period totaled $14.5M.

Outlook and guidance

• Interest rate cuts forecast for the second half of 2025 are expected to create a positive environment for IPOs, capital raisings, and benefit consumer, discretionary, and property-related companies.

• Expect continued volatility but see opportunities in high-quality, undervalued growth stocks and increased M&A activity, especially from private equity.

• Board remains committed to paying a stream of fully franked dividends, subject to profits reserves and franking credits.