WAM Strategic Value (WAR) H1 2025 earnings summary

Executive summary

• Dividend increased by 33.3% to 3.0 cents per share, now yielding over 5% after-tax and over 7% before-tax.

• Profit reserve has grown to $0.182 per share, supporting current dividend levels for at least three years.

• Operating profit after tax for the half year ended 31 December 2024 was $4.96 million, down from $6.40 million in the prior year period.

• Share price continues to trade at a discount to NTA, though the discount narrowed to 10.4% from 14.9%.

• Portfolio performance has been reasonable, with lower volatility than the market, and a 16.9% return for the 12 months to 31 December 2024.

Financial highlights

• Revenue from operating activities was $11.59 million, up from $5.56 million in the prior year period.

• Profit before tax was $5.34 million; profit after tax was $4.96 million.

• Basic and diluted earnings per share were 2.75 cents, compared to 3.55 cents in the prior year.

• Cash and cash equivalents at period end were $35.2 million (June 2024: $17.9 million).

• Net cash provided by operating activities was $24.5 million, compared to net cash used of $37.8 million in the prior year.

Outlook and guidance

• Management aims to have the share price trade at NTA or a premium through improved performance and dividend growth.

• Expectation to continue paying and gently increasing fully franked dividends, with a focus on capital growth.

• No change in principal investment activity is expected in the future.

• Cautious outlook for the year ahead, citing global uncertainties and market volatility.

• Cash reserves provide flexibility to capitalize on future opportunities as market volatility settles.