WAM Capital Limited (ASX: WAM) has reported strong financial results for the half-year ended 31 December 2024, with its investment portfolio outperforming key market indices and delivering increased profits. The company’s board has declared an interim dividend of 7.75 cents per share, partially franked at 60 percent, continuing its track record of providing high shareholder returns.
Portfolio outperformance and profit growth
WAM Capital’s investment portfolio delivered a 14.9 percent return in the six months to 31 December 2024, outperforming the S&P/ASX All Ordinaries Accumulation Index by 8.0 percent and the S&P/ASX Small Ordinaries Accumulation Index by 9.4 percent. Over the 2024 calendar year, the portfolio achieved a 30.2 percent return, exceeding the broader market by 18.8 percent against the All Ordinaries and 21.8 percent against the Small Ordinaries Index.
This performance contributed to a 40.3 percent increase in operating profit before tax, reaching $208.7 million, and a 40.6 percent increase in operating profit after tax, rising to $149.8 million.
Chairman Geoff Wilson AO credited the investment team’s disciplined approach, stating, “It has been pleasing to see another strong result from the WAM Capital investment team, with the portfolio continuing to outperform the market. This outperformance has allowed the board to maintain the high partially franked interim dividend of 7.75 cents per share.”
Dividend and shareholder returns
The declared 7.75 cents per share interim dividend represents an annualised yield of 9.6 percent, or 12.1 percent on a grossed-up basis. The dividend will be paid on 30 April 2025, with a record date of 17 April 2025.
Before this dividend payment, WAM Capital’s profits reserve stood at 24.9 cents per share, the highest level since September 2021, when the company traded at a 20 percent premium to net tangible assets (NTA).
Lead portfolio manager Oscar Oberg highlighted the company’s resilience, saying, “The investment team and I are pleased to have delivered strong portfolio performance for our shareholders. WAM Capital has outperformed despite a challenging environment, particularly for small-cap companies. With a favourable interest rate environment, we believe the portfolio is well positioned to capture opportunities in 2025.”
Market performance and investment strategy
For the financial year to 31 January 2025, WAM Capital’s investment portfolio increased by 19.7 percent, outperforming the S&P/ASX All Ordinaries Accumulation Index by 8.1 percent and the S&P/ASX Small Ordinaries Accumulation Index by 9.4 percent.
Total shareholder return for the six months to 31 December 2024 was 15.2 percent, or 16.6 percent when including franking credits. The reduction in WAM Capital’s share price discount to NTA, from 4.6 percent at 30 June 2024 to 1.4 percent at 31 December 2024, contributed to the total shareholder return improvement.
WAM Capital maintains a diversified portfolio, with top holdings including Tuas Limited, G8 Education, Judo Capital, and Service Stream. The company focuses on undervalued growth opportunities, leveraging both research-driven and market-driven investment strategies.
Looking ahead
WAM Capital’s board has reaffirmed its commitment to delivering strong investment returns and sustainable dividends. The company will host an investor Q&A webinar on 6 March 2025 at 2:00pm Sydney time to discuss the results in further detail.
