WAM Alternative Assets (WMA) H1 2025 earnings summary

Executive summary

• The investment portfolio increased 8.2% over 12 months to 31 December 2024, with a 9.5% annualized return since October 2020, and is trading at nearly a 20% discount to NTA, offering value for investors seeking alternative assets.

• Operating profit before tax was $6.6 million and after tax $4.6 million for the FY2025 half year, rebounding from a prior year loss.

• Portfolio volatility remains low at 3.4% versus ASX's 14% over the past year.

• Dividend reserves are strong, covering over three years of dividends, with a fully franked interim dividend increased to 2.7c/share and an annualized yield of 5.6% (grossed up to 8.0%).

• A Premium Target vote is scheduled for year-end, which may influence the company's future direction and help close the NTA discount.

Financial highlights

• Portfolio return was 8.2% for the last 12 months and 9.5% p.a. since October 2020.

• Total shareholder return was 6.9% for the half year, including franking credits.

• Dividend yield is over 5%, grossed up to 8% pre-tax, with 2.7c/share interim dividend declared.

• Net assets at 31 Dec 2024 were $230.3m, with cash and cash equivalents at $50.6m.

• Profits reserve stands at 16.5c/share, covering 3.1 years of dividends.

Outlook and guidance

• The portfolio is positioned for growth, focusing on increasing private debt allocation, additional infrastructure investments, and at least one more private equity allocation.

• Board remains committed to fully franked dividends, subject to profit reserves and franking credits.

• Portfolio is expected to benefit from increased M&A activity, higher asset valuations, and favorable private market conditions.