WAM Capital (WAM) H2 2024 earnings summary

Executive summary

• All four managed funds—WAM Capital, WAM Research, WAM Microcap, and WAM Active—outperformed their benchmarks in FY2024, with standout performances from WAM Research (+30.7%) and WAM Capital (+26.4%).

• Outperformance was especially strong against the Small Ordinaries Index, with WAM Research (+21.4%) and WAM Capital (+17.1%) marking the best results in over a decade.

• Fully franked dividends were paid across all funds, with yields enhanced by franking credits and supported by robust profit reserves.

• WAM Microcap maintained a seven-year outperformance streak since IPO and successfully deployed AUD 90 million raised in April.

• WAM Active outperformed its benchmark by 26%, benefiting from increased capital markets activity in larger small caps.

Financial highlights

• WAM Capital: +26.4% portfolio performance, +17.1% outperformance vs. S&P/ASX Small Ordinaries Accumulation Index, 15.5 cps full year dividend (60% franked), 12.3% grossed-up dividend yield.

• WAM Microcap: +21.6% portfolio performance, +12.3% outperformance, 10.5 cps fully franked dividend, 7.0% dividend yield, 10.0% grossed-up yield.

• WAM Research: +30.7% portfolio performance, +21.4% outperformance, 10.0 cps full year dividend (60% franked), 10.7% grossed-up yield.

• WAM Active: +25.8% portfolio performance, +18.2% outperformance, 6.0 cps fully franked dividend, 7.1% dividend yield, 10.1% grossed-up yield.

• Profit reserves increased, with WAM Capital at 18.8 cps and WAM Research at 45.1 cps as of 31 July 2024.

Outlook and guidance

• The team remains bullish on small caps, expecting a rebound if interest rate cuts materialize, and continues to focus on diligent research and market catalysts.

• Dividend increases are unlikely; focus remains on maintaining current high yields and building profit reserves.

• Portfolio managers highlighted select stock picks in alternative assets, maintenance services, medical imaging, and EFTPOS provision.