Wam Leaders (WLE) H1 2025 earnings summary

Executive summary

• Operating profit before tax rose to $48.0M for H1 FY2025, with after-tax profit at $38.9M, and portfolio returned 3.3% for the half year to 31 Dec 2024, supporting an increased fully franked interim dividend of 4.7¢ per share.

• WAM Leaders acquired 100% of QV Equities via a Scheme of Arrangement, issuing 103.5M new shares (~$135.6M), with seamless integration and no negative portfolio impact.

• Total shareholder return (TSR) was 4.0% including franking credits, with share price discount to NTA narrowing from 5.3% to 4.6%.

• Annualized interim dividend yield stands at 7.4%, well above the ASX 200 index yield.

• Since inception, the portfolio has delivered 11.8–12.2% p.a., outperforming the ASX 200 Accumulation Index by 2.7–3.0% p.a.

Financial highlights

• Net realised and unrealised gains on investments and FX: $28.5M; other operating revenue: $1.1M.

• Management fees: $9.6M; brokerage: $5.5M; profit before tax: $48.0M; income tax expense: $9.1M.

• Basic and diluted EPS: 2.86 cents, up from 1.33 cents year-over-year.

• Cash and cash equivalents at period end: $59.9M, up from $15.8M at June 2024; cash position is around 2.4–3% of portfolio.

• Profits reserve at 29.5¢ per share as of 28 Feb 2025, covering 3.1 years of dividends with franking available.

Outlook and guidance

• Board declared a fully franked interim dividend of 4.7 cents per share, payable 29 April 2025, with commitment to ongoing fully franked dividends subject to profit reserves and franking credits.

• Expecting continued volatility and rotation from momentum to fundamentals, benefiting current portfolio positioning.

• Anticipate further RBA rate cuts (1–2 more in 2024), with potential for more if global growth deteriorates.

• Defensive, high-quality stocks and resource companies favored for the remainder of the year.

• Sell-off in crowded, overvalued sectors (e.g., major banks) expected to continue, with opportunities in underappreciated names.