WAM Global Posts $74.9M Net Profit, Declares 6.5c Interim Dividend

Robust Financial Performance

WAM Global Limited has delivered a striking half-year financial performance for the six months ended 31 December 2024, with revenue climbing 148.4% to $113.6 million and net profit after tax surging 182.3% to nearly $75 million. This leap reflects the company’s successful investment strategy and strong portfolio management amid a buoyant global equity market.

The operating profit before tax reached $107 million, more than doubling from the prior corresponding period, driven by solid gains in the investment portfolio and favourable foreign currency movements. The portfolio itself appreciated by 13.4%, closely tracking the MSCI World Index (AUD) which rose 14.6% during the same period.

Dividend Growth Signals Confidence

In line with its robust earnings, WAM Global declared an increased fully franked interim dividend of 6.5 cents per share, representing a 168% increase from the prior interim dividend. Additionally, a special fully franked dividend of 4.0 cents per share was announced, underscoring the company’s commitment to returning value to shareholders.

These dividends translate to an annualised fully franked yield of 5.8% from the interim dividend alone, rising to 7.6% when including the special dividend. This yield significantly outpaces the average global equity market dividend yield of 1.7%, highlighting WAM Global’s attractive income proposition in a low-yield environment.

Net Tangible Assets and Shareholder Returns

Net tangible assets (NTA) per share before tax increased to $2.59, up from $2.30 a year earlier, reflecting the underlying growth in asset values. After tax, NTA stood at $2.55 per share. Despite this, the total shareholder return (TSR) was a more modest 4.9% over the half year, impacted by a widening discount of the share price to NTA from 7.7% to 13.8%.

The company’s profits reserve, which supports future dividend payments, grew to 87.3 cents per share, providing dividend coverage for over six years at current payout levels. This strong reserve position, combined with a franking account balance sufficient to fully frank dividends, positions WAM Global well for sustainable distributions.

Strategic Outlook and Market Position

WAM Global continues to focus on investing in undervalued international growth companies, aiming for capital growth and a steady stream of franked dividends. While the investment portfolio’s half-year growth slightly lagged the MSCI World Index, the company has outperformed the MSCI World SMID Cap Index since inception, delivering a 10.1% annualised return versus 9.0% for the SMID Cap benchmark.

The company’s low average cash weighting of 2.4% indicates a high level of market exposure, which has contributed to strong returns but also exposes the portfolio to market volatility. Management fees and company expenses accounted for a small drag on NTA growth, consistent with industry norms.

Looking ahead, WAM Global’s ability to maintain dividend growth and capital preservation will depend on navigating global market conditions and currency fluctuations, as well as continuing to identify mispriced opportunities in international equities.