WAM Capital Surges with 40% Profit Growth and 7.75c Dividend
WAM Capital Limited has delivered a robust half-year performance ending December 2024, posting a 40% increase in net profit and declaring a steady interim dividend of 7.75 cents per share. The company’s investment portfolio outperformed key ASX indices, underpinning strong shareholder returns.
- Net profit after tax up 40.6% to $149.8 million
- Investment portfolio grew 14.9%, outperforming ASX All Ordinaries by 8%
- Interim dividend declared at 7.75 cents per share, partially franked at 60%
- Net tangible assets increased to $1.59 per share before tax
- Total shareholder return of 16.6% including franking credits
Strong Financial Performance
WAM Capital Limited has reported a commanding half-year result for the period ending 31 December 2024, with net profit after tax soaring 40.6% to $149.8 million compared to the prior corresponding period. This surge was driven by a 45% increase in revenue from ordinary activities, reflecting the company’s successful investment strategy and portfolio management.
The company’s operating profit before tax rose to $208.7 million, underscoring the strength of its underlying assets and active management approach. These results were independently reviewed by Pitcher Partners Sydney, confirming their reliability and compliance with accounting standards.
Portfolio Outperformance
WAM Capital’s investment portfolio grew by 14.9% over the six months, significantly outperforming the S&P/ASX All Ordinaries Accumulation Index by 8% and the Small Ordinaries Accumulation Index by 9.4%. This outperformance was achieved with an average cash weighting of 11.5%, highlighting the manager’s disciplined approach to capital allocation.
Since inception, the company has delivered an impressive annualised portfolio return of 15.6%, beating the All Ordinaries by 7.1% per annum. This consistent track record reinforces WAM Capital’s reputation as a specialist in identifying undervalued growth companies within the small-to-medium ASX segment.
Dividend and Shareholder Returns
The Board declared an interim dividend of 7.75 cents per share, partially franked at 60%, payable on 30 April 2025. This maintains the dividend level from the prior year’s final dividend and translates to an attractive annualised yield of 9.9%, or 12.4% grossed-up including franking credits, based on the 31 December 2024 share price of $1.565.
WAM Capital’s net tangible asset (NTA) backing rose to $1.59 per share before tax, up from $1.45 a year earlier, reflecting the portfolio’s strong appreciation. After tax, NTA stood at $1.68 per share. The company’s total shareholder return (TSR) for the half-year was 16.6%, factoring in dividends and franking credits, with the share price discount to NTA narrowing to just 1.4% from 4.6% six months prior.
Outlook and Strategic Considerations
WAM Capital’s directors reaffirm their commitment to delivering fully franked dividends, capital growth, and capital preservation. The company’s profits reserve has grown to $250.8 million, supporting future dividend payments and franking capacity. The Board also highlighted that the level of franking credits will depend on future tax paid on realised profits and dividends received from investee companies.
With a robust balance sheet, strong cash position of $193 million, and no contingent liabilities, WAM Capital is well-positioned to continue its active investment approach amid evolving market conditions. The company’s focus on small-to-medium ASX-listed growth companies remains central to its strategy.
Bottom Line?
WAM Capital’s strong half-year results and steady dividend signal confidence, but investors will watch closely how market dynamics shape future returns.
Questions in the middle?
- Will WAM Capital maintain its dividend level and franking percentage amid changing tax landscapes?
- How will the company navigate potential market volatility impacting small-to-medium ASX stocks?
- What are the implications of the narrowing share price discount to NTA for future capital raising or buybacks?
