WAM Leaders Posts $63.8M Net Profit, Declares 9.4c Fully Franked Dividend

Financial Highlights and Dividend Commitment

WAM Leaders Limited (ASX, WLE) has announced a robust financial performance for the year ended 30 June 2025, reporting a net profit after tax of $63.8 million, a significant increase from $22.3 million in the prior year. The company declared a fully franked final dividend of 4.7 cents per share, maintaining a full year dividend of 9.4 cents per share, which translates to a 7.9% fully franked dividend yield based on the closing share price of $1.185.

This dividend policy reflects the Board’s commitment to providing shareholders with a reliable income stream, supported by the company’s profits reserve and franking credits. However, the Board cautions that sustaining such high returns and fully franked dividends beyond FY2026 is uncertain, given the reliance on realised gains and franked dividends from investee companies.

Investment Portfolio Performance and Market Positioning

Despite the strong profit result, WAM Leaders’ investment portfolio returned 5.9% for FY2025, underperforming the S&P/ASX 200 Accumulation Index, which rose 13.8%. The underperformance was attributed to a strategic underweight stance on momentum-driven stocks, including Australian banks, and the sale of The Star Entertainment Group. The portfolio’s cautious positioning during a momentum-driven market environment weighed on returns.

Since its inception in May 2016, WAM Leaders has delivered an annualised portfolio return of 11.8%, outperforming the benchmark by 2.4% per annum. The company’s investment approach focuses on quality, earnings resilience, and growth, with increased holdings in CSL, Goodman Group, Aristocrat Leisure, and NEXTDC, positioning the portfolio for a potential momentum reversal in FY2026.

Capital Management and Strategic Acquisition

In July 2024, WAM Leaders completed a Scheme of Arrangement to acquire QV Equities Limited, issuing approximately 103.5 million new shares valued at $135.6 million. This acquisition expanded the company’s capital base to $1.68 billion in issued capital and enhanced liquidity and market presence. The Board continues to actively manage capital to preserve shareholder value through dividends, share placements, and other initiatives.

Governance, Fees, and Shareholder Engagement

The company’s governance structure remains robust, with Directors’ remuneration totaling $132,500 for FY2025. No performance fees were payable to the investment manager due to underperformance relative to the benchmark. WAM Leaders emphasizes transparent shareholder communication through regular updates, webinars, and educational initiatives.

Additionally, the company maintains a diversified portfolio with significant exposure to Financials (24%), Materials (17%), and Health Care (10%) sectors. The net tangible asset backing before tax per share slightly declined to $1.29 from $1.34 the previous year, reflecting market conditions and dividend payments.

Outlook and Strategic Considerations

Looking ahead, WAM Leaders is cautiously optimistic as market dynamics that challenged performance in FY2025 begin to reverse. The Board and management remain focused on capital preservation, dividend sustainability, and navigating macroeconomic uncertainties. They also continue advocacy efforts on regulatory matters affecting retail investors and support philanthropic initiatives.