How Did WAM Strategic Value Achieve a 200% Profit Surge and Dividend Boost?

Strong Portfolio Performance Outpaces Market

WAM Strategic Value Limited (ASX – WAR) has reported a solid 9.8% increase in its investment portfolio for the six months ending 31 December 2025, comfortably outperforming the S&P/ASX All Ordinaries Accumulation Index by 5.4%. For the full 2025 calendar year, the portfolio rose 14.9%, beating the index by 4.3%. This performance builds on a consistent track record, with annualised returns of 15.9% over two years and 14.5% over three years, underscoring the fund’s ability to deliver steady growth.

Profitability and Dividend Growth Signal Confidence

The company’s operating profit before tax surged by an impressive 200.7% to $16 million, while after-tax profit rose 158.6% to $12.8 million in the half-year period. Reflecting this strong financial position, the Board declared an increased fully franked interim dividend of 3.25 cents per share, representing an annualised yield of 5.7% and a grossed-up yield of 8.1% when factoring in franking credits. Since inception, WAM Strategic Value has paid fully franked dividends totalling 18.75 cents per share, highlighting its commitment to delivering income alongside capital growth.

Portfolio Composition and Market Positioning

The portfolio remains heavily weighted towards equities at 82.7%, with the remainder held in cash and equivalents. Key contributors to the recent outperformance include listed investment companies with global equity exposure, such as Regal Partners Global Investments, Pengana International Equities, and Regal Asian Investments. Despite the strong returns, the company’s share price traded at a 23.2% discount to its look-through pre-tax net tangible assets (NTA) as of 31 December 2025, a gap that management believes will narrow as market recognition of the portfolio’s value improves.

Outlook and Strategic Focus

Chairman and Lead Portfolio Manager Geoff Wilson AO emphasised the company’s focus on ensuring the share price better reflects its underlying asset value. He noted that investing in undervalued asset plays requires patience but expressed confidence that WAM Strategic Value is well positioned to capitalise on opportunities in 2026 and beyond. The narrowing of average share price discounts across the LIC and LIT sector during the half-year period supports this optimism, with sector-wide discounts contracting significantly.

Dividend Reinvestment and Upcoming Events

The Dividend Reinvestment Plan (DRP) remains in operation without a discount, allowing shareholders to reinvest dividends into additional shares. Key dates for the interim dividend include an ex-dividend date of 1 May 2026 and payment on 29 May 2026. The company also plans to release its audited half-year results by 27 February 2026 and will host a Q&A webinar with senior management on 25 February 2026 to discuss the interim results and outlook.