WAM Capital has achieved a 176.9 per cent increase in net profit after tax for the half year ending in December, up from the previous year.
The Australian-listed investment company posted a net profit from ordinary activities after income tax expense of $70.3 million, a substantial uptick from its previous loss of $91.4 million in the first half of financial 2019.
Its revenue for the first half of financial year 2020 rose by 191.6 per cent to $118.8 million. Meanwhile profit from ordinary activities before tax was $95.6 million, up by 168.4 per cent.
In a statement to the ASX, chairman Geoff Wilson said the result was “reflective of the solid portfolio performance over the period.”
The investment portfolio increased by 8.9 per cent during the period, outperforming the S&P/ASX All Ordinaries Accumulation by 5.3 per cent with an average cash level of 20.1 per cent.
“We were pleased with the investment portfolio’s solid performance, which was achieved by the investment team’s rigorous application of our proven investment process,” Mr Wilson said.
For the half, WAM Capital has delivered a fully franked interim dividend of 7.75 cents per share, currently representing an annualised fully franked dividend yield of 6.9 per cent.
The firm provided shareholders with a total return of 15.2 per cent in the half, which it said reflected its investment portfolio performance and the increase in the share price premium to net tangible assets (NTA).
WAM Capital’s portfolio manager Oscar Oberg added the continuation of accommodative monetary policies both in Australia and overseas facilitated further growth in asset prices despite tension such as US-China trade war and the Hong Kong protests.
“Our focus on identifying undervalued growth companies yielded solid portfolio performance during a six-month period that saw the Australian economy falter and geopolitical tensions fluctuate,” Mr Oberg said.
“Pockets of the domestic economy showed weakness following strong performance in the August reporting season, affecting sectors such as retail and automotive, while others, such as mining services and housing exposed companies, showed promise.
“We positioned the portfolio to take advantage of this, investing in companies that demonstrated a strong growth potential, solid management and a catalyst to drive the share price higher.”
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
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