The Wilson Asset Management (WAM) listed investment company has achieved a 136.6 per cent surge in operating profit for the first half of the 2021 financial year, with the firm reporting it was propelled by strong investment performance.
WAM Capital reported a $166.5 million operating profit after tax for the half-year, more than doubling its result year-on-year.
The investment portfolio had risen by 22.8 per cent through the period, outperforming the S&P/ASX All Ordinaries Accumulation Index by 7.1 per cent.
During the 2020 calendar year, the portfolio had increased by 9.6 per cent, despite volatility from the pandemic.
The company signalled it had reacted to the shift towards value stocks in the last quarter, with lead portfolio manager Oscar Oberg stating in his update that WAM Capital had increased its exposure to “cyclical sectors like automotive, housing and financial services”.
But the firm also expects sectors such as mining services and building materials to benefit from a HomeBuilder Grant and low-interest rate-fuelled rise in construction activity.
Core holdings reported to have boosted WAM Capital during the first half included online marketplace Redbubble, metal detection and mining technology company Codan, home furnishings retailer Adairs and transport services and tourism provider SeaLink Travel Group.
Detracting holdings included telecommunications group Uniti Group, financial technology provider Bravura Solutions and donor management tech company Pushpay.
The board declared a fully franked interim dividend of 7.75 cents per share, representing an annualised fully franked dividend yield of 7 per cent.
The December half also saw WAM Capital present takeover bids for the listed Concentrated Leaders Fund, Contango Income Generator and telecommunications provider amaysim Australia.
The firm completed its takeover offer for Contango Income Generator, acquiring 69.6 per cent in November.
Meanwhile it has moved to take over all ordinary shares in Concentrated Leaders Funds (CLF), with the offer scheduled to close on 26 February, unless extended or withdrawn. WAM Capital currently owns 83.2 per cent of CLF.
CLF’s directors have unanimously recommended that shareholders accept the offer.
WAM Capital also owns 56.7 per cent of amaysim.
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.
You can contact her on [email protected].