Shares in WAM Capital Limited (ASX: WAM) are rising following the release of the equity manager's investment portfolio performance for the 2021 calendar year.
At the time of writing, the WAM Capital share price is $2.20, up 0.92%.
Let's take a look.
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WAM Capital share price up on news of 17.1% portfolio gain
There was plenty to share in WAM's update today. The company made these key announcements:
- Gain of 17.1% in WAM's investment portfolio performance for the 2021 calendar year
- 15.5 cents per share annualised FY22 fully franked interim dividend
- 7.1% FY22 annualised fully franked interim dividend yield
- 7% total shareholder return in the 2021 calendar year
- Fully franked dividend of 7.75 cents per share announced today
- Annualised grossed-up dividend yield of 10.1% based on Thursday's closing price of $2.18.
What else did WAM Capital announce in its update today?
WAM Capital advised it had a total shareholder return (capital gains + dividends) of 5.3% in the 6 months to 31
December 2021.
WAM Capital said in a statement that the gain mirrored "the company's investment portfolio performance and the slight increase in share price premium to net tangible assets (NTA)".
In further commentary, WAM Capital said:
In the same period, the investment portfolio increased 4.8% outperforming the S&P/ASX All Ordinaries Accumulation Index with an average cash holding of 12.9%. In the 2021 calendar year the investment portfolio increased 17.1% with an average cash holding of 10.9%.
These results led to an alpha generation above the S&P/ASX Small Ordinaries Accumulation Index of 0.2% for 2021 and 0.7% for the trailing 3-years of portfolio returns.
However, the portfolio lagged the All Ords by -0.6% after expenses, fees, taxes, and capital management initiatives.
It was also a busy period for WAM on the corporate finance side. In October for instance, the company acquired an unlisted investment company with net assets totalling around $36.3 million.
Perhaps the biggest update was WAM's takeover bid for PM Capital Asian Opportunities Fund (ASX: PAF). This got the green light in late December last year.
Finally, in December, WAM Capital, Westoz Investment Company Ltd (ASX: WIC) and Ozgrowth Limited (ASX: OZG) announced they will merge under separate transactions. WAM started the party by aiming to buy Westoz in an all-scrip deal in the same month.
"We estimate the accretion from the corporate activities for FY22 will be approximately 1.9% and will generate over $34.0 million in value for WAM Capital shareholders," the company said.
Management commentary
Speaking on the announcement, WAM Chairman and Chief Investment Officer Geoff Wilson AO said:
Pleasingly, since inception in August 1999, WAM Capital has consistently delivered returns to shareholders and has paid 269.50 cents per share in fully franked dividends.
WAM Capital Lead Portfolio Manager Oscar Oberg also said:
I am pleased with the performance of the investment portfolio for shareholders during the period as Australia emerged from coronavirus lockdowns and economies began rebounding. We remain focused on our investment process and are positive on small and mid-cap companies going forward.
What's next for WAM Capital?
The ex-dividend date for the interim dividend is 6 June. Shareholders will be paid on 17 June.
After the proposed merger with Ozgrowth and Westoz, WAM says it "will grow its net assets to approximately $2.0 billion". This will give WAM Capital a market capitalisation of over $2.3 billion.
"The Board of Directors believe the Proposed Transactions will provide WAM Capital shareholders with appealing benefits including the issuance of new shares at a premium to the Company's underlying NTA, a reduced management expense ratio and access to greater on-market liquidity," the release concluded.
WAM Capital share price snapshot
In the last 12 months, the WAM share price has barely moved, faltering by just 0.68%.
It is down 1.12% since 1 January compared to a 6.5% fall for the S&P/ASX 200 Index (ASX: XJO).
