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WAM Capital (ASX: WAM) has seen its profit rise to a record high and announced a share purchase plan and placement.
The boutique Sydney investment manager announced an 85.7 per cent increase in its operating profit before tax to $132.3 million, driven by a 21.6 per cent increase in the investment portfolio in the 12 months to 30 June 2016.
WAM says it found value for its 20,000 retail shareholders through exposure to undervalued growth companies in the vehicle leasing, retail and health product sectors.
Top performing stocks for the investment house were Smartgroup Corporation (ASX: SIQ), The A2 Milk Company (ASX: A2M), IPH (ASX: IPH), Mayne Pharma Group (ASX: MYX) and Blackmores (ASX: BKL).
Also featured in the company's top 10 holdings are Nick Scali (ASX: NCK) and media companies APN News & Media (ASX: APN) and Southern Cross Media Group (ASX: SXL).
WAM outperformed the ASX by 19.6 per cent over the year.
"The investment performance of 21.6 per cent was achieved while holding an average cash weighting of 35 per cent," says WAM chairman Geoff Wilson.
"[This] demonstrates the strength of our investment process, which has provided shareholders with sound risk-adjusted returns since inception in 1999."
The strong performance supports a fully franked final dividend of 7.25c per share, paid October 28, bringing the full year dividend to 14.5c per share.
Along with its results, WAM also announced a share purchase plan and placement, giving existing shareholders as at Friday 22 July the opportunity to acquire up to $15,000 worth of ordinary shares in WAM without incurring any brokerage.
Shares will be offered at the fixed price of $2.14. WAM is currently trading at $2.29. The share purchase plan will open August 1 and close August 19.
With the good news, the company flagged that the market outlook for the next 12 months remains 'mixed'.
WAM chief investment officer Chris Stott cited easing political uncertainty, further interest rate cuts and ongoing planned global stimulus, particularly in Japan and the United Kingdom, as supportive of equity markets in the near term.
WAM Capital has existed as a vehicle for investment in undervalued growth companies since 1999. Wilson Asset Management holds WAM Capital along with WAM Research (ASX: WAX) and WAM Active (ASX: WAA).
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