Good afternoon, everyone, and thank you for dialing into today's call. On the call you have myself, Lead Portfolio Manager, Oscar Oberg. To my right, you have Tobias Yao, Portfolio Manager, and you have Senior Equity Analysts, Sam Koch and Shaun Weick, and Equity Analysts and Dealer, Cooper Rogers and Will Thompson. Given Tobias and I spoke at length just over a month ago, we thought we'd change it up a little bit today. Sam and Shaun will give an overview of reporting season and then how we're positioned into 2023 before the team will then talk about our four highest conviction buy ideas into 2023. Following that, we'll have an extended question- and- answer session. We're happy to go as long as you on the call need it to go for, and that will be run by our Senior Corporate Affairs Advisor, Camilla Cox. Before I hand it over to Sam, I'd like you to turn to slide three, which is probably one of the most important Well, is the most important slide in the pack. And essentially, this is a summary of the dividends across the four funds that we keep paying on an interim basis compared to the profit reserve, which in other words, is the profit that we've built up to continue paying these dividends. If we look at WAM Capital, you'll see that our interim dividend is at AUD 0.0775 a share. This compares to the profit that's built up, which is AUD 0.147 per share. What this means is that from that AUD 0.147, we can fund the next dividend, which will be in April of AUD 0.0775, and approximately 90% of the October 2023 dividend. As a reminder, we can only add to that AUD 0.147 a share or the profit if the market is up and our portfolio is generating profit, positive profit, positive performance. In the case of February, the market was down and our performance was there or thereabouts in line with the market. We haven't been able to add to our profit reserve in the month of February. It's very important as investors that you're continuing to monitor the market and monitoring our net tangible asset updates are released at the middle of every month over the next few months to make sure that we've continued. Firstly, the market goes up and that our performance is in line with the market, so we can keep generating profit that adds to that profit reserve and then can give you more confidence around our dividends from October 2023 onwards. With that in mind, I'm sure there'll be a number of questions asked about that, like there was back at the end of January when Tobias and I did that call. We'll talk... I will pass it over to Sam, who will talk about our reporting season. Thanks, Oscar. Reporting season was actually one of the weakest on record, with more companies missing expectations than actually beating them. We had our fair share, as usual, of winners and losers for the period, and performance, as Oscar alluded to, was sort of there or thereabouts with mightily greater detail with our monthly NTA update later in February. From a sector perspective, the key trends that we identified were a deteriorating housing environment. You saw that in Domain and REA's results recently. That obviously flowed through into sort of consumer weakness in the household goods retailing sector with companies like Adairs, JB Hi-Fi, Harvey Norman, Temple & Webster posting weak results whilst seeing evidence of weak results in the consumer. On the flip side, you're seeing auto companies actually post pretty resilient results and resilient outlook statements. Companies like A.P. Eagers, McMillan Shakespeare, G.U.D Holdings and Smartgroup actually outperformed. Obviously in a very uncertain environment, the market's looking for confidence in the short term. It was companies like Steadfast and AUB Group, A.P. Eagers and Corporate Travel that could provide confidence in the short to medium term outlook that actually outperformed. As results rolled through, there was a really interesting, consistent theme irrespective of the sector. We saw revenue upgrades and earnings margin downgrades as inflation continues to wreak havoc on the corporate cost bases of Australia. With input cost inflation moderating to a degree, we actually saw that play out. However, wage inflation continues to run hot. When revenue is actually less certain in the current environment and input cost inflation and cost inflation as a whole is actually a given, the market was laser-focused on how healthy corporate Australian balance sheets were. You saw people focus in on cash flow conversion and increases in net debt were punished. We're keeping a really close eye out for any signs that inflationary pressures are easing, which will reduce the upward pressure on interest rates and reduce the downward pressure on the economy. In light of that, I'll pass to Shaun just to give us an overview of how we're positioned going forward. Thanks, Sam. Yeah. I guess in terms of our overarching portfolio position looking forward, I mean, we believe that a peak in inflation and therefore interest rates is now within line of sight, which should provide a more positive backdrop for companies within the small cap industrial sector to outperform. Albeit we don't expect that path to be linear, which has been the case throughout January and February to date. A key theme we did see throughout reporting season was those companies that had seen their share prices perform well leading in and were well owned by investors required very strong earnings results in order for the share prices to continue to rally. We've been selectively reducing our exposure to those companies in the months leading into reporting season, while adding to positions that we believe should outperform the market when investors look to add more exposure to small caps, which is consistent with what we've seen in previous market cycles. The small industrials underperformed the All Ords Index by 22% in calendar year 2022, as investors focus on maintaining high liquidity and lower risk within their portfolios. Hence, we believe there is quite a lot priced in with valuations in small cap industrials near 10-year lows and looking very compelling to us. We remain confident in our process and optimistic on the outlook for our portfolio companies. Balance sheets are healthy, with the majority of our portfolio in a net cash position, meaning they hold more cash and all property on their balance sheets than debt. In terms of some key themes within the portfolio, we remain positive on the outlook for companies exposed to the tourism and leisure sector such as Webjet, Flight Centre, Event Hospitality and Tourism Holdings. The reopening of the Chinese economy should also benefit these companies, along with others such as IDP Education and a2 Milk. We can also leverage this theme through mining services, with contractors such as NRW Holdings, Perenti and oil and gas services provider Mermaid Marine, which we expect to benefit from strength in resources. We've also been selectively building positions in companies exposed to domestic economy, which appear oversold and outlooks could ultimately prove, you know, what we think will be less bad. This includes companies exposed to the housing sector such as Lifestyle Communities, Boral, Johns Lyng Group and Qualitas to name a few. I guess as a broad overarching statement, there is a good balance of value and growth, you know, exposed stocks within the portfolio, and there's also, you know, an underlying focus on earnings resilience. The retracement in valuations is also enabling us to build positions in companies that we've previously screened out as too expensive, with high-quality names such as Pro Medicus, REA Group and Fisher & Paykel Healthcare, which we expect to benefit as the peak in rates is reached. I guess in terms of some high conviction ideas within the portfolio at the moment, we thought we'd all, you know, put one forward. I'll kick things off. The stock that I'm pitching is Qualitas. The stock code's QAL. It's one of Australia's leading alternative real estate investment managers. The company's got AUD 5.8 billion in funds under management, has been generating very strong inflows to date from global institutional investors, which we believe will continue given the rising appetite for exposure to private credit and the commercial real estate sector. Qualitas is a beneficiary of higher interest rates, along with the ongoing retreat of the major banks from this underserved market, which has seen the opportunity set continue to broaden and is more than outpacing committed funds within the business, which underpins a strong backdrop for deployment going forward. As such, we think the business is well positioned to upgrade earnings expectations in the future. WAM Strategic Value actually also owns shares in Qualitas as a listed investment trust, which the stock code is QRI, which currently trades at a 5% discount to NTA and has been closing more recently, and offers investors a very attractive 10% yield. I'll now hand it over to Sam, who will put forward his idea. Thanks, Shaun. My next high conviction pick is IPD Group. The ticker is IPG. It's an Australian electrical wholesaling business where the founders still own over 25%. We think IPD can actually outperform industry growth rates of 5% to 10% per annum through their exclusive partnerships with suppliers, through their greater exposure to high-growth areas like data centers, and obviously the very customer-centric business model. The cherry on top is that they've got a small but growing presence in the electric vehicle thematic, which we expect inquiry-wise to actually double and triple over the next 2-3 years. It's trading on just sort of 14x price to earnings multiple with 15% earnings growth outlook forecast. AUD 21 million of net cash on the balance sheet. We think the catalyst to see the stock rerated from here is earnings upgrades and further industry consolidation. I'll hand over to Will to provide his. Mine's LGI, which is a carbon abatement company. Carbon abatement is essentially you've got a landfill, a landfill from a, from your local council, and they remove the gas, which can be. It's actually methane gas, which is 30 times worse for the environment. Where they actually make money is they make that gas into energy and supply it into the local energy market, they also earn ACCUs, which are Australian Carbon Credit Units. We've seen those carbon credit units go from AUD 30 to EUR 100 in Europe. We've seen them go from $30 to $70 in the U.S., we've seen some strong price movement this year after the Chubb Review, which gave the Australian market a bit of guidance and a confidence going forward. Great management, great board, and it's one we really like in the micro fund. I now pass to Cooper. I'll do one Shaun mentioned earlier. The recovery in tourism industry is a theme that we like to play. Experience Co, the ticker is EXP. It's a tourism operator that runs a number of tours and activities across the East Coast of Australia and in New Zealand. For example, it runs boats out of Cairns for experiences on the Great Barrier Reef, luxury wilderness glamping style activities. It's got a treetop adventure parks business. The business that we focus on is the skydive business, and it's returning to strength after COVID had decimated its earnings. Through FY 2022, it was really only the weekend warrior that kept this business afloat. It really missed out on the midweek skydiving jumps. We're seeing international arrivals in Australia come back and that'll in turn fill up those midweek spots. The fixed cost nature of that Skydive business means that it's currently just break- even. It's sitting at about 50% of pre-COVID demand. When that increases, because of the fixed cost nature, you'll see a lot of that incremental revenue drop straight through to the bottom line. We'll be looking for upgrades in that area for EXP. It's one we'll keep close eye on. Passing back to Camilla for questions. Thanks, guys. Oscar, we're gonna start questions off with you. There's a lot coming through. The first one's from Stuart and actually a few others, who have asked, "Can you please explain why the WAM Capital share price has dropped recently? Yes, sure. Thanks, thanks for the questions. Yeah, Tobias and I were sort of and Jeff talked about this in the call sort of in January, just as a recap. Basically what happened, when the war occurred sort of around January and February 2022, that was a large event really for the whole market. What we saw was quite a strong dislocation between those companies that benefited from the war and those companies that didn't benefit from the war. Unfortunately, the process of Wilson Asset Management over the last 20 years has been that we focus on industrial companies, rather than resources companies, which is, you know, we've seen coal, oil, iron ore really do very well over this period. You know, shareholders might have holdings of BHP, Woodside, Commonwealth Bank in their portfolio have done very, very well. In that period, we underperformed quite extensively in March, and effectively that's the main reason why we have underperformed over the last, we'll call it 12 months. The reason why I'm giving you that context is because if you have a look at the WAM Capital share price in that March quarter, our cohort of stocks, the small cap stocks went down, and our portfolio went down, yet the share price didn't move. At one point in April, it was trading at a 30% premium to its net tangible assets. Now, when the sell-off really hit hard in the June quarter, we were actually in line with the market. That was okay 'cause everything got sold off. The WAM Capital share price caught up. I think when we got to sort of around June, that premium had shrunk to around a 15%-20% premium. Over that, over that six-month period, because our portfolio performance was negative, it was down with the market, it meant that there was a six-month period where we weren't generating profit to add to our profit reserve. We kept paying dividends, so that profit reserve that we showed you in slide three, that differential between the dividend, the interim dividend of AUD 7.75 and the profit began to close. Thankfully, over this last financial year, you know, we've been able to generate around 13%-14% of positive performance, so we've been able to add to that profit reserve. As I talked about previously, we really only have around 11 months of visibility. To put that all together, why has the share price fallen? The main reason, largely, is because of that 11 months visibility I'm talking to you about the dividend. If we have a period where the market falls extensively for the next 6 months, it'll put that the October and the April 2023 dividend at risk. Then secondly, small cap companies have underperformed large cap companies, and I think Shaun mentioned that just before. The underperformance is over 20% over the last 12 months. And that's why we're one of the reasons why we've underperformed the broader market. They're the real factors at play there, and that's probably the reasons why we sit today where the share price is. I still think it's worth noting the share price is still at a premium. It's still at a 10%-15% premium to its net tangible assets. As Jeff has always said, he likes buying things at a discount. The share price is still at a premium. I think it's but to finish off, it's very, very important for the listeners to be watching our net tangible asset announcements every month. Watch what the market's doing, and then you can make your own decision from there as to whether, you know, the stability of those dividends can be maintained. Thanks, Oscar. You covered off a few of our questions there. If we can focus on WAM Research for a minute. This one's from Mark. He said, "Is WAM Research's current share price premium to NTA, which was 27.48% for January close, a cause for concern? As you mentioned, WAM Capital share price decline was due to its large premium to NTA. Well, look, it's not cause for concern. I mean, it's a good problem to have, and I think WAM Research has a very strong profit reserve and ability to pay dividends. Relative to WAM Capital, the issue we do have in WAM Research is we are short a little bit of franking. That can change quite quickly if we have a positive market and we generate unrealized gains in the portfolio. Generally, as I'll come back to my last statement, a 27% premium to its net tangible assets is extremely high. Extremely high. You know, at some point, we could see WAM Research, you know, at NTA or even a discount. I think it's just worthwhile just reminding investors of that, because yeah, high premiums can easily become discounts at some point. Thanks, Oscar. You just mentioned the franking balance there for WAM Research. We've got a question: Is this going to impact the next dividend? Look, potentially. Look, it depends really. Our ability to pay franking is the unrealized gains that we make in the portfolio and the tax that we pay on those unrealized gains, and also the franking we receive from dividends from the companies that we own. Again, it just depends on the market. If the market's positive into the, into the end of the financial year and the start of the next financial year, then we should be okay. But as it stands today, we've got enough franking for the next dividend, but for the dividend after that, yeah, we are a little low, but that can change very quickly. I think broadly, Camilla, it's worthwhile noting, look, we were saying the same things right now that we were saying in the middle of 2020 with a number of the funds, and we saw, you know, huge uplift in the market from that point in time. I think it is a tough market. It's a very tough market right now for small cap companies, but it can change very quickly. Look, and certainly we're feeling very bullish around our portfolio. Yeah, look, I mean, it's worthwhile putting that into context, I think. Great. Thanks, Oscar. Tobias, I've actually got a question for you now from Sue. She's asked, "When do you think a rotation towards small to mid-cap sector will come into full swing? Thanks, Sue. To put it into context, Oscar mentioned this earlier. Last year in 2022, small cap companies underperformed large cap companies by over 20%. That's not new. We've seen this before. That was around the global financial crisis. That was the perfect setup for a few years of outperformance by small cap companies versus their larger peers. You know, we believe that we're getting closer to that point. A lot of the data, if you look at a lot of the macro data last year, it's been one direction. We're seeing a sort of mixed signal. Once the market gets comfort around what peak interest rate looks like, then there will be more risk appetite to come down the spectrum to invest in small cap companies. We do believe we're getting closer to that point, versus when we did the call last time around. Yeah, I think as well, just to maybe to put some context around it. Yesterday, there was positive data out on China, of course the iron ore companies had a very strong day. That's BHP, Rio Tinto, Fortescue, and that's broadly around 20% of the Australian market. We don't own a share in any of those companies. That basically, we underperformed the market yesterday by around 0.8%- 0.9%. That sort of shows you the sort of headwind that we've had. At some point, that will reverse and be very, very beneficial for us. I think it. Yeah, we said this in the last call. From 2010 to 2016, which is a great period for WAM Capital that you can all remember, small cap companies outperformed large cap companies by around 5% a year. The actual reverse of that has happened. It's actually been around -3% to -4% since 2016 to today. We do think we're actually very close to the bottom, and we do think this will rotate in small cap's favor very soon. Great. Thanks, both. Shaun, we'll go over to you. This one's from Nat, who noticed on a previous call that you were positive on the tourism sector. Is that still the case? Thanks, Camilla, and thanks, Nat, for the question. Absolutely. I mean, our overarching view on the tourism and leisure sector is it will continue to benefit from the shift in spend from goods to services as people get out and about. I mean, I think at the moment China's a great example of that. They've effectively been locked up for three years, and you can see they had a massive re-acceleration to turn there in terms of both inbound and outbound travel. As I mentioned before, I mean, companies such as Webjet, Flight Centre, Event Hospitality, Tourism Holdings, you know, Coopers, Stockbridge, Experience Co. These are all names that we really like. We still remain very positive on the tourism and travel sector. Thanks, Shaun. Oscar, this one's from Sally, who's wondering if the recent acquisition of Westoz and Ozgrowth contributed to the share price drop at all. Thanks, Sally. Look, I would say it probably did. However, I will say that the shares were too high at that point relative to what was happening in the market. For those on the call that can remember, we did the takeover of Euroz and Westoz, and it was announced to the market, I think, around December 2021. It took about 3 or 4 months to close, and I think we got the fund, I think, in sort of mid-April. We've had a previous takeover at Mason, where basically, those that weren't long-term holders of Wilson Asset Management, when we took over Mason, we saw some selling, and then the share price quickly rebounded to back to where it was. What happened with Euroz and Westoz, we had that same dynamic. There was some selling, the market came off, and that just exacerbated the selling more. It definitely would've contributed to that, I still think we'd be in the same spot with the share price anyway. I mean, we're still at a 10%-15% premium to its net tangible assets. The premium was 30%. It shouldn't have been there. Small cap companies have underperformed large cap companies. You know, the share price today is probably a fair reflection of what we've seen over the last year. Just as well, just as a reminder, on that transaction, that was very beneficial to our net tangible assets and was accretive. I think it was around 3.3% and actually added AUD 52 million to our net tangible assets. It was a good deal. It was just, yeah, in terms of the timing of those that were long-term shareholders of WAM, probably wasn't the best. Thanks, Oscar. Tobias, next one's for you. Are you positioning for any takeover opportunities at the moment? Yes. Yeah, sure. We typically don't invest in companies, where, you know, a takeover is a catalyst. You know, obviously, our investment process is to buy undervalued growth companies, you know, with, I guess, more organic catalysts that could rerate the share price. If we look at our portfolio, you know, we think healthcare is still an interesting space. There's a lot of interest from private equity funds or strategic investors to invest in that space. A couple of companies, you know, I've noted down, SDA Health and Capitol Health, so one's an aged care. And one's a radiology network. You know, these companies are trading at very cheap valuation or very attractive valuation. You know, there is scale advantage for someone to come and acquire these businesses and benefit from the economies of scale. These companies, we believe, are likely takeover targets in the future. Thanks, Tobias. Cooper, we've got a question for you from Elizabeth. She's asked: What are some of the mining services companies that you think are of fair value? Yeah. Thanks for joining us, Elizabeth. We have a significant holding in a few mining services stocks. To name a few, Austin Engineering, Monadelphous, Perenti, NWH. I suppose that's what I can think of off the top of my head. With all of these companies, we think they're either undervalued or fair valued, as you mentioned, Elizabeth. With all of them, the key thing to look for is margins and those improving margins and earnings over the next half. Yeah, they're just some to name a few. I think to add to Cooper's point, I mean, the valuation on these stocks relative to pre-COVID are, you know, at the moment on average around 20%- 30% lower. You know, we'd argue almost across the board, you know, stocks like Perenti and NRW, the actual underlying quality of the businesses, you know, improved significantly. Yeah, I mean, with the reopening of China and the positive leverage to resources and commodities prices that provides, I mean, also, you know, what we think is a very tight labor market here domestically, we think the balance of power is actually increasingly moving back towards the contractors versus, yeah, the miners themselves. Just add that as well. Thanks, Shaun. Thanks, Cooper. Sam, we'll go back to you to chat about earnings season again. This one's from Peter. He saw that Myer posted positive results during the season. What are your thoughts on the retail sector moving forward? Thanks, Camilla. Thanks, Peter. Yeah, Myer posted some really strong results. We're incredibly pleased with how that's going and obviously John King doing a cracking job there running the business. I mean, from our perspective, I think performance from here in the retail sector will be really interesting. I think it diverges depending on what sort of the exposure of that retailer is and also the people that are actually running the business. You're starting to see that now. As I mentioned, household goods, retailers are doing it a little bit tough at the moment. You're seeing companies exposed to the apparel, area like Premier and Universal Retail, two companies that we own within different strategies of the portfolio, so are really outperforming. Obviously with these, as Shaun has reminded me, too. You know, it really comes down to, I guess, operators that are driving these businesses to their full potential. It also comes down to exposure. In Universal's example, for instance, their core demographic doesn't have a mortgage. When you think about interest rate rises that are coming through the economy, they aren't as exposed there, so they continue to spend, they continue to wanna go out for live events, and the company is seeing that benefit, which again benefits Lovisa as well. I guess in as far as the retail sector is concerned, it takes a really sort of stock picker's approach. Thank you, Sam. Shaun, this one's from Dan. China opening up is beneficial for iron ore and coal. What about other sectors of the market? Yeah. Thanks, Dan. I mean, the key ones that we sort of see providing leverage to that China reopening theme is obviously the tourism and travel space. We've mentioned a few names there before, the likes of Webjet, Flight Centre, you know, Event Hospitality and Tourism Holdings. You know, we like companies like IDP Education, which will benefit from the return of, you know, Chinese students to Australian shores. I mean, historically, over 25% of their volume seen in Australia have been Chinese students. That's currently tracking at less than 10. Yeah, we think there's really good upside through that theme. I guess the final sort of leverage point there would really be around commodity prices, as we mentioned before. You know, we like the mining services space for that reason. Yeah, we are playing that theme and we do like it. Thanks, Shaun. Tobias, this one's from Rick. He asks: Do you see any opportunities within the technology sector? Yes. Thanks, Rick. Yeah, 100%. You know, we've invested in a few tech names recently. One that is of pretty high conviction is a company called Pro Medicus. You know, I think it's one of the highest quality tech businesses on the ASX. Has over 50% profit margins, and it's growing at 30%. Has a very strong moat. They've never lost a customer in the 20 years, you know, they've run the business. It's founder-led. The 2 founders own over 50% of the business. So that's one that we quite like. Yeah, overall, we're definitely finding more and more opportunities in the tech space. Thanks, Tobias. This one's from Peter. I think a few of the analysts can answer this one. Were there any surprises in the earnings season? Maybe Sam, we'll start with you. Definitely. Thanks, Camilla. Thanks, Peter. I think the biggest surprise. Like, earnings season always has surprises, but the biggest surprise for me was a couple of companies that posted, you know, some tough first half 2023 results for the last six months, but provided some confidence in their outlook statements that really got the market excited. Two companies in particular that I can think about there is just Corporate Travel and Credit Corp. Again, they have conviction in the next six to 12 months within their respective businesses, and they talked to the market about that conviction. Irrespective of their weak result, the stock actually outperformed. That was one surprising thing from my perspective. Yeah. Just expanding on Sam's point, I mean, overall, it was a tough reporting season. I mean, we saw the ratio of downgrades to upgrades for earnings was the highest in 25 years. Yeah, clearly not an easy environment. Yeah, I mean, we found, you know, I guess on average, the upside surprises were really those stocks that were, what we perceived as underowned or not well-owned by investors. A good example of that would be G.U.D Holdings. You know, business was trading on a single-digit PE, made a large acquisition out of private equity. You know, it's underperformed, I guess expectations. All the hallmarks of stock you wouldn't wanna own, I guess, initially. Yeah, we think that business has turned the corner. It's cheap. The end market is defensive and, you know, we think the earnings now look strong and the balance sheet should progressively de-gear as that comes through. I'm assuming the question on surprises is negative surprises. In terms of negative surprise, we did have our fair share, there's no doubt about it. I think, you know, going into it, we knew it was gonna be a very tough reporting season, definitely. There was gonna be a lot of companies that guided to a second half wait. There was only really one company where we really reduced our holdings significantly, which was Enero, AGG. The remainder of the companies that we own, we actually bought, you know, quite substantially, when the share prices fell. You know, as Shaun and Sam said, it was a very weak reporting season, but that's normal. Well, we were expecting that. The pleasing thing there was the small cap industrials index actually outperformed the broader market in the month. That's actually a very good sign that perhaps we are getting closer to the bottom. Thanks, guys. Tobias, we'll go to you now. This one's from Graham. Have you seen a slowdown in IPOs and capital raisings? How do you see IPOs trending in 2023? Yeah. Excluding, you know, companies in the mining space, it has been pretty slow. More recently, we've participated in a couple of capital raisings. You know, Flight Centre's probably the most notable one recently. You know, it's done really well for us. We're actually, you know, doing the work on the business prior to the raise. Even more recently to, you know, we've seen a couple of ones in the small cap space, Retail Food Group and Matrix Composites. We've started to participate in these names. From an IPO perspective, you know, we believe it will continue to be relatively slow. From a capital raising perspective, you know, we think there are more and more opportunities that will come to the market. Thanks, Tobias. Oscar, James has asked for your views on AMP. Yeah, we still like the company. We're a little bit disappointed with the result. We sold a lot into it, so did WAM Strategic, which was, you know, a good move when we started selling about AUD 1.30, AUD 1.35. Don't get me wrong, it still hurt us over that period. It was a very messy result. There's still a lot of one-off items and impairments going through the numbers, and it's difficult to note where certain divisions are. Yeah. I'm not surprised that it fell, and it had I think it was one of the best performing stocks in the ASX last year. Where it is now is we're now back at a 20% or over 20% discount to net tangible assets. The business is buying back around 25%-30% of its shares on issue over the next 2 or 3 years. A very strong balance sheet. We think the CEO, Alexis George, is doing a very good job. We do think there's more asset sales to come. We still like the company, but our holding has been reduced. It's about a third to a half of what it was a few months ago. Okay. Thanks, Oscar. Shaun, you might be able to answer this one. It's also from James, who asks: What part of General Development Group, ticker GDG, are you most attracted to? Thanks, James. Management would be the answer to that one. Business is run by Grant Hackett, obviously the former Australian Olympian. You know, we think he's extremely high quality, very motivated and driven to, you know, deliver strong outcomes for shareholders. I'd say from an operational level, I mean, the Loan Sec business has been absolutely flying. It's proved to be, you know, a very good acquisition, you know, which was obviously led by management and by Grant. I guess from here, we continue to see a really strong outlook for Loan Sec, and we think as markets sort of stabilize and some of the retirement, recent retirement policy changes, you know, that's actually very positive for the investment loans business too. Yeah, we think the outlook for GDG looks really good. Thanks, Shaun. Oscar, this one's from Karen, who's asked: Why isn't the WAM Microcap dividend higher, considering the profits reserve is so high? Thanks, Karen. Great question, really. Look, obviously it's a board decision. We've increased our dividend from AUD 0.05 to AUD 0.0525. Yes, you're right, the profit reserve is really high. It's one of the highest out of in the 4 funds that we currently manage. I think it's worth pointing out that in the last, I think of the 5 years we've run WAM Microcap, 4 of those 5 years, we've given special dividends when our performance has been very strong. Clearly in the last financial year, while we outperformed, we were down quite significantly. The board took a prudent approach not to give a special dividend. The same goes with increasing the dividend. you know, it is a very uncertain market right now, and I guess the last thing we want to do as a house is have a situation like we sort of do with WAM Capital, where if we pay more. We wanna gradually increase your dividends over a longer term. The last thing we wanna do is increase your dividend, and then the market falls for an extended period of time. Micro-cap companies will be worse than the broader market because they're highly risky. At some point in the future, we might have to pull or reduce your dividends. I can see the reason for your question, definitely. I think our view is we wanna be in this for the long term, and we wanna keep increasing those dividends every year. Great. Thanks, Oscar. Tobias, another one from James. What are some characteristics of Wilson Asset Management that differentiates us from our competitors? It's a great question. Thanks, James. I think firstly it's our investment process. You know, when Jeff founded the business over 25 years ago, you know, that investment process had been tested over various cycles. This is investing in undervalued growth companies with catalysts that could rerate the share price. You know, one thing that's pretty unique to us is also our active and research strategies, whether it's how it comes together. We do a lot of meetings, I think like probably 1,000 meetings, as a team over the year. That sort of forms part of the ability for us to identify opportunities relatively early on the active side and also on the research side. Now with WAM Microcap, these are companies that in the future could be larger companies in the ASX 200 index. Sometimes the micro-cap ideas also flow into WAM Capital, which gives us, I guess, helps us with the idea generation. Finally the LIC structure. You know, having this permanent pool of capital is a huge competitive advantage, you know, during periods of uncertainty. You know, we don't have the pressures of, you know, money flowing out from, you know, capital outflows. We can make longer term decisions and ensure that we stick to our investment process. I think a good example of probably our process and working at its best, let's call it, and don't get me wrong, there's plenty of times when it doesn't. Just to give you a flavor of why we think this is a competitive advantage. Mermaid Marine sits in WAM Capital, WAM Microcap. It's been our best stock over the last 12 months by probably a long way. Mermaid Marine was a small cap company. I think its market capitalization might have been $500 million or $600 million at the peak of the oil boom back in 2012. They did a very bad acquisition. The business. Oil prices fell, capital expenditure fell in oil and gas. Demand for their services fell, and the business was essentially broke, and was hardly alive, let's call it, for about five or six years. It raised money twice. We kept seeing Mermaid Marine over the last decade, probably once or twice a year. We knew the management team that had come in to try and fix it. Basically, it was probably around this time last year, you know, having seen them very regularly, you could sense a change in the management. You could sense that things were getting better. Clearly oil prices have gone up a lot. You know, the Russia and Ukraine conflict, and there just simply hasn't been any investment in that sector for a long, long time. We bought the stock, and we bought it at around AUD 0.40. I think the share is today about AUD 1.15-AUD 1.20. We aggressively bought the stock. We went to, you know, over 10% of the company, I think it was around May or June of 2023, across WAM Capital, WAM Microcap. That's a big bet in the, in both portfolios, and it's paid off. We wouldn't have gotten that bet. We wouldn't have been able to buy shares in Mermaid if we hadn't done all those meetings in all those years where no one was interested in the stock. For me, definitely, I think that's our competitive advantage. We do see a lot of companies and we've got good market feel across the market. Thanks, Tobias. Thanks, Oscar. Oscar, this one's from David. He says, "Can I assume that the profits reserve represents realized profits and not quote-unquote book profits on unrealized investments? If Most of the vast majority is actually unrealized profits, so it's unrealized profits and realized profits. The problem is, if it was just realized profits, we'd have to sell everything to be actually able to generate the profit and then also to pay you a dividend. Without those unrealized gains and prepaying tax, effectively over the course of those unrealized gains, you know, we'd have to sell a huge chunk of the portfolio just to keep funding the dividend. The answer is, a big portion of it is unrealized gains, and then a portion of it is also realized gains. That's how we generate the ability to pay dividends. Okay. Thanks, Oscar. Cooper, we'll go to you now. James again has noticed that in the January 2023 NTA update, Austin Engineering was a significant part of the micro-cap portfolio. Can you speak more about why you're excited about this stock and what potential it has? Yeah, sure. James, thanks. Yeah, thanks for all the questions as well. Shaun touched on some factors earlier on the mining services sector and why we're bullish around it. Austin Engineering is a company that does like truck trade bodies and buckets for the mining sector. We're really bullish on this stock. Basically, it's had trouble in its Australian division. It's had labor issues and supply issues. The demand has never wavered. Its order book's actually up 40%. They just haven't been able to service that demand. We believe Austin's made the necessary changes to address that issue, and hopefully we'll see this improve in the next half and then going through into FY 2024 as well. We really think the margins will improve, and you'll see this uptick once they start actually addressing that order book. Another reason we're really bullish, again, Shaun, you mentioned management. David Singleton runs this company. We followed him for a long time. He was managing director of Austin Boats before Austin Engineering, we followed him through that company and then in Austin. We believe he's doing a fantastic job, and we'll see an uplift in the shares as he addresses that Australian problem. I guess just to expand on that point, I mean, obviously, you know, we think there's earnings upside. The other catalyst there is really around acquisitions. The balance sheet's in great shape. You know, we think they can continue to expand their addressable market globally after undertaking M&A. Thanks, guys. Oscar, we'll go to you. This one's from Philip. He said, "Following the Westoz and Ozgrowth takeover, were there any duplications in the WAM Cap investment portfolio? Thanks, Philip. There were some very minimal duplications. We had some mining services companies. The guys just talked about Austin Engineering. We had a weighting in WAM Microcap, and it was doing very well at the time. We took on Euroz's. Euroz had a very large holding in Austin Engineering. I think we ended up with about 7% or 8% of the company. That's done very well for us. NRW, we didn't own any shares at that point in time, but we were actually looking to buy it at that point in time, and we inherited the NRW, which was great. The only other stock. Well, that was it. That was the only that was really the crossover. Philip, you probably remember that portfolio was largely re-resources orientated. As I said earlier, we focus on industrial companies, so basically anything that's not resources. Effectively, you know, we did liquidate quite a substantial amount of that portfolio. The last stock that we did liquidate, I think we did around about... When was that? Just before Christmas. It was a company called Allcorp. There's really not much of that portfolio. There might be 15% of that portfolio left in our portfolio in WAM Capital. It's probably around, that's probably about 4% or 5% of WAM Capital as it stands today. Those stocks we're very positive on. You know, if the context of the question is, has it been a headwind? The answer is no. Thanks, Oscar. Peter's asked you, he says, "I understand the profits reserve can grow when you make profits on your investments. Can you also grow the reserve from franking received from those underlying investments? That is correct. I think, you know, I'd say for the WAM Leaders, if you think about WAM Leaders, the vast majority of the companies that they own and that the guys own in WAM Leaders pays fully franked dividends. For us in WAM Capital, there's, you know, while we have companies that are generating, you know, that are generating effectively, unrealized gains, which is effectively profit that we get taxed on, that gives us the ability for us to pay, to give franking. 'Cause we're in small companies or really small companies, a lot of them don't might not pay dividends or might not even frank their dividends. It means that, you know, I would say, the franking is generally lower. The franking that we generate in a period is probably lower than the dividends that we have the ability to pay. We do have to find it in other ways, which we've done previously when we see a potential acquisition like Amaysim or Euroz acquisitions where we can buy something at a discount, you know, which we see a return doing that, but it has the added benefit of franking, we can pass that on to the shareholders. Thanks, Oscar. Tobias and Oscar, Chris has asked for your 2 high conviction stock picks. I'll go if you want first. Mermaid Marine, we're still very positive on. I think I said that back in January. It has had a good run. We have sold some over the last week because it's gone so well. That doesn't mean we're negative on it. We're still very positive. I'm reckon this one's gonna double this year. It's called Evolve Education. It's a childcare company. Very simple. It's quite small. We went substantial around 10% of the company, I think it was, back in late 2020. It's been a dog. It hasn't done well for us at all. It's sitting at AUD 0.50 a share. I think, you know, our average price might be AUD 1 a share or so. It's run by Chris Scott, who's the ex CEO and founder of G8 Education, which is ASX 200 company, over a billion-dollar market cap. He knows how to make money, knows the sector very well. They've sold their New Zealand operations. Business is net cash, they're looking to do acquisitions. It's very simple story, very similar to G8 in the early days. While we like childcare, we also own G8 in our, in WAM Capital as well. Why do we own childcare right now? There's a number of reasons. Firstly, it's very hard to develop a childcare center right now. Building costs are very high and banks are not willing to lend. Secondly, and most importantly, you probably have the most favorable conditions around funding that the sector's ever seen with the Labor's new policy coming into fruition in July. We think the demand for childcare is going to really increase, and this will benefit the operators. We see a good environment for acquisitions, good environment for organic growth. This business is trading, I think on a price- to- earnings multiple. We think of around sort of 5x to 6 x earnings. Once it deploys all its money, we think it could easily double over the next 12 months. Yeah. One for me, this company is reporting in about, I think two weeks' time. No pressure. No pressure. The company is Tuas Limited, T-U-A. Ticker's the challenger mobile operator in Singapore, run by or founded by the founder of TPG Telecom. It's a founder-led business. You know, we believe they're taking a lot of share from the incumbents. It has the same blueprint as TPG Telecom back in the days when they won share from Telstra over the decades. You know, we believe they have real and sustainable cost advantages in Singapore, which gives them the opportunity to price under the market in terms of the value of their plans. As an example, their AUD 10 per month mobile plan, you know, has 100 gigabytes of data attached to it, versus their peers can probably only offer up to 15-20 gigs of data. We think that's a substantial advantage for them, and you know, we believe they can continue to win market share, in Singapore and over time, you know, roll out other products. That, that's something that we really like on a 3-5 year time frame. Great. Thanks both. Oscar, this one's from Anthony, who's asked, "Why does Wilson Asset Management not advertise their investment portfolio performance after fees? Thanks, Anthony. I mean, Jeff. We always get this the question, you know, and what Jeff would say is, effectively, we want a like for like comparison to the benchmark. If you're looking at it, all our portfolio managers and, you know, and if you wanna have an ETF, there is a fee involved. We want a like to like comparison. We do disclose it, so it's on our website. Also we publish it in our annual reports, twice a year. Thanks, Oscar. We've got another one from Philip also for you. Considering the macroeconomic factors such as Russian invasion of Ukraine, supply chain issues and more, he's asked why a move to more defensive strategy, including substantial cash holdings, was not undertaken for both WAM Cap and WAM Microcap. That's a great question, Philip. Look, it's a tough one because, you know, we did this call, it would have been sort of July. I think, you know, if you reflect on the, that year, the financial year of 2022, what was the mistake? It was probably that we underestimated how much of an impact the Russia-Ukraine war would have effectively on sentiment. At the same time was more inflation. I think, you know, Russia-Ukraine war was a left field event. I don't think anyone knew or thought it was going to happen. Inflation was there at that point in time, but... I think, you know, our view was it was cyclical and clearly there's, you know, it's taking a long time for it to come down. That was probably something that we underestimated. Now, we've stayed true the whole time through. We didn't go to cash. We went to cash in COVID, that was the right move. We chose not to go to cash, and there was plenty of times through April, May and June, where we caught up and we said, "Should we go to cash?" We didn't. Now, looking where the market's gone this year, that was a great move. If we went to cash, went to 40% or 50% cash like we have in the past, there is no way we would be, you know, the portfolio would have been + 13%, 14%, pretty close to the All Ordinaries Index this year. It probably would have been, oh, God, a quarter of that, if we'd gone to cash. Look, it's a hard one to call. Yeah, if if I in hindsight, you would have loved to go into a bit more cash in January and February, and deployed it through the May and June weakness. As we sit here today, I still, you know, think it was the right move not to go to cash. We've just got to be prepared for when we wanna outperform. We basically when that tide turns, when large caps start underperforming and small caps start outperforming, we wanna, you know, do very well in that period. Jeff will always say that it's not about what you lose in the downturn, it's what you gain in the upturn. As I said before, WAM Capital's best years were from 2010 to 2016 when small caps underperformed large caps, and we think that's coming. So we wanna be in the market for that. Yeah. I think just to add to what Oscar was saying, during that period, we were rotating the portfolio. Yeah T he higher quality names as well. I think the equilibrium cash levels has probably changed versus, say, 10 years ago where, you know, the fund's a lot larger now. We have a lot more larger companies with more liquid companies in the portfolio. Also the makeup of the portfolio is very different now versus back in the days. I'd say with that as well, the problem. We did this in, at the back end of 2018. Like, when you go to cash, you're generally selling, this is Tobias' point, you're selling your most liquid companies to get to that cash level. Which means that what you're left with are the most illiquid companies, like the smaller, really small companies. That can really catch you if the market starts turning the other way, 'cause the smaller companies don't move. It takes them six months to move with the broader market 'cause they're risky. You look, yeah, I mean, it's a tough one to call. Oh, look, do we regret it? I probably. I think I personally, I think it was the right move at where we sit today not to go to cash. Thanks, guys. Will, this is a question from Chris. He says, "Do you have any strong views on lithium stocks? Yeah, we have a couple of strong views. We think, look, it's a really interesting space and as Peter Bradford, the IGO CEO, who sadly passed away last year, he said it's an immature market. It's very early days and there's a lot happening. We really like the companies that are generating cash and, you know, we own PLS in WAM Capital. We think that's really important. I think I said last time on the call that we sort of weren't looking at the developers as much because of the sort of stretched valuations. We'd rather be exposed to those earning cash flows when there was a bit more risk around where demand was coming sort of this year and next. However, those valuations have come back a bit. We've been adding positions in the micro fund. We own Global Lithium, which is GL1, and Lithium Power, which is LPI. Because we think that, you know, as people get more confidence throughout this year and we can see that that demand is stronger, I think that's the biggest question within the market. We all know how much supply there is, you know, the market whips around on a Goldman report on lithium out of China, suddenly last week it's whipping around again on the fact that that's been shut down and it's very spitty at the moment. These developer valuations are coming down. I think that there will be a point where you've got the upstream suppliers that need to come down and look at these companies and will look at buying them as well. The important point I'd add there is the way that we approach, you know, companies in the lithium space is exactly the way we approach our broader portfolio, which is always sticking to our process around, you know, identifying catalysts and high-quality undervalued companies. As an overarching statement that is how we approach that sector of the market, so. Cool. Thanks, guys. Shaun, we'll actually stay with you. Ian has asked if you believe that retailer City Chic Collective has bottomed. Tough one. I'd say as an overarching statement, we're always followers of Brett Blundy, and we view him as the smart money. He's a lot better retailer than I am. He's obviously taken a significant stake in the business more recently, which, you know, certainly piqued our interest. I think in the near term, like, the outlook's clearly challenging. I mean, I think the balance sheet risks have fallen for investors, but, you know, you are up against pretty tough short-term fundamentals, obviously with recession, you know, elevated inventory. You know, management focus is really around, I guess, re-reducing that inventory balance and, you know, prioritizing that over growth, which I think will, you know, see them ultimately get back towards that net cash position. You know, if you're willing to take a medium-term view on this business, I mean, we think it can get back 10%-13% EBITDA margins in, you know, normalized environments. If you're shooting that set by 25, I mean, the business is on 5x or 6 x PE at the moment. It does screen as really good value, but I do think you just need to take out a longer-term view on this one at the moment. Thanks, Shaun. Sam, we'll go to you. Nick Scali has been a favorite previously. Do you have any exposure at the moment? Thanks, Camilla. No, we don't have any exposure at the moment. It has been a favorite in the past. Our view is that it's obviously incredibly great management team, who manage the business well with an excellent track record of value creation. Just in the short term, though, I guess we're a little bit cautious on the near-term outlook. What sent the share price falling in February was the fact that written orders in January and the early start of February actually deteriorated significantly versus expectations out there in the market. We wanna see that play out a little bit further and see how they trade through this period, given a deteriorating housing environment. We think their acquisition of Plush was a great move. There's a lot of initiatives there that, again, self-help initiatives that can really drive earnings growth over the short to medium term. At the same time, they did acquire a business and double down on household goods, probably at the wrong point in the cycle as well. Again, one that we're keeping a very close eye on, but not in the portfolio at the moment. Thanks, Sam. Will, this is a question from John. What are your thoughts on Hansen, ticker HSN? Yeah, I really like Hansen. It's interesting. If you sort of said, you know, what are the top management on the ASX, Andrew Hansen would be there. What's one of the safest stocks in the ASX? Probably Hansen. 30% margins, which have been constant for, you know, nearly 10 years. Unfortunately, people wanna pay more for a company that's growing, that's got 3% margins, growing at revenues at 4 or 5 times a year, and as a really than in a high growth company, as opposed to Andrew's very safe company. Which means that their valuation isn't high. I think the key focus for Hansen is making sure that they can get some acquisitions, build it in, and they've made some amazing acquisitions in history. As we've seen now in the rising interest rate environment, the multiples of the businesses that they've been looking at are coming down. I reckon they're gonna start making some acquisitions probably in the second half. We know the CFO, Graeme, has just moved over to the U.K. I imagine that's to look at acquisitions and that. Once the market starts to see signs that they're looking at buying something, I think, you know, that stock will definitely start to reroute. Thanks, Will. Shaun, we'll go to you. Question from Joseph: Do you believe Harvey Norman is worth holding over the long-term period? Yeah, good question, Joseph. I mean, the Australian franchisees have been material beneficiaries of COVID. I guess moving through the second half of 2023 and into 2024, we do think sales growth, you know, and margins will moderate, you know, back towards historical levels and those pre-COVID levels, which, you know, in effect will see negative earnings momentum for the business. I guess the positive, though, is that the property portfolio, the freehold investment, you know, portfolio's worth about AUD 2.75 per share. You know, over the medium term, yeah, we do think it looks like good value here, but in the short term, we think a negative earnings momentum probably caps the share price upside. Thanks, Shaun. Oscar, question from Peter: What is the catalyst for staying invested in Keybridge Capital? T hat's probably one for Jeff, I think that one, Peter. You know, I think from memory, that was more of an activist position that we took years ago. A long, long time ago. I think it's been in the portfolio for... Before my time. Yeah. At least 8 or 9 years, I think. That's probably more of a question for Jeff. It's just in WAM Active, Keybridge. Thanks, Oscar. We'll go back to the analyst. Sorry, we'll go to Sam. Does WAM Research or WAM Microcap hold Magellan Financial Group, MFG? Thanks, Camilla. No, we currently don't own Magellan within the portfolio within, you know, WAM Research or WAM Microcap. Look, it's one that we're monitoring closely. Obviously, it's fallen from grace, obviously, you know, with a lot of management changes and the fact that they've lost a lot of FUM recently, but it's one that we're monitoring. There is value there. Probably seen press that Jeff has alluded to, just in terms of their stakes within various businesses, including Barrenjoey and including some of the unlisted businesses that they hold. We're monitoring it and, stay tuned. I guess what makes this one look pretty interesting too, is you've effectively got, you know, a AUD 1 billion EV. It's got AUD 250 million of cash and, you know, in theory, a AUD 400 million Barrenjoey stake. you kind of X that out, the actual underlying funds management business is trading on, you know, seven, eight times PE. yeah, there's definitely an interesting little discount to NTA play there, if you like, which is right up Jeff's alley. Thanks, guys. We'll stay with you. Does anyone have any thoughts on Mars Group and Mad Paws Holdings? I can do Mars. Let me do Mars Group and one of the other guys can do Mad Paws. Just on Mars. Look, it's been a very frustrating holding for us over the last 12-18 months. I mean, we always love founder-led businesses, but sometimes founders can do things that probably don't sit right with the market. Certainly Mars is that. Unfortunately, Mars Group decided to make acquisitions. Well, too many acquisitions and has continued to do that over the last 12 months and is paying the price for it now. Look, we have reduced our holding in Mars Group. We still own the company. Look, the balance sheet, the assets on the balance sheet is worth well north of where the share price currently sits today. It's been impacted by weather. Earnings are artificially depressed. What we would like to see the company going forward is to focus getting on organic growth, stop acquiring businesses, generate some positive cash flow and reduce debt, which we're hoping that the management's gonna do that. I suppose I'll have a stab at Mad Paws. It's not one that we look at, really. The market cap, I think is about AUD 40 million, yeah, AUD 40 million and unfortunately that doesn't really fit within our microcap strategy, even it's too illiquid for us to own. In general, the strategy around, I suppose, discretionary spend on people's pets has been an increasing one and especially through COVID. We haven't seen that trend change outside of COVID. Again, not one that we're gonna actively own. Cool. Thanks, Cooper. Thanks, Oscar. Oscar, good question from Mindy. Given the drop in the share price, are you saying it's a good time to buy in? Oh, I'll tell you a funny story about that, Mindy. I told a broker when our result came out as soon as it came out on the ASX, I was like, "Can you buy us, buy me some shares in WAM Capital?" I was like, the next day I was like, "I didn't hear anything from the broker." I called the broker up and he forgot. I was like, "Jesus!" I definitely bought the next day, and I think most of the team did as well. 'Cause it was one of the first times we've seen WAM Capital. I mean, I've been at WAM Capital, this is my seventh year. It's never traded close to net tangible assets like it did prior to us releasing the result and having that conference call. You know, generally, I'd say across all the funds, you know, speaking for myself, and I know the other guys are very similar, where our wealth is effectively or the shares that we own the most of, let's call it, are in the funds that are either trading close to net tangible assets or at a discount to net tangible assets. For me, personally, you know, where Microcap got a large holding, but also WAM Leaders and WAM Global, would be my largest holdings really personally. Look, is it a good time to buy? Look, we think it's a very good time to be buying small caps. Certainly, we're very bullish on the small cap market. If it turns out that we're right, then WAM Capital should do very well. Just remember, we're trading still at a 10%-15% premium to our net tangible assets. It's very high still. It's just, yes, the share price has reduced, but it's gone from a 30% premium to its net tangible assets to a 10%-15% premium to net tangible assets. Look, it's still high. As Jeff will always say, you know, you like to buy AUD 1 of assets at AUD 0.80. Just be mindful of that. Look, just generally, look, we are positive on small cap companies. That's why we're fully invested. Thanks, Oscar. Will, this is a question from Mark. I always butcher this pronunciation. Do you have any current thoughts on Centaurus Metals? No, you got it. That's it. Centaurus. yeah, Jared and Roger, we really like them, CEO and Chief Exploration Officer. I think they're great operators and have done an amazing job on this asset over in Brazil. I guess and we own this in WAM Capital. The one thing that they needed to do is get out of their agreement with Vale. That's gonna be a difficult thing to negotiate because Vale have spoken about their wanting to move into the future facing metals, which is copper and nickel and the rest of it. This is a really good nickel project. If they can get out of that, there's massive valuation upside for this company. We've reduced our position a little bit just because we think there is a little bit of risk there. you know, if they can do it's gonna be massive. yeah, we still like it. Thanks, Will. Oscar, this one's from Steven who says, do you think WAM has been adversely impacted because you are losing focus by allocating resources to look at acquisitions rather than looking after the investment portfolios? Thanks, Steven. No, definitely not. We don't look at the acquisitions. The team that's presenting today, the six of us, we don't look at them at all. That's largely Jeff and Martyn McCathie, who's in our or was in our operations team at the time that we did those acquisitions, and also Jesse Hamilton, our Chief Financial Officer. No, the answer is absolutely no. We do zero on that. We're fully focused on the. Always has, have been. I, you know, Jeff, speaking to Jeff, that's what exactly what he would say. He's more about the growth of the business. Obviously he keeps in tune with what we're doing in the portfolio and everything like that. The stock picking, the same companies, that's all the six of us. Thanks, Oscar. sorry, Tobias. Question from Phil. This sounds like something from Top Gun. Have you reviewed Mach7 Technologies, which is in the healthcare sector? A what? Yeah. Thanks, Phil. I, yeah, we've had Mach7 in the microcap fund, I think a while ago. We don't own Mach7 currently. I think one of the lessons we've had over the last, you know, period as being if you had a choice between a higher quality company with a better technology or a better moat and a lower quality company, even though the lower quality company is cheaper, we've, you know, I think the better investment has always been with a higher quality company. You know, Mach7 is not something we've looked at recently. Doesn't have the same earnings margin and the recurring nature of that business is a bit is not the same as Pro Medicus, which is something I've talked about earlier. Mach7's not something on our radar right now. Thanks, Tobias. Oscar, you did touch on this before, if we can revisit. This one's from Cynthia. Can WAM Capital and WAM Research continue to pay their current dividend into the future? The answer is yes. To rehash. Well, look, WAM Research definitely has plenty of tank in the profit reserve, so they're fine, at least for the next three or four years. Camilla, you might be able to get me what the sort of dividend coverage is there. For WAM Capital, we can pay the next dividend in April. That's AUD 0.0775. We've got AUD 0.147 in the profit reserve. We've got AUD 0.07 a share after we pay the April dividend. For us to improve on that seven, we need the market to go up. We need our performance to go up. That will build the profit reserve. you know, if that occurs, like it did in 2021, then we will add a whole heap to the profit reserve and, yeah, at least for the foreseeable future, we do have coverage of the, of our dividends. Cynthia, it's just very important just to monitor the market. If the market falls 10% from here over the next 4 months, and say we've done a good job and the market's fallen 10 and we're down 8, right? I'll be happy as the portfolio manager 'cause we've outperformed the market. you as an investor won't be happy because we're down 8%, so we're not adding to the profit reserve. When we get to this call in July of this year, suddenly we're at, we've only got AUD 0.07 in the profit reserve and that's it, when we last paid AUD 0.0775 in April, suddenly there's risk on that October dividend. You just gotta keep monitoring the market, monitor our net tangible asset announcements that come on the ASX every mid-month. Great. Thanks, Oscar. Question for both yourself and Tobias. Is Lendlease in your investment process, and is there a price that you'd consider buying it at? There's always a price, Camilla, that's for sure. I'm just looking at my phone. Yes, they do. WAM Leaders actually own Lendlease. They've got a reasonable position. I think it's in their top 20. The stock has been a perennial underperformer over the years. You know, there is sort of takeover rumors speculating. There's some activist investors to break it up. Matt and John obviously aren't on the call, but I think it's that activism and potentially breaking up the company that they're interested in. We don't currently own it within WAM Capital. Would we own it at a later date? Yeah, absolutely. If there was catalysts there and it was looking cheap and we, and we thought the share price would go up 100%. I don't think we've owned Lendlease for... I don't think since I've been at WAM. For the last 7 years, I don't think we've owned it. Yeah. Look, everything, you never rule out a company. From our perspective, we don't own it at the moment. Thank you. you. Thanks, Oscar. Cooper, a question from Steven. Is there any appetite to take a position in uranium producers in the near term? In the near term? Good question. We do dabble in and out of uranium stocks from time to time. It's part of a kind of a bucket we like to call new energy, or we believe there's a bit of an energy crisis that's happening in the world, so we do keep an eye on it as an alternative source of energy. Unfortunately, I think there's some government regulations in most of the Western world that prohibit that becoming a major fuel source. Because of that, we don't really have a long-term view on uranium. We do trade in and out of it, depending on what the uranium price is doing. When we do that, we'll play things like primary producers that, stuff that's in production, so you can actually capitalize on that change in the price. In terms of a long-term view, not too really sure. It relies on a lot of government regulation. Again, energy crisis is a thing that will continue to play out and it's something that we consistently look at. Thanks, Cooper. Does anyone across the team have any thoughts on Liontown? Yeah, Liontown. We talked on lithium and I suppose lithium supply earlier today. It's very tough to get these explorers and I suppose developers up and actually producing lithium. Liontown came out with a study that surprised the market on its CapEx requirements. It was much higher than the market was expecting. We see that happening in a few developers as well. We like Liontown. It's a quality asset. WA, good jurisdiction. We're happy to own it. We just don't think there's many assets like this out there in the world. It's one that we will continue to look at. We don't own currently, sorry, I should say, but it's one we will look to kinda own if it gets closer to production. I'd say at the moment it's an overarching statement for that. We are focused on assets in production, particularly given, you know, the risks around construction cost blowouts and getting mines up in, you know, lots of high inflation and, you know, tight labor market. Thanks, Shaun. Thanks, Cooper. Tobias, we'll go to you. Do you have any thoughts on Nine Entertainment? Yes. Thank you. Look, Nine's a great company. However, our concerns around, you know, TV has, you know, benefited during COVID, obviously with people having to stay at home. The way we are playing media is through oOh!media, which is an outdoor advertising business. You know, the recovery has been very strong. We believe they're actually winning share of linear TV, so we think that trend will continue. From, you know, the TV perspective, I guess, you know, the BVOD is the exciting area that's offsetting some of the declines in linear TV. Not something we're looking at right now, as we are pretty fully invested in oOh!media. Thanks, Tobias. That actually brings us to the end of the Q&A. Oscar, I'll just pass to you for any closing remarks. Yeah, look, thanks everyone for dialing in. Really appreciate it. Also thank you for your support. Look, if you've ever got any questions, very happy to have a chat. You know, obviously we've got the corporate affairs team, they'll always get back to you, personally, if you need to call us, we're only a phone call away. It is a very volatile market right now. It's probably the most volatile we've ever seen it. It's probably the toughest market we've ever experienced. I think it's harder than COVID, to be fair, to what COVID was. Look, in terms of how we're thinking broadly, we're, you know, does feel like the interest rate rises at least is sort of, it's mixed, but we do think that's coming to an end. When, when that does occur, I think that'll be very positive and you'll see a swing back to small cap companies from large cap companies. Look, really appreciate the support, and thanks again for your time.