I'd like to welcome everyone for dialing into today's call. On the call you have myself, Oscar Oberg, and Tobias Yao to my right, portfolio managers of the small cap products that we run at Wilson Asset Management, being four funds called WAM Capital, WAM Microcap, WAM Research, and WAM Active. Now, in terms of how the call will go today, I'll talk about our outlook for small cap companies. I'll then pass it over to Tobias, who'll talk about how we saw things through reporting season in February. We'll then talk about some key stock ideas that we quite like at the moment, and then we'll jump into the question and answer session that will be run by Camilla. So look, we've had a great start to the financial year, and in particular in the first half of the financial year that you've seen that we've released to the market across all funds, and the highlight being WAM Capital, which has actually managed to outperform the market by just over 5% in this period. So look, you'll see on the presentation we've released on the ASX today that we've given our performance figures up to January. Our net tangible asset announcement will come out on Thursday in a couple of days' time across the four funds, and we'll actually put an updated presentation there in terms of of how we're going up to February. But in terms of what I can say is, you know, we had a very good reporting season across all four funds. Very happy with how we're going. It was the best reporting season that we've seen really since over the last four years, since around August 2020, coming out of COVID. So look, to give a summary of how we're seeing things, look, overall we're very, very positive. It's probably the most positive we've been in a long time. And I think it's fair to say over the last two and a half years, on these conference calls, we've talked pretty consistently about how small cap companies have underperformed the broader market, and that's the All Ordinaries Index, which is effectively our benchmark across WAM Capital, WAM Active, and WAM Research. I think the best example I can give you here is in the 2023 financial year, the team managed to outperform the Small Ordinaries Index, or the Small Cap Index, by close to 10%, but we only just outperformed the All Ordinaries Index by over 3%. So in other words, there was a 7% headwind in our performance numbers in 2023. Now, as a reminder, it's worth noting that close to 50% of the All Ordinaries Index consists of six companies, being the four major banks and also Rio Tinto, BHP. And these are companies consistently that we haven't held across the funds, as we prefer to focus on our undervalued growth companies in the small cap sector. So we think the pausing of interest rate rises that we first saw in the United States in December of last year, and what we do expect to see in Australia as we go across through 2024 is going to be very positive for small cap companies. And we think this will actually reverse the underperformance that we've seen over the last few years, and in fact, it could be a very positive period for small caps where we actually outperform the broader market over the medium term. Now, we've provided a very simple slide, or chart in the presentation, and all this just showing is the Small Ordinaries Index and the All Ordinaries Index. Very simply, what you can see there is that the Small Ordinaries Index is trading at a level 15% below its all-time high, which was in 2021, and the All Ordinaries Index, which is obviously largely dominated by large cap companies, is just surpassed its all-time high, through December and January. So look, basically what we're saying here is it's been a very positive period for small cap companies since around December, when that changes in the macroeconomic environment occurred, and it's been very positive through February. But what that chart tells you is there's still a long way to go for that underperformance to be recaptured. So as I said before, sitting here today, we're, we are the most bullish we've been on small and microcap companies for some time, and this largely reflects the fact that there are some sectors out there, which are trading at multi-decade lows in terms of their valuation. In small and microcap companies over the last 12 months, we've seen extensive takeover activity, and in fact, the last 12 months we've seen AUD 18 billion of takeovers in this period, which is over 50% higher than the five-year average. We've been very lucky in our portfolio of that period. We've had takeovers in Silk Lasers, Estia Health, Ansarada, Healthia, what else, Tobias? Genex. Genex, Superloop. So it's probably the most we've seen to be, to be blunt. So we've been very lucky along the way. But when we look at the portfolio today, we, we expect it to continue. There's just so many companies out there that are trading below, you know, what they should be. And I think in public markets, bizarrely, we're seeing valuations actually lower than what they are in private markets. So, you know, we think private equity's going to be very active over the space you know, in the small cap space over the next few years. More importantly, we see a very positive environment ahead of us in capital raisings and, and initial public offerings. And this is a, this is a part of the market that's really been dead for the last two years. As an example, I saw a company today, you know, we, we saw it, I think it was about 6 months ago, and it's, it's probably going to come on as an, as an initial company on, on the ASX at a 50% discount than what we initially thought when we initially saw it 6-12 months ago. So that they're the opportunities that we're seeing here at the moment. Now, while all funds will benefit from this, it's WAM Microcap really that is the big beneficiary. And this is largely because the companies we invest in WAM Microcap are below 300 million market cap, so they're very small companies, and they need capital for growth. So capital's been, or capital raising's been a dirty word over the last 2.5 years. We actually think like it was in 2020 and 2021, it was very positive for a number of companies we own. So look, we're seeing a very strong outlook for that, going forward. So look, I'll leave it at that. You know, while everyone's on the call, I'd like to thank everyone for their support. We really appreciate the calls and the emails that come through. But look, I'll pass it over to Tobias, who'll talk about reporting season. Yeah, thanks, Oscar. So as Oscar said, you know, we are very pleased with the February reporting season. So it's actually the first typical reporting season we've seen in over two years. And by typical, you know, our definition is that companies that reported good news went up. So what does that tell us? It tells us that the market is now focusing back on the fundamentals of the business rather than getting impacted by macro sentiment, which you've seen over the last two years. Over the last 6-12 months, we've rotated materially into tech and growth companies. Now, our view was that over the last two years, many of these high-quality tech companies were actually winning market share while at the same time cutting their cost base and optimizing the cost base. Given the macro sentiment, many of these companies were trading at significantly below their intrinsic values. So we increased holdings and bought positions in companies like NextDC, Megaport, Temple & Webster, Life360, just to name a few. And those have done well during the February reporting season when they came out and reported accelerated growths, which led to more investors looking at these businesses and going back and buying these businesses. In addition to technology companies, we also took a contrarian view over the last 6-12 months in increasing our exposure in retail and consumer discretionary spend. Our view was the fact that, you know, we believe that over the next 12 months, consensus or sell-side analysts on the street, their forecasts for many of these retail and consumer discretionary names were very bearish and very low, and we thought that was unwarranted. So we increased positions in Harvey Norman - you may have seen Oscar talk about Harvey Norman on the last webinar - Nick Scali, Premier, and Myer. And so when many of these companies reported in February, you know, the gross margin was a lot better for many of these businesses, and the outlook wasn't as bad as what people were expecting. So many of these businesses actually did pretty well. So technology and retail, companies and that we had in the portfolio really helped us over the February reporting season. And the reason why we are bullish, in small caps over the next 12 months is the fact that typically when you have momentum and when you have upgrades in many of these businesses, they continue to keep going over the next few halves. So we feel very well, having positioned appropriately for what is potentially going to be a very good 12 months. Now, today, I also have to provide two stock picks. So I might choose one from WAM Capital and one from WAM Microcap. The first one on WAM Capital is a company called A2 Milk. It's a milk and infant formula company that sells in Australia, in China, and also in the U.S. Now, for those shareholders that's been with us for a while, you may have heard us talk about A2 Milk, you know, six or seven years ago when, you know, we had a lot of A2 Milk. We had a lot of Blackmores, and they were exposed to the China trade. Now, the reason why we are back in A2 in quite a large position, we started buying around December and January, is the fact that over the last two years, there's been seismic changes in China, a key customer end market for A2, and a lot of regulatory change. And A2, thanks to the execution of the management team, has been able to come through this, a lot stronger with a much higher market share. So, you know, the birth rate declining has been a key negative theme, and this year we believe the birth rate could actually increase. So A2 was able to grow revenue even when the overall market was shrinking. Our view is that when the market is now growing, the revenue could accelerate. Now, A2 reminds us a little bit like NextDC this time last year. Now, it's very different businesses, but like NextDC and Harvey Norman, these are large businesses that's often overlooked by large cap managers, and overlooked by and too large for small cap managers. So they're sort of in that, middle area and have such high short interest. And people, the negative views or the bearish views were predicated on macro concerns, which we think, you know, are unwarranted. And therefore, as the fundamentals come through, in this case, earnings upgrades, potential, EPS or creative acquisitions, the share price will re-rate. A stock idea in the WAM Microcap portfolio is a company called Genus Plus. It's a founder-led business with the founder David Riches owning over 50% of the business. Now, Genus Plus is a construction company which effectively builds transmission lines in Australia. You know, one of the reasons why we like this story, we think it's a long-term structural growth story, is because of the Rewiring the Nation initiative by the government, to spend over AUD 20 billion on turning the current transmission network to be more fit for purpose. Effectively, with all the new renewable hubs, energy hubs coming online, the transmission network is a little bit antiquated and needs service providers like Genus Plus to effectively build these transmission lines. And so we believe Genus could win more contracts. They've had a massive tender pipeline. They've upgraded recently in February, and we believe these contracts could lead to further earnings upgrades. So these are my two stock ideas. Now, I'll pass it over to Oscar for his two stock ideas. Thanks, Tobias. Look, my two ideas are the first one is a company called SG Fleet, which we own in WAM Microcap. We also own it in WAM Capital. SG Fleet is a fleet and novated leasing company in the automotive industry. So we've owned this company for quite some time, and it's been a frustrating stock for us. We've owned it for, I think, four years, and it has consistently upgraded earnings over that period of time. The only problem has been that the large source of the upgrades has been elevated used car prices coming out of COVID. So in terms of our peers that don't own the company, they've been worried about this moment when used car prices will fall and then what that impact will happen on the SG Fleet earnings. Now, we actually saw used car prices fall quite considerably in the first half of this financial year for the company, and that part of their business, I think, fell around 20%-25%. However, through new car deliveries and the strength of novated leasing and prudent cross-cost control, SG Fleet actually grew earnings through that period and actually grew earnings through that major headwind. We think the business has now found a new base. We think the business can keep growing through here. They're also integrating a large acquisition that they made in 2021, and a lot of the synergies from that acquisition will occur in the next 12 months. What's even more attractive is the valuation. Now, SG Fleet is trading on a price-to-earnings multiple valuation of 9x earnings, and its closest peer, McMillan Shakespeare, is trading on a multiple of 15x earnings. So we're quite very bullish this company. We think it's definitely turned the corner, and we think it can double. Now, my final stock or the final stock we'll talk about is G8 Education, which is the largest childcare operator in Australia. Now, this company has been a dog, full stop. Like, it's been a shocking company for a number of years for a variety of reasons. However, our major catalyst to buy the company was meeting G8's new CEO, I think, just over a year ago. And G8's new CEO has a background in retail, very good at rationalizing their footprint. In other words, getting rid of their loss-making, well, stores at his old job, but childcare centers, handing back unprofitable leases or selling them, which we believe is a great tailwind for growth as we look going forward. Now, coupled with that, through COVID, occupancy has fallen, so it's 3% below what it was at COVID. It's currently at around 76% versus pre-COVID at 79%. And we think due to what they're doing internally in the business, that occupancy can increase 1% a year really over the next 3-4 years. So in terms of how the business, well, how we're looking at the business over the next 3-4 years, we see a quite conservative pathway to around 15% per annum earnings per share growth. The company has effectively a net cash balance sheet. It's very low levels of debt. So we think there is the ability for capital management to potentially that could increase closer to 20%. And we see a very attractive valuation. The company's trading on a price-to-earnings multiple valuation of 12. We've seen it as high as 20x over the journey when it was doing well. So again, we see, you know, call it 50%-70% upside in the share price in this name. So look, that's, I guess, the formal part of our presentation. I'll pass it on to Camilla now for the question and answer session. Now, we're happy to go to the depth, like we always do, but, you know, if we do forget a question that comes through, look, we'll contact you personally after the call. So yeah, thanks again. But yeah, I'll pass it over to you, Camilla. Thanks, Oscar. Thanks, Tobias. That was a great update. Before we open up for questions, I just wanted to touch on a few things with you both that come through, quite regularly from investors. So we recently announced our interim results, and WAM Research and WAM Capital were partially franked. Can you speak to the franking levels and the dividends across the four funds that you manage? Yeah, sure. So I'll start off with the easy ones. So that's WAM Research, WAM Active, and WAM Microcap. So for those three funds, we held the level of franking and the dividend consistent with what we did with the final dividend to the interim dividend. Now, from WAM Microcap, it's worth noting that that's the first time we've maintained the dividend, you know, really since the 2017 initial public offering. Now, what we are conscious that the profit reserve is very high, but if you look at the dividend yield on the WAM Microcap share price at the moment, it's very high at 7%. Now, if you actually what really matters is the yield on the net tangible assets per share, that's even higher at 8%, and that's before we even consider franking. So we've had a lot of feedback, and I assume this will come up with some questions in the call around why has the WAM Capital share price fallen so much? Well, it's a similar dynamic with WAM Microcap because we're paying out so much in a dividend. We need the market and our performance to grow quite considerably to offset that dividend and to grow the net tangible assets and affect the share price, effectively the share price. So that is one of the reasons why the board held the dividend. You know, it's worth noting that nothing's changed in WAM Microcap. If we have good years, there is the potential for special dividends. Now, on WAM Capital, you know, I think it was interesting, going into the October board meeting, which I went into, you know, I think it's fair to say myself, Geoff, and the board thought there was probably 0% chance that we were going to hold the dividend into, well, hold the April dividend at AUD 0.0775 a share. While we'd been outperforming the market, you know, the market was down at that point in time. We're only just up a very small amount, and so it hadn't generated enough profit in the profit reserve. Now, since December, you know, the market has obviously gone up a lot, but we've gone up more than the market. So as it stands today, you know, we were able to pay the AUD 0.0775 dividend in April, and we actually have further visibility, as we look into 2025 across the October 2025, sorry, October 2024 dividend and the April 2025 dividend. So again, have a look at the net tangible assets release on Thursday, and you can see the level of profit reserve and how much coverage that we have for the AUD 0.0775. Now, in relation to franking, okay, so it's very similar to WAM Research. So with franking, you can only pay franking from your realized profits, and that all that means it's a fancy word for saying when I sell the shares and they convert to cash. With dividends, you can pay dividends from your unrealized profits, right? So when the share price goes from 100 to 120, I haven't sold the shares, but in my portfolio, it's gone up 20%. That's an unrealized profit. And your realized profits, which is when I actually physically sell the shares. Now, because we had the sell-off in 2022 and 2023, market went up, but not too much. We actually haven't sold much in the portfolio in a relative sense than what we have historically. And so what that means is we haven't generated enough franking credits over that period, and we were short as the board was looking. It was a board decision. And it was very similar to WAM Research. We potentially could have paid 100%, but we've chose but we would have had nothing in the tank for the future dividends. So the board has chosen 60% as a number. There is some visibility over 60% into the next dividend. So how about I leave it at that? It's hopefully. I tried to make that as simple as possible. But, I'll, I've been talking too much, so I'll leave to you, Camilla, for the next question. Thanks, Oscar. And you actually just covered off a couple other questions with your answer, so thanks for the detail. You both spoke to reporting season. Sounds like you had a lot of good runs, but let's talk about some losses. Can you name a few stocks? Yeah, we always have some stinkers. And, yeah, we're having a laugh the other day about there's a portion of the portfolio across all the funds, really, that you'd almost just like to carve off and forget a bit, forget again. But, there was one company in particular, all my fault. I think we talked about it on the presentation. I've got a feeling we spoke about it on the conference call probably a year ago. The company's called NextEd. It's in the international education sector. It was a great stock for us in the 2023 financial year. I think we first bought shares at about AUD 0.70 or AUD 0.80, and it went, it doubled more than doubled, and then it came crashing down. And the reason is, is effectively, cost of living pressures, full employment. There's been an influx of immigration coming in, and the government said, "Enough's enough. We're cutting immigration or cutting those really high levels of immigration back to where it was pre-COVID." These guys do English language schools and vocational courses for international students, so you couldn't get a worse sector, really, or busy business that's leveraged to immigration. So look, yeah, the revenues has fallen really quickly, and it hasn't given the management team enough time to cut costs. We owned a lot of the comp well, we still own a lot of the company. We're about 10% of the company. But we had a big swing at it a year and a year or so ago. It came off in 2023. It hasn't come off in 2024. And unfortunately, when a company falls that much and it's illiquid for a big fund like us, it's tough to get out. So, you know, we haven't sold a share, but unfortunately, we're sitting there at 10% of the company. So that's probably my gift to the portfolio, Tobias. What's yours? Another one that probably hasn't performed as well as we thought is the company called The Reject Shop, which made a. This wasn't your stock? Well, it was mine. Yeah. That's okay. But just in terms of one that hasn't performed, you know, they saw an issue with shrinkage, which is effectively people stealing. And we thought they would do pretty well in an environment where customers are sort of pulling back purse strings and trying to spend better. It hasn't really hasn't really occurred. And, you know, obviously, the management's trying to optimize the business right now. But, you know, compared to, say, something like Kmart, which has done incredibly well, it sort of has really underperformed, you know, some of its peers. So that's one that's probably hasn't done as well. Well, I think with that one as well, it's got AUD 100 million of cash, and I think the market capitalization's what, AUD 160-AUD 170 or something like that. So we've got a good backstop in the cash balance, but, yeah, there it has been a disappointing stock, that one. Yep. Great. Thanks. The next question is from Paul. It's a bit of a long one, so I've just broken it down slightly. He said that you've said WAM Capital shares have returned 15.1%. The share price has decreased 12% the last quarter. So where are you getting this 15% from? He's down 29% in his portfolio. So are you being honest with investors? Yeah, look, yeah, thanks. Thanks for the call, the question, Paul. You know, look, we're obviously always honest with our investors. So there's, I think, what you've got to understand here is when we're saying 15%, that's the portfolio. That's our portfolio return. Now, in a perfect world, the share price really should follow that portfolio return. Now, you're investing in a listed investment company, right? And one of the positives and also the negatives within a listed investment company is that when you first list on the ASX, your share price has a life of its own. So at various points in time, you could be at, your share price could be at a premium to what the assets are worth, which is the assets being the portfolio that we run. At other periods of time, you could be at a discount. Now, Geoff, obviously our founder and chairman, who everyone knows on the call, always likes talking about how he likes buying a dollar of assets at 80 cents. Now, that's what occurs when a listed investment company effectively is trading at a discount to what the portfolio is actually worth, which is effectively our net tangible assets. Now, we are shareholders in WAM. We're frustrated as well. However, I think it's worth noting, and this is, you know, an unfortunate occurrence, let's call it, is that at the end of 2021, WAM Capital was trading at, I think, about a 30% premium to its net tangible assets. And we've talked many times on this call, when the sell-off happened in 2022, the share price stayed pretty flat, and there was a big lag between the share price falling and the market falling, right? Now, the portfolio went up around 18%, I think it was last year. It's up 20% now. With just given the way that math works, we've only just starting to cycle through that period and actually being able to grow the net tangible assets. But the main one is, is that when it was trading at a 30% premium, right, effectively now it's trading, I think, at around an 8%-10% premium. So that is 20% that you've lost just purely because of the share price. In terms of our performance, that's that is what it is. But the share price itself has the, the premium has contracted. Now, the other thing as well that a lot of, you need to include when you look at that analysis is the total shareholder return. Now, through that period, yes, the, the share price has fallen a lot. We acknowledge that. But we've actually continued paying out, and the board has continued to choose to pay out quite a high level of dividends. Now, that's 7.75 cents a share twice a year, if you call it 15 cents, that's on a net tangible assets of, I think, today, I'm guessing about I think about AUD 1.50, AUD 1.55, let's call it. So effectively, you're getting a 10% yield on our net tangible assets. And that's even before we consider franking. So just to stand still, we need to effectively generate positive performance of over 15%-16% just to keep the net tangible assets standing still because we're paying out so many dividends. So look, in summary, look, it's a long way to answer the question. Obviously, we're shareholders too in WAM Capital. We're frustrated with the performance. But the big reason why the shares have fallen is because it was trading at a 30% premium, and today it's trading close to 10%. So you've lost 20%. You need to add in dividends that we've paid you over this journey. The dividend yield is extremely high. Some may argue it's unsustainably high, but that will actually improve your total shareholder return because you've received dividends. And as well, the 2022 sell-off was quite sharp, and we've only just started to cycle through that now, in this current financial year. So hopefully, that gave you a good summary, but always happy to have a phone call if you need some more information. Thanks, Oscar. Thanks for the detail. The next question is from Andrew Owen. He said, "Could you please comment on whether you're still invested in MMA Offshore and what you consider fair value in its share price? Yeah, and you'd point to me because Tobias was telling me fair value was about AUD 3 a share, and I thought it was 2, so I was selling it. And Tobias was telling me to hold on. Look, no, we're still in the company. We own around 4% of the company. We did own a lot. We owned 10. I made the great decision of selling some of the I think it was about AUD 1.20, AUD 1.30, which is when we went below 5%. It was a mistake. I should have held on because it went into the earnings that the company's produced was much higher than what we thought it would be. Also, it's gone into the small-cap index, so that's created more passive or call it ETF buying, which has meant the shares have gone up quite a lot. So to answer your question, yeah, if you asked me six months ago, I would have said probably around AUD 2 was fair value. I think you can get well over AUD 3, quite easily. It's got a great management team, doing all the right things, plenty of cash, capital management's coming, potential acquisitions. So it's still got lots of catalysts. So yeah, unfortunately, I would have liked to still have 10% of the company today, but we did sell some. But, you know, it's been probably our best stock since Afterpay. Second best. Oh, second, yeah, second best. 2, TPG Singapore and, and this one, Mermaid. Thanks, guys. The next one is, from Peter. He said, "When will you pay quarterly dividends or at least spread the dividend pay dates over a few months? Just, I'll start off with the quarterly dividend. I think, look, I think all our investors have been there for a long time, you know, know the vol the volatility that you see in the share price through the ex-dividend dates in particular. I think if you added and this is probably one for Geoff, to be to be frank, but my view is that if you're adding another two dates, so you're having four ex-dividend dates instead of two, it's going to create a whole heap of unnecessary volatility in the share price. So that that would be my answer there. On the dates, I think that's probably one for Geoff. Sorry. Thanks, Oscar. I'm going to skip down the list just because you just mentioned this company as being one of your best. Ashok has asked, "Have you completely sold out from your holding in Tuas Limited? The short answer is no. We sold out a little bit, which sort of led to the cease of substantial. We're still very, very positive. TUA, given, you know, they're sort of just starting to gain traction in Singapore. They're only about 10%-11% of the market share in Singapore. And if you looked at TPG Telecom over the many years, they grew their business in Australia. They went to 25% of Australia. What we're looking out for in the upcoming result is the broadband strategy, which they've just started, and how quickly they can gain share in broadband. So, unfortunately, you know, it's done really well for us. So we had to sell a bit given it was a very large position in a fund. Just to link it back to size of subs, it doesn't, you know, when we size subs, it doesn't mean we've sold out of a company. We're just adjusting the size of the position. Yeah. So what it is, when you say it on the ASX or say WAM Capital ceases substantial in the company, now all that means is that we've gone you know, we might have gone from 5.5% of the company to 4.5% of the company. And, you know, it doesn't mean that we go to zero. You know, a company like that would take six months to get to, to zero. And we certainly are very, very positive on the company. So we're not doing that. But, you know, if you have a look when we became a substantial shareholder, I think it was what was it, AUD 1.80? Yep. I think I told you at AUD 1. Mm-hmm. Yeah. Told me at AUD 0.50. No. No. But look, you know, we were taking profits in the company. It's been a tremendous performance. Tobias, you know, it was all his work. He's done an amazing job on it. So, but yeah, just remember that. It doesn't cease to be substantial. Doesn't mean we're going to zero. Thanks, guys. The next one is from Michael, says, "Do you think undervalued growth companies and small to medium-sized businesses like the ones that you hold in WAM Cap stand to gain from the forecast interest rate cuts? I'll say yes. And sort of this is our typical hunting ground. So in our view, that's going to be additionally positive. But in terms of what we're trying to figure out, we're trying to figure out the fundamentals of these businesses because, you know, let's say we're picking tech companies. Not all tech companies can exhibit high levels of organic growth. And so we're trying to differentiate the ones that we believe can continue to take market share from their peers, versus everyone else. So we spend a lot of time trying to understand that, as well. So overall, the macro sentiment will benefit. You've also seen takeovers in the space, like Altium, which is a circa AUD 10 billion company got acquired, you know, and that's AUD 10 billion of sort of capital invested in or tied up in growth that should cascade down to, you know, many of the other tech companies on the ASX over time. And so we're seeing a few you know, quite a few green shoots in the space, and we think that's going to help tech and growth companies in general. But we're still trying to pick the best out of the bunch. I think the hardest thing that's been over the last two years with the rising interest rate environment is that our stock picking you know, and we've talked about this in the call numerous times, it's actually been pretty good. Unfortunately, the index how its composition looks, you know, as I said earlier in my presentation, you know, a substantial amount of the ASX is the Big Four banks and the two large resource companies, BHP and Rio Tinto. We don't own them. We never have. So when they're going up, that can be a significant headwind for us, which a number of our listeners will know. You know, they've done tremendously well. I mean, you know, Commonwealth Bank, I think, hit AUD 121 the other day. I think that's 10% of the market. We don't own a share. So that's been the hardest bit. We've been calling the stocks. It's just the weight of money is going to the large cap companies, right, because interest rates are being going up. There's uncertainty around future earnings. Now, if we just have an involvement we're not even looking for interest rates to fall. We just want them to be flat. If they're flat, then that's all really we think we need because the stock picking should get us there. And then investors will just have more confidence to invest in small cap companies again. Great. Thank you. This next one is from Alex. He said, "You mentioned you're the most bullish on small caps that you have been in a while. So do you see the small ords testing its record highs this year, like the ASX 200 and All Ords have done? We think it can. There's a lot of companies you know, we've talked numerous times I think on this last conference call back in when would have been early September, we talked about our, our bet on consumer discretionary as an example, which is retail, automotive, housing stocks, etc. And, you know, that has really played out. That's been a you know, one of the team's you know, great calls, really. But there's still more to go. You know, we're looking at, say, like a Nick Scali as an example, which has probably more than doubled since we owned it. You know, most of the analysts are still quite pessimistic on the company. It's done well, but it's still trading on a price earnings multiple of 13 times. It's net cash. It looks like it might want to do an acquisition. So we've seen that trade as high as 16x and 17x when it's through an in-and-upgrade cycle. Now, Harvey Norman as an example is currently trading on, I think, about 12x earnings. And, you know, most of the market capitalization is in property. It's net cash. We've seen it trade as high as 16x and 17x times in an upgrade cycle. And why that's important to talk about is that's those stocks are pretty around 30% of the small cap index. So yes, there's some tech companies that have gone really, really well over this period. A number of companies done really, really well. But it's that 30% that we see effectively just getting a higher valuation, call it 20% higher valuation in time, right, which could happen if interest rates start falling. I mean, people start getting more bullish and more positive on, on retail. That really should get you there to the all-time high that I was referring to before. So yeah, we are bullish. We think it will happen at some point, because the underperformance, as you saw in those charts, it's been quite savage, really. And it's been one of the highest periods of underperformance we've seen over the last 25 years. Great. Thank you. This next one is from George. He's looking for your comments on a stock. "Are you still positive on Cettire given the speeding ticket recently issued to them by the ASX and the company's response? Yeah, what a topical stock. The answer is yes, we are. Look, one of the beauties of the WAM investment process is, you know, and we are an active fund manager. So, you know, we had quite a large position in Select at the result. You know, the stock, I think, went from AUD 3.30 to almost AUD 5. You know, we halved our position through that period. I mean, it was, you know, been one of our best-performing stocks, really, through that February. You know, we had halved our position that what we did when we went into that. And you always do things like that for companies like this that are quite topical. They're new to the market. People are trying to get their heads around it. There's a bit of noise around it. And this stock certainly has this. It's no different from Afterpay when it first came out. And so yeah, when the article came, we saw it on what was it, Monday morning? Yes, last week. You know, we knew the stock was going to fall a lot. But the reality was our weight was quite low. And we know the stock really well. We've met management numerous times. We've spoken to peers, or, you know, competitors in the US and Europe, done a lot of work on the industry. Will Thompson, who works with us, has done a tremendous job on it. So we took the liberty on when situations like that to buy more stock. And we've been buying more stock every day since. So I guess in summary is yes, we're still very confident on the company. Its largest competitor in the US fell over in December. It was actually through that December period. It had a great result, CETIA, but it was actually a very tough quarter because their competitor was heavily discounting to stay alive. And so now that competitor's gone. So these guys could end up being the largest player in this space. So we actually just fundamentally on the numbers, we still like the stock. Is there going to be more noise on the stock? Yeah, probably. But, you know, it was very similar to Afterpay in the early days. So yeah, we're still positive on it. Thanks, Oscar. This next question, I know you can't really answer it, but maybe you can speak to the Profit Reserve. It's from Michael, and he said, "Do you think the next dividend for WAM Capital will be AUD 7.75? Board decision, Michael, obviously. I'm not on the board, but, how about yeah, how about look at the, the Thursday's net tangible asset release? Great. Roger says, "Is WAM Microcap planning on acquiring any other small-cap LICs? No, never say never. But no, we are trading at a premium. So, you know, if there was a listed investment company trading at a discount, and we can make it accretive and beneficial to shareholders through an uplift in the net tangible assets, then potentially that's something we could do. But that's not on the radar at the moment. What I will say in WAM Microcap, though, is right now, we think is the best opportunity we've probably ever seen in that space. It is, it is like a hunting ground. There is just so many companies there at the moment. And why, why is that the why, why is that the case? Effectively, we've had a very uncertain period with interest rates and the war and everything like that, inflation, etc. You've seen a whole gravitation in the market towards the large cap companies, right? We think at the moment what we're seeing, hopefully, is a period where the all that weight of money starts flowing down to the mids and smalls, which WAM Capital focuses on. At the moment, micro cap companies are dead. They're atrocious. Like, we saw them in February. You know, they're upgrading earnings expectations and going down 10%. Now, I'm so we're looking at that going, "Whoa, like there's so many opportunities here, to invest." And look, to be perfectly honest to all the listeners, like I said to the board in I think it was in July. And, you know, I said I thought it was a high chance of us underperforming this year in WAM Microcap if we were right that interest rates would stabilize or fall because we thought the weight of money would go into small caps, not microcaps. Now, we are outperforming in microcap, but that is largely due to the fact that we've had quite a number of takeovers, and we've been very lucky in that sense in that regard. Most of our portfolio is just static and doesn't move. You know, we have our misses as well, you know. But I'd say for the most part, we've got probably 30% of the portfolio that just doesn't move. Share market goes up, sometimes goes down. So I guess what we're saying is that space, if we're right on small caps doing well in the next 12 months, we should start seeing investors starting to come down into micro caps. And this is what we saw in 2020 and 2021. And that will be very positive for the WAM Microcap fund. Sorry, long way to answer the question, but and we've also haven't seen any capital markets activity, which WAM Microcap's a massive beneficiary of that. So, yeah, definitely seeing a lot of opportunities in that space. Thanks, Oscar. Interesting time for micro caps. Next one, we'll go back to a stock pick from Graham. What is your view of Bubs? So probably no view at the moment. I think they, you know, we were positive. Bubs would have been two years ago when they first entered into the U.S. The reason we got it wrong was the fact that the management just couldn't execute. It was a very large market, required a lot of capital to do it well in the U.S. And so for sort of a micro cap Aussie company, you know, and obviously with sales in Australia and sales in China and having to take on effectively a very large market in the U.S. during that period of time was very difficult. And, you know, we got it wrong. We lost money on that on the investment. And so, they've had a change of management since. I think we need to see more, sort of runs on the board just to understand how they're actually going to take advantage of the current temporary license they have to sell infant formula into the U.S. Obviously, we're bullish A2 Milk. They have a U.S. business as well, and they're looking at the infant formula space in the U.S. as well. So that's probably where we're playing the infant formula space. And so, definitely prefer A2 Milk over Bubs. Thanks, Tobias. Another one. Trevor is asking about NextDC. Do you think they'll ever pay a dividend? So yeah, the answer is not in the short term. I think NextDC. Oh, I'd say never. Probably never. Not in the short to medium term. You want to be in NextDC for a dividend? No way. Yeah. So we first bought NextDC, I think, around AUD 9 this time last year. At the time, the catalyst we had for NextDC was just winning contracts. And these were cloud contracts, you know, with the likes of Amazon, Microsoft, Google after effectively 2 years of COVID where effectively all the contracts died, you know, was very hard to come by, due to supply chain issues. And what's actually happened since is with the, you know, ChatGPT and with the AI, you know, effectively trend taking off in earnest, you know, some of the contracts they're talking to now are significantly larger to contracts they've ever won in the history of NextDC. NextDC is a growth company. You know, they are a beneficiary of AI now, and they're a beneficiary of AI because a lot of the hyperscale guys need data center capacity to be able to compute for a lot of the large language models for AI. And so, you know, we have an investment in NextDC for growth. So we're not there looking for a dividend. And I think the business is, effectively, you know, positioned that way, effectively to grow as quickly as they can. Thanks, Tobias. Joseph has asked, "Will you place a small amount in small pharma and biological stocks? Look, we're very much generalist investors, and we focus on all sectors, really, in the industrial space. And biotech is one of them. Now, I think it's fair to say over the years, and it still is, it's still something that we find difficult. It's not really you know, if you're ranking all the sectors up against each other within the industrial space, it's probably the lowest in terms of our expertise. Now, in saying that, you never say never. And we've done very well out of Neuren, over the last 12 months. We actually exited the stock. We just thought a lot of the catalysts had played out. There was a bit of risk emerging, in the company. You know, Telix as well. We haven't owned it for about 6 months, but we did quite well out of it, you know, particularly in that recovery phase from 2022. So no, we're always looking at these companies. I mean, what we've learned over the journey is, you know, once they start executing, there's sort of no limit to where the share price can go. So they can be very, very good stocks if you if you get them right. If you don't get them right, they can be a disaster. So look, there's always part of the portfolio that's open to biotech. I think at the moment, we're I don't think we have one. Neuren was quite a large position, but we did exit. So yeah, so we're actually we're nude at the moment. We don't have any in the in the in the portfolio. Thanks, Oscar. Lawrence asks, "What was your reason for selling Select Harvests? Well, I picked the low on that one, that's for sure. Look, again, we have seen substantial in that one. But look, we are, it's still a big position. And it's, you know, I think effectively we've gone from, call it 6.5% of the company to about 4% of the company. Now, why did I sell? Well, as I said, I probably picked the lows in the almond price, that day, probably. Oh, look, it was, look, concerns around their balance sheet, really. You know, we did talk about the stock a few months earlier. Conditions got worse. And in Australia, they had a shocking harvest. This is in last June 2023. And so I think the noise around or the feeling was, particularly after that November result, that they probably needed to raise equity. Different market back then as well. So our view was, geez, if they're going to raise it was just at the time when Helius had just done a discounted capital raise and had performed poorly. And so on the day of the result, effectively, I took the opportunity to sell some stock. You know, I think we sold in the high 3s. And then the stock fell quite considerably afterwards. And then honestly, you know, from that point, we probably picked to buy a day. The All Ords price started rallying hard. The market started rallying hard. And, you know, we actually put back a lot of the stock that we sold at around AUD 3.20, AUD 3.30. So we've actually hadn't done too badly out of that selling. And the All Ords price continued to go up. It looks like it's going to, it feels like touch wood, it's going to be a good Australian harvest. You know, if that all plays out, they should generate a whole heap of cash that can pay off their debt. So, you know, the stock is still trading at a discount to its net tangible assets. We still like it fundamentally. And it's, as I said, it's still a very decent position in the portfolio. Great. Thank you. This next one is from Ian, who says he understands why you like M&A activity, but he's asked if you're concerned that the ASX is disappearing. He notes that we have lost many good dividend-paying companies to foreign acquisition. What are your thoughts on that? Oh, absolutely. Huge concern. I mean, if you know, from a dividend-paying perspective, like we're it's probably Matt and John in the large cap, portfolio with WAM Leaders to speak to there. But just if we look just at really good good companies, growth companies in small and mid-cap companies, growth in the small and mid-cap sector, yeah, it's we've lost CSR. We're losing Adelaide Brighton, Altium, you know, Virgin Money UK. Like there's a lot there's a whole heap. You know, the building materials sector, as an example, has been fascinating. You know, if you send Boral, Adelaide Brighton, and CSR in the space of a few weeks, which sort of gives you an indication of how things people overseas are feeling about Australia, I think it's not a bad place to invest in. So yeah, I we're we're I would agree. It's hard to get initial public offerings away. So, you know, the universe in small caps is just getting smaller. And at the same time, superannuation funds, you know, are growing really are growing quite a lot. So, you know, it makes things our job a lot harder. Definitely, definitely. So it would be great to see some more IPOs. They've just got to be priced appropriately. And I think to add to what Oscar was saying, you know, the Aussie dollar is very low. So if you're an overseas acquirer, it's probably as cheap as it's ever ever been in terms of acquiring a business in Australia. So, you know, we think the M&A activity will continue over the next 12 months. So as an example, we owned a company called Healthia, and I would have said it was one of the mistakes in the portfolio, you know, and that was all me. But I got a phone call, when was it, the end of the last day of August? And I was down the south coast, and I think I'd cracked open a beer. And it was about 6:00 P.M. I got this random number, and it was an investment banker. And he's like, "Oh, you own some shares in Healthia?" And I go, "Yeah, I own 10% of it. You know, it's been terrible, blah, blah, blah." And he goes, "Oh, we just had a takeover bid by private equity at a 90% premium. 90. I've never seen that before in my career." But that just shows you how undervalued, particularly in that micro cap space, is some of the numbers the companies are. I mean, there was a company yesterday, I think, that got at TASK. It was a tech company called Plexure. It's called TASK. What was it? 110% premium. So that's what we're seeing in the micro cap space right now. That's why we're really excited about it, because we can just see some bargains like that right now that if they're not going to go up in the Aussie market, they're just going to get taken out. So yeah, that's hence why we're quite bullish on the micro cap portfolio. This next one is from Alan, and you have touched on it earlier, Oscar, but if we could just revisit, he said his investments in WAM Capital and WAM Research in April 2021 have reduced in value while at the same time the ASX recorded record highs. Can you please explain why small caps have performed so poorly? Yeah. So there's, as I said before, there's a number, the biggest dynamic as to why that happened. If you go back to April 21, very positive time in the market, right? And you know there was small caps are doing well. Everyone was doing well. WAM Capital was trading at, I'm guessing, probably between a 25%-30% premium to its net tangible assets, right? So that would mean if we liquidated every company, sold every company in the portfolio today, you would have gotten 25%-30% less, right? Because the share price is trading much higher than what the actual assets are worth. And this is why all people on the call should be monitoring really closely what funds are trading at a premium, what funds are trading at a discount. Geoff would only buy funds that are trading at a discount, right? So when you say the 30%, and obviously we feel terrible about that, but that 20% of that 30% is effectively the premium in WAM Capital shrinking. It's gone from a 30% premium to a 10% premium, right? Small caps have underperformed over that time. So within that 10%, I'd say you know probably half of that relates to that. And then what you've got to add back, and it's hard without seeing your portfolio, is the dividends you have received through that period. It's actually quite a lot of dividends. So it shouldn't be as bad as the 30% of previous. Yes, the share price might be down that much, but if you add back dividends that you've received, it would be a bit better. So look, again, Alan, very happy to if you want to call in to discuss. yeah, unfortunately, a lot of our newest shareholders in that 2020, 2021, 2022 period, before the sell-off happened, bought shares at quite a high premium. The premium of the WAM Capital share price has shrunk. It's gone to about 10% today. Thanks, Oscar. We've had a few people join the call a little bit late, and we've got a few questions on how WAM Capital will be able to maintain its high dividend. Can you talk to this? The simple fact is, if the market, if we were in the same position in October, the dividend was getting cut, like straight out. It was getting cut. I think it's worth understanding we've talked a few times how, like, how do we pay dividends? Like how does it occur, right? It occurs from making unrealized gains and realized gains. So unrealized is that example I gave before. Share price goes from AUD 100 to AUD 120. I've made an unrealized gain of AUD 20. A realized gain is when it goes from AUD 100 to AUD 120 and I sell at AUD 120. So I make AUD 20 in profit and receive that money in cash, right? So effectively, we need the market to keep going up. When the market is going up, we're generating what's called profit, right, which we add to a reserve, right? In periods when the market goes down, right, say the market goes down 20% and our portfolio goes down 5%, right? As a fund manager, I'm really happy because I think we've done a good job. We've outperformed the market by 15% at really bad market. But as a shareholder, you're not happy because I've generated a loss, right? So if you generate a loss, you can't add profit, right? So when COVID occurred back in 2020, we had a huge sell-off in the market from January to June, right? And then the market started recovering. Now, because we had a period like that where the market fell a lot, we weren't generating any profit. We're generating losses. Yet we were still paying the same rate of dividends, right? So we ate into our profit reserve, right? Now, that dynamic has been in play really for the last five years. And you know when we came out of COVID, like I remember a board meeting in July 2020, where the board thought we were going to cut the dividend and then the market just shot up, right? The same things happened this time. In October last year, going to that board meeting, we're talking about you know potentially cutting the dividend. And the market from December has gone like that. And our portfolio actually has increased a lot relative to the market, which has been great. So we've been able to add more profit reserve, right, which you'll see on Thursday, right? Hopefully give you a little bit more confidence into the next few dividends. But I think you just got to take a step back and you just got to say, "OK, WAM Capital right now is paying a AUD 0.0775 dividend, which is great, but it is a 10% fully franked dividend yield. It's very, very high, very high. And we need the market and our say our performance to be in line with the market to be up 15 or 16% a year just to stand still, just to keep funding that dividend, right?" So in periods where the market falls, you know we're not adding to that profit reserve. And you've got to remember that. So this is the reason like we talk about, unfortunately, the premium going from 30% to say 10% today, right? It could go to a discount one day if we can't pay the dividend or we have to reduce the dividend, right? So that's, you know, that's the potentially where the, you know, obviously the frustration for shareholders will come through more even more 10 times more than what it has come through today because, you know, your share price will fall, go to a discount, and will cut the dividend as well. Like that could happen. And potentially it was going to happen, but the market really rallied in December, January, February. So look, again, long way to answer the question, but you really need to be monitoring every net tangible asset announcement, what our profit reserve is in each fund, and comparing that to our interim dividend. In other words, what is the ability for our profits within the fund to keep funding that dividend into over the next few years? Perfect. Thank you, Oscar. This next one is back to stocks, and it's Joseph. He says, "Will you or do you invest in Megaport? That's a very timely question. We do. Megaport is probably one of our top ideas that's exposed to the AI theme. You know when we first invested in Megaport, it was on the back of effectively the new CEO starting. One of Oscar's close contacts knew Megaport's new CEO, Michael Reid, really well and gave us the you know the two thumbs up that this guy has had an incredible track record when he was running ThousandEyes, which was a subsidiary of Cisco. And effectively, what Michael's done and Tish, the CFO, and Bevan, the chairman, over the last 12 months in terms of turning around the business is nothing short of amazing. You know they're having an incredible product, effectively a connectivity product that links companies with data centers around the world, bypassing effectively the traditional telco provisioning process, which is much shorter and much cheaper. We believe that they are very well positioned for the future where there's going to be a lot of data getting transferred between companies and data centers and you know AI models around the world. Megaport is a key beneficiary. We believe over the next 2-3 years, the revenue growth could accelerate. The good thing is the management's done an incredible job cutting costs as well. They're now in sort of a very profitable position. They're getting strong growth in the top line over the next few years, at the same time, very healthy earnings margins. Megaport is one of our key ideas. Great. Thanks, Tobias. This next one is from Ashok. He says, "Do you think the IPO market will become more active soon? Yes, I do. As I said, we saw one this morning that looked really interesting and was on almost half the valuation that they thought it was going to be a year earlier, so potentially. So like you know it could be, yeah. Like I mean, and that would be great. But you know vendors and private equity need to be realistic around what their valuations are. And unfortunately, the you know terrible IPOs that occurred at the end of 2022, sorry, 2021, is still in the back of everyone's minds. You know there was some good companies that IPOed in that period, but their valuations were just way too high. So hopefully, we'll see you know some positivity around that market because, as I said before, it's generally very good from the active side or the market-driven side parts of our portfolios. Thanks, Oscar. Kristen has written in, and she said, "Why should we buy more WAM Microcap when the share price is more than the NTA? That's a great question. Well, look, I mean, OK, so, what, how about I say this? Why have they consistently traded at a premium, right? Two reasons. The dividend, right, and the longevity of the dividend. Like, yes, we're short on the profit reserve, but WAM's paid a decent dividend for a very long period now. WAM Microcap's pretty similar. Like, we've paid the dividends have gone up quite a lot over the years. And so when you see it, the share price and look at it, you know it looks pretty attractive relative to its dividend yield. And I think, look, you know the track record, particularly in WAM Microcap, is that we've outperformed you know every year, really, since we IPOed. So that is, you know, and obviously, there's a lot of goodwill just to Wilson Asset Management as a whole. So I'd say just generally, that's potentially one of the reasons why it trades at a premium. Yeah, I mean, every individual is different in terms of what their risk profile is and so forth. I mean, the only thing I'll say is that you know Geoff Wilson, I think. OK, I'll go the other view. Why does some company, why do some funds trade at a discount? Or, you know, it could be the management team has done some poor decisions over the years. You know, maybe they've underperformed consistently, et cetera, et cetera. Are they doing things to fix it? Like that's generally an opportunity, and that's when our WAM Strategic Value will come in, when they can see an outcome where you know something was trading at a discount of, say, 20%, that can close that gap and go back to NTA. So look, I think it's just every individual's preference and risk profile, really. And you've got to make up that decision. But as I said earlier, to the last question, just whenever you're looking at a listed investment company, you've got to look at, is it trading at a premium or a discount to its net tangible assets? What are they investing in? And what is their profit reserve? What is their ability to keep funding the current interim dividend? They're the three questions, really, you sort of need to ask yourself. Great. Thanks for that detail. This next one's a good one. It's from David for both of you. What is your highest conviction holding across the four portfolios? Great question. What's his time horizon? David has not given a time horizon. Five years, I reckon. Yeah, five-year time horizon. Some of the ones that you know is pretty high conviction for us. TUA is obviously one. Temple & Webster. I'd say Megaport. Regis Healthcare. Are probably the four that come to mind. What am I going to do then? You've just chosen the four or five. The other ones I'm trying to think. It can be like WebJet. Yeah. You've told some growth ones, or I'll say some value ones. So look, I think it's going through a tough spot now, but I really like Ridley. I think that's a really good business. I actually think it's, sorry, an underestimated business by the market. Generates great cash flow, really run by a good management team, taking out costs, investing in the top line. Look, yeah, there's good things happening in that business. carsales.com, we didn't talk about that. That's a fabulous business done incredibly well. I mean, any of those classifieds businesses really are great businesses. News Corp, that's a good one. News Corp is a good one to own over the next five years. There's, you know, potential, you know, who knows what happens when Rupert finally passes away, but you know there's some hidden businesses, particularly that news and media business or Dow Jones business, sorry, in News Corp that's materially undervalued by the market that can release a lot of value in time if the family wants to do it. So that would be a good one. You obviously said TUA, TPG Singapore. Light & Wonder, I think, is a really good business as they become the number two player in the world for gaming. What else? Gentrack. Didn't say Gentrack. Gentrack. I think maybe we love founder-led businesses as well. So companies where founders have, you know, a lot of shares, probably over 20%, in the underlying business. You know it's founder-run. You know they look at the long term and they're not afraid to invest for growth. These businesses typically outperform. So any company that you know has a really good founder that's proven to have delivered value for shareholders, for non-minority shareholders, we'll back them. We have a lot of these founder-led businesses in our portfolio. So for, I guess, for investors that's looking out sort of 5, 10 years' time, I'll say back the founder-led businesses and pretty much co-invest with them. Now, hang on. We've said about 15 companies. We've got to say one each. OK. I'll say TUA. You're going to say? TUA is limited over the next five years. I'm going to say, oh, that's a tough one. I'm going to say carsales. I think carsales is a great business. I still think it's underestimated by the market. So I'm going to say carsales. Yep. Thank you. That was heaps. You both overdelivered there. Another stock. Greg, do you have a view on Archer? The ticker is AXE. Oh, I've seen it on the wires, but no, we haven't seen it. Sorry, Greg. Sounds like we should. Another one. Peter, what is your view on DroneShield? It's done really well. It's funny you say that because I thought we had some about a few years ago. Yeah, but I mean, look, I think it's we own Codan in WAM Capital, which is very much a defense business these days and has been growing extremely well in that part of the market. In the micro cap fund, we own EOS. You know we bought Shaun, actually, one of our colleagues bought at a really good price. I think it's doubled since he bought it. And these businesses, clearly, there's a war going on in the Middle East and also in Ukraine and Russia. So you've got to be careful around that. And these businesses are benefiting from that. So look, you've got to you know that conflict doesn't seem to be ending anytime soon, but these guys are going well. So you do need to take that into account. Look, I'd say for DroneShield, you know, met them before. Liked the technology. It was lost back in that period of time. We've had a look at the numbers. It does look like it's really turning. It's had some great orders as well. But I think for us, we owned EOS. So it was either one or the other. And so we've chosen EOS. Cool. Thanks, Oscar. The next one is from Ian. You might not have the exact figures, but how much cash are you holding across the four funds? So I wonder if this is Ian, my father-in-law. But in the four funds, we are 13% cash in WAM, which is actually quite high over the last 12 months. And it was lower in January. So we have taken some profits in a number of companies that have done well. WAM Research is about 10%. I think WAM Active is about 8% or 9%. And WAM Microcap is 8%. Pretty standard. It doesn't really change that. It hasn't really changed much, really, for years around those sort of levels. OK, thanks. And then the next one is Brian. Do you regard businesses in transition industries such as Ampol as a sound investment with growth potential? Yeah. I mean, look, I think they're great opportunities, really. I mean, you know, Ampol, we don't own Ampol. I think the WAM Leaders' guys do. But the company we own a lot of is Viva Energy, which we've owned for some time. But they were great. They were fantastic buys around three or four years ago where you know the EV transition was taking over the world and petrol cars were going to be nonexistent in five years or whatever. And lo and behold, I think it's fair to say it's going to take a lot longer than what people think. And this is giving the petrol station operators time to think how they reposition their business. And that's what Viva Energy has done. So it's bought a company called On the Run, which is the largest service station operator in South Australia. It's a very good business. And they're converting their Coles Express service stations, which is around 700 of them, to On the Run across Australia over the next decade. Now, the On the Run is a why it's a good business is it's a retailer. It's not your standard Coles Express servo that you jump in, you buy a pack of chips and some Eclipse mints, do your petrol, and leave. It's a destination. So for those callers in South Australia, they'll know it well. You know there's coffee there. There's you know fast food. You can actually sit there. They've got a lot of their own brands in the servos. They've got their own app, which none of the other I don't think I've ever used an app from another petrol station operator. So that's something that Viva can leverage as they roll it out. So it's just a different retail experience. That's how they're transforming their business, is they're going to become more of a retailer. In other words, trying to increase the volume of people coming to the store, potentially take share away from the supermarkets or probably the jet that's probably the corner store as people start refueling or charging their cars you know in time. So I think so to answer your question, look, yeah, definitely, we always plan themes. So AI is a theme. Energy transition is a theme. Some sectors become in vogue. Others go out of favor. You know sometimes looking at the out-of-favor sectors like Ampol and Viva were, you know you can make really good money out of them because I think Ampol, for instance, I think well, both stocks have doubled over the last three years. So and both look you know very, very good going forward. All right. We've had a couple of people ask this next one. So do you own any lithium or uranium? We own one uranium company, which is Boss Energy, which has done very well for us. Lithium, we don't own any. The stock that we do like from time to time, we don't own now, is Pilbara Minerals. It's fascinating, this company, because I don't think I've ever seen a bigger short interest, which is effectively, call it hedge funds betting against the company. In other words, the shares will go down. So I think the short interest last time I looked was like 21% or 22% of the shares on issue, which is enormous. I don't think I've ever seen a company as big as that. So clearly, people are negative out there on the company. But if you look at the fundamentals, it doesn't have any debt. It's got very strong cash. It's got low costs within mine. So you know for us, that looks pretty interesting because at some point, you know if lithium prices go up, those guys that are short or selling the stock, they're going to have to buy the stock at some point. And it could go up a lot. So we don't own it at the moment. But we are sort of looking at Pilbara, which is PLS. But looking generally for both sectors, I mean, yeah, clearly, beneficiaries of the energy transition move away from fossil fuels. In the case of uranium, opening up more in countries such as the U.S. And in lithium, longer term, you know still very positive on the space. I think there's just you know been an oversupply, generally, over the last 12 months and plenty of processing capacity in China. But in time, that'll free up. You know, we're still, you know, longer term, you've got to be bullish on both those sectors. Thanks, Oscar. This one's from Noel. He said, are you expecting WAM Capital and the Small Ords to outperform the All Ords over the next two years? I'm not I wouldn't how can I say this? So from December, the Small Ordinaries Index has outperformed the All Ordinaries Index, I think, by about I reckon about 4% or 5%, something like that, as soon as the Federal Reserve said they'll pause interest rate hikes. Now, as I said earlier, our base case across the team is we're just hoping that interest rates stay flat. And the reason why we're hoping it stays flat is you sort of it becomes more about the stock picking as opposed to the macroeconomic data that comes through. And what we view ourselves as is we're not very good on the macroeconomic, you know reading what the Federal Reserve is going to do, the next CPI print, what the RBA is going to do. Like honestly, we just want to pick stocks that are going to double in the next three years. That's what we're trying to do. And it's been very difficult to do that over the last couple of years. So look, in time, we think it will revert. Is it going to happen in the next two years? I'm not sure. We're not actually we don't really care if it does, doesn't. As long as it stays in line with the All Ordinaries Index, then we're pretty happy because we think it's more about our stock picking. And you know that should in itself, you know hopefully, bring good performance. Thanks, Oscar. This is one from Chris on the team structure. Can you talk to a potential succession planning for WAM Cap once Geoff hangs up his stock charts? Is there a key man risk, or is this just a perception? Well, as Geoff's always said, so you know Geoff you know leaves, let's call it, the investing you know to effectively the teams. So Geoff is always a sounding board. Geoff and I speak a lot of the time. You know Geoff's obviously done this for a very, very long time. But you know ever since I've been at WAM since 2016, Tobias has been there ever since 2015, 2014, sorry, and he's been very hands-off, so extremely hands-off. So he leaves us to do it. He knows we're doing the work. He trusts us. And so you know he's more focused on the business in terms of our growth than the Wilson Asset Management brand as such. So look, yeah, obviously, Geoff is amazing. Like it would be you know when we talk about succession planning, it'd be a huge loss to the business when it does occur. However, does the day-to-day investing change when he steps away? No, not at all. It's exactly the same as what it always was. So you know we've got a big team. There's 6 of us in the WAM Capital team. There's 4 in the leaders' team. There's 4 in the global team, 2 in the alternatives team. So look, there's plenty of expertise across the wider Wilson Asset Management investment team. And you know we've all been doing this for a very long time. Thanks, Oscar. This one is Dave again. And he's curious if Sigma is on any of your radars across the funds with the reverse takeover of Chemist Warehouse. Yeah, it's been probably our top three best stocks over the last, you know, call it this financial year. So we first bought shares at the start of 2022, I think. And again, it was a CEO change. You know, it's been a very funny stock. It's had these sort of, it's been at the same time we were buying it. HomeCo were buying it. We didn't know at the time. And I remember saying to Sam, who first came up with the idea, he was like, oh, let's buy this really, really slowly. We've got lots of time. And then it just started shooting up. I'm like, oh, jeez, what's going on here? So we sort of went with it and got a decent position. And then, you know, fast forward a year and a half time. You know, it was interesting. We were talking internally, I think, a couple of days before the deal actually happened about, oh, who can we speak to? Surely there's an investment banker or someone who's out of the industry. You know if something did happen because there was rumors at the time something was happening, how would it look? Because Chemist Warehouse is an enormous business. And Sigma's just a small, you know underperforming distributor that's been there in the ASX forever and hasn't really done much. And then I think two days later, the deal happened. We had no idea. So in that process, you know that occurred. I think it was in October or November. Now, we spent the weekend. We spoke to the Chemist Warehouse management team. It's an incredible business. Like it's one of the best businesses we've probably ever seen. You know it's very unusual that you get a potentially a AUD 9 billion business where we can invest in that in the small cap space. Normally, that's for Matt and John, Anna, and Haley in the WAM Leaders' portfolio. But you know effectively, you know we get a great position in this company. And yeah, like I mean, the thing is so to answer your question, yeah, it's been in big positions, Sigma. It's done really well for us. Look, we you know again, like I said with Select earlier, we have taken some profits along the way you know because we don't who knows? The ACCC might have an issue with the acquisition, which might create some uncertainty in the share price. But overall, we do think it'll go ahead. Once it does go ahead, I think the market will then finally see how good this business is. I think we'll do very well. Thanks, Oscar. Another stock question. Kirsten has asked for your view on Metcash, please. One for John and Matt in the WAM Leaders' portfolio. We haven't invested in, from our perspective, for a while. Why would that be the case? It would be because their hardware business was a bit of a COVID beneficiary, like a number of sectors were, and was doing incredibly well. We thought that would come off at some point. Obviously, their grocery business or the core business, you know it's in a very competitive market where Woolworths and Coles dominate. But in the end, I think it's fair to say we're probably wrong on the hardware business. And it does look like the acquisition they did recently looks quite good. Look, we don't own it in the portfolio. Like we tend to look at the retailers, like a Harvey Norman or a Super Retail as an example. But I do know that Matt and John own it, and they quite like it. Pays a good dividend. It's quite cheap valuation as well. Thanks, Oscar. I'll just mention that Matt and John will be hosting a webinar next Tuesday at 3:00 P.M., and they could dive further into it. The next one is from Tony. Tobias, you were in the AFR commenting on this one a little while ago. What is driving Appen? Any thoughts on Audinate, please? What's happening? Sorry. It's actually sorry. It's a question. There's a really good question we're actually asking ourselves today. But it's in trading hold, isn't it? In the last one we checked when we came in, it was important trading. So I don't know what sort of announcement that's occurred since then. They had a new management team, a new CEO that's you know the old CEO left. And I think the last update they provided was positive in terms of you know giving the market a little bit more visibility that you know they lost a very large client. That you know that's what appears to be a one-off case. So potentially, some of that and you know obviously, it was sold down very heavily. So potentially, some reversion of that. So I'll have to go back to their shareholders and just check to see whether there's been any announcements on Appen since. In terms of Audinate, look, it's one where I'll say it's a big mistake not investing in Audinate over the last couple of years. We had a couple of chances. We didn't quite get I don't know what it was one time. We didn't quite get enough position or didn't quite get enough conviction. They have a very good IP in terms of the core products. And the business has done incredibly well. So it's one which I've got wrong personally has done that's done really well. Perfect. Thanks. Peter has asked, do you lend shares to short sellers? And if you do, why? The answer is no. We agree. We don't know why anyone would do that, to be fair. They do. Perfect. Thank you. Tony reckons gold is looking good. Do you own any gold at the moment? Gold probably is looking good, like given the macroeconomic environment. So we do. We own two names. And they came actually from the Westoz or sorry, one of them came from the Westoz acquisition, which was Emerald Resources. So it's been a cracker, actually. I think that's probably up 150%-200% since we inherited that portfolio. And was it April 2022? And that business is run by ex-Regis Resources CEO. Morgan Hart is fantastic. He's a good fellow. And he's delivered everything he said he would do. They own two mines in Cambodia. And Cambodia is actually quite a you know friendly jurisdiction in terms of mining. And they're the largest operator there. And they've actually what's more interesting the catalyst, actually, to buy it was they bought a tenement in Australia called Bullseye. By developing that mine, that will increase the exchange exposure within Emerald, which should hopefully drive a rerating of the share price. That's been done incredibly well for us over time. It's a small position, though. We have reduced it over the last couple of years. It's sitting at about 0.5% in the portfolio. The other company that we own is Bellevue Gold, which we took in a placement, I think, around this time last year, I think. I think. I've traded the stock quite well over the journey. It's in a key risk period right now because the processing mill is fully operational. These guys have quite high-grade gold. I think there's a big debate in the market at the moment as to whether it's sustainable or not. We think it is. We do think that they can get through this period, start operating at their full run rate. And when that happens, as we've seen with Emerald, is you can see quite a large rerating of the share price as the company starts going into various gold indices globally. So yeah, we like those two. On the mining services side of the gold exposures, normally, we do own Imdex and ALS Limited, but we don't at the moment for various reasons. Trying to think of any other oh, and Codan, obviously. Codan, which we own quite a lot of, is their gold. About 40% of that business is in gold metal detectors. And you know that's been a fabulous business for these guys. And then they had a very good result. So that's probably to be fair, that's probably our biggest gold exposure in the portfolio. Thanks, Oscar. Next question from Joseph. Would WAM and Microcap ever merge? That's an interesting question. I've never had that one before. I'd say no. They definitely no, they wouldn't because effectively, you'd be disadvantaging Microcap shareholders because you know our size would get so big. And the whole point of the WAM Microcap portfolio was to stay relatively nimble. You'd be more than doubling the size if you added WAM Research. From a WAM Microcap perspective as well, you would be diluting your profit reserve. Microcap has a profit reserve of AUD 0.50. Research, I think, is about 35%-40%. So you know there's a lower profit reserve in WAM Research. So you're disadvantaging your Microcap shareholders there. And also, if you're a Microcap shareholder, you want to be investing less than AUD 300 million in less than AUD 300 million companies, whereas WAM Research, obviously, is the whole market. So I'd say no. Never say never, as Geoff would say. But you know the question I do get asked is whether Capital and Research would merge or, in fact, would Active Research and Capital merge at some point. And look, again, it is possible. But each fund has you know some funds are trading at a premium, some that are a net tangible asset. In Active's case, there are a slight discount. You know there's different levels of profit reserves. So you don't want to be disadvantaging you know each of the shareholders that like the specific strategies by merging into one. So yeah, there's my long-winded answer to that question. Thanks, Oscar. Alex has said, what assurances are you able to offer investors in WAM that have ridden the share price downfall so far? Obviously, I can't give you any assurances. But all I can say is it's been, you know, we've come out of a very challenging period. Like, you know, the 2022 financial year was extremely hard. You know, and it's hard to explain this because, you know, we were sitting in it. Like, but that February 2022 reporting season, like we had a great reporting season. And, you know, we'd get upgrades of earnings. Shares would go up 5%. And two days later, they're down 20%. Like, that's what we were fighting against when the war in Ukraine occurred and interest rates started going up. Right, the 2023 financial year, for us to outperform, which I said before in my presentation, there was a, I think it was a 7% headwind in terms of large-cap stocks outperforming small-cap stocks. And we still outperformed by just over 3%. For me, that was in terms of the team, that was an amazing achievement. If you told me that at the start of the financial year, I would have said no chance. So we feel like we've cycled through the tough times. The start to this financial year was still tough, very tough. And we were doing well at that point in time, still outperforming. And we finally had, call it, the macro event that we've been searching for was just, as I said before, rates hopefully flattening out. And whooshka. We've seen the portfolio do well. We've seen small-caps do well. So look, I can't obviously give you assurances. But put it this way, the macro environment right now, as it stands, is a million times better than what it was two years ago. Is that fair? Like so much better in terms of our process and how we look at stocks. Thanks, Oscar. The next one is from John. We know you can't give advice, but he's interested in which fund would return the most on capital gain. OK, well, how about I say this? So the fund that should with the highest you would expect the highest risk profile to return the highest capital gain over the longer term, which would be WAM Microcap. Yep, yep, that'd be fair. But obviously, you could look at a total shareholder return perspective. Microcap's 7% dividend yield, I think, on the share price. I think WAM is sort of 9% or 10%. So if markets sort of just stayed the same way they are now, maybe on a total shareholder return, WAM might be better. But I'd say you know looking at sort of an economic textbook, finance textbook, you'd say Microcap should be the one that should do the best but will also do the worst, if that makes sense. It's got the highest volatility because it's in, as I discussed before, we're in very speculative stocks there. You know if we get something wrong, we get it really wrong. At least if it's something we get wrong in WAM Capital, we can get out of it. If we get something really wrong in WAM Microcap, we can't get out. So that's a risky take. But over the longer term, that should return the best. Thanks, Oscar. Trevor's interested in your take on Sandfire Resources for the long term. Geez, a copper stock that's tough, isn't it? No, we don't own Sandfire. But look, longer term, I mean, you would expect this company like there's no Oz Minerals has left the ASX. There's no pure-play copper companies on the ASX. Good management team. Look, clearly, we don't own it at the moment. But you know there's no pure plays in copper. It's part of the energy transition. So you would expect if the guys do a good job, hit production targets, they should do well. And you would always expect them given Oz Minerals got taken out at such a high valuation that potentially, it's a takeover target at some point. Thanks, Oscar. Ian, next. Would you consider Silex Systems as an opportunity? Always consider stocks like that as an opportunity. Will and our team saw them recently, actually, quite liked it. It's not a company, I'd say, is in our wheelhouse. It's very you know it's obviously leveraged to uranium. It's a sort of tech company sort of. So it's sort of hard to know whether. Yeah, we like—you know—I think our bread and butter is we like easy-to-understand, correct businesses. It sort of helps, which is one of the reasons why we've typically haven't had a huge exposure in biotechs because they're sort of binary. So for us, you know, what can we add the most value to the portfolio, to our shareholders is to finding businesses that we can really understand and investing in those. Hopefully, the margin of safety for us is a bit higher in those type of businesses. We try to pick the best ones. Obviously, there's opportunity cost. If we invest 1% in a company, then it stops us from investing 1% in another company that we like more or have more confidence. We're always thinking about opportunity cost and how best to allocate the capital. Thanks, Tobias. Mark has said there was takeover speculation around Generation Development in the media a few months ago. Would a takeover be the end game for them? Well, end game, yeah, if someone wants to pay a big premium for the shares, yeah, well, it could be the end game. But then you know given we're quite a big shareholder there, we'd want a pretty nice premium to the share price. But the article was largely referring to their investment in Lonsec. They own 49%, I think it is, of Lonsec. Lonsec is a ratings house, so it provides investment recommendations on various funds. But it has its own managed portfolio. And that managed portfolio has grown incredibly well. Like it's currently, I think what is where is it at? I think it's is it AUD 12 billion, I think? And it's come from nothing in the space of like a few years. And so that part of Generation GDG has actually outperformed expectations massively. Now, if that was listed by itself, we actually think it would basically be the current valuation of GDG at the moment. That's how we think the market would value it. Now, we didn't actually invest in GDG for that reason. We invested in it for its investment bond business, which is going to be a huge beneficiary of the changes in superannuation that it's occurring in terms of restricting amounts over AUD 3 million. And to put that in context, I think there's around AUD 200 billion that's over that AUD 3 million threshold. So if GDG was to get 1% of that, it would double that business. So that's why we're very positive on the business. It's got a great management team, great board. We've been there for a while. But if you have a look at the share price, it obviously feels like it's finally breaking out. Yeah, we see quite strong upside. We think it's very similar to Pinnacle was in the early days back in 2016 and 2017. Thanks, Oscar. From Graham, I'm not sure if you know this one, but will you be looking at the IPO for Aegros later this year? Sorry, I missed that. What, IPO for? It's spelled A-E-G-R-O-S, the company. I haven't heard it. Haven't seen it come through. Sorry, Graham. Next would be Tony. I think we've had this on a previous call. Again, no financial advice. But out of all the WAM products, which ones would be the best investment in the next 12-18 months? Well, OK, OK, all right, I'll give you this one. This is not advice, but this is my view. Can I say that? I can say that, can I? Can you? I don't know. Can I? I don't know. Oh, I think, well, look, OK, put it this way. If Geoff was here, what would he say? He'd say WAM Active because we're trading at a discount to its net tangible assets. And if you look at, we had a great year last year. We're having a great year this year. So we would like to think, hopefully, that NTA gap will close. Great. Thank you. Do you have a view on Strike Energy ticker STX? That is from Dean. Not particularly at the moment. Sorry, Dean. We have owned it occasionally in the Microcap portfolio. I think their hits on their drilling hasn't been as good as the market has expected. However, given where it's located, it's very strategic in between Beach and Mineral Resources with AWE. You would expect it to be acquired at some point. So yeah, I'd say not one for us. But don't be surprised if it got acquired one day. Thank you, Oscar. Interesting. The next one is from Geoff Wilson. But it's a different email, so it's not our Geoff Wilson, who's asked, what catalyst do you think NextEd needs to drive recovery? And how do you rate the chance of that happening? Oh, I think thanks, Geoff. Well, yeah, it's what we call it dead. Like I think, look, it's no man's land for a period of time. The catalyst like what we always see with the government when they make rash decisions like they have. We saw an aged care you know coming out of the Royal Commission. And then they've done a 180. And now it's all positive in the space because they realize they're killing providers. You know I think there's going to be a huge amount of fallout from their decision around immigration because effectively, a lot of these colleges you know scaled up over 2021, 2022. They got massively hit in COVID, right? Then the government comes out, oh, we're all pro-immigration, everything like that. And all these guys scale up to take in all these students. And then a year later, they go, oh, sorry, no, we're cutting in half. So I think you'd need pain and blood on the streets from a lot of the private providers. And then for the government to realize that, go, we've probably gone too far here. Now, that's the catalyst. Now, are we there yet? No. I think it's going to be when the trajectory, you know, the government can see that we're getting back to those pre-COVID immigration levels. But and you need noise in the press from, you know, this college that was doing the right thing falling over, going bankrupt, and you know all this sort of stuff. And then they realize we've probably gone too far. And we actually need international students. It's good, you know, obviously, for tax purposes and education and whatnot and jobs and everything like that. You probably need the unemployment rate to start going up as well, which we're probably a long way off. So you know I'd love to paint a more bullish picture for you. But I can't at this juncture. So I honestly think you can't be looking for a catalyst in the next 12 months. We do think that, don't get me wrong. Over the longer-term view, we think the business is massively under-earning. They've done all they can. Balance sheet's fine. They've done all they can. We've just got to wait. So unfortunately, I think it will probably take longer than a year for that to occur. Thanks, Oscar. Next up, Chris. Oscar and Tobias, what is your view on health care equipment stocks? Do you want to know? Yep, so a stock you're probably referring to the likes of something like Nanosonics during reporting season. We had a very small position. That's one that didn't do as well. We're still trying to get our head around something like Nanosonics, for example. You know the U.S., from what we can tell, is sort of back business as usual in terms of for most companies. But Nanosonics is having some issues, growing pains in the U.S., which has cast doubt on the longer-term trajectory of the business. I think it's fair to say we're still trying to make up our mind on companies like this. So it's sort of a bit difficult for us. We just you know one of my colleagues is going to the U.S. for a trip. You know, we all have obviously these trips to do on-the-ground research and meeting a lot of these businesses. So happy to report back on the next webinar to see whether we've probably had sort of more insights on those. Great. Thanks for that, Tobias. The next question you might want to comment on is another stock. Do you have a view on Pacific Current Group, PAC? Well, I think like if you asked me last week, I would have said that was a great way to play GQG, which is a you know they had a big shareholding in you know a really fast-growing fund manager that's listed as well in the ASX that's been doing well. But they sold their stake. Now, I assume we haven't seen them for a while. But given they sold their stake, that probably is code for we're going to use that cash to make acquisitions. I think it would be fair to say. So yeah, maybe that's one we should probably have a look at. But it's always been very cheap. Our issue with the stock is and we had like I think it was 2017. We owned quite a lot of it. And the issue while we sold it's just so complex. A lot of funds, we didn't really understand that they owned shares in or had a stake in. I think, fair enough. Liquidity was pretty tight in the stock as well. So I think, you know, we might have done OK. Then a buyer came around. We thought, oh, you know, we'll take liquidity and sell out. But you know, I think yeah, I think you probably want to look at the balance sheet post this GQG sale, read between the lines. I assume they can't when we haven't we don't know this. But we assume they're probably looking for acquisitions now. I think a lot of investors. Or maybe to capital management, potentially. I think a lot of investors invest in fund managers, some of the larger ones, just for market exposure. Of course, it's a big or because it's a big index weighting. You know for us, we're index unaware. And you know for market exposure, we would invest in the underlying businesses. So we don't have the same impetus to sort of invest in some of these fund managers. Thank you. And then next one is Chris looking for your opinion on Link Market Services, please. It's under takeover. If it wasn't under takeover, I think we would have said it was actually turning around. But it had high debt levels. So I would have said I reckon that was why yeah, it was doing an OK job on costs. But the debt levels were about 3 times, weren't they? So we would have probably said, no, we don't own it at the moment. But it got taken over in December like quite a number of other companies. So it's another company that's leaving the ASX. Thank you. Then Marion has said, do you or would you invest in companies such as Connexion Mobility, which have market caps of AUD 23 million? And why wouldn't you? So the answer is yes, of course, we would. But for to put this into context, so the Microcap portfolio is where that would fit. I think the Microcap portfolio is AUD 280 million, something like that in size. You know that company, you said, I think was AUD 23 million. So for it to make a difference in our portfolio, we would need to own 15% of the company, right? So you know if we're making a bet like that, we would have to be extremely bullish on the company. And you know I think the closest example I can think of of something when we did that was when Noni B acquired the Specialty Fashion Group and was left with City Chic back in 2017. We took I think it was about 12% of the company. It might have been a market cap of AUD 40 million or something like that at the time. So look, a long way to answer your question again. But yeah, we'd have to be extremely bullish, extremely positive on the company to do that to do that. Because the problem is if you're buying of a company that size, if you're buying a big stake like that, you're not getting out of the company. Thanks. All right, guys. Next one, Chris is looking for your view on the future of Cogstate. It's a frustrating stop, this one. Yeah, I think we've had a few cracks at Cogstate. And then I think the longer-term story makes sense in terms of how you know they're sort of exposed to biotech or pharmaceutical companies needing to do research around Alzheimer's. However, I think probably over the last 12-18 months, we just probably found better ideas that have more near-term catalyst, which is more sticking with how we invest. And so we've gravitated towards ones where I guess it's probably a little bit more binary in nature. So it's one where we sort of keep an eye out on. But you know we're seeing a lot of ideas in both the smaller market cap space that you know that's within our, I guess, circle of competence and you know ones that we like and more liquid. You know we think give us sort of 10 years of growth, for example. We're looking more for those ideas. And so it's one that we have followed. But it's not one we have in the portfolio now. Thanks, Tobias. This is more of a question for the board. It's from Joseph. Do you think there'll be a rights issue soon to build up your firepower? Great question. Definitely not in the larger small-cap funds like WAM Capital, Research, and Active. But yeah, I mean, look, it's a board decision. But clearly, as you can tell from our comments today, we're quite positive on the microcap space. We're seeing a lot of opportunities there. We think it's a very similar environment from when we raised money back in August 2020 in the microcap fund. So yeah, look, I mean, look, who knows what markets do over the coming months? But from my perspective and Tobias's perspective, yeah, we'd you know in the microcap portfolio, we'd love a little bit of extra cash because we're seeing a lot of opportunities. Thank you. And then a bit of a buy-hold-sell kind of coming through a couple of stocks for your thoughts. Codan, Tyro, and Echo IQ, please. So you do Echo IQ? Yeah. Do you know Echo IQ? No, sorry, we don't know Echo IQ. You do Tyro. I'll do. Well, you can do both. You tend to like the good ones. So I can do the bad ones. So I'll do Tyro. I'll do Codan. Codan is one where Oscar's told you know being really bullish on and you know being sort of more bearish. He's been right. This guy's stock has done incredibly well in the business. It's on the back of the profit growth for the business. That's on Codan. We are positive to stock. Oscar's picked the bottom on that one. Thanks, Tobias. You get everything right, don't you? Tyro, look, I mean, it's, again, a frustrating stock for us. We do own quite a bit of the company. We're about 6% of the company or so. You know at the results, it was a funny one because we sort of saw the result. We're like, oh, this is good. It's going up. And then it went down 15%. So clearly, we were wrong. Look, the business is going through a bit of a transition. It had too much costs. UCS did a really good job taking a lot of costs out. But they've got to grow the top line now. And that's what the market's focused on in that result. They didn't grow the top line. It actually downgraded the top line but then upgraded the profit. And we thought that's what the market would care about. But they didn't. So it was the top line as the stock fell. But again, it's net cash balance sheet. As we said, we like the management team. You know we're hoping that the top line can start moving again this half and as we go into the next financial year. But I think that the other thing with that payments industry, which we think is interesting, is they are takeover targets. And you know we would not be surprised one day if there was you know if it was a Square or someone who wanted to get into the Australian market. And this you know buying Tyro get pretty decent market share on day one. So yeah, been a frustrating stock. But you know we still like it. It's still decent holding. OK, thank you. Next one, Chris is asking for PEXA Group. What's your view? We've had PEXA for a while. I know our large-cap colleagues like PEXA. It's not one that we currently have in the portfolio. I think it's fair to say the registry business is coming back because obviously, the property market in Australia is probably doing better than what people are expecting. The interesting part and I guess the catalyst for PEXA over the next 12 months is what they're going to do with the growth business and what are they going to do in the UK. Those were supposed to be the two growth drivers given the PEXA business itself. The registry business is pretty much like a monopoly here in Australia. So it's not one we currently have in the small-cap fund. I know the large-cap guys like it because they think there's optionalities with the potentially shutting down the growth business if it doesn't do well, if it doesn't break even, or winning more contracts in the UK. All right, thanks, Tobias. Stephen has asked Oscar, is a 60% franked dividend in effect a decrease in a dividend coming down from 100% franked AUD 0.75 per share? It's not a decrease in the actual dividend. It's more the franking, right, that you effectively can offset your tax with, right? So look, a lot of our shareholders, if you remember from back in when was it, 2019 with Bowen and yeah, a lot of our shareholders get the cash refunds from the franking. Effectively, by going to 60% frank, you will get a less what we call it a 40% lower franking coming back to you in that cash refund. I thought that was probably the easiest way to explain it. Now, is that permanent? No. As I said in my prezo, you know the board made the call. We could have paid you 100% this dividend and hoped that the market could go up quite extensively over the next six months and asked to sell out of a few stocks to generate those franking credits. But the board took the conservative approach to doing 60%. So there was some visibility on the next dividend of 60%. But again, like as we said, us cutting the franking like we have you know should have effectively been a, how does it say, warning? Is that the right like we were on. Precursor. Yeah, like it's a precursor. I think it's probably the right word you know in terms of where we were at with the dividend. The dividend could have well, it should have been cut. We could have been on this call apologizing for the dividend being cut by 50% or something. Now, the market saved us through December, January, February, effectively. So yeah, so look, yes, we obviously feel bad that the franking has been cut from 100%-60%. But the story could have been a lot more different, certainly, like as we went through the result and on this call today. Thanks, Oscar. Tony's wondering, have you ever invested in ENN, Elanor Investors Group? Yep, a long time ago, I reckon, pre-COVID. It's a property sort of funds management business. And I think at a time, they were trying to grow their effectively funds under management and taking advantage of some of the opportunities you know they saw in the market. It's not one we followed you know that's not one we followed very closely. I think at the time, it was paying out a very high dividend yield. So you know we were sort of getting paid to wait and sit there to wait for the, I guess, increase in the funds under management. But it's probably been a while since we've relooked at it. All right, thank you. Joseph says, what's your view on AX1 and UNI in the mid-cap range for Staples compared to your positive view on Nick Scali? So we own Universal, UNI in the microcap portfolio. Really like it. You know there was concerns going into that result that it was going to get hit hard because of its exposure to youth but actually came flying through. And they're accelerating their rollout. So that's valuation, good management. We quite like that one. Accent, I think that the issue we're not in Accent. We could be. Again, really good management team founded their business. So it's good. It ticks all the right boxes. I think with those guys, though, the core business is slowing. So that's the Athlete's Foot and Platypus and Hype. But they've got a very strong new business in Hoka in terms of the distribution rights there for Australia, which is doing incredibly well. So it's trying to work out when that sort of inflection point is with their earnings. But again, yeah, I mean, we never rule it out. But we don't own it at the moment. All right, thank you. Let's do a quick buy-hold sell with these ones. There's four from Tony: NXL, EML, RDY, and CCX. What was the first one? Nuix? New X. Nuix, probably a hold. We don't have it in the portfolio now. Effectively, we're finding more opportunities elsewhere in technology. EML buy. We have it in both microcap and capital. The new management team has come in. You know we believe has effectively got rid of the biggest problem that's plagued the business for many years, which is the pistol business over in Europe. You know the base business, what's remaining could potentially be a 5%-10% growing business over the coming years. What's the other one? CCX? CCX, CCX, I think it's a hold. Look, it's been a shocker, obviously, the last couple of years. Was a good business. It's finally through that destocking period. The balance sheet's fine. So it's just got to find out where its true level of sort of the new base of sales are at. I still think there's a bit more uncertainty in the next six months. So it's probably 6-12 months away. What was the other one? I think the other one's RDY. Oh, ReadyTech. Yeah, we don't have ReadyTech. But we have TechnologyOne and TNE in the WAM Capital portfolio, which is, I guess, much larger. We used to own ReadyTech. But our struggle with that one was there was always all this investment coming into the business that hit their EBITDA forecast. But as Warren Buffett will always say, what does he say? He says, EBITDA is a crap term that's made up by investment bankers or something. And the profit, which is all that matters, would always miss. So we don't own the shares at the moment. If they fix that up, we probably would own them because they're trading on a very discounted valuation relative to TechnologyOne. Yep. All right, fantastic. Thank you. Yeah, I think generally in the tech space, we're just looking for the ones that we believe will have the highest growth rates. OK, cool. Thanks, Tobias. Next, looks like our final two for stocks: Square Stock and BWP Trust. BWP, unfortunately, I've got no view. The only thing I will say is REITs, we don't so real estate investment trusts, we don't generally we don't do. We prefer the fund managers like a HomeCo or the land lease guys like Ingenia. However, I will say they're probably all buys, I think, just in the if you've got a view that interest rates are flattening and then going down, they're big beneficiaries, REITs, because they've been a terrible sector in small caps for some time. So yeah, so I don't know anything about BWP Trust. So I'm sorry about that. So I don't know any of the specifics. But I do think that REITs or the trusts will go up over the next period. Square would be a buy just in terms of how they've really optimized the cost base over the last two years. They're really taking on what is a rather antiquated sort of banking sort of system in the U.S. You know Afterpay is a small portion of the overall Square business with Cash App and the Square Terminals. They've continued to win market share in the U.S. and winning share and upgrading. So it's a buy for us. It's still quite a bit below the previous highs. Thanks, guys. This is from Greg. Why do you have to sell stock to obtain franking credits? Don't they accompany dividends that you receive? Or is it because your dividend income is low and the sale crystallizes a tax gain and you pay tax to access those franking credits? Correct. So that last part of the question is right. But not the first half of the second point, if that makes sense. So you're right. So when you sell the shares and you make a profit, you pay tax. And that tax we pass on to you guys. That's the franking. So that effectively is around, I think it's about 60%-70% of the franking that we give out to our shareholders through our frank dividends. The remainder is generally the frank dividends we receive from the companies we invest in, right? So if we receive a fully frank dividend from a company, what's a company that we own that does fully frank dividends? SG Fleet. SG Fleet, good example. Yeah, so SG Fleet, we will then pass that on to our shareholders. Now, just remember what we invest in. We invest in small and microcap companies. A lot of these companies and the other thing is just think about over the last five or six years, the tech technology sector has increased in terms of its weighting in terms of our universe that we look at. A lot of these companies don't pay dividends, right? So that impacts our ability to 30% of the dividends, let's call it, and all franking every year, right? So where you're in small-cap companies, a lot of them don't pay dividends. And we're not just going to invest in a company because it pays a dividend. And that's to your first point of that question, first half of that question when you're saying I think you said, are we just selling shares to get the franking? No, we definitely do not do that because that would hurt your return. We don't do that for the dividends. We don't do that for franking, never, because that would impact the return you're getting on the portfolio. If we were just selling everything just to fund a dividend or franking, it would have been detrimental to you. So we just purely look at the fundamentals of a stock. Does it fit our investment process? And we'll buy or sell the stock depending on the investment process. So yeah, happy I think it was Greg, was it, that came that question? Correct. Happy to have a call later if maybe. Thanks, Oscar. That is actually it for the questions. We've had a few comments saying, thank you for the open and informative session for answering everything. So we'll leave the Q&A there. And then I'll start. Can I just there was those ones of the guys that emailed, you know. Yeah, they start. Oh, OK, right. OK, cool. I just wanted to make sure we got them all. Yeah. I think we did. Yeah, printed. I think so. OK, sweet. We'll call anyone who. If we haven't apologized. Sorry. We'll get back to you. We had 97 today. But I'll let you call us. Is that a record? Is that a record? I've come back to you on that. I reckon two hours is a record. I don't think we've done longer than this. Anyway, no, thank you very much for everyone dialing. I really appreciate it. It was a great turnout. Thanks to all your questions. And we're seeing you all in a few weeks for our roadshow. So yeah, please feel we'll be there before the actual formal presentation. So any questions you have, please fire away. So thank you very much for dialing in. Thank you.