Good morning, everyone, and thank you all for dialing in to this morning's presentation. With me to my right is Portfolio Manager Tobias Yao, and Investment Specialist April Lowis. Together, we're gonna talk about our listed investment companies, the current environment for small caps, and then Tobias will conclude and talk about some interesting stock ideas that we see. Turning to slide 2, and this is our disclaimer, and obviously this is as we always have in every presentation, this is just for general advice and not financial advice. Then we'll just turn to slide 3, and this slide's giving a snapshot of our interim results for the four funds that we manage. I might just kick off talking about WAM Active first, and as you can see on the far right, and myself and Sean White were here for a conference call back in January. Performance of that fund has been very, very strong and of course we raised some money in a placement and a rights issue that completed about two weeks ago, and we're very thankful for our shareholder support for that fund. That fund's done very, very well, has been investing in the resources sector, and Sean's done a tremendous job on that portfolio. For the purposes of this conference call, we're gonna talk about the three listed investment companies on the left there, which is WAM Capital, WAM Microcap, and WAM Research. We'll just turn to slide 4, which is we wanted to show this chart and we're using WAM Capital as an example here, and this is to largely show the premium to NTA or net tangible assets that the current share price is trading at. Now, on your left is a snapshot of the financial year of 2022. Now, what you can see is in July, the premium was trading at around 16%, this is in July of 2021. Now, as you can see in the blue bars, that started to fall away from around October 2021, and that was largely because of rising inflation, and that culminated in the Russia and Ukraine conflict around sort of January, February of 2022. You can see that decline in the net tangible assets over that one-year period. What happened was the share price disconnected from the net tangible asset fall, and you can see that at its peak around March 2022. The share price was trading at around, I think it's a 30% premium to its net tangible assets, which is extremely high. Then as you can see, the year finished up, we got to June, that premium had shortened from 30% to just over 20%, and I think, as we got to Christmas, that premium had actually shrunk all the way to net tangible assets. Now, if we have a look on the chart on the right, and this is what we're seeing so far in the 2026 financial year. We started off in July of 2025 at a slight discount in terms of their net tangible assets versus the share price. In the first four months of the financial year, small cap companies were going very well. There was no conflict in Iran. There was interest rate cuts forecast, not interest rate hikes, and our performance was very strong across all the funds. That all flipped on its head in October, and as you can see, the net tangible assets of WAM Capital have declined from that point in time as there's been a shift back to large caps versus small caps. A number of the sectors which we'll talk about in the call have really struggled. Now, this has only been exacerbated by war and artificial intelligence in the last few months, but despite all that and the net tangible assets declining consistently over that period, you can see that the premium to net tangible assets is extremely high now at 30% as at the end of February. Now, we're trying to show a comparison of the 2026 financial year to 2022, and we see similarities, and we think that premium from what we've experienced over the years will hold until the dividend is paid. Then we do envisage a similar scenario that we saw back i n May, June 2022, and then towards the end of 2022 when perhaps the premium may shrink even further. Look, we obviously can't give you advice, but one thing I can say if Geoff was here, he always likes to buy a dollar of assets at AUD 0.80 and you'll see that he's been buying shares in one of our other listed investment companies, WAM Alternative Assets, WMA, and that's currently trading at a 20% discount. I'll leave it at that, and we'll move it to the next slide 5, which is around what's been happening at the moment, and the 5 factors that have really impacted small-cap companies really since October. Before I start, I think this is fair enough, Tobias. I think this is the hardest period both of us have ever experienced in investing, and we've been doing this for 16- 17 years. Geoff, if Geoff was here, there's no doubt he would say this is the hardest period he's seen, since probably the global financial crisis. It has been very rapid, since October, and yeah, some of the things like artificial intelligence have really taken us by surprise. I'll quickly go through the five impacts. The first one's the interest rate outlook, which I touched on earlier. Around October, the market was forecasting two interest rate cuts. That flipped on its head, I think around Melbourne Cup time with the consumer price index report, which had higher than anticipated inflation, and now all of a sudden, economists are looking at 3 interest rate hikes. That 5 rate hike move has really hit small cap companies hard because there's a big proportion of companies that we invest in exposed to the economy. That was the first, let's call it downside that we saw in the companies that we invest in. The next one came from the resources sector. In periods when we see higher inflation, resources tends to go quite well, and that has certainly been the case. To put this into context, the Small Resources Index has outperformed the Small Industrials Index, which is what we invest in, by close to 90% in the last 12 months. Now, we don't invest largely in small resources companies, but when that occurs, it takes money away from the small industrials that we invest in into small resources. It's done very, very well. Now, the positive there is, as a lot of our investors will know, is that resources markets are cyclical. Now, in time, we will get a great benefit from when resources stocks falls. Is that gonna happen in the near term? Probably not, but it will happen, and we saw that period happen from around 2012 - 2016, which was some great years for the business. The third is rising geopolitical risk. Now, this doesn't even talk about the Middle East. This is things like Venezuela, which we've probably long forgotten about. But as soon as these things were happening, and this has been consistent really for a very long time since COVID, what you see is when investors see risk, they tend to go up the liquidity and up the market cap curve. We've seen a transition into the top 20 companies in Australia, and to the extent where small-cap industrials since October have underperformed the broader market by well over 20%. That's a big number. This was exacerbated really through the reporting season of February. The fourth impact that we've seen is artificial intelligence. Now, artificial intelligence we ultimately think as a business will be very positive for the Australian-listed companies that we invest in. However, it is changing very, very rapidly. The extent that we saw this change over the last few months from Christmas to today has been extraordinary. What's been happening is we've seen announcements by Claude and Anthropic, and this has been impacting some of the technology companies globally, and this has been happening for some time. Around end of January, early February, there was a number of products that they released that really impacted service-based companies. I'm thinking insurance brokers, I'm thinking engineering companies, I'm thinking travel agents. That really hurt us in that early February period, 'cause that's a lot of what we invest in. Then finally, of course, the Middle East conflict in terms of what happens with oil prices and consumer discretionary companies and so forth. I think that hopefully gives you a summary of the difficulties that we've had over the last four months. It's been extremely tough. Now, on to the positives. Move on to slide 6. This is showing very simple table, and it's just showing our performance in 2022, which was, as I talked about previously, came off the back of high inflation, Russia-Ukraine war, and it was a tough period. It was a tough period. It was very tough period for the firm. We underperformed the market by 11%. Now, I always remember being in the, I think it was the April roadshow, and Geoff made a comment in his opening remarks saying, "Look, it's been a tough period, but what matters is how you bounce out of these tough periods." The team worked extraordinarily hard through that 2022 period like we are right now. We did a lot of travel, we found a lot of new ideas. Then on that subsequent three years, we outperformed the market by 3%, 14%, and 9%. We bounced out harder and effectively added more value to the net tangible assets of our fund than that 11% drawdown. Look, I'll conclude with that. We're seeing a lot of opportunities in the market, valuations are as depressed as we've ever seen them. The fundamentals of the companies we're investing in are as strong as ever. Balance sheets are very strong. We think the listed companies that we invest in will weather the storm. We're seeing a lot of opportunities to invest. We just need to ride it out and get some stability back into the markets. When that occurs, the investment process will start working again, and investing catalysts will see a rerating of the share prices of the companies we look at. Look, I'll leave it at that. It's a big opening, but I'll pass on to Tobias to talk about more exciting things, which is some stock picks. Thanks, Oscar. Just on slide 7, and I guess given the uncertain economic and sort of macro backdrop, we thought we'd pick four companies that we like that has more of a defensive nature to them. I think the first one on the left is a company called GemLife. They effectively are land lease communities for over fifties retirement villages, particularly in Queensland, and they're expanding into Victoria and New South Wales. GemLife listed on the ASX around July of last year. What makes them quite special, I think, is they have a vertically integrated model. If you know, Oscar and I probably have been to over 10 of their communities, visiting, you know, not only the residents, but also the facilities. What's really stood out to us is the quality of the product. You know, the clubhouses are always two levels. There's indoor swimming pools, ten-pin bowling, outdoor lawns. Sometimes there's 2-3 clubhouses within each of these communities, so indoor cinemas. One of the reasons they can offer this is because they are a vertically integrated developer, so a lot of the margin they would otherwise have given away to a third party, they've really reinvested that back into the quality of the product. Now, GemLife has upgraded twice since they've listed, once in August of last year and then earlier in February. They've got around 10,000 lots, and they're currently only about 20% of the way through. We think there's a significant pipeline of growth opportunities for them as they continue to develop these communities over time, and obviously exposed to the aging population. You know, we believe their products is very suitable for retirees, you know, when they do want to crystallize the equity in their homes. Often what we see is they sell their homes, they enter one of these communities, buy one of the houses. They could, you know, the crystallization of the equity in their house, original home, they could buy a caravan, they could travel around Australia. Opportunity and the product attractiveness is very high, and we believe the growth, and I guess now the catalyst for this one is that they could continue to exceed expectations in terms of the growth and the earnings that they can achieve, across the business. Now, the second company is called Event Hospitality or EVT. EVT effectively run the Event Cinemas. They have a pretty large hotels business, QT, many of you may have stayed in one of their hotels, and also they own Thredbo Resorts. Now, the catalyst for Event is actually, we believe they're on a multi-year journey to become a more capital light business. What they're doing right now is they're selling some of their non-core properties, like 525 George Street, and reinvesting that into hotel management rights, and they're really growing that part of the business. That's quite attractive to us because currently EVT is trading below the value of their properties, so you're really getting the operational business for free. To us that's very attractive because we're getting really free optionality and free option value there. The catalyst, as they continue to sell the properties and reinvest into the hotels business, will lead to earnings upgrades, in our view, over the next few years as they transform the business itself. The third company is a company called FINEOS, perhaps not as familiar to most of our investors. Now, FINEOS is a software provider to large insurance companies in the U.S.. The software provides effectively an admin or back office software suite for these large insurance companies that, you know, over the last probably 20 years have really modernized the front end or the user interface of their websites and their systems, but a lot of the back-end systems are still quite antiquated, and these are running on legacy systems that's 20 or 30 years old. Now, FINEOS have already won 5 of the top 10 largest U.S. insurance companies, so the likes of New York Life, Guardian Life as an example. What makes them quite special is the fact that, you know, we believe there are really two winners in this space. There's themselves, and there's another company called Guidewire listed in the U.S.. To be able to use AI and really apply AI in real-time, you need to have, I guess, a more modern back-end stack, software systems, so to speak. One of the reasons and one of the drivers of why we're seeing more customers or clients signing up with FINEOS is this is the first step for these insurance companies to be able to apply the efficiencies that AI systems can drive. Firstly, they need to put it on what is a modern software system. FINEOS has a five-year target in terms of revenue growth and margins. They're well on their way, upgraded recently in February, and so that's quite attractive to us. We believe consensus doesn't have their long-term aspirational guidance in their numbers, and that will be probably the key catalyst that would drive the share price higher over the next few years. Finally, a company called Service Stream. They are a provider of essential services, maintenance, and asset management services. Now we've owned this business for quite a long time. We've had a very long history with the management team, which we rate quite highly. Service Stream does a lot of the NBN maintenance work as an example. They're also pretty heavy in utilities. Now, what's quite exciting for us for Service Stream is the fact that around six months ago, they won a defense contract. That's gonna be a big driver of their growth over the next few years, in addition to the utilities business that we think will also drive their growth. However, the share price is now below when they've announced the defense contract. Business is trading on less than 15 times price-to-earnings ratio for a business that's effectively just all recurring revenue, maintaining these essential infrastructure. With the net cash balance sheet, we think the upside is quite attractive to us given and we believe they can continue to actually out-deliver on some of the growth aspirations they have. These are just four companies that we quite like in the fund. Great. Thank you very much, Tobias. I just wanted to flag quickly that we're traveling to Sydney, Melbourne, Canberra, Adelaide, Perth, and Hobart in April to meet with shareholders. The event will include insights from the investment team and also an opportunity to learn more about the Future Generation companies. You can register for the event using the QR code on the screen. Now time for questions. Maybe we'll start with one from David. "Could you provide an example on some stocks that maybe you've seen extreme valuation declines, but the fundamentals are still holding up?" Yeah, sure. I mean, there's plenty. That'd be the first thing I'd say. And yeah. I mean, we reviewed, touched on it before our February reporting season. You know, it was probably, say, it was extremely tough, like the toughest we've ever had. We felt like we didn't really put a foot wrong. Like the actual numbers the companies were producing were really strong. We had a number of companies we think would have gone up 20%, 30%, 40%, but they've gone down 20%. Unfortunately, the investment process just doesn't work in markets like these. It was very similar back in February 2022, but I'd say it's more magnified than that. Look, I'll give a good example. The stock that always comes to my mind. I reckon you've got the same stock, so I apologize, is Carsales. Carsales is a stock, obviously it's a classified business in the auto industry. Company has consistently grown earnings per share by 10%-15% per annum. I'd say over the last decade, it's traded at p robably between 26 and 30 times earnings. 40 times at some points. It got to 40 times earnings at some points. Today it's trading on a price earnings multiple valuation of 20 times earnings, lowest it's been in more than a decade. Commonwealth Bank trades at 27 times earnings, for context. Yeah. Look, companies like that. There's plenty of companies like that. REA is another one that comes to mind. Lots of great growth companies that perhaps we probably weren't investing in because their valuations were quite high. But now certainly, you know, we're looking at them now and very excited once we bounce out of this tough period. Great. We have a few questions on the dividend. John has asked why the dividend hasn't increased in WAM Capital since 2018, but WAM Research or WAM Microcap increases dividend given their respective current profits reserves? Yeah. Thanks for the question, always comes up. Look, I'm not on the Board, so I can't directly answer that question other than to say you need to look at our profit reserve. The profit reserve dictates how the Board, in terms of how much dividend they can provide. If we use the example of WAM Capital, there's AUD 0.21 in the profit reserve. If we maintain current levels of dividends, that's AUD 0.155 in the next 12 months, which means we've only got AUD 0.06 after that. AUD 0.21 minus AUD 0.155, call it AUD 0.06. What that means is that the portfolio needs to keep going up. Like, the shares that we invest in need to keep going up, 'cause if they go up, they generate a profit. If they generate a profit, it means we can use those profits to pay a dividend. We got very close back in early 2023, after a tough year in 2022, where potentially we needed to cut the dividend, and our strong performance got us through to where we are today, to be frank. Clearly, when the market is down like it has been since October, we're not generating profits, so we're not adding to the profit reserve. That's if we were to increase the dividend, we reduce the profit reserve, and if the market is down for, say, a year or so, we're not adding to it, so therefore you take a risk that you cut it. That's the WAM Capital example. WAX and WAM Microcap, yes, there is a lot of profit reserve there. The Boards of both those funds don't want a situation like WAM Capital, where we increase the dividend quite high to 2018, and then we're pushing against the profit reserve barrier, I guess you'd call it, because we don't want to keep eating away at the profit reserve. We wanna build the NTA, the net tangible assets over time. We don't want it to decline. Look, that's the conundrum that we're in at the moment. Look, you saw with WAM Microcap, there was a very slight increase in the dividend at the half. WAM and WAX has kept maintained the same. Without saying what's gonna happen, I dare say that given the current market, they're probably gonna be kept the same. Yeah. It is a balance of for the Boards, like, with their decision to do the capital growth and the income. Correct. Yeah, if we pay you more dividend, it means the net tangible assets come down, and so that'll impact the share price. It's weighing up what investors want. Do they want the share price going higher or they want more dividends? We're trying to get that right balance. We also have a question on WAM Capital, what the profit reserve is after the interim dividend is paid, and that is AUD 0.134 per share, so a bit less than one year's dividend. That's right. Which means we've got coverage for the October 2026 dividend, and we've got around 70% coverage for the April 2027 dividend. The financial year starts on July 1st, and that's very important. If the market is positive and our performance is positive in July and August and September, that should give hopefully enough profit where we can add to the profit reserve and have confidence around that April 2027 dividend. Great. Elaine has also asked what the profits reserve of WAX WAM Research is and why it wasn't published in the latest report. It is AUD 0.468 per share, and we publish them in our monthly NTAs every month, obviously. Dave has asked, "How do you generate franking?" Well, franking is very similar to what I talked about before. Basically instead of the unrealized gain, right, it's actually the realized gain because we actually pay tax on the realized gain. If we have a company and it's a AUD 100 share price, it goes up 20% and we sell it, we've made a 20% profit, which means we pay tax on that, and we use that tax to effectively give to our investors through a franking credit. Now, that's around sort of 70% of the franking that you receive as an investor. The other 30%, let's call it, is the franking we receive from the dividends that the companies that we invest in, and we pass them on. Sometimes there is a mismatch between the unrealized gains and the realized gains. We saw that in 2022, when you have a down market, and that's one of the reasons why we had to cut the franking from 100% - 60%, I think it was about two years ago. That should have given you an indication that if we're cutting the franking, we're pretty close to cutting the dividend as well. We haven't thankfully, and it's been maintained since. That should have been a warning sign in essence to all shareholders that we were close on the dividend. Yeah, franking for WAM Capital at the moment is 60%. For it to go back to 100%, it won't be anytime soon, but we would need a very strong market, very strong performance, more trading to generate that tax that I'm talking about or the profits on sale and more tax that we can pass on to our investors. The Board can have confidence that if we were to go back to 100%, we can maintain it for the foreseeable future. Thank you. We've also got a question on AI stocks. What percentage of the portfolio is currently in AI stocks or companies that have or will be significantly impacted by AI? Yeah, it's a great question, and something we, I think, debate about pretty much every day. I think in our fund, there are really three or four buckets. The first bucket are those that we believe are direct beneficiaries. The second bucket would be those software companies which we believe will be beneficiaries, but, you know, time will tell. You have a bucket where there'd be, I guess, service providers to AI companies that perhaps are not in the software space. In the fourth bucket are services companies that could get disrupted. I mean, thinking back, I think two years ago, we talked about why we're bullish AI and, you know, the efficiencies AI could generate for a lot of these businesses. That still stands. I guess what we've underestimated is that during this interim period of adoption, there's actually no real consensus by investors, both in Australia and the U.S., across all the tech companies on who are the real beneficiaries and who are the companies that will get disrupted. What's happened is, outside of the large language models, you know, the OpenAIs, the Anthropics, which are private businesses and very large, and obviously you have your Googles and the Amazons of the world and Groq, everyone is really just trying to debate, and you probably all have read about all these, I guess different research on who are the winners and losers and what are the frameworks to determine this. From our perspective, we've probably gone down a rabbit hole on this for quite a while. Our perspective is quite simple. What would be the catalyst to change an investor's mindset that this company is an AI beneficiary? In our view, it's to have real tangible evidence of this, of the AI working and continuing to have this tangible evidence increase. We believe the tangible evidence at this current juncture has to be top-line revenue. I know, I think two years ago we thought about the, you know, potential benefit being on the earnings side with the cost out. We've seen quite a lot of that across some of the companies. Like, I think Energy One in their presentation had they've written 1.6 million lines of code using AI, so that's really coming through. For these businesses to be a real winner, it has to generate top-line growth, and then they have to announce contracts or demonstrate their revenue has accelerated. Going back to the original questions, in the direct beneficiaries, we'll have companies like Firmus, which is like a neocloud, so they just effectively think about them as a data center operator that just help with GPUs, that's used for AI. We have Megaport, which does the connectivity, and they're already seeing the volume of AI data going through their platform. Those will be the direct beneficiaries. We have quite a few technology companies. As an example, we obviously talked about FINEOS before. You know, Pro Medicus, Technology One, Energy One, as examples. These are ones where we've done a lot of work on to try to understand whether they are or will be disrupted or whether they would benefit. You know, like just picking some of the common themes across the space. These are software businesses that's involved in industries where there's heavy regulation. Pro Medicus, as example, you know, you need FDA approval for the software, and the regulation side obviously slows that down quite a bit. There's a network effect, and the most important thing is the management of these businesses are adopting AI at a pace that, in our views, quicker than many of their peers. As an example, you know, Pro Medicus has, I think, 75 employees. They've been able to disrupt a lot of the larger competitors over many years, while AI has just given them more tools to disrupt at a faster pace with less headcount. In our view, that DNA is quite important, and so these are the companies we wanna back. Now, in the short term, there's never gonna be consensus on whether all of these companies will come through as beneficiaries, but we believe over the medium to long term, when that does occur and that they're actually benefiting from AI, the valuation should go back up. Finally, the other bucket are companies like Maas Group, which does a lot of the building of AI data centers, etc. They also benefit from AI. In terms of, I guess some of the industries Oscar's mentioned earlier that could get disrupted, we don't really have a lot of exposure, if any, in travel anymore. But one of the things we do wanna leave you with is the fact that with any new technology, the adoption curve flattens out as we've seen many times before. The early adopters obviously are very early on the adoption curve, and so then the dot points initially shows an exponential growth in adoption. But over time, as they penetrate more industries, the adoption curve flattens out a little bit and it takes a bit of time to get there. This leaves, I guess, it's a bit more time for these industries and businesses to reinvent themselves to take advantage of AI. It comes down to the management, it comes down to the foresight that they have and the investments they're willing to put behind AI. Like it's maybe give investors context as to how quickly this has changed. There's a company that's listed in Australia called AUB Group or the old AUB Group. It's an insurance broker. I think it was in November, they got a takeover bid for about AUD 30, I think, just off the top of my head. A private equity fund came in and said, "I think, you know, I'll pay a 30% premium on the share price and pay you AUD 30 for AUB Group." That like that was in November. Now that ended up not happening. Share price went back to sort of AUD 23, I think, AUD 23. One of the AI, I can't remember which one it was. Claude? Claude came out basically saying that AI can compare insurance policies. In the U.S., all the insurance brokers got smashed, and AUB Group, I think, has gone from AUD 23 to about AUD 15. They had their result, it was an upgrade, so nothing fundamentally had changed with the business. You step, you take a step back and you go, "Okay, what does AUB Group do?" Well, they're an insurance broker for very, very small businesses. Yeah, a company in a small town with a factory or something like that. You sort of go back and you go, it's very particular, it's very unique, the insurance policies that they provide, and the cover that they provide their clients. How can AI actually disrupt that? Like I get it from a. We get it from a mainstream perspective, but at that really micro end, it's very difficult to see how that, how they can, how it can be done when every business is incredibly diverse and different. Now, the market at the moment doesn't care. This provides opportunities for us, clearly. Around that, I'm going to the U.S. this Tuesday for two weeks, basically just to try and understand AI and, you know, who the winners and losers will be. We're doing similar strategy that we did in 2022, where the whole team will be doing a lot of travel in the next six months to really ramp up and get some new ideas in the portfolio. So look, it's evolving. It's certainly evolving, but we've never seen something impact sectors so quickly and without real thought. I think you would say l ike no one really knows how it'll end up in the long term. It's just the market has just said, "Nah, it's the long-term valuations of these companies are materially lower." That will change over time, and it's up to the companies to prove to the market that they are indeed a beneficiary. 'Cause at the moment they've been defenseless. Sorry, that was a long answer. No, very interesting. Fascinating. We have a few questions on Middle East and oil." What is the impact of the Middle East conflict on your strategies, and what can you do to reduce risk?" The only thing really we can reduce risk is our cash balance. We invest in small and mid-cap industrial companies. We don't invest in oil and gas companies. We don't invest in iron ore. The WAM Leaders team do, and of course, we've been having a very good year because of that. It's very difficult for us to invest in anything that is call it a hedge against what's happening. All we can do is focus on the fundamentals of the companies and make sure that they're achieving the catalysts that we think they need to be beating our earnings expectations. Most important thing for us, as I said earlier, is to be prepared when the market changes back into our favor to reward our shareholders effectively. The cash balance at the moment is sitting at 20%. It's the highest it's been since COVID. We feel that's the appropriate amount. If we go higher than that, it means it's... That's fine. If the market keeps falling, yeah, okay, we will outperform the market if we're, say, at 40% or 50% cash. But as we saw in COVID, and we saw on Liberation Day, we've seen time and time again, this market can flip very quickly. Now, if we go to 40% or 50% cash, it is very difficult for us to get back in the market and get back to, say, 15% cash. We're weighing that up at the moment. We're comfortable where we're at. As I said, the quality of the companies we're invested in are very high. The reporting season was actually very strong. Balance sheets are good. We've got plenty of stocks with catalysts, so we're confident we just need to ride it out. We're happy keeping it where we're at 20%. But that's not to say we wouldn't go higher. But we do. Obviously, it's a constant evolving issue at the moment. But look again, like, you know, when we're catching up this time last year, it was all about tariffs, and that ended pretty quickly and the market rallied hard. COVID, great example. That, who would have thought in middle of March of 2020 that the market would do what it was gonna do after that? Even after the Russia and Ukraine war in March 2022. Look, the market moves very quickly. Yeah, we wanna be on the right side of that when that occurs. I think the key thing is also to stick to our investment process, and the investment process has actually helped us over, I mean, since when we first started WAM, and obviously even before when WAM first started, and we've gone through many of these cycles. It doesn't make it easier. Gone through quite a few in the last five years. I know. Quite a few. The investment process has been very consistent, and so we have a very high faith in the investment process to be able to take us out, you know, of the current situation. We have a few stock questions. "What's your view on Telix Pharmaceuticals, TLX?" Oh, we don't have a very strong view. Hasn't been something we've invested in the last- Couple of years. Couple of years. Again, we quite like simple businesses. In terms of the biotech space, like we have a company called Imricor. So less on the drug side and more on the devices side and have this really interesting technology or platform and technologies, including a software system called NorthStar, which has received the FDA approval. You know, that's not a large position in the fund. You know, we typically try to find businesses where we sort of understand the drivers and obviously have expertise around it. We did well out of Telix a few years ago, and it was in an earnings upgrade cycle, and we sold it just because we thought earnings had gotten too far ahead of itself, and it's had a few slipups, and that's where it's. That's why it's back to where it is today. Those, wouldn't write it off, but yeah, we're not looking at it at the moment. What about EML Payments? Any view on that? Yep. EML Payments, you may have seen us reduce our substantial shareholder notice recently. When we first bought the business, you know, they were going through a significant transformation. They were selling what was a problematic business out of Europe, and then trying to sell a problematic acquisition out of the U.S.. They sold it, had new management come through. One of the reasons why we reduced subs, we're still shareholders, is because it was, I guess, a very large position in the fund. However, we think the integration process or the process to turn around the business could take a little bit longer. Now the management's very good, but in terms of, you know, as portfolio managers or investors with a portfolio of companies, we need to often determine the attractiveness and the upside in the share price of each opportunity relative to the other opportunities we see in the market. Because there's been obviously a huge dislocation in the share price with a lot of companies falling, we're finding better value elsewhere. It's one of the reasons why we reduced our position, but- That's a great point. Like that's exactly what we were talking about before. EML, there's actually the company's doing a really good job, and it was hard for us to sell it, and we spoke to them, and it was almost like an apology. The chair, the chairman is buying shares. Bought some shares this morning. We've got a portfolio, and it was a big weight in the portfolio, and we're seeing companies like Carsales that we talked about before and REA, and we've got a smaller weight in those companies, a bigger weight in EML, and it's the question we're asking ourselves is, if the market changes, is EML gonna go up at the same rate as REA and Carsales? The answer was no. We sold EML, and we put it largely into Carsales and REA. That's sort of how the portfolio managers can think. It's nothing against the company, and we've still got it in the microcap portfolio and still very happy with that weighting in the microcap portfolio, but unfortunately, it's. You've gotta make some hard decisions sometimes, and that was one of them we've made in the last few months. Ross has asked what your views are on Qoria, QOR. "Have you half sold or completely sold?" That's another example like EML. They obviously did a large merger with a U.S. business. One of the reasons why we reduced Qoria is to have a small stake. It's because effectively, you know, we are seeing a lot of the larger tech companies come off. You know, to Oscar's point, if the market goes back up, you know, we think the initial bit of money, and this is the trend we saw out of 2022, goes towards the larger, more liquid tech companies first, and then, you know, as you know in 12 - 24 months, then that money goes back into the smaller tech companies. The valuation rerate happens at the larger end first. Again, that's an example of where we sort of redeployed that into the larger tech companies. In summary, it's out of WAM Capital, and again, like EML, it's in the microcap fund. There's absolutely, like, again, hard decision because the company's actually doing well. Again, it was a portfolio decision. Graham has asked, "Do you consider investing in two stocks, SX2, which is Southern Cross Gold, so probably not so much in your realm, and 4DX, which is 4DMedical?" Southern Cross Gold, yeah. That's a no for us. It's probably WAM Active can. I'm not sure that they're in it at the moment, but yeah, 4DX? Yeah, 4DX, I mean, we have effective very small exposure through our holding in Pro Medicus, which obviously holds a lot of the warrants for 4DX. The technology, you know, we haven't done a lot of work on it, but they've obviously had, I think, a couple of FDA approvals. The share prices has done really well. Again, it's something that's in a space that's not typically sort of the area we're looking at. But that's, yeah, our exposure will be, you know, very minute through the Pro Medicus holding. Michael has asked, "Are you actively trading the market to take advantage of the dips?" Like in small-cap companies, it's very difficult because when you have periods like this, liquidity dries up. The answer is yes. Like, I think when we left, it was looking like another day in small caps where we grossly underperformed the market. We'll, yeah, we're buying, but, you know, it's small amounts. It's difficult. Like when you're in a good market, there's liquidity around, so everyone's feeling a little bit more positive. When you see harder markets, they're more willing to buy. At the moment, everyone's sitting back on their hands. Yeah, look, of course, we're taking advantage of days when the market's down. Conversely, when the market's up, and we've seen some pretty big up days in the last few months, yeah, we're trimming our positions 'cause it's, there's a lot of uncertainty at the moment. Look, as I said before, the key for us is to bounce out of this as hard as we can, and the pruning we've been doing around the portfolio is to try and make sure we're in the best companies for when that occurs. Yep. We have a few more questions on dividends and profit reserves. Dave has asked, "If WAM Capital is low in spare cash to keep paying the same dividends, can the Board take some cash from other funds which has more to lift the WAM cash reserves?" No, they can't, unfortunately. Well, I shouldn't say unfortunately. No, you just can't. So, no. Y eah, there's a Board for each of the lists, so it's independent. Well, I think the other funds would be a bit annoyed by that. Yeah. No, you can't do that. Yes. Someone has asked whether the money in the profit reserve is held somewhere else, or is it embedded in the NTA? It's an accounting term. The profit reserve is based off the unrealized gains that we achieve in the portfolio. If our portfolio at July 1st is 100, and it goes to 120 by July 31st, it doesn't necessarily mean we sell every company in the portfolio. We don't sell any of the companies in the portfolio. That's a 20% unrealized gain that we've made. That 20% goes into the profit reserve. That profit reserve we can use to pay a dividend. That's effectively an accounting term, but it essentially means that you can, the profits you make in the business can be book profits, not cash profits. Think of it like that. What matters most for us is that, as I said, July, August, September of this year, into the new financial year, into the 2027 financial year, we see the market and our performance be strong. That will give us profit reserve. That profit reserve we'll be able to use to top up effectively our ability to pay dividends in the future. That is still working for shareholders as well because it forms part of the NTA. Correct. Because otherwise, we'd be forced to sell all the companies that we own, like, to generate a realized profit, which wouldn't work. That's why it exists. Bill has asked, "Why are people buying WAM Capital? Shouldn't they be selling and buying another Wilson Asset Management LIC at a discount? Which you did cover off?" Well, I can't give advice. What was it? Slide 3 of the presentation, I think, hopefully tells the story. Yeah, great. Stu has asked what your view is on Magellan and Barrenjoey merger. He's gone into some more detail, but saying that, Morningstar analysis said it was a dilutive acquisition. Look, it was a dilutive acquisition to Magellan shareholders. I mean, conversely, the business that's effectively doing a reverse takeover of Barrenjoey, you know, I would say, has got some of the, like, smartest and brightest individuals in the Australian share market. Built that business from a standing start to where it is today. It's pretty extraordinary. Look, I think Magellan, I think a lot of our investors know Magellan quite well. It's had a number of issues over the years. Yes, as a Magellan shareholder, technically, you're diluted, but you could argue that the sum of the parts now with Barrenjoey makes it, in the future, a high valuation business anyway, so you'll benefit. I think. Look, it is. The only thing I'd say there is that the merger's been done. Barrenjoey's obviously linked to equity markets, linked to capital raisings, linked to initial public offerings, linked to companies doing acquisitions and so forth. That part of the market, certainly in our space, in industrials, in resources, it's fine, but in industrials is yeah nonexistent at the moment, and has been for six months. Sandeep has asked a very broad question. "What's your outlook and where to invest if you have anything to add in addition to what you've already covered off?" Well, the way to invest is to take a long-term view. As Tobias said, like, the investment process across all our funds has proved to outperform the market over the longer term. We've been through tough periods. 2022 was very difficult. I think, obviously, the GFC, there was two years in the GFC period when the business was a lot smaller. It was very difficult. Obviously, COVID. COVID. Yeah. We outperformed in COVID. I don't know how we did that, but we did. Look, yeah, it's just taking a long-term view. I mean, the mistakes you can make as an investor in this period is looking at what's happening globally. As an example, like, it's funny how it shifts the other way. Like back in 2022, when you had a disruption in oil, all the refining companies like Viva Energy and Ampol just went crazy 'cause refining margins went up. Then the war stopped, and a year later, like, refining margins went down, and they all got sold. What's happening now? All the brokers are telling us to buy Viva Energy and Ampol again because the refining margins are going up. The mistake we can make as an investor is go, "Oh, that looks interesting." We buy it now, and then with the assumption that you're buying shares today that are capitalizing refining margins very high into perpetuity, and then you buy that now because you view it as a hedge on your portfolio. The market then changes, the war stops, and these stocks get hit hard. You just gotta go back to the like, management, quality of the business, and are they achieving the fundamentals that you expect them to in terms of earnings growth versus the valuation? For us, that's our investment process, and we need a catalyst. As long as we've got that, we'll keep investing for the longer term. Yeah. No, I think as Oscar said, I mean, the share price, obviously, you know, movements, we look at it every day, but what's more important is the underlying performance. During reporting season, we're really looking at whether these companies are delivering, and whether they can continue to deliver. Because when we come out of, I guess this current trough, the market will gravitate towards the companies that's continued to deliver through what is a tough period. We saw that in quite a few times. Those are the companies that will have the largest increase in share price. We have a question from Sydney. "WAM Capital performance is published against two benchmarks, so you can see the All Ordinaries and the Small Ordinaries. Which of these benchmarks is the one you place the greatest importance on?" The joys of a benchmark. There's a bit in this, and it's worth talking about. The rise of passive money has been extraordinary over the last decade. When the business started up years and years ago, the ASX top 20 was nowhere near the same proportion it is today in the wider ASX, and it's gone up a lot. I think it's around 65%, off the top of my head, of the ASX top 20 of the wider ASX. Now, our benchmark is the wider ASX, but we invest in small- and mid-cap industrial companies. That's not resources, industrial companies. We can have days where we do. We have five earnings upgrades from our companies in anticipation, but the big four banks go up 2% and we underperform. For us running the fund, even though that's our benchmark, the All Ordinaries Index, it's out of our control largely. The Small Ordinaries Index we put in there, that's probably a better gauge. In saying that, in periods like we've seen in the last twelve months, where resources do well, we do badly. Now conversely, that can change. The keys for us, this dynamic with the shift to large caps and the shift to resources versus industrials, has been going for a long, long time. It's been exacerbated in the last twelve months, but it's been going on for really since around 2016. What's the positive there? It can change. We saw it changing at about six months ago. Shares, probably a lot of you own Commonwealth Bank, had. There's nothing wrong with Commonwealth Bank, by the way. I don't mean to sound negative. It's a great business, one of the best in Australia. It trades at a very high valuation, and it missed its results slightly in July and fell, or August, sorry, and fell quite a lot. At the same time, interest rates were going down, the market went, "Okay, I'll sell the Commonwealth Bank, and I'll buy small cap and mid cap industrials," which is what we invest in. From July to October, it was fantastic, and then it just changed really quickly. In summary, it's very difficult managing the fund. I won't lie when there's a lot of things out of your control versus your benchmark. Now, what we can control is what we invest in, and knowing that at some point, that headwind we've had on the benchmark will turn into a tailwind. Now, long answer to your question. The answer to your question is, we look at the Small Ordinaries Index, which is a better gauge of how we perform. Great. Sorry about that. No, that's good context. We have another question on, I think this was in reference to when you were talking about the downsides." What, where the market is at the moment. Why don't you short sell in that case?" Look, the answer is we can. Why, like, we haven't done it for a very long time. Probably well over 10 years. Why don't we do it? 'Cause it's not our expertise. Like, shorting stocks is very difficult, and just remember, if you get it wrong shorting, so it's the opposite of what we do, so if you get it wrong shorting, it means the share price goes up, the position you fund actually goes up. So you need to be doubly sure, triple sure, like, that your thesis is going to play out. So while the hedge funds are doing exceptionally well right now, and good on them, like, you know, it's their market, let's call it, that can change again. The last thing we wanna do to our investors is, I mean, we could buy Commonwealth Bank, we could buy BHP right now, we could buy Santos, Woodside if we really wanted to, but it's not our expertise. If we did that, and the market changes back to our stocks, then all of a sudden we're scrambling, because we need to get back into the stocks we know well. Look, we have periods like these where they're very tough and they're very painful. We're not sleeping as a team at all, and haven't been for four months. Ultimately, you've just gotta follow the process, stick to what you've known for 30 years, and the market will come back to you and follow your investment process. Do you have a view on financial services company MA Financial? Look, we do. We're not there. It's done very, very well. We think it's quite expensive. But again, like Barrenjoey, I said before, full of great individuals, some of the brightest in Australia. They've done a very, very good job. We would look at it at a point in time, but not for us at this point in time. Stu has asked about Bapcor. "It's repeatedly disappointed with earnings and share price falling for years. With the February 2026 delayed results, there's a capital raising. What's your view on the outlook of Bapcor's new-ish management to turn around the business?" We didn't own Bapcor. However, we participated in the recapitalization of the business at AUD 0.60. For context, I think this hit a high of AUD 8. COVID. This used to be one of the best stocks in the small-cap space in Australia. It's a good company. There's nothing wrong with it's just been managed badly. The new CEO is ex-Supercheap Auto. CFO is ex-Newcrest and Orica, so very high quality again, high-quality individuals, and what do we always look for in companies is management. This isn't gonna turn around in the next six months. But as I keep saying internally to the team, if we can't make money out of Bapcor at AUD 0.60, then we might as well go home. It's like, honestly, like that was a bargain basement price. There are things they can do internally in the business, such as sell a few assets, sell some underperforming or close some underperforming businesses. If the business went back to being a trade business solely, I think it's a AUD 3 stock every day of the week. Look, I think this, these are some of the opportunities you get in tough markets. On a long-term view, we're actually very, very positive of the stock, noting that we got in at AUD 0.60. John has asked, "Why is GemLife superior to Ingenia?" We actually own Ingenia as well. We talk about this every day. We own Aspen Group, and all three companies are exposed to this aging population, and obviously, you know, the retirees that's gonna be entering retirement age. I wouldn't say it's superior. Like Ingenia is a lot cheaper. I would say GemLife's growth prospects are a bit higher. It's really depends on whether you're paying for, I guess, a higher, high valuation business with a bit of high growth or a low valuation business with a slightly lower growth. I'd say, look, we like founder-led businesses and, definitely, Adrian Puljich, who runs that business, has done a tremendous job, and it's very much exposed to Queensland, GemLife, with this, yeah, as Tobias said, strong growth profile. It's founder-led. Ingenia isn't founder-led. I'd say GemLife's grown largely organically, whereas Ingenia's grown really through acquisition. We do think ultimately, probably Ingenia should trade at a discount in terms of its valuation to GemLife, but the discount's crazy at the moment. Again, another example of an opportunity we're seeing. I think Ingenia's almost trading at net tangible assets. Last night, as an example, another company in the land lease space called Lifestyle Communities based in Victoria, a strategic investor, I think, I don't know if they announced it, but it's in the press today, called Hometown America, whether or not it's true or not, it was a strategic of some sort, bought shares at a premium to take a stake in the company. Look, they're very, these assets, these land lease communities are in high demand in Australia from global peers. Look, we think, yeah, Ingenia potentially is a takeover target at the moment as well. We have a question to get your view on healthcare stocks, and another person has asked about Sonic Healthcare specifically. Yeah, in terms of our exposure in the funds, we've got IDX and Regis Healthcare, probably two of the largest. They both have very good results. Again, in February, upgraded. IDX is radiology. Regis Healthcare is aged care. That's more in our sort of in the small cap space. We're obviously very positive on those two companies. Hung has asked, "Any chance Tuas stops buying M1 in Singapore by their IMDA?" Yeah, the Tuas, which is TPG Singapore symbol, they obviously six months ago decided to buy M1. They're currently getting approved, or the process is with the IMDA, which is like the ACCC equivalent of Australia in Singapore. You know, yeah, we're very confident on the deal going ahead. We've obviously done a lot of industry work on it. We're sort of just waiting for the regulator to you know just to go through their process for the deal. I think on the Keppel call, Keppel, which is a large Singaporean conglomerate, they're the seller. They're the sellers of M1, and on their call in February, I think public call, they've reiterated the confidence in the regulator approving the deal. From our perspective, nothing has changed. The businesses are going really strongly organically, and I guess we're just all sitting around, you know, waiting for the approval. We've got a few stocks coming in, so maybe I'll fly through them if you wanna do the buy, hold, sell. Yeah. IDP Education? Yeah, we own it. We like it actually. It's on a price-earnings multiple of 10 times earnings. Used to trade at 50 times earnings. But it's a small weight. I think management's doing a really good job there. But we just need student volumes. I think if they can get some volume growth, I think the operating leverage in this business will be massive. Again, another example of what we're talking about, bargain basement price. GDG? Yeah, we've been buying. Oh, that's right. We've been buying. Nothing has changed, yet the share price has fallen 40%. Bravura? Our exposure there is through Iress. You know, the CEO for Iress is the ex-CEO for Bravura. Obviously, we've done extremely well while he was running Bravura, and now we've sort of followed him into Iress as well. NEXTDC? We don't have NEXTDC in the fund. You know, we obviously have Firmus, which, in our view, is more exposed to neoclouds and the AI trend, and Megaport, and that sort of. That's a more capitalized version to play NEXTDC. MGH. The question is specifically, "WAM was holding some MGH, which is selling much of their assets to HMA for more than their market cap. Why would we not buy more of that?" We still own MGH. Yeah. Yeah, I've never had a company get a takeover before and fall 30% instead of go up 30%. Anyway, they got a great price. It was a bizarre move that day. Another example of what we're talking about. Look, Wes has shifted the business into electrical construction, and they're a big beneficiary of the AI infrastructure build, and in particular, neoclouds that Tobias was talking about. Yeah, we've been buying the stock, and it's I think pretty much recovered that fall almost, which has been a good effort. I think it's a wait and see for contract announcements. HCW, which is HealthCo Healthcare and Wellness REIT? Yeah. We've actually just started buying that recently. Obviously, it's part of the HMC Capital cohort. We started buying that in WAM Microcap. It's currently trading. I think it's still at a 50% discount to the NTA. We think potentially, given what's happened, you know, we're getting to the end of some of the issues, and yeah, we think significantly undervalued then, you know, like the margin of safety is quite high. They hold very good assets. So we'll just have to wait for them to sort out some of those issues. IPH? Solid results, another company that the market will think will be impacted by AI. I actually think they'll be a beneficiary, 'cause a huge amount of their work is procedural in nature. So we haven't owned it for two years, I think, oh no, about a year, I think. But we've got a very small weighting, 'cause it's so cheap, the stock. I think it's on a price earnings multiple of 7. Used to trade at AUD 20. Anyway, we're doing the work on it, so we own a tiny bit. Lindsay Australia, LAU, and the question was, "Disregarding recent fuel supply and price issues, does it creep onto the investment radar?" No, not yet. Everything's got a price. It's a capital heavy business. It's had periods where it's gone well. Always sort of get nervous 'cause it's got a big exposure to Coles and Woolworths. We're not there in the micro fund. A question from Philip: "How has the deployment of funds from the recent WAM Active placement been going?" It's been going really well. I think it was from running the portfolio's perspective, I think it was very timely because effectively we've got extra cash in there, and we can be patient and deploy it properly. I think cash levels are running around 25% I think at the moment, which has been helpful in the current markets. There's big positions in the fund in Forrestania Resources and also Lindian Resources. Lindian had a very good announcement two weeks ago. Yeah, we're being patient, and yeah, like when the time is right for the market to turn, I mean, that 20% could go to zero in the space of 10 minutes. N o need to be a hero at this point in time. George has asked, "Is there a limit as to what percentage of your portfolio can be invested in one specific sector? I'm particularly interested if there is an upper limit to the proportion of resource stocks in WAM Active, actually." The answer is no. We, of course, monitor it. Look, as I said just before, the WAM Active portfolio is very small. It's AUD 150 million, and Shaun, to his credit, has done an amazing job shifting the portfolio to resources like he did around September, October. That's the only reason why the fund has done what it's done. If he'd stuck to industrials, it would have underperformed. The answer is no. Like, that fund's very small. From our perspective, running a huge fund, we need to, of course, be cognizant of where our sector exposures are, and it's something we talk about every day. Stan has asked, "If AI makes analyzing investment options available to everyone, what does that mean for WAM?" It's a good question. Maybe I'll answer that question with how we are using AI internally. Obviously, we have Copilot across the entire organization. You know, obviously, I also use ChatGPT. I think Shaun uses Groq. We all have our different choices. It really helps condensing a lot of information that is probably just on the internet down and helping to speed the research. I think from my personal experience, it's been a huge help in terms of being able to condense a lot of information and really pulling together in a format that it would have probably taken me a couple of days to do. Then with the sources, if I really needed to check, I could sort of go and have a look, and that's been really helpful. Obviously, like it's really how you use it. Can we use it better? I think the key is for us to continue to figure out how we can actually leverage that and having more integration with some of the new tools that's coming out. It's pretty exciting times for us as investors to be able to have more capacity to look at more companies and in more detail thanks to AI. As an example, I'm going to the U.S. next Tuesday and meeting a lot of companies I've never met before in the United States, and you can just go on, Copilot or what's the other one? ChatGPT. Say, "What are the 10 questions you can ask Home Depot?" Bang, like, "What were the top 10 questions asked in the Home Depot quarterly call?" Bang, there they are. Like, that time saving is enormous, and then I can just focus on the plain reading, being more detailed in my reading. 'Cause often you're typing out questions that companies don't know, but if you've got a start like that's huge. There's no question it can make our job more efficient. Yeah. Definitely on the back end as well, we use it quite a lot. Yes, huge. Michael has asked, "Just going back to EML, it is close to a 52-week low. Are you considering buying back in?" We always look at, like obviously opportunities across the entire fund and the... I think from our perspective, as you know, with our investment process, it's identifying catalysts. You know, we only buy and sell based on the catalyst that we think could appear. For us, it's more about figuring out, you know, what's the next catalyst, and hopefully investing on the back of that. Obviously, we have confidence in that. You know, of course, we could buy back in, or sorry, adding to our existing weight. That, that's what would determine our sort of investment. I think from memory, they've got 2028 targets out there, and you've just seen the chairman buy stock, so you would assume that he's pretty comfortable around that 2028 target. Yeah, I mean, look, it's a tough year for them this year, not just the macro, but just getting everything right in the business. We took a call for WAM Capital. As I said, we own it WAM Microcap, but WAM Capital that the market changes, we wanna be in other stocks that will go higher. Yeah, we still like the company. What are your views on Healius, HLS? Yeah. Well, not too positive. I think they have a lot of issues. Obviously balance sheet is one, and some of the challenges that they've had. Not something we'll be looking to invest anytime soon. We spoke about Telix. But as far as biotechs are concerned, do you have a holding in PYC Therapeutics, PYC? No. Question from Steve, "How do you turn an on-paper profits reserve number, which is not cash, into actual cash for the dividend payments?" I think the- Well, it comes out of our cash balance. Yeah. 'Cause we obviously like, right now, we have 20% cash, so the dividend's gotta come, can come from that effectively. Across the WAM Group of LICs, what is the strategy and type of assets and accounts you use to invest in, use to invest the cash reserves? For instance, bank bills, CMAs, overnight lending, government bonds. Oh, we'd have to get back to you on that. We used to do term deposits, but, yeah, we'd get back to you on that. Finance team can get back. Neil has asked, "I assume after your explanation of the profit reserve being based on unrealized gains, do you adjust for some of the downward movements due to current market valuations?" Again, using my example, if the portfolio is worth 100 on July 1st and it's negative, or sorry, we go down 20%, so it's 80 at July 31st, then we don't add anything to the profit reserve. It's just as simple as that. We were adding to the profit reserve to the end of October, and we've been adding consistently for the last 3.5 years. Since the tough market started from October and started falling, we haven't been adding to it. You've got to recapture those losses. It's very unlikely by June 30th that we'll add to the profit reserve, but the positive is it starts at zero from July 1st. Hence why I'm saying you've got to watch what we're doing, how the portfolio is performing in July and August. We have a question on GenusPlus Group, GNP. Do you have any views? Very positive on GenusPlus. 2.5 years ago when we first- No, we owned it for ages. We bought it at AUD 0.80. Yeah, AUD 0.80. So we've had a really good ride. So again, a founder-led business. David Riches is the founder, Damian is the CFO, and they've done an incredible job and they've really diversified our business to being a lot larger. I know the guys have pretty strong aspirations for where this business could get to. And they are positively exposed to electrification and, you know, batteries, etc. A lot of the structural growth investment that's occurring in Australia, and they would be one of, I think, two companies most exposed to the Rewiring the Nation initiative, which is effectively connecting up all the renewable energy sites to the grid. You know, the original grid that was connected to just coal-fired power plants wasn't future-proven. Obviously this investment in the electricity grid, which they benefit from, and the growth has been exceptional. I think the upgrade they did, like in January, was like a 30% upgrade, you know, on consensus numbers. They- Where's the share price now? Down 10. Yeah. You know, again, like it's a good example of companies that's just doing incredibly well, and the share price might not reflect this, but when the market comes back, you know, very confident. Bernard has asked, "Given the growth in electric vehicles and their simpler parts construction, has any thought been given to the effect on companies in the ASX that supply their parts?" The answer is yes, but I think those concerns have. That was, I'd say, a big concern almost five years ago- No, longer. Six or seven years ago. I think that was when, on the demand side, it was pure play EV. Then, when it shifted to hybrid, I felt that sort of those concerns, even got pushed out. Look, it's a structural consideration, like, but it's a long way away. There's no question. It's a longer than what we all thought a few years back. James has asked, "Given the rising cost of risk-free capital, arguably permanently, would you agree that a P/E of 15 is the new 25, and do you think that investors and portfolio managers have fully absorbed this reality?" That's a very good question. It's a good question. I agree. Yeah. No, the answer is yes. Yes. Like, I mean, gone are the days of EV sales and things like that. Like, all these companies are now trading at what they should trade on as price-earnings multiple valuation. I think the reality is that, look, our investment process is looking for a valuation that is less than the earnings growth of the business, and that that's a part of our investment process. We have added catalysts such as, well, obviously, if they're gonna upgrade earnings, if they're gonna buy a company, if they're gonna divest a company, then that will dictate our weighting in the portfolio. Yeah, in periods like this, there's no question, P/E, but P/E value, price-earnings multiple valuations decline very, very rapidly, and like 100%. Like, if you look at when we do our internal reviews of companies, the valuation we're using is probably 20%-30% lower than what it was 6-12 months ago. You've got to take that into account, there's no question. Ben has asked, "Is NEC in bargain territory?" No, I don't think so. I didn't like the outdoor media acquisition. Everything's got a price. It's just hard in TV. It's still in structural decline. Yeah, my answer is no, but everything's got a price. Like, it would be trading at a very cheap multiple. I don't know what it is, but it would be. Yeah, just one to have a look at, I guess. There's a few more stocks, but I think they might be outside of your remit, so just let me know. Do you hold Green Technology Metals? No. Nope. Do you have any views on Lynas? Not specifically on Lynas, other than say that the rare earths industry's clearly of strategic importance. They did a deal this week, I think with the Japanese on an offtake. The problem with rare earths has always been that it's quite uneconomic to produce. The Japanese have come in and basically put a price floor, I guess you'd say, on what they'd buy the commodity at. Look, there's a lot of good things happening in that space because it's strategically important. Lindian, which we own extensively and where I'm active, is I think the third largest deposit globally. Is that correct? Well, it's the second, but it could be third. Let's just say the third. Top five. It's very strategic. They had a very positive announcement a few weeks ago around their processing plant. We think the potential they could announce some offtake partners, so that's the catalyst for that one. Yeah. We have a question further on GDG. Mark says, "I ask about GDG 'cause it's a long-term holding of WAM LICs. Do you think the re-rating is related to Evidentia inflows, AI risk or something else?" It's inflows broadly. You've got the Division 296 changes coming through, like the super changes that should be very positive for the bond business, and the shift to managed accounts is only accelerating. Look, what we've seen, great example from the previous question, is just the price earnings multiple valuation in the company has rapidly declined. Has anything changed in the business? Zero. In fact, we think it's getting stronger. Again, it's one we've just been buying pretty much every day for about three months. Yeah, I was gonna say, at some point, you know, we're trying to invest in these businesses with strong top-line growth or with growth. At some point, it's gonna reach a certain point where the growth is gonna offset the valuation decline, and, you know, that's sort of the trend where it goes the other way, where then the growth is then priced in, once they reach sort of an equilibrium valuation then. Yeah, I think it's a good point, like, 'cause it feels to us that the Carsales, REAs of the world have found a technology m ight have found a little bit of a bottom here. They're bouncing around at these levels, which is a positive sign. When they get to depressed levels like this, every investor can look at them. When they're at very high levels, there's only a certain portion of the market that invests that way, that looks at them. More eyeballs, more ability for other funds to buy is a good thing. I would say GDG is still a small cap, and so that's why it's falling. It is exposed to the market as well. George has asked about WAM Active: "Can you comment on how the newly issued shares have affected the profit reserve per share and franking credits on hand? Does the issue put at risk the quantum of future dividends per share, and the franking?" I suppose I'll just cover off that the profit reserve is AUD 0.165 per share, and the dividend that equates to a dividend coverage of about 2.6 years. Not sure if you had anything else to add. Yes, the performance has been very, very strong, and that allowed us to do the capital raise. Effectively, we did raise the capital and it reduced the profit reserve. But we've got 2.6 years' coverage, as April said, that's quite very strong. For context, WAM Capital has about 1.3 years coverage, I think at this point, at this juncture. WAM Active should be a turbocharged style product with the market. If you get periods for a year where the market is up, and there's more capital raisings, there's more IPOs. WAM Active is a small fund. You know, we'd like to think that we do better than the market. That should be very strong for the profit reserve. Shaun, who runs the fund, has done a tremendous job over the last three years and got to the position where the fund could do this. I think, you know, for as a business, I've, well, I've been in the business for 10 years. We've been talking about WAM Active, trying to grow WAM Active ever since I've been in the business. To be able to do it and have the support from our shareholders was truly extraordinary, and in a very difficult market as well. Obviously, thank you to everyone who participated. It's a pretty decent achievement, I think. Shareholders benefit 'cause you can spread those costs over a wider level of funds. We think there's a lot more opportunity for the fund itself. Yeah. We have a question from Steve, and you've covered off your area of expertise being small industrials. He's asked, "Please explain why you avoid investing in resources given the recent outperformance? It's a gap in your portfolio diversification strategy." Yeah, it's a gap. Again, it's been a painful gap, let's be frank. It's not something that's been going on for a small amount of time. It's been about 10 years. However, it's just worth pointing out that the, I think, four or five-year period into 2016 was like the best four or five-year period the business has ever seen. We will get a benefit of a resources downturn at some point. Well, okay, let's take a step back. Why doesn't it fit the investment process? Resources companies, while you could be positive on a resources company for doing a production upgrade or potentially an acquisition or something like that, the reality is it doesn't really matter because all that matters is the commodity, and we're not a commodity, we're not commodity experts. That's not to say we couldn't be in the future, but we've traditionally been exposed to small and mid-cap industrial companies. We've done that for 30 years. It's been a very tough period. As I said, it's like we've never seen underperformance like this from small and mid-cap industrial companies, and it's been a five-year period. It hasn't been like it's been four months, it's been over five years. It will revert. It's up to us to tell you that when we have a big year, when it happens to say, "Hey, cool your jets a little bit. Just remember resources fell, and we got that benefit." It was a natural tailwind to our performance, 'cause that's the same as what's been at the moment, which has been a headwind. Look, not to say we wouldn't do it in the future, it's just that we feel our expertise and what fits the investment process is in industrial companies. We have a few more stocks. What's your view on Xero, X-R-O? We don't have a strong view, and we haven't had Xero in the fund for quite a few years now. In the large end, you know, we have Pro Medicus, Technology One, HUB24, which I think I mentioned earlier. That's sort of been our larger tech sort of exposure there. Xero, WiseTech, we don't currently have in our fund. DBI, Dalrymple Bay Infrastructure? No, we don't. Yep. BlinkLab, BB1? No. A question from Leon: "Which small industrial WAM LIC would you invest in if funds became available?" Look, I can't give you advice obviously, but it just depends on what your investment horizon is and what you're after. I mean, in terms of riskiest fund to probably least riskiest fund in the industrial space, it's probably the riskiest is probably WAM Active, then WAM Microcap, WAM Research, and then WAM Capital. Again, just depends on what your risk profile is. A few more stocks. What's WAM Active's view on 14D, which is 1414 Degrees and LAS outside of- Sorry. Yeah. Don't know it. Just following up on the Sonic Healthcare specifically, Stu just wants a bit of clarification. Sonic Healthcare hasn't grown earnings since 2020 minus the COVID spike. Are you aware of any adverse headwinds for Sonic, and what is your view on future earnings? Well, it's likely costs. Yeah. Yeah. Yeah. Maybe we can get, you know, WAM Leaders to come back. Yeah. Oh, I'd say broadly, yeah. It's a large cap company. Thinking about the other pathology players like Healius in our space, there's been a lot of cost pressure in pathology. It's probably the cost pressures is offset any sort of the more than offset the revenue growth that we're seeing. Yeah, that's probably specifically WAM Leaders question. I mean, the other thing is I would say where we've held a lot of pathology in the past, you know, we've always thought that the volumes will go back to pre-COVID levels. There was always this trajectory back, where you saw that sort of dip in volumes. That's probably taken a long time or I think the view is just probably doesn't really get back to that level pre-COVID. Perhaps the structure element as well. Great. Maybe just touching on the WAM Capital share price that got to AUD 2.20 with the lower ASX. I suppose maybe just touch on that journey over the last few years as well, which I know you covered off earlier. That's fine. Look, when it was AUD 2.20, it was trading at a very high premium, and that was before. Well, I think COVID occurred. We had the really big COVID bounce in 2021, right? That was fantastic. We had the sell-off in 2022. We kept paying you the same amount of dividends through that period, notwithstanding the market was negative. What happened was the value of the portfolio fell with the market. We then paid you dividends. That made it fall even further. The NTA, the net tangible assets, fell further. The premium or the share price fell with the net tangible assets, but it also, what happened was the premium, which is what I was discussing earlier, the first thing in the presentation, the premium also contracted. Now, we've worked incredibly hard as a team since that 2022 period, over that 3.5-year period on the fund, and I'd like to think that the performance speaks for itself in 2023, 2024, 2025. We got it to a point in October where we're feeling pretty good about where the share price was and where the net tangible assets were. As we discussed earlier in the presentation, it's been an incredibly tough period since that point in time. Despite all that, the premium, i.e. the share price, hasn't fallen to the same extent that the net tangible assets have fallen. It's just so important, I can't reiterate that enough to the calls today. In our eyes, the share price is artificially high. Yeah, I'll leave it at that. Just a few more stocks. Thoughts on MTS, Metcash. Is that in your remit? More large-cap question. Yep. Defense stocks such as DroneShield and EOS. Well, we have Codan in the fund. That's probably our defense name. It was hard to buy DroneShield when the CEO sold AUD 65 million worth of shares. In EOS's case, which if I had to pick one of the two, that's probably the one we'd probably own. They had a misstep in terms of their announcements and a short report written on them and so forth. Again, like, you gotta be careful with these stocks. They're hot at the moment for obvious reasons. If the market changes, then they'll get sold, and it'll all go back into the stocks that are suffering at the moment. They're not there in DroneShield. Might consider EOS, but we're not there. The one that we like is Codan. We've been in Codan for 11- 12 years, so we know the management there and the business very well. That's all we have time for today. To stay informed with our latest investment insights, join our community of 100,000 subscribers, and you can also follow us on LinkedIn, X or Facebook, and visit our website for more. Thank you very much for everyone that submitted questions. A recording of this call will be made available on our website shortly, and I'll pass back to Oscar for closing remarks. Yeah, look, just thanks to everyone for dialing in, and I appreciate it's, you know, quite a volatile time at the moment. Yeah, look, appreciate your support and hope to see you at the roadshow. Thank you very much. Thank you.