Hello and welcome. Thank you all for joining us today for the WAM Capital FY 2026 full year results and dividend webinar. My name is April Lowis from the Investor Relations Team, and today I am joined by Geoff Wilson, Chairman and CIO, Chief Investment Officer of WAM Capital, and Oscar Oberg, Lead Portfolio Manager of WAM Capital. Before we begin, a disclaimer is displayed on screen. What we discuss today is general in nature and is not financial advice. To start, Geoff will speak through the dividend announcement, and Oscar will then run through the portfolio and outlook. I thank you for the questions that you have already submitted today. We look forward to taking your questions in the latter part of the webinar. I will hand over to Geoff. Great. Look, thanks everyone, and thanks very much, April. Again, thank you for all your questions. I know a number of people have called in and please, any question you have, please send it in because it is your company and we are only here doing this on your behalf. Why do I just sort of take you through the process in terms of dividends, like why did we get here? From the questions and people I have spoken to, some have said when the board made the result announcement, they were a little bit surprised at the, well, significantly surprised, as we can see by the share price performance, at the talking about the rebasing of the dividend. Our ability to pay dividends is really a function of the profit we make on an annual basis. We put that profit, actually on a monthly basis, into the profit reserve, and then we pay the dividend out of the profit reserve. In terms of the franking, we get franking two ways. It is by when we make money and we pay tax, we get franking that way, but also Australian shares that we are invested in, they pay their dividends, we get franking that way. Actually, if we flip up to slide, I think it is slide eight that has got all the, and these will all be up on the ASX, all the WAM-listed investment companies. If you look at the, I think at the far right-hand side column are quite small numbers, but the second last two columns. It has got the profit reserve, and it is how much is that profit reserve as a number compared to the dividend we pay on an annual basis. You will see now the WAM one there is at AUD 0.0775. I have not got my- Yes, it is. Long glasses. So effectively, that's telling you that we haven't got enough profit reserve to pay a year of dividend. We've been in that position before, and the board believed we should tell shareholders exactly what position we're in terms of the profit reserve, and the fact that it probably looks like, depending on the performance of the portfolio, that the dividend will have to be rebased. We were down to AUD 0.056 odd cents in the profit reserve, and that's why we're talking about instead of the AUD 0.155, this is after if we pay the AUD 0.0775 final dividend for next year, we still have to make some more money to put it in the profit reserve, so we could pay an AUD 0.08 dividend. How did we get here? To me, the interesting thing is, and whose responsibility is it? First of all, it's the board's responsibility, and myself as Chairman and Chief Investment Officer, I take full responsibility for the unfortunate situation we had to do, which was guiding shareholders to a lower dividend going forward. What errors had we made as a board? Or what would've put us in a different situation? If you go back when COVID occurred, in 2021/2022, when the portfolio was down, 18 odd percent. So broadly, that means in that year, WAM didn't make any money. It actually, the assets were down by 18 odd percent. If the board then cut the dividend from, say, that AUD 0.155 to say, by a couple of cents or AUD 0.025 - AUD 0.13, we would still have profit in the profit reserve. Because if you look at the performance of the portfolio since COVID, I think the market's done about 8.1%, the portfolio's done about 8.5%, and I think the Small Ords has done, what, 5 odd, and the small industrials, which we specialize on, has done 3.1% over that period. So the performance of the Portfolio Manager, myself, Oscar, and the rest of the team, they've actually done a reasonable job. The fact is, if we go to the slide, sort of the first slide, is the fact is we were paying out a lot more than we were, in terms of dividends, and that's partially franked, than we were making on an annual basis. To me that's why we've ended up where we are. All those figures will be in the various slides. What other slides have we got? That's in terms of the rebasing. Back in 2022, when the portfolio fell that 18-odd percent, then of course, if you have a 10% yield on a dollar, if the portfolio is at AUD 0.82, then you have to make 12% on that. We actually got to a situation where we had to make, what was the figure, about 16-odd percent on a per annum basis to maintain the dividend. After we pay the next dividend of AUD 0.0775, it would have been close to that 17%, 18% per annum. That is where the board thought, "Hey, look, we have really got to guide people to where we are going." I know a lot of questions have come in and said, "Hey, look, why did the share price fall so much?" It was trading at a premium, and a number of questions have come in and said, "When will the dividend get back to AUD 0.155?" If you look at our dividend slide, and this is probably a good one, there you will see how we grew the dividend in the early years, and we actually had our special dividends, because our performance was very strong. We did have to cut the dividend, and we cut it down. We pretty much halved it from AUD 0.16- AUD 0.08, and then we were able to build it back up from that AUD 0.08 - AUD 0.155. You can see that we kept it at that AUD 0.155 level, which we were paying out more than what we were earning over that period of time. That is where I said, it is really probably the board's responsibility, and myself as chairman, we probably should have cut the dividend earlier, then we would have still had something in the profit reserve. Will we get back to that AUD 0.155, AUD 0.16? My belief, yeah, of course, that is the plan, to get back there. To me, the strange thing is, back in 2022, we actually, at the end of one of the years, and that was when the market was down that 18%, we were sitting on, I think we had AUD 0.01 in the profit reserve. Before we actually announced our result, the guys just had some extremely good performance numbers, so the profit reserve was starting to fill up again. The logic was, "Hey, look, let us hold off and see if we can maintain the dividend at that high dividend amount." I think, Oscar, in the 2023 year, what was the portfolio up? Was it- Oh, we outperformed by 14%? Yeah. I think the actual was up 26%. Yeah. Then the year after, it was up- 22%. Yeah. So, let's hope we're setting up for another 26% and 22% performance year going forward. Obviously from the board's perspective, we think we've got the dividend at a reasonable level, and the plan will be to grow it. Grow it back up to that 16%, 17%, 18%. In theory, assuming we're making more than we're paying out, the logic is to continue to grow that dividend. I think, what else did I need to touch on? The next slide, it goes- Oh, yeah. Through a little bit more about the breakdown. Yeah. Look, that just shows you how it works. You've got X amount of assets, you make so much in terms of performance, and then, of course, your assets decline by how much you pay out. That just shows you how, over the period, what is it? Since COVID, how much we made and how much we paid out, and the fact that if we had paid out less in dividends, of course, we'd have more in the profit reserve. As I said, we would've only had to reduce the dividend by a couple of cents. Well, over that period, we would've been maintaining the dividend at that lower amount, that AUD 0.13-odd. Look, that's just the premium and discount. To me, actually, I know it's incredibly painful what's happened with the share price. I actually think this is positive. I know you might say, "Oh, yeah, of course you would." The reason I think it's positive is because we're paying out pretty much all of what we're earning or slightly more of what we're earning, then there was very little capital growth. Over time, say if you're going to make 10% per annum over time, if you get that all as a yield and not as any capital growth, then investors think, "Hey, look, my assets aren't going up." Because if you make 10% on a AUD 1, say the portfolio goes up 10% a year, so AUD 0.10 on a AUD 1 each year, but it pays out AUD 0.10, then the share price stays the same. The fact is, we're paying out slightly more than what we're earning, so the share price comes down. You get a sort of a negative impact on the capital side. People don't like that. If they were getting that 10% return, and that return in the new environment, particularly with the new capital gains tax, the return you want. In the old age, you probably wanted the 10% as capital, as purely as capital, because that was the lowest tax rate. Now, because the tax on capital's increased significantly, then that 10%, you probably want 3% in line with inflation. That means you don't pay any tax on that 3%, and you want the other 7% as a dividend or a distribution. We think we're positioned quite well for that. Now, I know you'll say, "Well, hold it. That doesn't make me feel good because now I'll get some capital growth, but I've lost X amount of capital growth because the share price has come down." Yeah, we've seen it before. As I said, I'm Chief Investment Officer, so I take responsibility on that side as well, on the performance. But if you look at the performance over, is it 20 How many years? 29 years. 29 years. There's five years that we've had negative performance. Last year happened to be one of them. The reason why the dividend was cut was because we'd been paying out slightly more than what we'd been earning since after the COVID period. I think, does that pretty much do most of my slides? Yeah. Okay. I think you've already touched on the next slide. Yeah I think it's over to Oscar. Thanks, April. Thank you. Thanks, Geoff, and good afternoon, everyone. Look, unfortunately, the 2026 financial year was personally the hardest year I've ever had in investing since I started close to 20 years ago. From WAM Capital's perspective, it's definitely the hardest year that we've had since the global financial crisis. As you see on slide 10, we've outlined some of the reasons behind this, and this is largely due to a combination of war, inflation, government policy, and also artificial intelligence that really hit small cap industrial companies hard. In fact, this was the fifth year in a row where small cap industrial companies have underperformed the market. On top of this, we had a number of large holdings, such as Corporate Travel, Webjet, Tuas, which had done well for us for a number of years, in particular those good years after 2022, and they became unstuck for various unforeseen circumstances. In previous years, we always make mistakes, and in previous years, these mistakes are generally more than offset by positive catalysts that we see, whether it be through earnings upgrades, acquisitions, or even takeovers. The problem was because the market was so uncertain and the macroeconomic environment was tough. We got plenty of positive catalysts, but unfortunately, it didn't positively impact the share price. In fact, it was probably a negative for the share price because it became a liquidity event for investors to sell. For these reasons, that magnified our performance, and as a consequence, it's the hardest year we've ever had in WAM Capital. Look, on behalf of myself and the team at WAM Capital, we acknowledge the pain, as Geoff said, that shareholders will be facing right now. You can be rest assured that we are working extremely hard at the moment to make sure that WAM Capital is best positioned for when the market settles, when it becomes more about stock picking and identifying catalysts in line with our investment process than the macroeconomic environment. Look, as we've said many times on these calls and in presentations, when we use the Wilson Asset Management investment process, we're looking for undervalued growth companies with a catalyst. As we've done for the last 30 years, the vast majority of these holdings come from the small cap industrial sector, and this is in sectors such as retail, healthcare, technology, media, building materials. The reason why we choose these sectors is generally, these companies have a higher level of growth rate versus their valuation, and they have catalysts that can see a rerating of the share price over time. These sectors tend to do well in periods where interest rates are low. Conversely, they tend to do badly when interest rates are on the rise. As long-term investors, we're looking for catalysts that can see a rerating of the share price over the longer term, and we are looking through cycles. As you can see with the Wilson Asset Management investment process, over the last 30 years, we've proved to outperform over the longer term through various degrees of economic cycles. Now, on slide 11, which is in front of you at the moment, you can see the period coming out of the GFC from 2010 - 2018. As you can see here, the dark blue line, interest rates fell from levels of about 4.5% - 1.5%. In this period, small cap industrial companies did very well, actually slightly outperformed the market, and this coincides with some of the best years we've had in WAM Capital. If you turn to the next slide, the reverse has occurred. You can see this happened from 2022 in the dark blue line, when interest rates effectively went from zero at the end of 2021 to levels of 4.5% that we see today. As you can see, the green line being the All Ordinaries Index or the market, has materially outperformed the small cap industrials market, which is what we invest in, and that's been a major headwind for us, not just in 2026, but really since 2022. The positive, as I said before for shareholders, is the share market moves in cycles. While it remains very tough at the moment, and I don't want you to come from this call thinking that I'm expecting things to change, they're not. Inflation is very difficult at the moment, it's proving very sticky, and the war is nowhere near a conclusion. However, in saying that, we do think we're getting closer to what we hope will be a very positive period for small caps. If we go to the next slide, on slide 13, we outline these reasons. Firstly, pleasingly for us, August was a great reporting season. In terms of what we could control, we had 65 companies report, and over 70% beat earnings expectations. The positive for us coming through this reporting season is the fact that they beat earnings expectations shows that these companies are very resilient through what's been a very tough environment, and are poised to rebound very strongly when the macroeconomic conditions improve. Secondly, we're seeing a lot of takeovers, and this is the exact same thing we saw back in 2022. Seeing companies such as Cleanaway, Steadfast, [inaudible], Equity Trustees, Energy One, Reliance, probably the most amount of takeovers I've seen in a three-month period throughout my career. We've been lucky enough in the portfolio, we've held Reliance and also Energy One, which has been great, and we think takeovers will continue. The Australian market is very cheap in the space that we look at, and offshore private equity buyers and trade buyers tend to be the smart money. We think, as we saw in 2022, this is the start of a rebound in small cap companies. On valuations, and we've talked many times around how cheap valuations are in small cap industrial companies being at decade lows. We've got the portfolio, the valuation of our portfolio at the moment is the cheapest it's been in five years. We have many companies trading below asset value, including Event, Cedar Woods, and Harvey Norman. I think Harvey Norman is one of the best examples of this. If you have a look over the last 20 years, or, sorry, I should say Harvey Norman right now is trading at a share price around AUD 4.20. The net tangible assets is AUD 4.37. What this means is you are getting the retail business for free. There has only been two times over the last 20 years, other than now, where that has occurred. If you invested in Harvey Norman at that point in time, the share price doubled in the next two years. We think we are in that point right now with Harvey Norman, and that is why it is in the portfolio. Lastly, look, as I said, we acknowledge it is a very tough environment at the moment. There is more likelihood of an interest rate rise near term in September than there is of it being stabilized or even cut. However, the positive is that every company we saw over reporting season was talking to a softening of their outlook. We think a lot of the data that we are currently seeing at the moment, which is fueling the RBA, the Reserve Bank's decisions, is backward-looking. The companies generally can tell you what is happening in advance. While that might be a negative near term for earnings, the positive is the market always looks forward. If we get a situation where the market thinks that interest rates are going to be cut, and we certainly think this will happen in 2027, this will be very positive for the small cap industrial companies that we own in the portfolio. Now, before I finish, I thought I would give a quick example of what I am talking about with JB Hi-Fi. JB Hi-Fi in the recent 2026 reporting season reported negative sales growth for the first eight weeks of 2027. The last time this happened was in 2012. If you go back to 2012, you can see that the 12 months after JB Hi-Fi reported negative sales growth in 2012, in the next 12 months after that, Reserve Bank cut interest rates 8x. I am not saying we are cutting 8x. We are going to get eight cuts. At all, but I tell you what, if we get a stabilization, that would be nice, but if we got one or two, that would be even better. That's where we are at the moment. I think just finally, I put just on the last slide, in slide 14, and this is basically showing you, and we talked about this at the April roadshow, 2020 and 2022 were tough years for the business. 2020 was COVID, obviously, and as you can see, we bounced that out very strongly in 2021. 2022 was a very, very tough year with the Russia-Ukraine war, still had COVID, and inflation had just started, and that was, again, was a tough year. But then we had three excellent years after that. This year it has been even tougher. Now, again, I am not saying that we are going back to a really positive market for us. I still think we have got another three to six months, but we are long-term investors, and we are very confident in the holdings in the portfolio, and we think we are poised to outperform once the market comes back to us and settles. How about that? I will leave it at that, April. Just on the I know this is the result presentation, so we are talking about the period to June this year. Since the end of June, how is the portfolio? What is it? July was an extremely tough month. Yeah. Extremely tough month for various reasons. It was a lot of the artificial intelligence stock to the United States just came off quite savagely, and there was, I guess, a liquidity drain in the market. Yeah. The war kicked off as well. We underperformed in July. August, I don't think we could have had a better reporting season if we tried. Right The fact that we had over 70% of our companies upgrade Yeah Earnings doesn't mean that 70% of our companies had their share prices up. Yeah. They generally went up, and they were lower about two or three days later. Despite that, we outperformed the market. So as it stands today, we are underperforming the market by around 3%, but again, you take a step back and you go, "What can you control?" And we are outperforming small- Is that the All Ords or the- That is the All Ords, which is our benchmark- Yeah Of the market. What it matters. But small industrials, we're outperforming by 4%. Gotcha. Okay, so small industrial's been really tough. Small industrials can- Still tough. Continue to be very tough. Yeah. Okay. It will probably get tougher in the next three to six months. Yeah, depending on interest rates. Yeah. Yeah. Thanks, Oscar, and thank you to everyone for submitting your questions. We have had quite a few come through, so what we will do is we will start by running through the most common questions that we have received in advance, and then we will move on to the live questions. So we will start with some questions about performance. We have touched on it a bit, but what drove the FY 2026 portfolio loss and underperformance against the market? Maybe if you just want to recap a few key points. Yeah, sure. Well, it is probably worthwhile taking everyone through what happened through the year. It was basically broken up into three periods. The first four months of the year was actually very positive for us. We were outperforming the market, believe it or not. That was in a period where interest rate expectations were going down. Literally on Melbourne Cup Day, it changed, and we went from cutting rates in Australia to raising rates. That immediate moment, we saw a big shift in the market. Resources companies started rallying, which is a part of the market we are underweight. The financials companies started rallying, and the small cap industrial companies in sectors such as exposed to the consumer fell quite considerably. Now, in the second third of the year, from around November to February, it was all about what is called the SaaS apocalypse, and this was largely due to artificial intelligence. Basically, I have never seen anything like that. That was a very tough part. That is probably the toughest period we have had, because we have had war and inflation before, and you can weather that, but this was the unknown. Basically, Claude and OpenAI were bringing out new products, or Anthropic I should say, and basically, investors were saying, "Look, the terminal value of realestate.com.au or carsales.com Ltd or mortgage brokers, travel agents, it is going to be 50% lower." The companies just fell quite considerably, and that was despite the fact they actually had very good results. I have never done this before in 10 years, 11 years at WAM, but I literally got on a plane as soon as reporting season finished and went to the United States to try and work it out. Then, of course, the war hit and Did you work it out in the U.S.? I think it is tough to work out because it is moving all the time. Yeah. Did we make good decisions following that trip- Yeah And other trips that guys have done? Yeah, 100%. Yeah. A lot of that artificial intelligence stuff ended up being a bit of a beat-up. Yeah To be frank. We've seen those stocks rally in the last few months. The war hit in March, and war hits, oil goes up, commodities goes up. Investors don't want to be in small caps, they want to be in large caps. That, look, can't hide from it, we had a bad year of stock picking, there's no question. Corporate Travel Management was a big hit on the portfolio. Well, sorry, it was a hit on the portfolio, and probably not as big as probably the press made out, but it was probably more the other stocks around it, TUA in particular. Awesome stock for us since 2020. Was about to acquire the third largest telecommunications company in Singapore. Literally the day before it was going to get announced, announcement came out saying they were incorrectly using other competitors' spectrum. This is stuff that was unforeseen. We had Webjet that had a police raid their Spanish subsidiary for tax issues. Things like that probably cost us about 3% or 4% of performance. You look at the small caps underperforming the market just generally, that was probably another big part of the underperformance. Yeah, look, it was a brutal year. Look, as we come back to it, we are sticking with our companies. All that happens is they get cheaper. As I said, they have performed very well over this August reporting season, given a very tough macroeconomic environment. Yeah, we are looking forward to when things can finally improve, and we can get, hopefully, a free kick one day. Maybe this one is for Geoff. Why did the share price fall so sharply following the results? Yeah. Pretty much because the board came out and said, historically we have been paying AUD 0.155 a year, two lots of AUD 0.0775. The board said, "Okay, with the final result, we will pay, because we have got three quarters of a year's profit reserve, we will pay out the AUD 0.0775, then we have only got AUD 0.056 odd left." The board just thought it made sense that if people were not necessarily reading our monthlies closely enough, that the dividend has to be around that, what is it? The yield of about what? 6 odd percent on assets. Yeah, to me it was that commentary that made the market fall. When the share price fell significantly, then it went from, WAM had been trading at quite a premium to NTA. It went to trade around NTA. Yeah, I actually bought some shares on the first day it fell, there is a thing in terms of if something comes out and the market takes it as bad news, the best day to buy is the third day. Do you believe that? Not necessarily. No. Okay. Usually, no, I would agree. Yeah. Yeah. Anyway. I reckon it is probably the fifth or sixth. Okay. I think the third day. It usually bounces then. Yeah. Anyway, I bought some on the first day, and then on the second day, it was trading a little bit lower, and I bought them around the AUD 1.24. Then second day, it was trading around that AUD 1.21, 2 level, so I put some in to buy at AUD 1.21 and a half. Unfortunately, they went up after that, and then I did not buy it yesterday, which was the third day, and I think they are up a little bit now. But, yeah, it is just I think people saying, "Hey, look, the dividend is going to be re-established, and we are not going to pay a premium for that." No, I think a lot of people had been buying it for the yield. A lot of people probably had not looked at it was trading at a premium to the value of the assets. Yeah, ideally what we like to do is, as Oscar said, we've been doing it for nearly 30 years, buying undervalued growth companies when we can see a catalyst that's going to change the valuation. I personally like to buy things at NTA or at discounts to NTA. Then if they go to a premium, I get the free kick. Now, will we get back to a premium again? Yes, we will. You've seen that premium slide, premium discount slide. There's myself as CIO, but Oscar as Lead Portfolio Manager, and the other five guys you work with, nothing's changed from that perspective. That'll come back. While we're talking about this, maybe it's worth discussing what resources are available on our website, because I felt like some shareholders were a bit surprised. We do release, we have a monthly update where we include profits reserve and the dividend, so you can work out dividend coverage. We've also put in the end of last month's share price, and then the net tangible assets so you can see if it's trading at a premium or a discount. They're just some things that are worth looking out for that I believe that maybe some shareholders aren't aware are on the website. Yeah. I think some of the shareholders that I've spoken to after last week, they're saying, "Oh, well, what does it mean for WAM Leaders?" Effectively, it means nothing for WAM Leaders. WAM Leaders it's got two point four years in its profit reserve, or WAM Global's got four point seven, WAM Microcap four point two. WAM Research, which has been jumping around a bit, even though it's trading at a premium NTA, but they've got AUD 0.036 in its profit reserve. To me, you've just got to keep an eye on the profit reserve. We had a similar situation back when we cut the dividend. When was it? Back here in 2007. I remember, we'd been sort of explaining to shareholders that we're running out of profit reserve, and then we did. The share price came back and then it sort of back around then everyone said, "Oh" I think it went down to AUD 0.90. When was it? AUD 0.90. It could have been around that period. Yeah. People were saying, "Well, will it ever get back to AUD 2?" Well, it did get back. This time, in terms of growing the dividend, I think the board won't be as gung ho as we did, I think, back then, where we pushed it too hard. Say we're earning on a dollar, Oscar and his team were making AUD 0.10, and we're paying out AUD 0.12. Eventually you just run out. I think the board, the reason why we came up with that figure, there was a lot of discussion, high quality discussion, saying, look, particularly with the new environment, with new capital gains tax, ideally you want that 3% capital growth because that's for free, because you do not pay any tax on that in the new environment. We wanted to have a combination of yield and capital growth. But please be aware that at the moment, the profit reserve, I know it was up a little bit, a fraction last month. Is it 5 point- 5.7 Seven. Yeah. We have still got to make a little bit. Each month, you will see in the announcement, we say how much there is in the profit reserve. Yep. Why were shareholders not given earlier warning of the deterioration in performance? Maybe worth saying that in addition to the- Yeah, but first of all, it was not deterioration of performance. They see the performance on a monthly basis. Yes. And what- Which I think maybe some people don't see, but it is on the website, the gross. Yeah, the, sorry, the website, but what the NTA is, they get it every month. They also get what's in the profit reserve. We were nearly going to cut the dividend two years ago. We were, the profit reserve was very low, then you had, I remember it was the half year to December. It was January. January 2024. Yeah. Yeah, and I remember in December, the board had sort of thought about it, and we were ready to cut the dividend. Oh, up +10% or something. Yeah. It happened quick. Yeah. The profit reserve, all of a sudden we thought we were going to cut the dividend back then, and we would've made an announcement similar to this back then. The guys just had a couple of cracking months. Of course, the profit reserve fills up again. Yeah. Very good. The same could have happened this time. Yeah, the reason why, we had a board meeting earlier on in February. It's not as if the board just said, "Oh, look, great, let's cut it," or, "Let's not cut it. Let's tell them we're probably going to cut it." But we had, I think our first board meeting was earlier in August. "Geez, we haven't got much in the profit reserve. Let's see how we go and let's see how the portfolio performs for the rest of August." Hypothetically, if you'd had a cracking August, we might've kept the dividend going. Because I know historically we've said, "Look, we'll keep paying until we've got nothing left. We were hoping we'd have potentially been in that position, but we weren't. Who is accountable for investment performance? Maybe Oscar, you could talk about yourself and your team. Well, me as CIO, I think first, and then. Oh, yeah. And then Oscar and his team. We've evaluated every minute of every day. Yeah, look, it's been very, very tough the last period, there's no question. Yeah, it's hard when the process is working, we're getting the catalyst, but it's hard when I could give you an array of stocks and you just type them in. Have a look at a company GemLife, GLF, have a look at the share price, what it's done two weeks ago. It had a great result. One of our largest positions, I think it put on 15%. It's now today lower than what it was before the results. The catalysts are working, the share prices aren't at the moment. That's been the most stressful part of it. But look, this is a cycle, and we've been there before. We were there, I remember in 2022. This is a lot harder than 2022, there's no question. When things start working again, at this time last year, it would've been a completely different conversation. Everything was working because rates were going down. That's what we just need, and once that happens, demand comes back into your stocks and as you saw in the chart, they've underperformed for a long, long time, five years now. It's a big number. A little bit- For the small. Small industrials and small caps. Yeah. Both. So yeah, look, there's a bit of mean reversion to be had at some point. Have there been any changes to the investment team or decision-making process? Nothing to the decision-making process. It's still the same. We're still seeing the same amount of companies, if not more. Probably doing more than we've ever done before because clearly the numbers haven't been good. Doing more travel than we've ever done. We've also hired as well. Sophia joined us from Macquarie, so beefed up the team as well. Cooper, who's on the dealing desk, is doing more stock selection now as well. We've been on conference calls with Shaun, who got promoted as a portfolio manager. He's done very well in WAM Active. The team's getting stronger. It's just unfortunately, it's been a very, very tough period. And Geoff, why was the dividend maintained above the profits reserved for as long as it was? Well, it's pretty much if you go all the way back when we started with WAM Capital, I think we had our first year and we did a AUD 0.02 interim, AUD 0.02 final, and we just had a cracking year, and then we paid an AUD 0.08 special. Next year, we did AUD 0.03, and AUD 0.08. Then we just dropped the specials and then we just started increasing. It's the uncertainty of investing, and if you look at the slide. We haven't got that in a slide, have we? That one? No, we don't. No. If you look back since 2000, you've had a year where the market's, 2006, 2007, the market's up 44%. Then 2007, 2008, the market's down 23%. When the market's down 23%, do you rebase the dividend? Do you cut it and rebase it? Then the following year it was down 3%, but then the following year it's up 30%, and then you've rebased it. To me, what we're trying to deliver, the growth in the assets doesn't exactly align, and the real challenge is you can't pay a dividend. To me it's trying to balance, and in retrospect, the thing is for that AUD 0.155, has that been for nine years? Since back nine years ago, of course, we'd have AUD 0.09 more in the profit reserve and we pretty much wouldn't have been cutting the dividend. It's just an equation, isn't it? And it is because of the volatility. We could keep dividends really low, relatively. What we have tried to do, we have tried to give people a better yield, and if you look over time, we would have yielded something ridiculously on when we started on a per annum basis. Do you know what the figure is? When you started? No, I do not. Sorry. Oh, yeah, it would be something like. Yeah, that is right. It would be something like 16% per annum for 28 years or something like that. But you could have said, "Oh, look, maybe the yield has been too. We have paid out too much." And do not worry, back in 2007, 2008 when we cut the dividend, we had only been going for six or seven years. We were thinking, "Oh, geez, if we just paid out a little less." It is just that balancing act. It is tough. And hindsight is 20/20. Yeah. Yeah. When you are making the decisions with the information you have at the time. Yeah, I think for context, there has been four down markets in the last eight years. Yeah. There was, I think one maybe, I think after the GFC. GFC was a tough period. Definitely. Definitely. The volatility's been huge. Yeah. Yeah. It has been a tough period. As Oscar said, the last five years for mid and smalls normally. In terms of if you look at the next 12 months, if you're taking a 12 month-18 month view, as Oscar was saying, you're probably more positive on next year. The talk is, and Oscar mentioned it, that I think the odds of September, they're saying even though our guys don't necessarily think they'll increase interest rates in September, but I think the market's saying there's a 50% chance, and then the market's saying there's a 100% chance of an increase in interest rates in November. Even though, I know Damien and Matt are more of the view, if you look at what's happening in the real world, real world as in of Australia, things are really tough. As you said. Oh, yeah. With JB Hi-Fi. Well, the companies we spoke to, yeah, very negative in terms of their outlooks. Yeah. No question. Yeah. The tough thing is, as Oscar did say, in theory, the more negative people say, if you're a professional investor, Yeah The more excited you become. Absolutely. Because you know, wow, everyone's talking about how negative it is, so it's all in the price. Then if it changes to neutral or positive, then you get that. You can get the significant moves as we've seen back in 2023, 2024, up 26%, 4%, 5%, up 22%. Why was the dividend reduced, or at least the FY 2027 target, in one step rather than gradually? Yeah. To me, it's a fair question, but they're hard decisions all the way through because go back. The board's had these discussions on a regular basis. Go back four or five years, "Do we reduce the dividend a little bit? Then what do we reduce it to?" Then, "Well, people rely on the dividend, so is it fair to us to decide that we're going to reduce it when we've got the profit reserve?" It's just so difficult, and particularly when we've had the experience where you go back in, was it 2004, when we were nearly going to cut the dividend, then you guys had a 10% month. So all of a sudden, we've got another AUD 0.14 in the profit reserve or something. The same thing happened in COVID. Yeah. We were going to do the same thing in July. Yes. This is July 2020. Yes. The portfolio went up a lot. Yes. It is really hard because the board has been debating this probably for the last five years. Do we rebase it? Do we reduce it? I take my hat off to Oscar and the guys. They have been able to continue. We have nearly cut it, and then, geez, the guys have pulled a rabbit out of a hat in terms of performance and got us going again. What is the plan and expected timeframe to restore investment performance or maybe more, I suppose, profit reserve and the dividend as well? Yeah. But performance, hey, it was a tough year last year a nd in theory, want to restore it ASAP. Oscar and myself, and everyone out there. In terms of mids and smalls, there's good dislocation in the market. Which sort of makes you feel positive. A few fund managers closing down, and people leaving, which means there's different flows of stocks over there and with interest rates going up or talking about going up again. But all I know is the guys are working their Guys and girls, or guys. I'm not sure what's politically correct. I would say guys. I say guys as well. Is females as well? Or is that everyone? I think it's inclusive. Okay. As Oscar said, they're working harder than they have historically. Which means you'll find more diamonds eventually even though you mightn't be able to see them now. They'll eventually deliver. Unfortunately with markets, I can't say it's going to be next week or next year. Particularly, another thing that, and we didn't necessarily want to mention this much, but the budget. That's had incredibly negative impact on the Australian economy. Let's just put the housing to one side, and I know it's on the front page of enough papers, housing. But in terms of how it's changed investors' behaviors, how they're looking for yield rather than only a little bit of capital growth. Where the old days, they want a lot of capital growth. How the risk capital is, A, moving offshore, or it's moving away from mids and smaller growth companies. You're better off putting it in the larger companies. That might sound really negative. All you know is it's going to make things really cheap and you're going to have a phenomenal opportunity, because who knows whether the current government lasts? Both, I think whether it's the coalition or One Nation, they're both I think the coalition came out very early on and said, "We're going to wind back everything." I think One Nation, I'm not sure who their economic spokesperson is, I think it could be Barnaby. But I think they've said they're going to Or they've talked about capping it at 20%, which would be slightly less than what the maximum was before. Which would be good for growth companies and productivity in Australia, et cetera. It can be a good time for active investing when there is so much change happening as well. Yeah, it is. It can be challenging. Challenging But in the end it is good. How will WAM Capital rebuild shareholder confidence and support the share price relative to NTA? It takes time. It takes time. Ideally, the board wouldn't rebase it, but the board just thought before when we've talked about it, and I know in one of our results, was it two or three years ago where we said we had to return X amount to be able to keep paying the dividend? I think, was it 15% back then? 15%. We said, "If we don't do 15% this year, we're not going to be able to pay the dividend." Now, it was really clear. But now, because we keep paying our dividends, and if we're not making that amount, the asset value's going down, because we're giving it to shareholders, pretty much. Then the return we're going to have to make was getting close to just under that 20% mark. I know Oscar and the guys are good, but to keep doing 20%, to believe that they could do 20% per annum on a consistent basis would be, I think it's just a pile too far. Is it the right saying? Something too far. How will the profits reserve be built? Yeah, that's how it's built is performance, and you'll see it on a monthly basis. Yeah, as we've always done it. The reason why we bought the profit reserve in and announced it monthly was just so people can clearly see what our ability to pay dividends is. Yeah. Because performance as in absolute performance. Yep Not relative performance. Yeah, exactly. Yeah. Like the market, if the market's down a lot, we've got to do absolute performance. Yeah, not relative performance. Yeah. Moving on to the investment strategy, is the current investment strategy still appropriate for the prevailing market conditions? Oh, yeah. Undervalued growth companies with a catalyst and with a deep research base, it always works. Yeah, and it works over time. There might be a period where it doesn't work, but over time it does work, and the greatest correlation between anything is EPS growth and share prices, and it's been for the last 200 years. AI might come in, but what is a company worth? If it doesn't earn more money, it's not worth more. Now, we know PEs expand and contract with interest rates. Over time, people will pay more for a business that earns more, and that's what ours is based on. It's very pure, our logic. Yeah, I'd say, I'll come back to it. Our company's actually performed very well through this period. Now, a lot of them are down a lot over the last 12 months, but we're long-term investors, and as long as we can keep seeing the catalysts, and we're doing a lot of God, we've done so much work around the numbers, and I'd say for the most part, as I said, it was a 70% hit rate. That's as good as we've ever had it. You've just got to be patient, and as long as they keep hitting those catalysts and keep doing what they're saying they're going to do, keep that earnings per share growth going, then it'll come. But unfortunately, we've just got to wait. How much cash are you holding at the moment? About 12%. Yeah. Why did the portfolio have limited exposure to better performing sectors such as resources? Yeah, and this has been a question. We must be close to the top of a resource run is when we tend to get those questions. The guys had a little bit of resources, or you can go in detail, but from my perspective, as over time, people tend to ask that question when resources have done really well, and that's usually the time where you don't necessarily need to be long resources because it's already priced in. Just in terms of our philosophy, we're looking for undervalued growth companies with a catalyst, and it's hard to predict resources profitability. We're trying to reduce volatility, not increase volatility, and to value an industrial company is, well, my view is, and I don't know what Oscar's, I think similar, it's easier to value an industrial company. It's hard enough to work out what the profit is of an industrial company. If you've got another variable, which is, say the price of the commodity, then it just makes it so much harder. Do you want to. Yeah, I think, look, I can remember it was Melbourne Cup day last year, and we were sitting as a team. I think we had a team function or something like that. Yeah. I was thinking with Shaun and Tobias, we were like, "Oh, we're in trouble here." You could tell, because we know the sectors that do well when interest rates go up, a lot of it's financials. This is after they increased. This is after they increased. Increased. You could see they were going to increase. Yeah. Financials and resources. Not only do we not do much resources, but we don't do much large caps as well. You have a choice at that point in time, right? Do we sell all the industrial companies and plow the portfolio into resources companies that we don't really know that well and don't really have an edge on? We don't really know what the commodity price is going to do. As Geoff said, it's hard enough to forecast the earnings, let alone the commodity price. We've just stuck to the process. We've done it for 30 years. We're long-term investors. The companies, we're very confident on. The management's fantastic. They will get through this period, and they will be stronger. That's the thing that I think coming out of this is the good companies come stronger. I'll give you an example. Like Nick Scali. Nick Scali has bought a business in the U.K. and bought it very well about a year ago. We went over to the U.K. in May, and it was clear that this business is already doing the same metrics as Nick Scali's Australian business one year after they bought it. Nick Scali's share price is down a lot in the last 12 months, but I tell you what, when we see interest rates come down, the market comes back into Nick Scali, and they've had this business for three years instead of one, and it's actually doing better than the market thinks. Not only do you get the added benefit of Australia coming back, but you got this small U.K. business that they bought. The next high in the share price, and I think the high was AUD 26 in January or so this year. Today, it's AUD 14. Maybe the next high is AUD 35, and that's what we're looking at, and that's why we're investing longer term. That's why it's part of the portfolio. How have specific underperforming investments been reviewed and managed? All the time. All the time. Look, we made some mistakes last year. Look, I might as well do it now because I assume the question will come up. Corporate Travel was probably the worst investment I have ever made in my career. We did not own Corporate Travel through that before-COVID period, where there was a lot of negativity on the accounting and so forth. COVID hit. The mistake we made was every travel company raised money through COVID because they were effectively bankrupt because of what was happening. Corporate Travel did not. Our view was, well, if the accounts were truly fictitious, then they would have fallen over through COVID, and they did not, and that was in the back of our minds. To be frank, we probably did not do enough work. The reason why it did not fall over was because they were on some sweetheart U.K. contracts, which in turn, we found out they were over-earning on. We bought Corporate Travel, I think it was in early 2025. We bought it for the right reasons because the earnings growth was higher than the valuation. They had just come out of, obviously, disruption from COVID and war, like the Russia-Ukraine War in particular. This was before the Iran war started. Simplistically, we thought they were going to upgrade earnings, and we thought they could potentially do acquisitions. It was a company we knew very well with the founder over the years. It went into trading halt, I think it was in July 2025. Of course, yeah, it was in trading halt for over a year. It looks like it is going to relist in the next couple of weeks, but we have exited the company. As I said earlier, Tuas was a big position. Unfortunately, we had that spectrum issue. We did reduce it, but look, we still own it in the portfolio. We have got a lot of IP in that business. We still think it is doing well, and again, we will beat our earnings expectations. Then I would just say we had an array of companies really, if you think about it, interest rates going up, artificial intelligence, and a war. If we are not in resources, what sectors do well? Probably the only real sector that was any good last year was electrical contractors exposed to artificial intelligence and maybe the agricultural sector. The rest were very tough. Yeah, we have made significant changes to the portfolio, like for a number of stocks if they did not fit the investment process. At the same time, I would say for the most part, it is pretty similar to what it was, particularly on the research side, which is where we got hit the most. It is pretty similar to what it was a year ago. And Geoff, do management fees and performance fees remain appropriate given the shareholder outcomes for WAM Capital? Yeah, I think so. There is no performance fee this year. On this, should costs be reduced or some funds consolidated so resources remain focused on existing shareholders? Resources are. We actually are probably over-resourced in terms of managing the money. I think there was another question coming up about that, and we are just looking at, say, our competitors in the listed investment company space. We manage about AUD 6 billion, and we have 20-odd investment professionals. Say, AFIC, which they manage probably AUD 12 billion, say double our size, and I think they have about 10 to 12 investment professionals. So you could argue we are running more investment professionals. Oscar, who would be our similar size out there in the market? Do you, and how many Oh. What do you say? Yeah. I'm trying to think. In listed investment company or like- It doesn't matter. Just any of them. I would think the majority of funds have two or three people per AUD 1 billion. Yeah. So what have we got? Yeah, so we've got three and a bit. Three and a bit. Yeah, three and a bit per billion. So yeah, we're probably- Definitely Well, then you could argue, have we got too many? Hopefully not. Well, no, we don't think we have. Yeah, we think it's a good amount. There is another question that has come a little bit later, but kind of in this realm, which is, have you created too many different listed investment companies? Yeah And lost focus? Not really, no, because WAM Income Maximiser has no impact on Oscar and his team. That is managed by Matt, and we brought Damien on, ex-Reserve Bank experience. We brought the resources on for it. If you go all the way back, was it 29 years ago? It was me, and then it was me and Matthew Kidman, and then when we had AUD 20 million or AUD 30 million or AUD 40 million. Then when we have added people, if there is a product, we have added people. Like when we went into Leaders, there are four in the team in that, and then Global is at five in the team, f ive now in Global. Yeah, so they are all in their team. If we had added anything, we add a team to support that. Yeah. So we are not taking from someone else. Moving back to dividends and capital management, how sustainable is the FY 2027 dividend target, and could the dividend be reduced again? Yeah, it could. Yeah. In theory, we have AUD 0.057 in the profit reserve, so we have not got AUD 0.08 yet. What I can tell you with confidence is that we have got the interim, because that is AUD 0.04, and that is now why we set it there. Then, the performance has to be, was it AUD 0.023? So, the portfolio has got to be up, that is after tax. So what is it got to be, up 4%? From here. If the portfolio is up 4% from here, from today to June next year, we have got enough for the two dividends. It has also got from, because the profit reserve resets on the 1st of July, and we have also got from the 1st of July till August, now for it to be up that AUD 0.02-odd. What would be required to restore a higher fully franked dividend? Yeah, just bigger profit reserves. Yep. Yeah. With one of the questions earlier is, it is sort of balancing up. Do not push the dividend too far. The plan is to keep growing the dividend. We have had to rebase it. We have had to rebase it before. On the slide, I think slide five or so, when we modular the ASX, you will see the dividends we had been growing back to, what was it? 2007. Then it was halved, and then it took us three years around that period. From [inaudible] 2019, it grew for, what is it, eight years. It grew from AUD 0.08 to nearly AUD 0.16 or AUD 0.155, and then we sort of maintained it up there because we were actually paying out a high percentage of our profit. In retrospect, too high a percentage of our profit. Should the Dividend Reinvestment Plan continue, and how is shareholder dilution from that being managed? Virtually, there's very Dividend Reinvestment Plan, I think it's only 10%-15% participation. In the Dividend Reinvestment Plan, if you look at the slide, the Dividend Reinvestment Plan, actually, when we're trading at a premium, there's no dilution. You'll see since COVID, the actual capital raisings or DRPs actually added nearly AUD 0.11, or takeovers has added nearly AUD 0.11 to the assets over time. Because on average, the money's been raised at a premium. If you look at the slide, there's no dilution. At the moment, it's trading around NTA, so there's no dilution if we're issuing at an NTA. Are the WAM LICs- Sorry, Wilson Asset Management LICs facing the same risk of having dividends cut? No. Not at all. That's why a few years ago, I think when we were paying out more than we were earning, it was clear. Because if you're paying out more than your earnings, your capital's declining. So you have sort of that, it's a negative impact rather than paying out less than what you're earning, then your share price and NTA is increasing. So I would have thought it's, and we've been aware of that for the last three or four years. I talked about four years ago where we're thinking about we're nearly going to cut the dividend. So that's experience we've had, so we've been able to communicate with the other boards about when some people say, "Let's grow the dividend a bit harder," because people will say, "Oh, there's more in the profit reserve. Let's just try to gently tick that up so it's more sustainable." But yeah, just look at the monthly updates, then you can see them all there. We've had a few come in about the share price. Perhaps you could touch on what influences the share price and the outlook from here. Yeah. Well, the share price at the moment, there's that readjustment. You just don't know. The volume on the day the dividend was announced, I think it was 23 million shares, went through. There was a high volume day. I think the next day was 6 million -8 million or something like that. I know this morning, the volume's declining, because people are adjusting. The ones that have decided, "Hey, I needed that dividend to live on. I've got to do something else," or something like that. Maybe they're taking a capital loss and moving on. What was the actual question? I suppose, what influences share price and the outlook from here? Well, what influences share price is, again, it's supply and demand. In theory, we're very transparent, everyone knows what's in the profit reserve. I would assume seeing that profit reserve get over AUD 0.08 would be a positive. Catalyst. Everyone knows, great, we've got next year locked in and the underlying performance of the portfolio. Yeah. To me, they would be the two. As we go year after year, I would've thought we'll get more. As we start growing the dividend, then, well, in theory, you get PE expansion or premium expansion. As people say, "Oh, great, they're back on track. They've paid us AUD 0.08. Now next year's going to be AUD 0.085," or whatever the figure is. It really depends what's in the profit reserve. Yeah. But initially, it'd be gently growing it. We've got some stock questions back on CTD, Corporate Travel. Lee's asked, "What's the value of the Corporate Travel write-down to the fund, the LIC, and what were the red flags that you missed? We sold our holding just before, in June, I think it was, in the private market. It will come on. We sold at a significant loss. Yeah, I think it was a 1.25% position, so that was 1.25% of the underperformance. As I said before, it wasn't the biggest position. I think it obviously got a lot of press. We have positions that go down like that every year. What generally happens, though, is we've got three or four, or probably more, maybe 10 positions that go up 2% each through the year. Unfortunately, we didn't have any of that because it was a tough market. Look, in saying that, it was a bad stock call. What did we miss? Well, we missed the U.K. But how could have you? Well, look, sometimes companies don't feel right. Yes They were very high margins. Yeah. I think the mistake we did was what I said before. We kept saying it. Yeah. Oh, they didn't go under in COVID. Yes. They didn't have to raise money in COVID- Yes So it must be okay. Yes. That was a mistake. Yeah. The margins they were doing in that U.K. business was like- Yeah 50%. Yeah. For a travel agent, that is not right. Yeah. We did, there was, "Oh, we have got the best technology," all that sort of stuff. Always. Yeah. There was always a reason. Yes. But we got it completely wrong. Yeah. Hopefully that was the answer. Howard asked, "Can you advise the funding round for Firmus, when that was made, and how it is currently valued for NTA, net tangible asset purposes? That investment was done, I think it was at AUD 100 a share in July last year. It was a AUD 10 million investment across WAM Capital. It has been revalued to AUD 230 a share, which was the last round, and then we are looking for the business to IPO in probably the next couple of months, which would be great. We actually sold a portion of our holding. It was about a third of our holding, and we made 200 something percent on it. Did you sell it at AUD 230? Yeah, that AUD 10 million we sold for, I think it was like AUD 30 million. Yeah. We do have a lot remaining. We have made money on the investments, which has been great. Anthony has asked about the share price. "If the share price is aligned with the dividend payout so that the lower dividend should have the effect of raising the share value, why has the share price, after announcing the dividend will be halved for 2027, not reflected this? What is the question saying? If the dividend's halved, should the share price halve? Well- Is he saying? Or- I think more so that, like we've said, that the dividend target for FY 2027 better aligns with the profits. I suppose, why did the share price not reflect this. Yeah If it's fallen so much? Yeah. I don't know. Well, it could though, because we've just gone from a premium to NTA. Yeah, but why wasn't it reflecting it beforehand? In theory, the market. To me, that's the opportunity for the investor. Yeah. That's why people invest in the market. Because the market, I know the efficient market theory is the market knows everything, so it adjusts accordingly. Well, we couldn't have been more transparent. In theory, they've got the monthly NTAs. Maybe, obviously Noah was in the board meeting, so they didn't know what the board was thinking. I'm not sure. I suppose he's saying, in theory, as it was clear that our profit reserve was reducing, in theory, the share price should've been adjusting downwards over that period of time. It probably wasn't, because people were buying it because they could see the yield. It's often lagged as well, and we saw that in 2022. It was a three to four-month lag after the Russia-Ukraine war and a tougher period of performance before the actual share price fell. Yeah. The share price, I remember that year, fell in around June, July, notwithstanding the big hit to the performance was in February and March. Got you. Got you. Yeah, sometimes it takes time. I also think people, to your point, Geoff, people do look at dividend yield, and they do not look at the share price versus the NTA. Or how you are able to pay the dividend. Yes. Yeah. Yeah. We had that problem back when we cut it in November 2007, 2008. We had gone along and done our roadshow and explained to everyone how in those days, we would do twice a year roadshows, that we did not have the profit reserve to pay the dividend. Then we cut the dividend, and then everyone was asking, "Why did we cut the dividend? Howard has asked, "Would you consider publishing WAM Fund NTAs on a weekly basis? That is possible. I actually don't think it adds any value. Because broadly, we do it monthly. Anyone can work out what the Small Ords has done over that period, or the All Ords if you want, after the end of the month to work out approximately what the NTA is. What I've found is by people announcing their NTAs more frequently, and you look at the bigger players, the AFICs and the Argos, they went from monthly to weekly. It hasn't helped them. They're still trading at reasonably sized, I'd actually think pretty real value, reasonable sized discounts to NTA. In theory, ideally you want a group of investors that understand what you're doing and support you for the medium long term. I don't know if announcing weekly helps anyone. It might increase the trading in the stock. WAM's a size where it's liquid enough. If it was a really smaller fund, you could argue maybe we want to increase trading for liquidity purposes, because liquidity tends to find liquidity. Patrick has asked, "Given the portfolio fell circa 10.5% in FY 2026 and the profit reserve is now below the level needed to support the past dividends, what specific conditions or catalysts do you need to see for WAM to return to positive NTA growth and rebuild the profit reserve in FY 2027? How is the portfolio positioned to capture the upside? Well, the first part is, at the end of last month, we've improved our profit reserve, AUD 0.1 of a cent. So it was AUD 0.056, now it's AUD 0.057. So it's actually perfectly positioned if the portfolio goes up from here. Do you want to talk to the other part, Oscar? Well, we need absolute positive performance. As I said earlier, we're not going to deviate from what we do, which is small cap industrial companies, with a catalyst to see a re-rating. Look, it's a tough period right now. The market is extremely difficult. Inflation's going up, it's going up in Australia, it's going up in the U.S. The war just continues. It's not a good environment for small cap stocks. Look, as Geoff said earlier, the dividends have been rebased to a level now that once we finally do get a positive market, then we should start to see the net tangible assets grow because we're not paying out capital like we have been previously. We've got a few questions regarding the LIC structure compared to ETFs. Why do you still preference a LIC structure over an equivalent portfolio in an ETF structure? Oh, [inaudible] an ETF structure, in a company structure, say you start with AUD 1 NTA, and it goes over a 12-month period from AUD 1 - AUD 1.50, then you can pay that AUD 0.50 you made out, you can pay that out over time. Where an ETF structure, if you made that AUD 0.50 and it was realized, then you've got to pay it out immediately because it's a trust structure. Also, the terrible thing is the ETF players haven't seen it yet, the younger ones, but I saw it in 1987 when the market crashed. I've seen it in 2007, 2008. When you are in a trust structure, you could have a real tax bill. What happens is if the assets fall, you buy in after there is profits made in the trust structure, and then the assets fall and you lose money, but the portfolio is turned over and there is a profit made. You actually lose money, but you get a distribution, which you got to pay tax on. That is a really bad situation for an ETF, which is an exchange traded fund, which is a trust. Where the LIC is, you know what your tax liability is, you know what dividends you are getting. Dividends can be effectively given to people over time, streamed over time. It is a lot better structure. In theory, for the change in capital gains tax, assuming there is no change in government in a year and a half and the capital gains tax stays in, the actual listed investment company is the bigger winner than the ETF, because they can control the capital growth and the income, where the ETF cannot do that. It has just got to distribute, because of the trust structure, whatever is made. We have got a question on profits reserve and franking position, and I have got some of the numbers here to try and help. What is the current profit reserve and franking reserve position and their expected coverage? The profits reserve is AUD 0.134 per share before the AUD 0.0775 FY 2026 final dividend is paid, and it is 5.7% after that, so that is the number we have been quoting today. That equates to zero point seven years dividend coverage based on the AUD 0.08 per share FY 2027 dividend target. In terms of franking, it is zero point three years of coverage after the FY 2026 dividend based on an AUD 0.08 per share FY 2027 dividend target and assuming it is 60% franked. Sorry, there is a lot of numbers there, but we have got quite a lot of them on one of the final slides as well in Geoff's presentation that will hopefully help. Please reach out if you need any help, and I am happy to answer those questions later. Mark has asked, "How are you dealing with the shrinking listings on the ASX? Oh, it is a big problem. It is a big, big problem. A lot of the companies that have had takeover takeovers are funny because they are great because you get an uplift in your holding. It is great. But a lot of the times, the reasons they are getting taken over is because they are struggling. Reliance Worldwide, it is a plumbing business, does plumbing fittings, it has got a takeover bid for AUD 4.75. It has had four really, really tough years. Now, that business is not worth AUD 4.75, in my view. It is worth well over AUD 6 in a normal environment. But as an investor, what do you do? It is AUD 3 when the takeover bid happened. Of course you are going to say yes. It is a great premium. The problem is, at the moment, there are no companies to replace these companies. The way the market is trending at the moment, with the rise in passive investors and so forth, and active managers struggling, is that unless you are a very big company in the top, say, call it the ASX 50, it is very difficult to find eyeballs and to find interest. We have seen this in small cap companies for the last five years, really. Yeah, it is a big problem. There is a diminishing number of companies on the ASX, and what that means is the ones that are doing well, their valuations go up too much. It is a crowding effect. Yeah, I would say just generally, the market needs more IPOs, definitely. It was great for the if we go back, prior to COVID, in the years up to COVID, there was almost an IPO every month. Now great, they usually price well, they go up 20% or 30%, fantastic. But we just have not seen that at all. I think there has been, like, three in the last 12 months. Yeah, it is very frustrating, actually. It's a big issue. Adrian has asked, "Given the GDP figure out today, do you think that the RBA will go another 0.25% this month? I think they will. I think they will, and I'm going to agree with Matt and Damien. I think it is a mistake, but I think they will. Because it's backward-looking, the data. The trend's there, you can see it, and the CPI print last week, yeah, it was a bit worse than what people were thinking, but you can see where it's come from, and we're coming up against harder comparative figures. I think inflation was well over 3% around November last year, so it's going to soften into those prints. But look, I think as Damien and Matt would say, look, I think, yeah, they've probably got an excuse now to raise, but they would also say they shouldn't. I think it's better if they raise, because I think if they raise, it just means we're going to go to cuts quicker. At the moment, what's been happening More pain Probably a bit more pain, and as I said, the market will look through. If the market starts thinking there's rate cuts I remember JB Hi-Fi in 2023 went up 50% in a period its earnings went down. Oh, because of margins, yeah. Because the market was looking forward. The market was saying, "Okay, I think rates are going down, they'll do better. Yeah. I remember just tearing my hair out going, "Why is the stock going up? Yeah. And then that is how we are positioned for our portfolio. Like JB Hi-Fi, we own in the portfolio, Harvey Norman, we own in the portfolio, because we know that things are going to get tougher in the next period. But I tell you what, once the market thinks that, it will go up as much as it went down very quickly. I made that same mistake in 1982. Oh, yeah? When I was the analyst for a white goods manufacturer. It was a great name. It was called Email. EMAIL. The young people, you would not have heard of it. But I remember I was the analyst, and 1982 was a recession, and I just said, "Hey, they are going to lose AUD 4 million this year," or something like that. The stock pretty much when I set it to sell, it just doubled because that was the bottom. I remember when I was a broker, just before I joined WAM, I gave up on mining services just as I left, and I put all of them NRWs are coming. I think it was trading at AUD 0.10. Yeah. I said, "No, it's a sell. Give up." Well, today it's AUD 8. [inaudible]. It's just amazing how it can change- Yeah So quickly. Sorry. Peter and Russell have asked, "If we have an interest rate environment higher for longer, how does that impact performance of WAM going forward?" He said, "Noting the 10-year AUD bond rates have hit 5.2% today. It will be tough. There is no question. As we have said, we are long-term investors, and we have been through many cycles before, and we have just got to go through the cycle and trust the process. The catalyst is still happening. The company is doing well, management is doing a good job, and we will come out the other side stronger. I am not going to be here in two weeks' time telling you that our best holding is BHP. We are not going to do that. Investors are seeing how the portfolio is, and we have got a 30-year history, you can see how the portfolio performs in periods when small caps do well. If you go back to 2016, which I think was our best year, it was the first year I joined WAM. For All Ords, the market was up 2%. We were up over 20% that year, and that was in a period when the small industrials index, I think, was up 16%. We have not seen that since 2016. That's what you've got to look forward to as an investor when that time comes. But yeah, is the environment going to be harder in the next few months? Yeah, I think it probably will, but. Well, you could have, yeah. Exactly. Let's assume there's a couple of interest rates rises. Then, as you said, it means we're closer to them cutting interest rates because anyone who's watching this and is plugged into the real economy, people are hurting out there. Absolutely. In Australia, things are tough. Are really tough. And a couple more interest rate increases, there's going to be a lot more pain. Well, the Bathla impact that we've seen from private credit, that's like 2,500 apartments. Yeah In Sydney. That's insane. That are going to be- Half-built. Yeah. People had put in money for pre-sales- It's gone And so forth. Yeah. Yeah, the pain's there. Yeah, the higher and the quicker they raise rates, the quicker the rates will fall probably. Well, that's my view. Yeah. Back at Melbourne Cup time last year, it was literally click your fingers and it just reverted. Yeah In the space of a week, it can do the same thing on the other side. Roger's asked, "Why has WAM Active done so well in FY 2026 compared to WAM Capital? Well, [inaudible] Tag, we've had a few calls with Shaun, our conference calls on this, but it's worth taking you through the journey of WAM Active. WAM Active, we'd had a lot of feedback from investors over the years that I think the quote, I remember fine roadshow, one investor said, "WAM Active's the ugly duckling of the group." I know because it was small, and probably you could argue hadn't been given the right amount of love, I guess, potentially out of all the other funds. In 2022, which was actually a terrible period, inflation, also COVID, we had a tough year, and WAM Active, out of the four small cap funds effectively myself and the team manage, WAM Active was the worst fund out of them all. We went into that board meeting, I remember one of the board members said, "Hey, Oscar, tell us why was your performance so bad?" For me, I was sort of like, "Well, I did what I could. I've outperformed the small cap market within what I could control." Then we thought about it, I remember Kate and I spoke after the meeting, we said, [inaudible], he made a good point, the board member." Because WAM Active, when we launched the fund years ago, it was an absolute return strategy. So reality was is that even though I was running it as if what it had been the small cap index, it was actually incorrect. We weren't right. We effectively weren't running it for what the IPO said it was meant to. Shaun was in the team, had done very well. I'd worked with him for many years as a stockbroker. We decided effectively at that point in time, which was mid-2022. We did it for a year as a test case, then I think mid-2023, we launched it, where it basically got separated from WAM Capital, WAM Research, and WAM Microcap as its own fund. Then as time went on, Shaun has an interest in resources, and has an interest in the macroeconomic environment. I'll be the first person to say it's not my strength. I think my strength is seeing a lot of companies, doing the work around the process and so forth. Shaun's very much got an interest in the macro, he's done a very good job on it. Basically, if you go back last year, WAM Active looked pretty similar to WAM Capital in terms of the stocks that we're investing in, because we thought, and Shaun thought interest rates were going down. Around that Melbourne Cup Day, like I said, we said as a team, "It's going to be very tough for WAM Capital this year." We didn't obviously we thought be as tough as it was, but then Shaun made a decision. He said, "You know what? I think interest rates are going up. I'm going to go as long as I can into resources." He sold a lot of his industrial names and went as hard as he could into resources. He picked some great stocks, then artificial intelligence started, he picked some great stocks there as well, and just rode that performance for the 2026 year. Obviously, his numbers were incredible. So, yeah, effectively that fund has been run separate now under Shaun's I'm sort of called the lead portfolio manager of the team, we still are a team, and Shaun contributes to all the funds anyway that I sort of manage. But yeah, Shaun's done a really good job on WAM Active. Look, if the market changes and he thinks that interest rates are going down, he might go back straight into small industrials. So yeah, that's the long-winded story as to why there is a difference. And also size. And size, yeah. Like if he puts, say, 1% of his fund into a position, that's- AUD 1.5 million. Yeah. And 1% of WAM into a position Is, well, AUD 20 million. Yeah. We've got a few questions similar to that about, I suppose, your investment strategy. One Alan's asked, "Would you consider starting a resource-focused LIC? Yeah, we've thought of that at various points in time. Well, I think that's WAM Active. Because I think- More these days. Yeah, but he's got the flexibility of going out of it. Yeah. Which is a good thing, because- Yeah As Geoff said, I think people forget how the 2012 - 2016 period in resources Yeah That was brutal. We've had a bull market in resources over the last decade. At some point Yeah It will go the other way. Yeah. There's also WAM Leaders and Income Maximiser. Exactly That can invest in resources as well. But same thing, where they have the flexibility. But you don't get the leverage. Yeah. We could at some point. We could. John has asked, "Is it a problem that WAM is restricted in what it invests, i.e., small to medium cap retail/industrial? Would it be easier to make consistent profit if a wider variety of companies, so energy and mining, could be utilized? Look, we're not restricted, but it's what we're good at. Yeah. I think that's two different things. We have full flexibility. If that's what we wanted to do, we could. I guess the point is that if you do that, you become more index aware, don't you? I think we've forgotten that. If we were sitting here a year ago, it was a completely different conversation than we're having today because we've come off three very good years. As I said before, we haven't seen a small cap bull market versus the broader market for about a decade. What am I constantly thinking about? Obviously, right now it's constantly thinking about the right companies. Are they achieving the catalysts, et cetera, et cetera, following the process. But it's also, I want to make sure that when this market turns positively for us, that we make the absolute most out of it. As you saw in that chart at the back of the pack, the underperformance of small cap industrials versus the market is very high. If we do get a favorable environment for a year, which we will at some point, want to make the most of it. We won't be having that conversation. We've got some more dividend questions. Steven has asked, "Why don't you pay dividend as a fixed percentage of profit each year? Yeah, that could be, but I just haven't seen it work in an Australian context. There used to be a fund that did that. Unfortunately, they weren't that successful. Because of the volatility, then people, when they're buying a LIC, their logic is, "Oh well, I'm getting it." That's it. Richard has asked, "Several LICs are adopting quarterly dividends. Will you consider something similar? Yeah. I know Argo's talked about going to quarterly dividends, and there are others that do quarterly dividends. My view is you're either half yearly dividends or you're monthly dividends. We've got Income Maximiser, which is monthly, which has done well since it's started. I don't think quarterly is the answer. I know in the U.K., I think half the companies pay quarterly dividends, but it doesn't necessarily solve it's over there or even here. I think why they're doing it is, I think why Argo are doing it is because they're trying to reduce the discount. I would've thought it would've been better for them to go monthly. Mark has asked- It's something the board looks at and considers. Yeah. Mark has asked, "Since returns are unpredictable, why not go to a combination of base and special dividends depending on performance? Yeah, it's a fair call. I'll mention that at our next board meeting. But to me, it does create that uncertainty. What we're trying to do is certainty, and I know you'll say, "Well, hold it. You're trying to tell me certainty, and then the board comes out and creates an enormous amount of uncertainty by reducing the dividend." I suppose that's why we've got the profit reserve. Given you charge management and performance fees and directors are paid, how are shareholders and management aligned? Oh, how shareholders. Well, the directors get paid. We're probably the lowest payer, I'd say, of anyone a similar size to us. In theory, they're taking risk, directors' risk. But in terms of management fee, we get our management fee on the value of the assets. So if the value of the assets go down, if they're down 20%, we get 20% less fee. In terms of performance fee, if the portfolio goes down below the starting point, we only get performance fee on absolute performance, and it's absolute above the all. It resets each year. But if the market's down 40%, we're down 20%, that's a relative performance fee. We don't get one of those. You're both shareholders in WAM Capital as well. Yeah. Both shareholders. Yeah. We've had a few questions about the WAM share price going from AUD 2 over the past seven years to where it is now. Yeah. Someone said, "If you go back to slide six, could you cover the share price and NTA movement since COVID again? The share price? That's, and it's on the- Oh, since- I think it is the one on the right-hand side that you have got there. Which one? That one. I think that is what they are referring to. Oh, that. Slide six. Okay. What we are saying is, so slide six is up there now, that we started, the assets were AUD 1.84 back at the start of 2020, and then we are saying that the performance of the portfolio, in theory, say if it is up 10% for a year then in theory that is another AUD 0.184. But over that period, it was up AUD 0.93. That is the performance of all the years since COVID, all added up. Then there was some capital raised or takeovers, and they were accretive, so they gave us another AUD 0.11. That is the advantage of, I suppose, the listed investment company structure, because in an ETF you would not get that. So effectively we started with the AUD 1.84 and the AUD 0.93 and the AUD 0.11 is what the portfolio and the capital accretion was. So, we got to AUD 1.04. In terms of what we have paid out, and in terms of to have something franked, you have got to pay tax or get the franked dividend through. But we have broadly paid out pre-tax, AUD 1.41. So we have paid out an extra, what is that, AUD 0.37, is it? Yeah, we paid out an extra AUD 0.37 than what we made. Then also, over that time, when we period of how we performed, there was looks like AUD 0.09 of performance fee. There was AUD 0.12 of management fee over that time. There was, some other company expenses were AUD 0.04 over that time. So to give you an NTA of AUD 1.22. The other way of looking at it is, so that is seven years, say we just paid AUD 0.10 out each year for that seven years, so that AUD 1.41 would have actually just been AUD 0.70, and there would be another AUD 0.71 still in the profit reserve. Then your NTA would not be AUD 1.22. It would AUD 1.93. If that confuses everything for you. Because in theory, if you make the profit, you either keep it in the company and the assets go up, or you pay it out. What we are trying to show you there is we have actually paid out more than what we did, or we would have had to do is pay you all less dividends, which is less money in your pocket. The value and the assets, the NTA would be AUD 1.93, not AUD 1.22. You would all feel better, but it is exactly the same. You wouldn't have had the money over the last seven years. Yeah. I think that's what some people don't realize. They think when they get the dividend that that's for free, but you've got to make the money to pay the dividend. Yep. Oscar, Graham has asked, "Cash levels used to be much higher, while in recent years the funds seem to be more fully invested with lower levels of cash. Can you comment on this? Yeah, that was a decision we made back in 2019. This is before COVID, or sorry, the back end of 2018, and that was when the Federal Reserve started increasing interest rates. Traditionally, we were about 30% cash, but what happened in that period, the fund was in a lot of illiquid companies that were smaller, and didn't trade very much. When the, effectively, Fed started increasing rates, there was just no liquidity in our portfolio. I remember they increased rates, I think each month into Christmas, and then, I think it was Christmas that he was nice to them, came out and said, "Oh, should we not raise rates anymore? We're going to drop them." The problem was, we were stuck with all these illiquid companies, and there was all these liquid companies that always run first before the illiquid companies that we wanted to buy, but couldn't because we were stuck in them. We underperformed that year. I think yeah, the decision we made at that point was we thought the fund had gotten bigger, and that way of running the fund was probably the same. We'd always run it for a decade, but we're a lot smaller. It was a realization that we were bigger, so then we chose to increase the liquidity of the portfolio. So yes, while we've brought down the cash, we're actually in much more liquid stocks than we were previously. The ability to turn it to cash Turn it to cash quicker. Is probably better. Better, and also if we are more bullish in the market, the ability to turn it to profit. Our ability to go, over the last week or so, our cash levels have gone up probably about 3% or 4%. In that period, it might have been lucky to go up two, if that makes sense. The last couple of years, what were the highest cash levels? Highest cash was we got to 20% at one point. Yeah We got to 40% in. Sorry. Yeah. If we hadn't done that, COVID would've looked. We outperformed in COVID. That was a miracle, basically, given what happened. No, it was just good management Oh, thanks Of the portfolio. If you can imagine Yeah With small caps in COVID. Yeah. Terrible. Yeah. But we've got to 40% cash Yeah, liquid. Very quickly, because we were in more liquid stocks. If we weren't. Then what happens when you go to 40% cash, and I remember Cochlear Raise Money was the first to raise money, and John Ayoub from our large cap team was speaking to the bankers, and I said, "Oh, Johnny, how'd you go with Cochlear?" Because they didn't own shares. And he goes, "Mate, we didn't get any." I was like, "Oh, I think we're back on here." So we went from 40% cash to 15% cash in the space of a week. So that was when the market started rallying again, and turned out to be the right call. But you wouldn't have been able to do that if we'd kept it the same way we did back in 2019. Certainly, this last period and with the volatility that we've seen, numbers would've looked way worse if kept that same strategy. Geoff, Bruce has asked, "Will you be doing a capital raise for WAM Capital anytime soon? No. Well, obviously it's a board decision, but I wouldn't plan that. Yep. Keith has asked, "What are the key lessons learned from this," I suppose the last year, "and the dividend announcement that you will take moving forward? I think we were too gung-ho in terms of kicking the dividend up, and maybe we should've taken some medicine as the board, or me as chair, but as the board earlier. So back when we had that tough year and the assets had declined a little bit, yeah, reduce the dividend then. Because if we had, as I mentioned earlier, if we'd reduced it by, five years by a couple of cents, then we'd have another AUD 0.10 in the profit reserve. Therefore, if we were paying AUD 0.135 or AUD 0.13, then we could still pay it and then who knows, then we might make it again. Then we'd still have to do 10%, 11% on assets. I know that we'd have more in assets. Yeah, of course, we'd have another AUD 0.13 in assets, so that's right, it'd be AUD 1.35 we'd have. We'd still have to do 9.5%. Yeah, to me, it's maybe this time in terms of it growing the dividend. Obviously, it depends on the performance of the portfolio. If we have an up 40% year, then of course, the assets, well, up 40%, then they're back to AUD 2, in theory. Then we can be a bit more generous in terms of growing the dividend. To me, "What lessons have we learned?" It's the pulling the lever lessons. Maybe we've got to be on the conservative side in terms of growing the dividend. But again, it's a function of the underlying performance of the portfolio. Michael has asked, "WAM Capital has seen its share price drop from AUD 2.20 - AUD 1.52 over the last four years. Yeah. Are you looking at cutting costs, like expensive lunches with shareholders at the road shows, and why not just do webinars? Yeah, maybe we should cut the lunches. Yeah. I'll see what the board thinks. The good thing about the lunches is that WAM Capital only pays for a portion of the lunch. Do we do it by capitalization? Do you know? I'm not sure. I'm not sure if we do it by capitalization or by number of shareholders or by entity. Yeah, we'll take that on board. Thank you. Michael- I will clearly communicate with you if we are cutting the lunches. Yes. People do like lunches. But in terms of the lunches, it actually costs, we are talking about over AUD 6 billion of assets, and the road shows are just a very small cost. So it is 0.000, probably. One or something like that. Michael has also asked, "Is there any expectation to downgrade other linked LIC dividends? For example, WAX, the share price has decreased approximately 15% in a fortnight, yet there is no change to their dividend expectation. Yeah. WAX, I mentioned earlier, it has got three point six years in dividend cover. So there is no change to the dividend. Just the franking, which we. Yeah, the franking came down a little bit because we didn't have the tax paid. But, the profit reserve, that's ex-dividend too. Yes. That 3 points. Oh, so we've done them all ex-dividend. Yeah. The 3.6. Yeah, okay. So it is AUD 0.414 before the AUD 0.05 AUD 0.364. Yeah. The last question is from Lucas: "What gives you confidence in the current strategy, or that the current strategy can turn performance around, and are there any new ideas or changes to the portfolio that you think will be a catalyst? Yeah. There is always new ideas, and you are always learning. Oscar, do you want to talk about- Oh, the process has proved to outperform over the longer term. We've had a really tough year. I think it's- Yeah, and you go back on it, the war, the hardest bit, I think inflation is a cycle, and you can go through that, and you can weather that. If we just had that, I don't think the number wouldn't have looked as bad as what it did. Artificial intelligence really knocked the sales out of the small caps in what is a period, January, February, March is probably our most important period of the year with results. We got no benefit from good results at that point in time, and the war happened at the same time. Look, I think we just need the macro environment to stabilize. As I said, small industrials over the last five years have delivered 0.2% per annum. I think the overall market is 7.6%. When we've gone into work on the 1st of July, we're negative 7% in the last five years. When you go back to have a look at 2023, 2024, 2025, when we outperformed by quite a lot, and they were amazing years for us because we didn't get a free kick. Ask yourselves a question, what happens if we get a free kick? Yeah. We haven't seen that for a decade. That's what we're looking for, and I guess- You're going to be getting closer to a free kick. Well, we keep saying it. We have been saying it every conference call for five years. Yeah. But look, and you can see that- But you're closer than you were five years ago. Closer than we were five years ago, but we need things to go our way. Yeah. But the process, look, as I said, 70% of the companies we owned in reporting season outperformed earnings expectations. That's our process. Did the share prices outperform? No, they didn't. But once we come out, at some point they will. We've just got to be patient. We've also been referring to this piece of paper on the desk, but this is performance by year since inception, and it's all in the annual report as well. Thank you, everyone, for submitting questions and joining us this afternoon. If you feel we haven't answered your questions directly, please reach out to us via email on our info@wilsonassetmanagement.com.au email address, or call us on 0292476755. We're always available to speak to shareholders, so please don't hesitate to contact us if you have any questions about today's discussion or would like any further information. A recording of this webinar will also be available on our website shortly. I'll pass back to Geoff for some closing remarks. Oh, yeah. Look, thank you very much. We all acknowledge that as a shareholder, it's been challenging. In terms of our job, myself as chair of the board, the rest of the board members, myself as Chief Investment Officer, Oscar as Lead Portfolio Manager, and the rest of his team, we all know what happened, we've got to get those dividends. Now it's been rebased, growing again, and get the share price going back to a premium again. That's our goal and just reiterating April's comments, please, if you have any questions or any criticism, we all say constructive criticism, but any thoughts you've got, please feed them through to us. Thank you very much.