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WAM Global share price higher after 186% increase in half year profit

James Mickleboro
ASX Investment Manager

The WAM Global Ltd (ASX: WGB) share price has been pushing higher on Tuesday following the release of its half year results.

The global equities-focused investment company’s shares are up 1.5% to $2.26 in afternoon trade.

How did WAM Global perform in the first half?

Despite the performance of WAM Global’s investment portfolio falling a touch short of the MSCI World Index in the first half, the company recorded a significant jump in profit.

For the six months ended December 31, WAM Global achieved a 185.7% increase in operating profit before tax to $38.8 million and a 186.3% lift in operating profit after tax to $27.2 million.

Management advised that this reflected the sound investment portfolio performance and the growth in assets over the period. In respect to the latter, since the investment company’s IPO in May 2018, its assets have grown from $465.5 million to $523.1 million.

In light of its solid performance in the first half, the WAM Global board has declared an inaugural fully franked interim dividend of 3 cents per share. This represents a 50% increase on FY 2019’s final dividend. Management notes that this is consistent with its investment objective of delivering investors a streak of fully franked dividends.

Chairman, Geoff Wilson AO, was pleased with the half and notes that its shares are trading at an attractive discount to their net tangible assets. He believes this is in the process of narrowing as the company “continues to deliver a track record of performance.”

This may explain why Mr Wilson has been buying shares through on-market trades over the last couple of weeks.

Outlook.

Lead portfolio manager, Catriona Burns, appears cautiously optimistic on the second half.

She said: “We believe conditions for global equity markets will remain positive in 2020. Despite this short-term optimism, we are conscious that central bank intervention has inflated assets prices and valuations are elevated in certain segments of the market.”

“We are focused on preserving shareholder capital and delivering risk-adjusted returns from a diversified portfolio comprising the world’s most compelling undervalued growth companies,” she concluded.

Amongst its current holdings are the likes of American Express, Airbus, Thermo Fisher Scientific, and Hasbro.

The post WAM Global share price higher after 186% increase in half year profit appeared first on Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2020