WAM Leaders (WLE) are providing shareholders the opportunity to increase their interest in the company by way of a pro-rata 1 for 5 non-renounceable Entitlement Offer. Proceeds will be used in accordance with the Company’s investment strategy, focused on identifying Australian large cap enterprises with compelling fundamentals, a robust macroeconomic theme and foreseeable catalysts. Equivalent to the Company’s pre-tax (realised and unrealised) net tangible asset value, the $1.44 issue price per share represents an attractive discount of 4.9% to the last close. Holders on the 19 July Record Date may apply for new shares provided application monies are received prior to the 6 August Closing Date.
Coinciding with this announcement, the Board of Directors also declared a final fully franked dividend of 3.5 cents per share, representing a 7.7% increase to the FY20 fully franked final dividend of 3.25 cents per share. The final dividend brings the fully franked annual dividend to 7.0 cents per share, yielding 4.4% and 6.3% on a net and gross basis respectively, using the last close. The maintenance of sticky and growing income to shareholders is substantiated by strong portfolio performance and benchmark-relative outperformance. New Shares issued under the Entitlement Offer will rank equally with existing WAM Leaders shares on issue and will therefore receive the fully franked final dividend of 3.5 cents per share.
The portfolio is currently overweight energy. Market prices for these continuing pandemic laggards remain depressed, albeit while the disconnect expands as commodity prices soar. Heavy discounting from ESG risk exposure, attractive valuations and low funding costs may help to drive M&A activity in the sector.
Bell Potter’s Indicative NTA tracks the ‘indicative’ movement of a LIC’s underlying NTA each month by monitoring the percentage movements of the disclosed holdings and using an index to track the movement of the remaining positions. The Indicative NTA works best with LICs that have a high percentage of investments concentrated in its Top 20, regular disclosure of its Top 20, lower turnover of investments, regular disclosure of its cash position and the absence of a performance fee. We have also included an adjusted indicative NTA and adjusted discount that removes the LIC distribution from the ex-dividend date until the receipt of the new NTA post the payment date. This report is published each Monday prior to the market open and is available on a daily basis. Intraday indicative NTAs will be available on request through your adviser.
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