Investment manager Wilson Asset Management says mining services firm SRG Global (ASX:SRG) was a key contributor to its WAM Active (ASX:WAA) portfolio in December 2024.
In November SRG, which provides engineering and construction services to various sectors including mining, secured $700 million worth of contracts with repeat clients in the water, dairy and resource sectors.
WAM, which has $5 billion in funds under management, says following the news SRG’s share price increased to $1.385 on 31 December 2024, representing a 106.7% increase over the 2024 calendar year.
“A low-liquidity period during December 2024 amplified SRG Global’s share price movements, while anticipation of its expected inclusion in the ASX 300 by March 2025 drove increased interest,” WAM notes.
“Additionally, market expectations of upside potential to FY25 earnings guidance ahead of upcoming reporting further supported the positive share price momentum.”
The solid December performance by SRG only partially offset a less favourable performance from location-based sharing service provider Life360 (ASX:360), which witnessed its share price drop 10.9% following the continued sale of shares by CEO Chris Hulls.
As a result, the value of the WAM Active portfolio’s net tangible assets per share before tax slipped to $0.8612 in December, from $0.887 in November.
However, the performance of the overall portfolio since inception in January 2008 is up 11.5%.
The aim of the WAM Active portfolio, which holds $66.5 million in assets, is to deliver a regular income stream via fully franked dividends, provide a positive return with low volatility and preserve capital.
For the full year to 31 December 2024, WAM Active will pay a fully franked dividend of $0.06 per share, equating to a fully franked yield of 7.3% and a grossed-up yield of 10.4%.
Dividends paid out by the portfolio since inception total $0.987 per share.
Over the past year WAM Active has outperformed the Bloomberg AusBond Bank Bill Index by 28% and the S&P/ASX All Ordinaries by 21.1%.
Meanwhile, the WAM Strategic Value (ASX:WAR) investment portfolio, which holds $228.2 million in assets, increased in December.
The portfolio holds investments in Salter Brothers Emerging Companies (ASX:SB2), which invests in small-cap Australian companies with a market capitalisation under $500 million, and Regal Asian Investments (ASX:RG8) – which manages a concentrated portfolio of long and short positions in Asian listed securities.
Net tangible assets per share of the WAM Strategic Value portfolio climbed to $1.2557 in December from $1.2488 a month earlier.
The investment outperformed the S&P/ASX All Ordinaries, which fell 3.1% during the month.
This followed a 6.7% month-over-month increase in the share price of Salter Brothers Emerging Companies and a 2.9% tick up in Regal Asian Investments’ share price.
WAM says during the 2024 calendar year the investment portfolio demonstrated its defensive characteristics by outperforming the market during every monthly decline.
“Notably, it delivered positive absolute returns in two of those downturns,” the company notes.
“We are optimistic that a falling interest rate environment will encourage investors to seek quality, high-yielding assets offering stable and predictable income streams. This will position listed investment companies and listed investment trusts as particularly attractive opportunities for long-term value creation.”
For the full year to 31 December 2024, WAM Strategic Value will pay a fully franked dividend of $0.0625 per share, equating to a fully franked yield of 5.3% and a grossed-up yield of 7.6%.
This includes the payment of a $0.01 per share special dividend, paid on 20 December, and marks a 50% increase in the full-year dividend.
Dividends paid out by the WAM Strategic Value portfolio since inception amount to $0.1275 per share.
Sydney-based WAM was established in 1997 by Geoff Wilson AO and manages 10 listed investments for 130,000 investors.
Write to Angela East at Mining.com.au
Images: Wilson Asset Management
