WAM Microcap Ltd (ASX:WMI) goes ex-dividend on 16 October 2026 for a final dividend of 5.35 cents per share, listed as $0.053. The dividend is fully franked at 100% and is scheduled to be paid on 29 October 2026. Investors buying shares on or after the ex-date will not be entitled to the dividend. The final dividend brings the fully franked full-year dividend to 10.7 cents per share, representing a fully franked dividend yield of 7.6% and a grossed-up yield of 10.9% including franking credits, according to the company. Since listing in June 2017, WAM Microcap has delivered 80.7 cents per share in fully franked dividends, or 115.3 cents including franking.

Shareholders on the register before 16 October are expected to receive the payment. The board's decision to maintain the fully franked full-year dividend despite the portfolio's flat return highlights the role of the profits reserve in supporting dividends through weaker periods.

Company Overview

WAM Microcap is a listed investment company managed by Wilson Asset Management. It invests in a portfolio of microcap companies listed on the ASX, with a focus on industrial businesses it considers undervalued. The company is chaired by Geoff Wilson AO, and Oscar Oberg is lead portfolio manager. It listed on the ASX in June 2017.

Recent Developments

On 20 August 2026, WAM Microcap announced its fully franked final dividend and FY2026 results. Key points include:

  • The board declared a fully franked final dividend of 5.35 cents per share, taking the full-year dividend to 10.7 cents per share.
  • In the 12 months to 30 June 2026, the investment portfolio increased 0.1%, while the S&P/ASX Small Ordinaries Accumulation Index rose 8.1%.
  • Since inception, the portfolio has increased 14.4% per annum, outperforming the Small Ordinaries index by 7.4% per annum.
  • The company reported an operating loss before tax of $2.4 million, compared with an operating profit of $59.7 million in FY2025, and an operating loss after tax of $0.1 million.

Mr Wilson said the benefits of the listed investment company structure, together with the profits reserve available, have enabled the board to continue providing fully franked dividends through market cycles. Mr Oberg said that, following eight consecutive years of outperformance since listing, FY2026 was a challenging year. He attributed the underperformance mainly to limited exposure to resources companies during a period of very high performance in that sector, combined with stock selection below the level the team expects.

Mr Oberg said the main headwind was the significant divergence between resources and industrial companies. He said many portfolio holdings continue to deliver sound operational outcomes despite share price weakness, and that the team continues to identify opportunities where fundamentals are not fully reflected in valuations. He said the portfolio is well positioned entering FY2027. The company held a Q&A webinar with the WAM Capital and WAM Research teams on 22 September 2026.

Mr Oberg described the positioning as having detracted from performance in FY2026, but said the team believes its focus on undervalued micro-cap industrial companies will continue to create opportunities over the long term. The company invited shareholders to register for its full-year results Q&A webinar with the investment team, which also covered WAM Capital and WAM Research.

Sector Context

Microcap companies are the smallest listed businesses on the ASX and can offer significant growth potential, but they also tend to be more volatile and less liquid than larger companies. In FY2026, resource stocks performed very well, while many small industrial companies faced pressure from interest rates, inflation and economic uncertainty.

Listed investment companies focused on microcaps rely on active stock selection to generate returns. Profits reserves built up during favourable years allow LICs to maintain dividends during weaker periods. However, extended underperformance can reduce reserves and affect future dividend capacity.

Microcap managers often focus on industrial companies with growth potential, which can mean limited exposure to resources. In periods when resource stocks rally sharply, these portfolios may underperform broader small-cap indices that include mining companies.

Risks

WAM Microcap's portfolio underperformed its benchmark in FY2026 and recorded an operating loss, and continued weak performance could reduce the profits reserve. Microcap investments are volatile and can be illiquid. The portfolio's limited exposure to resources may lead to underperformance when that sector rallies. The share price can trade at a premium or discount to NTA. Future dividends depend on reserves and franking credits. Share prices typically adjust on the ex-dividend date.

Continued divergence between resources and industrial companies could weigh on relative performance if the portfolio maintains limited resources exposure.

The operating loss recorded in FY2026 did not add to the profits reserve, and dividends were funded from reserves built up in earlier years.

Catalysts to Watch

Investors may watch for payment of the final dividend on 29 October 2026, monthly NTA reports, and performance relative to the Small Ordinaries index in FY2027. Any changes to dividend guidance and developments among portfolio holdings will also be relevant.

Commentary from the investment team on portfolio holdings that continue to deliver operational results despite share price weakness may provide insight into potential recovery. Any changes to the profits reserve and dividend guidance will also be watched.

Investors may also compare WAM Microcap's long-term record of 14.4% per annum since inception against its more recent performance when considering the portfolio's prospects.

The Bottom Line

WAM Microcap's fully franked final dividend of 5.35 cents goes ex on 16 October, payable on 29 October. FY2026 was a challenging year for the portfolio, but the company maintained its fully franked full-year dividend of 10.7 cents.