WAM Research Ltd (ASX:WAX) goes ex-dividend on 15 October 2026 for a final dividend of 5.0 cents per share. The dividend is partially franked at 50% and is scheduled to be paid on 28 October 2026. Investors buying shares on or after the ex-date will not receive this payment. The final dividend brings total FY2026 dividends to 10.0 cents per share, partially franked at 55% in total. The level of franking reflects the franking credits available to the company at the end of the year. The board has also flagged that franking on future dividends may be lower, depending on tax paid on realised profits and franked dividends received from investments.

Shareholders on the register before 15 October are expected to receive the payment, with the franking component providing partial tax credits for eligible holders. The company's decision to pay out its available franking credits in the final dividend reflects its stated focus on providing franked income where possible.

Company Overview

WAM Research is a listed investment company managed by Wilson Asset Management. It invests in a portfolio of small-to-mid cap industrial companies that it considers undervalued listed on the ASX, using a research-driven investment process. The company is chaired by Geoff Wilson AO, and its lead portfolio manager is Oscar Oberg. Pre-tax net tangible assets (NTA) were $0.78 per share at 30 June 2026.

Recent Developments

On 24 August 2026, WAM Research announced its final dividend for FY2026. Key points include:

  • The board declared a final dividend of 5.0 cents per share, partially franked at 50%.
  • Total FY2026 dividends were 10.0 cents per share, partially franked at 55% in total.
  • At 30 June 2026, the franking account balance was $2.4 million, adjusted for a $1.0 million income tax refund, equivalent to 2.7 cents per share as a fully franked dividend.
  • Pre-tax NTA was $0.78 per share at 30 June 2026.
  • The investment portfolio decreased 18.0% in the 12 months to 30 June 2026, while the S&P/ASX All Ordinaries Accumulation Index rose 5.7% and the S&P/ASX Small Ordinaries Accumulation Index rose 8.1%.

Mr Wilson said the board understands the importance of franked dividends and is paying out the franking available in the final dividend. He said the listed investment company structure and accumulated profits reserve enabled WAM Research to maintain its FY2026 dividend despite the decline in portfolio performance. The company said its ability to pay franked dividends depends on future tax paid on realised profits and franked dividends received from investee companies.

In FY2027, the company anticipates that franked dividends received from investee companies will generate franking to fully frank approximately 1.3 cents per share. If WAM Research maintains a full-year dividend of 10.0 cents per share in FY2027, the board currently expects it to be partially franked at approximately 10%, assuming no tax is paid on realised profits. Mr Oberg said the FY2026 result fell short of expectations, with market conditions unfavourable for the investment process and several larger positions detracting. He described FY2026 as the most challenging investment environment the team has experienced since the global financial crisis.

The company noted that the franking available for future dividends will depend largely on tax paid on realised profits, and that the expected franking level for FY2027 assumes no tax is paid on realised profits during the year.

Sector Context

Small-to-mid cap industrial companies on the ASX faced a difficult environment in FY2026, with rising interest rates, inflation and a divergence in performance between resources and industrial stocks. Investment managers focused on industrials they consider undervalued have generally underperformed indices that include resources companies.

For listed investment companies, franking credits come from tax paid on realised profits and franked dividends received. When portfolios underperform or realise fewer gains, franking balances can decline, leading to lower franking levels on dividends even if the cash dividend is maintained from profits reserves. Investors who rely on franking credits may therefore see changes in the after-tax value of dividends.

The Wilson Asset Management group of LICs share a common approach of paying dividends from profits reserves, but franking levels depend on each company's individual tax position. Investors who rely on franking credits may wish to consider how the expected reduction in franking affects the after-tax value of dividends.

Risks

WAM Research's portfolio declined significantly in FY2026, and continued underperformance could affect NTA and the profits reserve that supports dividends. Franking on future dividends is expected to fall to around 10% if the dividend is maintained, reducing the value for investors who use franking credits. The share price may trade at a premium or discount to NTA. The portfolio's focus on small-to-mid cap industrials exposes it to economic and interest rate conditions. Share prices typically adjust on the ex-dividend date.

Larger positions that detracted from performance in FY2026 may continue to weigh on returns if their share prices do not recover. Reduced franking may also affect demand for the shares among income-focused investors.

Catalysts to Watch

Investors may watch for payment of the final dividend on 28 October 2026, monthly NTA updates, and any changes in dividend or franking guidance for FY2027. Portfolio performance relative to benchmarks and the realisation of profits will influence future franking levels.

Updates on the profits reserve and franking account balance will be watched closely, as they determine the company's ability to maintain dividends and franking levels.

Key Takeaways

WAM Research's 5.0 cent final dividend, franked at 50%, goes ex on 15 October and is payable on 28 October. The board has maintained the FY2026 dividend but expects lower franking in FY2027 after a negative year for the portfolio.