Key Highlights

• WAX declared a full-year Dividend of 10.0 cents for FY26.

• It recorded a net loss after tax for the year.

• Dividends are paid from accumulated profits.

• The company is a listed Investment company.

WAM Research Limited (ASX:WAX) declared a full-year dividend of 10.0 cents per share for FY26 even though it recorded a net loss after tax of A$27.95 million, because dividends are paid from an accumulated profits reserve rather than from the year's result alone. That reserve stood at 41.4 cents per share at 30 September 2026.

A listed vehicle for undervalued growth companies

WAX is a listed investment company that has traded on the ASX since August 2003. It is managed by MAM Pty Limited, part of the Wilson Asset Management group, for a fee of 1% a year plus GST of portfolio value. The mandate targets undervalued growth companies, generally small-to-medium industrial businesses listed in Australia.

At 30 September 2026 the portfolio was spread across industrials, information technology and consumer discretionary names, with 4.2% in cash and none in the ASX Top 20.

What happened in FY26

For the year to 30 June 2026 the company reported a loss before tax of A$40.88 million and, after a A$12.93 million tax benefit, a loss after tax of A$27.95 million, or 13.42 cents per share. A year earlier it earned A$28.49 million. Net Assets fell from A$226.2 million to A$180.7 million.

The investment portfolio returned negative 18.0% over the 12 months to 30 June 2026, before fees, expenses and taxes, while the All Ordinaries Accumulation index gained 5.7%. The company said several large positions, including G8 Education, Regis Healthcare, Web Travel Group and Tuas, were hit by company-specific events.

Longer-term figures look better. Since the July 2010 change of strategy, the portfolio has returned 12.5% a year to 30 September 2026 against 8.9% for the index, again before costs.

The dividend and its franking

The final dividend of 5.0 cents was 50% franked, with an ex-dividend date of 15 October 2026 and payment on 28 October 2026. With the 5.0 cent interim dividend, franked at 60%, the full-year payout is 55% franked in total. The Dividend reinvestment plan priced new shares at A$0.8297, a 2.5% discount.

Because that price is above the 77.16 cent pre-tax Net Tangible Assets (NTA) per share on the same date, shareholders are paying a premium of roughly 11% to the underlying assets.

Risks and the franking squeeze

The key constraint is franking. The franking account held A$2.4 million at 30 June 2026, adjusted for a A$1.0 million tax refund, equal to 2.7 cents per share fully franked. The company said its ability to keep paying franked dividends depends on future tax paid on realised profits and on franked dividends received. If 10.0 cents is maintained in FY27 without tax being paid on realised profits, it expects the dividend to be about 10% franked.

Dividends from a profits reserve are also finite. On paper, a 41.4 cent reserve covers roughly four years at the current rate, before any further investment gains or losses.

The pre-tax NTA rose from 76.72 cents in August to 77.16 cents in September, a small monthly move that does not offset the year's losses.

Dates ahead

The Annual General Meeting is on 18 November 2026 at 11.15am AEDT, in Sydney and online. Shareholders will vote on the remuneration report and the re-election of Kate Thorley and John Abernethy. They will also consider Stephen Mayne, a candidate not endorsed by the board, whose election the board recommends voting against.

Monthly investment updates and NTA announcements will show how the portfolio develops after the FY26 loss.