WAM Capital Limited (WAM) Earnings Call Transcript & Summary

Welcome to the 25th WAM Capital Annual General Meeting. This is a hybrid meeting held here in-person at the Museum of Sydney and also online. I'd like to acknowledge the Gadigal people of the Eora Nation and pay my respects to Elders past and present. Thank you for joining us and for your support of WAM Capital. Before we officially open the meeting, I'd like to say that our thoughts and prayers with all people who are in conflict right now, particularly in the Middle East and Eastern Europe. I'd like to point you to a disclaimer, which is displayed for you on the screen for you to read. I am Geoff Wilson, Chairman of the Board of Directors. Joining me today in person are my fellow directors, Kate Thorley, James Chirnside; Matthew Pancino, and joining us online, our other directors, Lindsay Mann, Dr. Philippa Ryan and Angus Barker. Acting in the capacity of moderator is joint company secretary, Jesse Hamilton, who is also the CFO of Wilson Asset Management, and he'll be assisting with any questions during the meeting. Scott Whiddett in the front row here is our auditor from Pitcher Partners and is available for any questions on the financial statements. It's just after 10:00, and a quorum is present. I declare the meeting open. The Notice of Meeting has been circulated to shareholders and in the absence of any objections, I'll be proceeding on basis the notice as being read. I encourage you all to read the Chairman's address announced to the ASX in full. It's a 3-odd page document where we've gone -- we've tried to go into quite a bit of detail. I'll give you -- I'll talk a little bit about the outlook and a few specific comments in a minute. Shareholders who have logged into the webinar with your user name and password will have the opportunity to submit questions online and ask audio questions as well as vote on all resolutions. If you're joining online, questions can be submitted at any time. If you ask -- if you're online and you would like to ask a verbal question, an audio question facility is available during the meeting. For those joining us in person, if you can please wait for the microphone to come to you because so the people online can hear the question clearly. Voting today will be conducted by way of a poll on all items of business. When I opened a poll, the voting icon, which I'll be opening in a few minutes, the voting icon will appear on the navigation bar. Simply select one of the options to cast your vote. If you change your mind -- you can change your mind any time until the voting is closed. I'll now declare the voting open on all items. In terms of looking at the last 12 months, it has been -- well, in terms of the WAM Capital portfolio in the 12 months to June, the WAM Capital portfolio has performed strongly, where the team outperformed the all odds and actually outperformed the small odds. So it was an extremely -- to me, extremely pleasing result. The -- one of the frustrations, I think from a shareholders' perspective is probably a decision that was made at the start of COVID was to continue paying the high fully franked dividend, a dividend which would amounted to a little over 10% on assets fully franked, which on a grossed-up basis is close to 15%. And as we're paying out these super yields, then if the underlying portfolio over the 4-year period since COVID has only gone up about 9-or-so percent, and we're paying out 16 or 15-odd percent, then effectively, you're getting a reduction in asset value. And I think that's been a frustration for us all. And I suppose you just have to be aware that in terms of your return, you have to look at your pretax return is a combination of yield and capital. If you're getting a super yield, then that can, in some instances, and in this instance, at the expense of capital. In terms of the dividend, you'd be aware that we just -- we've just got [ x ] WAM capital of [ $0.077 ] dividend and the company -- and in terms of the profits reserve, the $0.066 are left in the profit reserve. So that profit reserve has to increase for the $0.077 dividend to be paid out again. The -- Jesse, do you have any figures pout in terms of the portfolio, what it needs to increase from here for the profit reserve to be topped up again?

Yes. So from here, we need an additional 7.2% performance to cover the interim fully franked dividend. So for it to go from $0.066 to $0.0775 and a 15.6% performance to also cover another $0.0775 at 30 June next year.

Yes. And that is from today. Yes, that's adjusting for the fall in the market and the portfolio because the market is down 3-odd percent so far this month, we just calculated those figures as of this morning. Yes, so that's broadly where we are. The -- what I'll do is I'll move over now to the formal part of the meeting. The -- yes, and then we'll open it up for any questions. In terms of the formal part of the meeting, there are 6 items of business for the AGM today as set out in the Notice of Meeting. 5 items are to be voted on. The Notice of Meeting and Explanatory Memorandum were circulated to shareholders. And in the absence of any objections, I'll proceed on the basis these items are taken as read. I note our Boardroom I'm the returning officer for today's meeting, and we'll be conducting our poll. I further note that Resolution 1 of 5 are subject to voting exclusions as outlined in the Notice of Meeting. The Board recommends approval of each resolution. And as Chairman, I'll be voting all open voting for each resolution -- each resolution. We'll advise the ASX as soon as the results are available, and that will be later today. You can submit any questions online at any time or any questions you have on the financial report now, please. The first item of business is to receive and consider the financial statement the Director's Report and the Auditor's Report for the company for the year ended 30th of June 2023. As I mentioned, our auditor, Scott Whiddett, is with us here in the front row. There's no resolution on this matter. It's not required. Now I'll just ask Jesse, are there any questions online? Are there any questions in the room on this?

No?

There being no questions, let's go to the items of business. Resolution 1 relates to the adoption of the remuneration report. Please submit any questions you have online now. The proxies will put them up on the screen. Just as Chair, I'll be voting in favor of the resolutions. Now are there any online, Jesse, for this? Any questions in the room, please raise your hand.

No.

No. I now put the motion -- the resolution be approved as set out in the Notice of Meeting. If you're a shareholder, online and eligible to vote, please vote. Anyone in the room please fill out -- please vote by pressing the relevant buttons on your machine. Resolution 2 relates to the reelection of Director, Dr. Philippa Ryan. And now I'll just pass over to Pip, who'd like to make a couple of comments to you as -- Oh, sorry, before that, we have a question. Yes.

These machines are not allowing us to vote on Resolution 1. They're only got Resolution 2, 3 and 4. So something has gone wrong with your system.

Okay. That's good. We'll get that. Good pick up. We'll get our technical experts -- we'll get Boardroom's technical experts there immediately. The good thing is about voting on resolution. Any of the resolutions, we can do that until I close the poll. As soon as I'll pass, now we'll go over to Pip who'd like -- Dr. Ryan , he'd like to say a few words about her being reelected as a director. And then we'll come -- actually, is it working now or -- No. Okay. I'll come back to when it's -- can anyone who can't vote on Resolution 1, if you put your hand up? Thank you. That's everyone, Okay. Resolution 1 and 5, other ones are the exclusions. So you might have our -- you might have our voting lines that we can't -- because we can't vote on them. So I've excluded you. Okay.

I think people online might have the same issue.

Okay. When online maybe the same issue. We'll get that sorted out, and I'll report back during the meeting. I will keep voting open until we're 100% that everyone in the room has voted and people online have voted as well. So now is Pip -- have we got Pip online?

I am here, Geoff.

Thank you, Pip. I'll pass it to you.

Yes. Thank you very much. It's lovely to be here and thank you for the opportunity to speak to this motion and my reelection as a Nonexecutive Director. For those who don't know me, I'm an honorary associate professor at Australian the National University and my expertise sits around digital economies in the law. I've published on this topic as well as the role of blockchain technology in promoting the sustainable development goals. So while I'm not a shareholder in WAM Capital, the skin in the game that I have as a Board member sits around my expertise and professionalism. I am not a practicing barrister anymore, having practiced for 20 years, but I continue to be a member of the New South Wales Bar Association, and I continue to give presentations and right and publish in this area. So I'm retired as a net from Lander & Rogers, a national Australian law firm after a statutory period of all, which was then continued under an option, and that was a very enriching experience and very different to this one. So my role on this Board is to bring diversity in relation to expertise as well as perspective from the angle of someone who has a doctorate in breach of trust and conflicts of interest. I welcome any questions, of course. Thank you very much, Geoff.

Thank you, Pip. Do we have any questions online for Pip? Not any questions in the room? I know from my perspective, as Chair, there's -- and there's a lot of familiar faces here that have been on the journey with us as investors for a period of time. What we -- what as a Board we've tried to do is keep the corporate memory of some -- with some of the longest serving members of the Board, but really add high-quality expertise, and you'd notice with whether it's Matt or Pip or Angus, the last 3 directors that have come on all have what we see as an organization or as a Board, some really high-quality skills that add to the diversity of the thought process and the information that we can, at a Board table, get access to. So yes, I'd strongly support Pip being reelected as a director. The -- in terms of -- sorry, Jesse, we checked the are no online questions, no. In terms of your ability to -- in terms of the open proxies, which have been granted to me as Chair, I'll be voting in favor of the resolution. In -- the proxies are up on the Board. I'll now put the motion that Dr. Philippa Ryan be reelected as set out in the Notice of Meeting. If you are a shareholder or proxy holder and eligible to vote online, could you now please complete your vote? Anyone in the room? You can do #2. You can do 1 and you can do 5 as well. Okay. So Obviously, that technological hiccup has been sorted out. The -- so that's great. So please vote for that. Now I'd like to go to Resolution 3 is the ruling to the reelection of Matthew Pancino. Matthew, you're here in person, would you like to just make a few comments about your experience?

Thanks, Geoff. Look, just by way of introduction. So of all, thank you for everyone coming today. By way of introduction, my name is Matt Pancino, I'm currently an Executive Director for Google in Asia Pacific, and I'm also a Nonexecutive Director for Greenstone Financial Services and SydWest Multicultural Services. I just want to thank both management, my peers on the Board and obviously shareholders for letting me fulfill my first 3-year term. It's been a wonderful experience in addition to watching the highly professional asset management team deal with some pretty challenging times post COVID. It's also been really good for me to be part of the Board where we've seen Wilson Asset Management really lift a lot of its capabilities internally, particularly around nonfinancial risk, cyber risks and operational resilience and even adding some new capabilities within the organization, which I think it sets itself up for the objectives and the future growth of Wilson Asset Management, particularly around how to ensure that we provide ongoing strict dividend yield, capital growth and while preserving capital. I look forward to hopefully serving another 3-year term and continuing to import with on my skills, which are pretty much around technology, nonfinancial risk and cyber risk. Thank you.

Thanks, Matt. Now do we have any questions online? Jesse, or Matt? Any questions in the room? No. The -- great. For the open proxies, which have been granted to the Chair, I'll be voting in favor of the resolution. I'll now put the motion that Mr. Matthew Pancino, be reelected as set out in the Notice of Meeting. If you are a shareholder or a proxy holder and eligible to vote online, please do. Anyone in the room, please also vote. Resolution 4 relates to the election of Angus Barker. Angus you're online? Can we -- we'll go over to you to say a few words. Thanks Angus?

Thank you. And thank you, Chairman, and good morning to all my fellow shareholders in WAM Capital. My name is Angus Barker. And as you vote for me on the Board of WAM Capital. I thank you for the opportunity and have some brief remarks about the value-add I'll bring to WAM Capital and through that to the value of all our shareholdings in WAM. As you may have read in the notice paper, I've got lengthy experience in mergers and acquisitions and equity markets with global investment banks. And given the value creation that WAM Capital is delivered through by another investment companies trading at discounts to net asset value over recent years. Those skills may prove handy in the future. But over the course for 2023, and for now, my background that's a special value to Geoff and the team at Wilson Asset Management is my 8 years experience for working as adviser to federal government and in particular, in the treasury portfolio. I know how government takes and I know how to help influence outcomes. So I'm working closely with Geoff and his team as they send integrity of Australia's dividend imputation and franking system, which is currently under attack from 2 measures proposed by the government and soon to be considered by the Senate. I'll be working hard for you as shareholders to help the Wilson Asset Management team as they constructively engage with the government, the Senate Cross bench and the opposition to try to ensure the franking system, which has served Australia and kept our economy strong over 3 decades is not salami-sliced to failure. This happened before in the U.K. It could happen here, too. As a WAM Capital shareholder, I share your aspirations . WAM capital to deliver fully franked dividends and growth over time by investing in the very best small and mid-cap companies on the ASX. I appreciate the trust our Chair, Geoff Wilson and my fellow directors have placed in me through my appointment early this year. I hope to receive your support for reelection to the Board of WAM Capital today. And if elected, I'll work hard to repay the trust you've placed in me over the coming years. Thank you.

Right. Look, thank you. Thank you, Angus. The -- for the open proxies, which have been granted to the Chair, I'll be voting in favor of the resolution. The -- in terms of the proxies, they're up on the screen. I'll now put the motion that Mr. Angus Barker be reelected as in the Notice of Meeting. If you're a shareholder or a proxy holder and eligible to vote online, could you do so now? Anyone in the room, please also -- could you vote now? And we look forward to having all nonexecs remain on the Board. And as I said at the start, these 3 nonexecs, they've really been handpicked by us in terms of skill bases that could add significantly to WAM capital. In terms of Resolution 5, that relates to directors' fee cap. And probably before we go to questions, I'd just like to note what we try to do as a Board is do not have any flexibility in the fleet -- in the fee cap. And so when we put a new director on then we need to go to shareholders to increase the fee cap. Otherwise, we'd like to have it pretty much at the ceiling. So then it's obviously it's more challenging to increase the Nonexecutive Directors remuneration. So Jesse, just on that -- on the resolution 5, which relates to the directors' fee cap, have we got any questions online?

No questions. We are still having some voting difficulties for the people online. So bear with us, and we'll keep the polls open as long as possible. It should refresh shortly.

Okay. And do we have any questions in the room on the fee cap? No. You see the proxies on the screen in terms of for and against. I'll be voting -- those proxies are granted to the chair. I will be voting them in favor of the resolution. The -- I'll now put the motion that the resolution be approved set out in the Notice of Meeting. So therefore, anyone in the room will still have the ability to vote on Resolution 5. And we have the view that people online resolution 5, they might be able to vote at this point in time. But we will keep the -- we'll keep the voting open.

And just a reminder, anyone who has already submitted their vote ahead of the meeting doesn't need to vote again if you're having any difficulties. So if you've already submitted your votes and you're having any difficulties at the moment, you don't need to submit again. The proxy you submitted before the AGM still counts for the voting.

Okay. But there's still some -- the votes online. So what I'll do now -- and I mentioned the results will be announced at the ASX as quick as we can. There's no formal business for the meeting, but now I will just take informal business before we close the meeting and close the poll. Yes, please. And actually, we'll get -- we'll just the microphone -- we'll just wait for the microphone so that people online can also hear the questions. Thank you.

Chairman, Geoff [ Elvin ], Chairman from Brisbane. Mr. Chairman, following on from the recent referendum, it looks like the federal and state governments and other entities will be pursuing 4 issues. The first is the Truth and Justice commission. I don't know whether there's any implications to the share market in that. The second issue is treaties. This is something that I'm not sure whether there's any financial implications there or not. I don't know whether you can advise us on that, Geoff. The third issue is Makarrata. I'm done if I know what that's all about?

My understanding is Makarrata's treaties.

Yes. And then the final one, which is the real snake in the grass is reparations. And I've heard something about that being expressed as a percentage of GDP. If that's the case, that could amount to a very, very large sum of money. And I was just wondering if you could tell us whether there's any implications for the market in general or this particular company?

Yes. Well, look, one of the good things is we've got our portfolio manager here, Sam, he's in the cut and thrust of what happens on a minute by minute basis. Can we pass the microphone to Sam in terms of where we are in that and whether from an investment perspective, you're seeing any risk or any uncertainty, that would be great, Sam.

Yes. Definitely. Great question, and thank you. So as far as the referendum is concerned, our view internally is that we don't think there is a material risk to markets broadly in Australia and the bread and butter of small to mid-caps that WAM Capital invest in. So it hasn't been an overt focus of the team. Lately, the team has been, I guess, more focused on, I guess, as what's been happening in terms of expectations around inflation, reaccelerating across the world. And you've seen a spike in oil prices recently. And that's really what's been driving, I guess, the sort of risk off sentiment in markets at the moment. And that's why you've seen markets take a dive lower over sort of the back end of September and October. So I guess that's what's really front and foremost for the investment team. Yes, that doesn't change, I guess, our investment process, like we're still looking for undervalued growth companies with the catalysts. And I think the investment performance has played out and demonstrated that over the last 3 months and obviously, FY '23 as well.

And in theory, the vote has occurred. So from a -- you'd assume the government understands, well, how everyone voted and if you read the comment the political commentators when you look at the poll, I think it was at this morning's call or the Roy Morgan poll where libs are actually in front for the first time. So I would say the things that you're potentially concerned about, they will get resolved in a way that's positive for all Australians logically because I think the government -- yes, I mean -- the government you'd assume will digest what happened and then work out the best way forward. So yes, so that's that one. Any other.

Just before we jump into any others, just a voting update. So I do apologize for this. So online, everyone should now be able to submit their votes. So please do submit all your votes again online. The system has been completely refreshed. And also for everyone in the room, unfortunately, your devices have just been refreshed to enable voting on resolution 1 and 5. But any votes submitted on the other resolutions will just need to be resubmitted again. So we've got a representative from Boardroom here as well that will be able to help anyone. But we'll keep the polls open all the way through to 10:45. If you have any difficulties, just raise your hand, and we'll have someone come and help you.

Yes. So effectively, the polls will be closed at 10:45. Yes. And so everyone in the room needs to vote from 2 to 4 again.

1 to 5.

1 to 5 Again. Thank you. The -- any other questions in the room?

I've got some questions submitted ahead of the AGM.

Thank you, Jesse.

So we've got a question, when will WAM Capital -- when will WAM Capital's value return to pre-COVID levels?

When will WAM Capital's value return to pre-COVID levels? Well, it's really -- it's a function of 2 things. It's a function of the performance of the underlying portfolio and a function of the amount of dividends paid out. So -- the -- and just to look at it the other way. I mentioned in the Chairman's address when I was talking about the -- effectively the very high level of dividends that have been paid out little over on NTA, a little over 10% on the current NTA on an after-tax basis, which is nearly 15% on a pretax basis. That if -- when COVID started, a lot of directors -- sorry, a lot of boards cut their dividends. And we had the profit reserve and we had the franking, so our logic was to keep paying those high dividends. Now as one of the best I was talking to, they say, well, what if you cut it, what -- back then 4 years ago, you cut it into half. Well, if we cut it into half, then effectively the share price would be $0.28 higher because $0.28 hadn't been paid out. So really to get back -- I think the pre-COVID levels will be the plus $2. And it really -- it's the premium and discount. You've got to adjust that in, and then it's what we can achieve. And we're saying to keep paying the dividend, we said in the Chairman's address, but also it's in the announced result that we need to pay -- yes, we need to return 15% plus to keep paying that dividend. Because in theory, we make 15% we pay tax and then we can pay 10% out fully franked. So to get it back to that $2 level, then it really has to be -- it's probably now 3 or 4 years of 20% profit returns. That's what we'd have to achieve.

Just on a similar note.

I can't give you the exact -- like it's a mathematical equation is no. We can -- if they tell us -- if they e-mail the price they want to know, and then we can just tell them what we have to achieve to do that and over what time?

Just on dividends. So will the same fully franked dividends continue or be increased for the foreseeable future? Or will they be reduced?

The -- our ability to pay the dividend is a function of the profit reserve and the amount of franking we have. At the moment, we have $0.066 in the profit reserve. So if we had to pay a dividend now, the next dividend is $0.066. The -- so we need to make another cent in a bid to pay [ $0.07 ] in a bid. And to do that, the portfolio needs to increase -- is it -- what was it, 7.5% Jesse? From this morning's value that's adjusting for the portfolio being down this month. Yes, The market is down 3%. And the portfolio did really well in the first 3 months is outperforming. We're still outperforming, but the market is down for the year. That's between now and when we pay that dividend. And yes, and then if we -- like if we run out of profit reserve, then we'll rebase -- then in theory, we've got to get profit reserve again to pay the dividend and then we need to pay the tax on the profit to get the franking or the tax comes from dividends we received from other companies. And with our portfolio, business mid and small, the yield on the portfolio is probably 2% to 2.5% where the other market yields probably -- I think it's something 3.8%, 77% franked some.

No other questions.

Any other questions in the room? Yes. Yes.

Yes, I've heard your comments about the dividends and effectively using that an excuse for the falling value of the shares. I don't really accept that because I've got a portfolio of about 40 or 50 shares they will pay dividends. And in general, since I've bought WAM, they've gone up in price. So I've had a rise in capital and I get dividends paid. So when I bought WAM, my idea was that someone was going to manage this, look at the market as a whole, pay me dividends and hopefully, there would be an increase in the capital value. Well, that hasn't happened. So I mean, I don't mean to be flippant, but you can ask me what my portfolio is and you do a lot better than what your people are picking. So my question is, it's really not acceptable to say we're paying reasonable dividends. So a lot of other companies. I think you need to explain why the shares have fallen so dramatically.

Like in terms of -- I hear your question clearly. Let me just take you through -- we're an investment -- WAM Capital is an investment company. So we invest in other companies and whether they go up in value or down in value is whether we make profits or losses and we can only pay dividends when we make profits. So effectively, we're not an operating business. We're an investment business. So we start with the portfolio, let's say, 4 years ago, we start with a portfolio of $1 and the portfolio goes up 10%, then it goes up 10%, say, pretax, then we have to pay tax. So we have to pay 3% tax, so we've actually made 7%. And because we had had profits that we made in previous years, we actually paid you pretty much 10% on assets. So we actually paid you more than what we made in the 12-month period. So we can only pay out what we make and how we make money. We're not like an operating business. We're not making widgets and selling them. We're investing in the market, and we make money when the portfolio goes up. So over the 4 years since the GFC started the portfolio has gone up, I think, 8% or 9% per annum. But we've actually been paying you 15% per annum. Well, we've had to make 15% because then we pay 5% tax or 4.5% of tax. And then we're paying you 10% fully franked. So that's how an investment company works. So an operating company, you've got you're actually -- you're selling something. We're investing. So if the portfolio just goes down, we can't pay any dividend. So what we're saying is effectively, what we've been -- we've been paying you more than the value of the portfolio going up since COVID. And like the second year of COVID, the market was down 18%, and we were down 20%. Last year, the actual portfolio, the underlying portfolio actually outperformed the market, but it didn't give us enough money to pay -- it gave us enough money to pay last year's dividend, but it hasn't given us enough money to pay this year's dividend. So far this year, that the portfolio is -- well, as of today, because the market is down 3% this month, the portfolio is down, it's down 1%. So if we make -- if the portfolio stays there and doesn't go up, we just can't pay you dividend because that's how we make money. You sort of understand it? Yes. Yes, yes. No, sorry. Yes. Yes. And also a bit -- yes, the premium -- or was it a bigger premium? No it's a lesser premium. But yes, I'll ask the question back. Sorry, we just need that -- sorry yes.

I agree with everything you said. But then how do we increase -- how do you approve an increase in directors' fees after telling us all that like it was 36% or something voted against it?

Yes. The -- how do we -- well, I mean, you are the shareholders. So whatever -- we're adding 1 director, it's a $1.7 billion company WAM Capital, and we pay directors' fees. What was the title of director fees, $190,000. I think if you look at every listed company that has a Board of Directors, the quality we have on our board, that will be paid, if I had to guess, [ $750,000 -- $1 million ] dollars. So you're actually getting an exceptional deal in terms of $190,000 for a Board of Directors of the quality we have on a $1.7 billion business. Any other -- yes, please. I do -- just wait 1 second, we'll just get there. Behind you?

I take the points that you have been making, and I take the point that the gentlemen in making. But there's 1 anecdotal thing that I just hear around among my own friends and investors. And it's simply because the interest rates are up, people are simply selling out and investing their money at 5% where it's safe. And breaking in the money and simply not worrying about investing and a lot of people are doing that without getting too deeply involved in whether the market is going up or not? And also worrying about we're not in resources. We're in a very limited segment of small to medium companies, which have performed anything like the resources sector out. So the people are out selling and they're going into resources or else they're selling and they're going to cash. And that's just the anecdotal thing that I'm getting among my contemporaries.

Yes. Well, you've got your finger on the pulse because that is what is happening. But it doesn't take away the -- an operating company like sells something like sells a pen, and it makes a margin from selling the pen and then it allows it to pay a dividend out. What we've got is, we've got assets that we invest. And so if those assets go down in value, we can't pay you dividend. And if they go up in value, then we can put some of that money in a profit reserve and then we can pay you a dividend. So it's actually understanding that. And in terms of the -- what we've actually -- since the GFC, what we've paid out in terms of the year the portfolio was down -- the market was down 18%, and the portfolio is down 20%. You'd say, if you're an operating company, no one would have got a dividend that year that was 3 years ago, but we actually paid out broadly close to a 10% fully franked yield, which that's 10% after tax. So it was about a 14% pretax. So that year our assets, a, they went down by 20%, and we paid out 4.5% in tax and 10% in the dividend. So that year, the assets went down 35%. And so yes, and then -- so then all of a sudden, you're from a base 35% lower. So say, last year, the portfolio -- the investment guys did a really good job. They outperformed the market, and they outperform, as you said, we tend to focus on small and medium-sized companies, and they outperformed that by about 8%, which was -- that's really good work. But it doesn't -- how does that help shareholders -- the -- what it's done is it's increased the profit reserve so we can keep paying dividends. But we've got to keep increasing the profit reserve. And in terms of you actually hit the nail on the head there as well. If you look at the mid and small cap space, it is -- it's very unloved the small and mid-cap sector has underperformed over the last 2 years, it's underperformed the market by about 20%. So the -- all that tells me is at some point in time, it's going to outperform the market because everything goes back to equilibrium. And over time, the smaller mid-caps, they catch up. And they actually end up giving you better growth over time. But it's just -- it's been a difficult period. And that's been a function of what you exactly said, the rising interest rates, it's been difficult for that sector.

Well, I'm very happy with the dividend you've been paying. It is remarkable.

We've got to keep -- yes, I know they are. That's the thing they're remarkable because we're paying so much. But we -- like the challenge is to keep doing it and the question is whether we can or not is really...

Yes, I can understand that. [indiscernible] and I accept that when I bought in, it was at a premium. I just happened to buy shares that were at a premium. We -- that's what happens in a -- and even now, they are still trading above their NTA. And a lot of most -- many -- I can't exactly say, but some LICs are certainly well below their NTA. And I think that given the market situation, I think you've been doing remarkably well, really, and I can't say that I'm unhappy.

Thank you. Well, it's the guys doing the hard work. I'm the one that makes noise [indiscernible]. Yes. No, thank you for that. Any other questions? Well, Thank you. Any other questions online, Jesse?

That's it. So.

Now in terms of the voting. So we got the voting all the voting.

I believe so. So we can close the polls now.

Okay. Thank you. I would just like to -- I'd like to the short -- close the formal -- sorry, I'd like to close the meeting. I declare the AGM closed. I'd also like to thank the Board of WAM Capital. I'd like to thank everyone from Wilson Asset Management who's managing money on our behalf. Thank you very much. And I'd like to thank shareholders. I know it's been a difficult period of time. The -- and we like we love what we're doing. We understand what we're doing and we hope that we can continue to deliver solid returns and dividends to you over time. Thank you very much.