Cadence Capital (CDM) H1 2025 earnings summary

Executive summary

• Reported a half-year loss after tax of $7.8m for the period ending 31 December 2024, with the portfolio down 3.6% over six months.

• Top contributors included Netflix and Meta Platforms, while major detractors were from Metals and Mining holdings.

• Turnaround investments in Netflix and Meta Platforms delivered positive returns as both stocks reached new highs.

• Interim dividend of 3.0 cents per share, partially franked at 50%, declared.

• Downturn in commodity prices negatively impacted Metals and Mining holdings, with the S&P/ASX 300 Metals & Mining Total Return Index down 3.1% over the same period.

Financial highlights

• Interim dividend equates to an 8.7% annualised yield, or 10.6% grossed up for franking credits, based on a share price of $0.69.

• Shares are trading at an 11% discount to pre-tax NTA of $0.778.

• 9.5 cents per share in profit reserves remain after dividend payment.

• Dividend reinvestment plan (DRP) in operation; ongoing on-market buy-back to repurchase DRP shares.

Outlook and guidance

• Market volatility expected to remain high due to policy changes from the new US government and ongoing inflation concerns.

• Fund maintains higher than normal cash levels amid valuation expansion outpacing earnings growth and underperformance in resources and energy stocks.

• Ongoing focus on the Cadence investment process amid market cycles.