Cadence Capital (CDM) H2 2024 earnings summary

Executive summary

• Achieved a profit after tax of $21.6 million for the year ended 30 June 2024, with the fund up 10.4% for FY24.

• Top contributors included Meta Platforms, Alumina, Netflix, Karora/Westgold Resources, Whitehaven Coal, Capstone Copper, and Austin Engineering.

• Largest detractors were Sierra Rutile, Zillow, and Syrah Resources.

• Turnaround situations, especially in Meta Platforms and Netflix, were key drivers of returns.

Financial highlights

• Profit before tax reached $27.7 million; profit after tax was $21.6 million for FY24.

• Fund delivered a 10.4% return for the financial year.

• Announced a 3.0c fully franked final dividend, bringing the full year dividend to 6.0c per share fully franked.

• Dividend yield stands at 8.6% fully franked (12.2% gross including franking credits) based on a $0.70 share price.

• Shares are trading at a 14% discount to pre-tax NTA.

Outlook and guidance

• Ongoing uptrend in interest rates is seen as a key factor for future asset prices.

• Increased cash levels in July 2024 to prepare for market volatility and economic slowdown concerns in the U.S.

• Expectation of continued high volatility in coming months, with focus on disciplined investment process.