Stellus Capital Investment (SCM) Q4 2024 earnings summary

Executive summary

• Invested $2.6 billion in over 200 companies since IPO, with $1.6 billion in repayments and $288 million in dividends paid, equating to $16.69 per IPO share.

• Fourth quarter 2024 GAAP net investment income was $0.35 per share; core net investment income was $0.37 per share, excluding excise taxes.

• Funded $109 million in new investments and received $65 million in repayments during Q4, with portfolio fair value rising to $953.5 million.

• Net asset value per share increased to $13.46 at December 31, 2024, from $13.26 at December 31, 2023.

• Full-year 2024 net increase in net assets from operations was $45.8 million ($1.79/share), up from $17.5 million ($0.80/share) in 2023.

Financial highlights

• Investment portfolio at fair value reached $953.5 million across 105 companies, up from $908.7 million and 99 companies in the prior quarter.

• Q4 2024 net investment income was $9.6 million ($0.35/share), down from $11.9 million ($0.49/share) in Q4 2023.

• Net realized equity gains of $5.5 million from one full and one partial equity realization, with $6.5 million in proceeds.

• Weighted average yield of debt and other income-producing investments was 10.3% at year-end 2024.

• 98% of loans are secured; 95% are floating rate; average loan per company is $9.5 million.

Outlook and guidance

• Portfolio surpassed $1 billion for the first time in early 2025, expected to remain at this level through the quarter.

• Dividend for Q1 2025 set at $0.40 per share, payable monthly, expected to continue through the year, subject to board approval.

• No return of capital is expected in 2024 distributions; a portion is expected to be characterized as long-term capital gains.

• First quarter EPS likely will not fully cover the dividend, but substantial spillover earnings will help support payouts.

• Anticipates $4–$5 million in additional equity gains by June 30, 2025, with historical realizations exceeding 2x cost.