Full Year 2024 Cadence Capital Ltd Earnings Call (Pre-recorded) Transcript
Key Points
- Cadence Capital Ltd (ASX:CDM) reported a full-year profit of $21.6 million, with the fund up 10.4%, indicating strong financial performance.
- The company declared a final dividend of $0.03, bringing the annual dividend to $0.06 per share, equating to an annualized yield of 8.6% and a grossed-up yield of 12.2%.
- Successful investments in Meta Platforms, Netflix, and the Karora/Westgold merger contributed significantly to the fund's positive returns.
- The portfolio is highly liquid and diversified, with 87% of the portfolio capable of being liquidated within a week.
- Meta Platforms and Netflix showed strong EPS growth expectations for 2024, with Meta's shares up over 75% and Netflix's shares up more than 50% over the last financial year.
- Investments in Sierra Rutile, Zillow, and Syrah Resources were detractors from the fund's performance.
- The performance of resource companies was mixed, with poor results from lithium investments and a decline in coking coal prices affecting Whitehaven Coal's share price.
- Earnings growth for companies has been declining over the past two years, with PEs for stocks increasing, presenting a challenging investment environment.
- The slowdown in China's economy has negatively impacted industrial commodities, affecting Australia's largest exports like coal and iron ore.
- Interest rates are expected to remain volatile, with potential implications for investment strategies and economic stability.
Ladies and gentlemen, welcome to Cadence Capital Limited's year-end webcast for June 2024. By now, you would have seen that our full-year results have been released and the fund is up 10.4%, producing a profit of $21.6 million. And we've had a good year in terms of the volatility of our funnel relative to development, which has produced good risk-adjusted returns.
Stocks that have done well for us this full financial year were Meta Platforms, Alumina, Netflix, the Karora/Westgold merger, Whitehaven Coal, Capstone Copper, and Austin Engineering. Detractors for the period were Sierra Rutile, which has now been taken over, Zillow, and Syrah Resources. Investing in turnaround situations such as Meta and Netflix has produced good returns for the fund over the past year.
Performance of resource companies has been mixed. Investments in copper, aluminum, and gold companies such as Capstone Copper, Alumina, and Westgold Resources performed well. Whilst investments in, for example, lithium mine has performed
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