Cadence Capital Limited returned a gross performance of -0.3% in July, compared to the All Ordinaries Accumulation Index which was up +2.6% for the month. The top contributors to performance during July were Clarity Pharmaceuticals, Amplitude Energy, Block, Whitehaven Coal and Pantoro. The largest detractors from performance were Boss Energy, New Gold and Netflix.
Amplitude Energy shares performed well during July after the company reported record quarterly production of 77.1 TJ/day in Q4 which drove FY25 production to the upper end of the company’s guidance range. The company’s FY25 guidance had already been increased twice so this was an excellent result. Revenue for the full year of $268m was 22% above the prior year due to both increased production and higher gas prices. The East Coast Supply Project continues to provide Amplitude (and their 50% project partner O.G. Energy) with significant opportunity for growth, targeting up to 90 TJ/day of additional gas from 2028. AEL is on an FY26 PE of 12x with a PEG ratio of 0.6.
Boss Energy shares fell significantly in July after the company announced difficulties in reaching nameplate capacity at its flagship Honeymoon Uranium Mine. The challenges stem primarily from lower than expected continuity of uranium mineralisation compared to the feasibility study, as well as greater than anticipated difficulty in leaching uranium from the ore body. The company has commenced an independent review to determine the extent of the impact. We have sold our position in line with the Cadence process.
Discount to NTA
For the first 7 months of this calendar year, after adjusting for dividends, CDM’s Pre-tax NTA has increased 7% whilst its share price has increased by 1%. CDM is trading at a pre-tax NTA discount of around 16%. CDM is currently trading at its third highest discount in 19 years, only trading at larger discounts during the GFC (41% discount) and COVID-19 (43% discount) market moves. The current portfolio can be purchased for 84 cents in the dollar.
The Company has been buying back its own stock at a discount to NTA in the CDM on-market buy-back program. Directors have also been adding to their CDM shareholdings at a discount to NTA by participating in the DRP and by buying shares on-market.
Fund NTA
Fund Performance
Fully Franked Dividends Declared Since Listing
After paying the interim dividend the company has around 9.5 cents per share of profits reserves to pay future dividends.
Historic Portfolio Exposure
Portfolio Sector Analysis
Portfolio Market Capitalisation Analysis
News
Over the coming weeks we will be releasing the year-end webcast. To watch CDM’s March 2025 Quarterly Webcast please click here. In this quarterly webcast, Karl Siegling first gives an update on the Company’s performance, its 3.0c interim dividend paid, the current composition of the portfolio and its top 20 holdings and then discusses the Company’s discount to NTA. Karl then discusses in some detail six of the fund’s new investments (namely New Gold, Myer, Boss Energy, Aurelia Metals, Robex Resources and Champion Iron) before closing with an update on the outlook for the rest of the year.
To view all previous Cadence webcasts and interviews please visit the Media Section of the website.
We also encourage you to visit our 52 books you should read before buying your next stock page on our website. We have compiled a list of books/ documentaries that have influenced our investment style or helped provide insight into the Cadence investment process.
