Cadence Capital Limited returned a gross positive performance of 2.3% in July, compared to the All Ordinaries Accumulation Index which was up 6.3% for the month. The top contributors to performance during the month were Whitehaven Coal, New Hope, Terracom and Tietto Minerals. The largest detractors from performance were BHP and Alibaba Group.
Markets recovered in July after the sell-off in June, with some of the worst performing sectors in the first half of calendar 2022 leading the rally. For example, the ASX Technology sector was up 19.5% during the month. The fund increased its net exposure during the month as it scaled back into existing positions which resumed trend as well as adding several new positions which meet our criteria. The portfolio’s short exposure detracted value in July and was reduced as we scaled out of some of these positions. As of 31 July 2022, the Company was 48% invested (52% cash and cash equivalents).
Fully Franked Year-End Dividend
On the 15 July the Company announced a 4.0 cents per share fully franked year-end dividend bringing the full year dividend to 8.0 cents per share fully franked. This is a 60% increase on the previous year’s dividends of 5.0 cents per share reflecting the strong performance of the company over the past few years and the build-up of profit reserves.
This full year dividend of 8.0 cents per share fully franked equates to an 9.0% fully franked yield or a 12.9% gross yield (grossed up for franking credits) based on the share price of $0.885 per share on the date of the announcement. Importantly this equates to an 8.1% dividend yield based on the current pre-tax NTA of $0.991, as the Company shares are currently trading at a discount to NTA despite recent strong performance and a 16-year track record of significant outperformance against the All Ordinaries Accumulation Index. After paying this dividend the Company still has around 25 cents per share of profits reserves to pay future dividends.
The Ex-Date for the dividend is the 17 October 2022. The payment date for the dividend is the 28 October 2022. The dividend re-investment plan (DRP) will not be in operation for this final dividend as the Company’s shares are trading at a discount to the underlying NTA.
Earlier this month the Company released its June 2022 Year end Audiocast. In this year-end audiocast, Karl Siegling firstly provides an update on the Company’s year-end performance, the 4.0c per share fully franked year-end dividend, the portfolio’s current composition and the increasing interest rate trend. Karl Siegling, Charlie Gray and Jackson Aldridge then discuss their long positions in Whitehaven Coal, Newhope Coal and Resmed and their short positions in Graincorp and Textainer Group. Karl Siegling then finishes with an update on the outlook for 2023.
* Gross Performance: before Management and Performance Fees
Fully Franked Dividends Declared Since Listing
* Off market equal access buy back
Historic Portfolio Exposure
Portfolio Sector Analysis
Top 20 Portfolio Positions
Portfolio Market Capitalisation Analysis
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