Cadence Capital Limited returned a gross performance of -2.0% in November, compared to the All Ordinaries Accumulation Index which was up 3.7% for the month. The largest detractors from performance during November were Resolute Mining, Westgold Resources, Robex Resources, West African Resources and Chalice Mining. The top contributors to performance were Netflix, QBE Insurance, Alcoa and Block.
Gold fell in the month of November 2024 and as a result gold stocks fell more than the gold price fall. The fall in the gold price is after a substantial rise in price in calendar year 2024 as outlined in our recent Annual General meeting. The gold price has recovered some of its recent falls this month. More specifically, the Resolute share price more than doubled in the first 10 months of 2024 due to gold price rises and good operational performance. During November the share price fell back to where it was at the start of the year after the company announced that its CEO had been detained in Mali by Government Officials following disputes over business practices and tax. The company believes the claims are unsubstantiated but has agreed to pay the Mali government USD 160m to settle the claims. The Fund has reduced some exposure to gold stocks following our process.
Netflix continues to perform well. Over the past year Netflix has benefited from a focus on reducing password sharing, as well as the introduction of ad supported plans that are cheaper for subscribers but are expected to be just as profitable as ad free plans for Netflix. On the recent Q3 results call Netflix upgraded their 2024 guidance for revenue growth and operating margin and said that membership for ad supported plans was up 35% quarter on quarter. Netflix expects operating margin to increase again in 2025 and they see plenty of room to continue to increase margins over the long term.
Recent AGM Investor Briefing
To watch CDM’s recent AGM Investor Briefing please click here. In this AGM Investor Briefing, Karl Siegling starts by giving an update on CDM’s past and current year performance, discusses the portfolio’s current composition and highlights some important market trends. Karl Siegling and Chris Garrard then discuss in detail some of the portfolio’s positions, namely Evolution Mining, Westgold Resources, Meta Platforms, Netflix and Block. Karl then discusses some further investment themes and holdings before closing with the outlook for 2025.
Fully Franked Year-End Dividend
On 31 October 2024 the Company paid its 3.0 cents per share fully franked year-end dividend, bringing the full year dividend to 6.0 cents per share fully franked. This full year dividend equated to an 8.6% fully franked yield or a 12.2% gross yield (grossed up for franking credits) based on the share price of $0.70 per share on the day of the announcement. Importantly this equated to a 7.4% dividend yield based on the pre-tax NTA of $0.81 on the day of the announcement, due to the Company shares trading at a discount to NTA. After paying this dividend the Company still has around 12.5 cents per share of profits reserves to pay future dividends.
The dividend re-investment plan (DRP) was in operation for this final dividend. The Company will buy-back the shares it has issued under the DRP. This buy-back will operate when the CDM share price is trading at a discount to the Pre-Tax NTA. At the time of writing this newsletter, CDM is trading at a pre-tax NTA discount of around 14%.
Fund NTA
Fund Performance
Fully Franked Dividends Declared Since Listing
After paying the final dividend the company will have around 12.5 cents per share of profits reserves to pay future dividends.
Historic Portfolio Exposure
Portfolio Sector Analysis
Portfolio Market Capitalisation Analysis
News
To view all previous Cadence webcasts and interviews please visit the Media Section of the website.
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