Sandon Capital Boosts Profits and Initiates Quarterly Dividends
Sandon Capital Investments Limited reported a robust half-year performance with double-digit growth in revenue and profit, alongside a strategic shift to quarterly dividend payments starting March 2025.
- Revenue increased 11% to $22.97 million for H1 FY2025
- Net profit after tax rose 13% to $16.78 million
- Interim fully franked dividend set at 1.4 cents per share
- Transition to quarterly dividend payments commencing March 2025
- Net tangible assets per share improved to 91.82 cents before tax
Strong Financial Performance
Sandon Capital Investments Limited (ASX: SNC) has delivered a solid half-year result for the six months ending 31 December 2024, reporting an 11% increase in revenue to nearly $23 million. The company’s net profit after tax rose 13% to $16.78 million, reflecting both realised and unrealised gains in its investment portfolio.
The company’s investment strategy, focused on activist value management, appears to be paying dividends as Sandon Capital seeks undervalued assets with strong tangible backing. Net tangible assets (NTA) per share before tax improved to 91.82 cents, up from 85.09 cents a year earlier, signaling enhanced shareholder value.
Dividend Policy Shift
In a notable development, Sandon Capital announced it will commence quarterly dividend payments, increasing the annualised dividend slightly from 5.5 cents to 5.6 cents per share, fully franked at a 25% tax rate. The inaugural quarterly dividend of 1.4 cents per share is scheduled for payment on 7 March 2025, with a Dividend Reinvestment Plan (DRP) available but without any discount.
This move to quarterly dividends aligns with a broader trend among listed investment companies aiming to provide more regular income streams to shareholders, enhancing the attractiveness of the stock for income-focused investors.
Portfolio and Investment Highlights
The company’s portfolio showed net realised gains of over $2 million, a significant turnaround from a loss in the prior corresponding period. Unrealised gains on financial assets also increased to $13.4 million, underscoring the manager’s ability to identify and unlock value.
Sandon Capital’s activist approach includes investments in both listed and unlisted securities, with a focus on companies possessing strong tangible assets. The recent compulsory acquisition of Carbon Conscious Investments Limited (CCIL) further consolidates its holdings, with Sandon Capital owning 90% and its managed activist fund holding the remaining 10%.
Financial Position and Outlook
The company’s balance sheet remains robust, with total assets of approximately $166 million and net assets of $129 million. Operating expenses and finance costs remained well controlled, supporting the improved profitability.
Looking ahead, Sandon Capital’s commitment to quarterly dividends and its activist investment strategy suggest a focus on steady income generation combined with capital appreciation. However, as with all investment companies, future performance will depend on market conditions and the success of its activist initiatives.
Bottom Line?
Sandon Capital’s strong half-year results and shift to quarterly dividends mark a new phase of shareholder engagement and income reliability.
Questions in the middle?
- How will Sandon Capital’s activist strategies evolve amid changing market dynamics?
- What impact will the quarterly dividend policy have on investor demand and share price stability?
- How might the valuation and performance of key Level 3 investments influence future earnings?
