Sandon Capital Investments has reported a robust 17.7% portfolio return for the half-year ending December 2024, driving net profits up to $16.78 million and announcing an increased fully franked dividend yield of 6.8%.
- 17.7% gross portfolio return, more than double the market
- $16.78 million net profit after tax for H1 2024
- Quarterly fully franked dividend of 1.4 cents per share announced
- Attractive 6.8% dividend yield with strong profit reserves
- Key contributors include Nuix, Fleetwood, Midway, and Wellard
Strong Half-Year Performance
Sandon Capital Investments Limited (ASX: SNC) has delivered an impressive financial performance for the six months ending 31 December 2024. The company reported a gross portfolio return of 17.7%, more than twice the return of the All Ordinaries Accumulation Index, which stood at 6.9% over the same period. This robust performance translated into a net profit after tax (NPAT) of $16.78 million, marking a healthy increase and underscoring the effectiveness of Sandon's investment strategy.
Dividend Strategy and Shareholder Returns
In a move to enhance shareholder income, Sandon Capital announced the introduction of quarterly fully franked dividends, with a payment of 1.4 cents per share per quarter, up slightly from the previous annualised rate. This adjustment reflects an annualised dividend of 5.6 cents per share, yielding an attractive 6.8% fully franked return based on the current share price of $0.83. Including franking credits, the yield rises to approximately 9.0%, positioning SNC shares as a compelling income option in a low-yield environment.
The company’s strong profit reserves, totaling 39.0 cents per share as of 31 January 2025, alongside a franking balance of 7.6 cents per share, provide ample capacity to sustain dividends well into the future. The board has the flexibility to pay fully franked dividends equivalent to more than four years of the current rate, offering reassurance to income-focused investors.
Investment Highlights and Market Context
The standout contributors to Sandon’s portfolio performance included Nuix Ltd (NXL), Fleetwood Ltd (FWD), Midway Ltd (MWY), and Wellard Ltd (WLD). Nuix and Fleetwood saw market recognition of their turnaround efforts, while Midway benefited from a scheme of arrangement that delivered a significant premium to shareholders. Wellard’s sale of its last ship at nearly three times book value also boosted returns.
Despite occasional market volatility and short-term price fluctuations, Sandon’s investment manager emphasized the resilience of portfolio companies, many of which continue to report strong demand, profitability, and cash flow. The manager highlighted that where market prices diverged from intrinsic values, selective asset sales to more appreciative buyers generated substantial premiums, exemplified by transactions involving Midway, Wellard, and Global Data Centres.
Looking Ahead
With signs of growing corporate and private market confidence, evidenced by increased takeover activity, Sandon Capital is actively exploring new investment opportunities. The company remains committed to its disciplined investment approach and continues to encourage portfolio companies to enhance their operational performance. The board and management express confidence in sustaining strong returns for shareholders in the coming periods.
Bottom Line?
Sandon Capital’s strong half-year results and enhanced dividend policy set the stage for sustained investor confidence amid evolving market dynamics.
Questions in the middle?
- How will Sandon Capital’s portfolio perform amid potential market volatility in 2025?
- What new investment opportunities is Sandon considering in the current takeover environment?
- Will the company maintain or increase its dividend payout given its strong profit reserves?