Ryder Capital Limited has reported an impressive 27.5% pre-tax net tangible asset return for FY25, significantly outperforming key benchmarks and raising its fully franked final dividend to 5.5 cents per share.
- 27.5% pre-tax NTA return for FY25, well above S&P benchmarks
- Final dividend increased by 10% to 5.5 cents per share, fully franked
- Strong portfolio gains led by SRG Holdings, BCI Minerals, and Fleetwood
- Dividend Reinvestment Plan suspended due to low uptake and costs
- Positive outlook with portfolio trading below intrinsic value
Robust Performance Outpaces Market Benchmarks
Ryder Capital Limited has announced a standout pre-tax net tangible asset (NTA) return of 27.5% for the financial year ending 30 June 2025. This performance notably surpasses the S&P All Ordinaries Accumulation Index return of 13.23% and the S&P Small Ordinaries Accumulation Index return of 12.26%, underscoring Ryder’s effective investment strategy in the small-cap Australian equities space.
The portfolio’s strong gains were driven by key holdings such as SRG Holdings, which surged 113%, BCI Minerals up 55%, and Fleetwood with a 75% increase. These results reflect the company’s high-conviction, value-driven approach, focusing on medium to long-term capital growth and active portfolio management.
Dividend Increase Reflects Confidence and Financial Strength
In recognition of this robust performance and a healthy balance sheet, Ryder’s Board declared a fully franked final dividend of 5.5 cents per share, a 10% increase from the previous year’s 5.0 cents. This raises the total annual dividend to 10.0 cents per share, supported by over five years of fully franked dividend coverage and substantial retained profits reserves.
The dividend will be paid on 5 September 2025, with an ex-dividend date of 20 August 2025. However, the company has decided to suspend its Dividend Reinvestment Plan, citing low participation rates and administrative costs, signaling a shift in shareholder engagement strategy.
Portfolio Adjustments and Strategic Outlook
Throughout the year, Ryder actively managed its portfolio, realising profits and reallocating capital into both core and new positions, including an investment in the Tetratherix IPO, a medical technology company. While some holdings like Janison Education detracted from performance with a 47% decline, the company expects these to contribute positively in the coming year.
Despite recent market volatility affecting certain stocks such as Aurelia Metals and Fleetwood, Ryder maintains a positive outlook. The Board believes the portfolio remains undervalued, with several core holdings trading below their intrinsic value, laying the groundwork for continued strong returns.
Looking Ahead
Ryder’s 2025 Annual Report, due mid-August, will provide further insights into the company’s performance, portfolio composition, and strategic direction. Investors will be watching closely to see if the company can sustain its impressive run and how it navigates the evolving small-cap landscape.
Bottom Line?
Ryder’s strong FY25 results and dividend hike set the stage for a pivotal year ahead as it seeks to capitalize on undervalued opportunities.
Questions in the middle?
- How will the suspension of the Dividend Reinvestment Plan impact shareholder returns and engagement?
- Can Ryder sustain its outperformance amid potential market headwinds and small-cap volatility?
- What specific catalysts might unlock value in the portfolio’s currently undervalued core holdings?