Cadence Capital (CDM) H1 2025 earnings summary

Executive summary

• Reported a half-year loss after tax of $7.8m for the period ending 31 December 2024, with the portfolio down 3.6% over six months.

• Top contributors included Netflix, Evolution Mining, QBE Insurance, Iperionx, Queensland Pacific Metals, and Meta Platforms; major detractors were Whitehaven Coal, Resolute Mining, Capstone Copper, Stanmore Resources, and BHP.

• Downturn in commodity prices negatively impacted Metals and Mining holdings, with the S&P/ASX 300 Metals & Mining Total Return Index down 3.1% over the same period.

• Turnaround investments in Netflix and Meta Platforms delivered positive returns as both stocks reached new highs.

Financial highlights

• Interim dividend of 3.0 cents per share, partially franked at 50%, declared with an annualised yield of 8.7% (10.6% grossed up for franking credits).

• Shares trading at an 11% discount to pre-tax NTA; post-dividend, 9.5 cents per share remain in profit reserves.

• Dividend reinvestment plan (DRP) in operation; ongoing on-market buy-back to repurchase DRP shares.

Outlook and guidance

• RBA reduced interest rates by 25 basis points, placing Australian rates below US rates, a rare occurrence.

• Market volatility expected to remain high due to policy changes from the new US government and ongoing inflation concerns.

• Fund maintains higher than normal cash levels amid valuation expansion outpacing earnings growth and underperformance in resources and energy stocks.