Sandon Capital Investments (SNC) Investor Presentation summary

Financial performance and returns

• Achieved a gross portfolio return of 19.9% and total shareholder return of 20.2% for the 12 months to 30 June 2024, with net profit after tax of $14.36 million.

• Largest positive contributions came from Spectra Systems and A2B, with most holdings delivering positive returns.

• SNC shares offer a 7.2% dividend yield (9.6% grossed up for franking) and trade at a 15.4% discount to NTA.

• Profit reserves and franking balance support the current dividend for approximately 4.3 years.

• Since inception, over 60cps in dividends and 23cps in imputation credits have been distributed.

Portfolio composition and investment strategy

• Selected holdings represent about 58% of the portfolio, focusing on industry rationalisation, decarbonisation, unique technologies, and strategic assets.

• Major holdings include Spectra Systems (13.6%), Fleetwood (9.7%), COG Financial Services (8.8%), and Coventry Group (6.9%).

• Investments are concentrated in resilient sectors, with most portfolio companies maintaining strong balance sheets.

• Turnaround strategies and management changes at portfolio companies have improved financial and operational performance.

• Win/loss ratio of ~65% over 13 months to 31 July 2024, with top five contributors adding 24.4% and bottom five detracting 6.3%.

Key investment cases and recent activity

• Announced a recommended takeover offer for Carbon Conscious Investments Ltd (CCIL), valuing it at ~$11.6 million, with future revenue tied to carbon credit units.

• Global Data Centres Group adopted a value realisation strategy, selling major assets and retaining a stake in AirTrunk, which is undergoing a sale process.

• IDT Australia reset its strategy under new leadership, focusing on advanced therapies and medicinal cannabis, with recent contract wins and a facility valued at over 20cps per share.

• Magellan Financial Group identified as undervalued; Sandon Capital advocated for capital returns, cost review, and board renewal, resulting in improved performance and a 30% return from average purchase price.

• Midway Ltd executed asset sales, paid significant dividends, and is now focused on forestry and carbon management.