Sydney-based boutique fund manager Ryder Capital (ASX:RYD) says the immediate outlook for equity markets has become increasingly uncertain.
The firm, which generated a statutory profit after tax of $1.23 million for the six months to 31 December 2024, says the uncertainty comes as interest rate expectations fluctuate from what was a well-accepted easing bias, to now the possibility that the US Federal Reserve moves to pausing as it monitors a resilient and potentially reaccelerating US economy together.
With the added risk that the Trump administration induces inflationary pressures with new policies, including trade tariffs, Ryder notes that with historically high market valuations and an uncertain outlook, “we are actively realising profits while building a more defensive portfolio by raising cash and ensuring the portfolio is composed of a core group of value stocks that generate cash, have conservative balance sheets, strong management and for the most part, pay regular dividends”.
Ryder Capital has increased to the interim dividend payment declaring a $0.045 per share fully franked interim dividend – a 12.5% increase from the $0.040 per share fully franked interim dividend paid in 1H FY24 – with an ex-date of 24 February and a payment date of 19 March 2025.
In the long run, Ryder says future dividend payments will be a function of current and future investment performance; “however, it is important for shareholders to note that recent strong investment performance together with more active realisation of portfolio profits has further strengthened the company’s large distributable profits reserve and franking credit balance which forms the foundation for current and future dividend payments”.
Statutory profit as reported and referred to above ignores unrealised gains or losses within the company’s portfolio. Ryder says total comprehensive income is “therefore a better measure of overall performance as it includes the unrealised movement in Ryder’s investment Portfolio for the period”.
Gross portfolio performance for the six-month period ending 31 December of 16.80% exceeded the Ryder’s performance hurdle rate and other Australian equity market indices such as the ASX Small Ordinaries Accumulation Index (being the most comparable) which returned 5.46%.
Ryder’s pre-tax net tangible assets per share increased to $1.5446 at 31 December, from $1.3875 at 30 June 2024.
Write to info@mining.com.au at Mining.com.au
Images: Ryder Capital & Unsplash
