- Cadence Capital (CDM) has reported a strong start to the 2021 financial year as markets continue to recover from the impact of COVID-19 in 2020
- The Sydney-based investment firm posted a record $48.5 million in profit after tax, driven by a 27.7 per cent increase in its portfolio
- High-achievers included Pinterest, which is up 283 per cent since the start of July, as well as Lynas, Pointsbet (PBH) and Redbubble (RBL)
- However, any further gains were held back by short positions in Wisetech Global (WTC) and Jumbo Interactive (JIN)
- Based on the strong performance, a fully franked interim dividend of 2 cents per share will be distributed to shareholders on May 13
- Cadence Capital is up 1.36 per cent to $0.90 per share
Cadence Capital (CDM) has reported a strong start to the 2021 financial year as markets continue to recover from the impact of COVID-19 in 2020.
The Sydney-based investment firm posted a record $48.5 million in profit after tax, driven by a 27.7 per cent increase in its portfolio which outperformed the All Ordinaries Accumulation Index — comprised of the 500 largest companies listed on the ASX — by 12 per cent.
Such a strong performance was driven primarily by high-achievers like Pinterest, which is up 283 per cent since the start of July, and Lynas (LYC), Pointsbet (PBH) and Redbubble (RBL), which are up 217 per cent, 224 per cent and 204 per cent, respectively.
However, any further portfolio gains were held back by short positions in Wisetech Global (WTC), which increased 72 per cent, and Jumbo Interactive (JIN), which is up 49 per cent.
Cadence Capital estimates that roughly 78 per cent of its portfolio is able to be liquidated within a week, while 87 per cent can be offloaded within a month.
Its holding consists of 55 companies — the largest accounting for around 7 per cent of the fund — 63 per cent of which are companies with market capitalisations in excess of $1 billion.
Based on the strong performance, a fully franked interim dividend of 2 cents per share will be distributed to shareholders on May 13.
Karl Siegling, Chairman of Cadence Capital, noted that the Australian market is now approaching its all-time highs, with corporate profits rebounding strongly out of government-mandated lockdowns.
Better-then-expected earnings, combined with ongoing stimulus measures and near zero per cent interest rates, are driving significant demand for financial assets and encouraging investors to take risks.
“We have come a long way from the panic in March and are seeing new investor euphoria in certain parts of the markets,” Siegling said.
“While overall conditions remains supportive for equities, maintaining high liquidity for the portfolio remains a focus and will allow us to adjust to any changes in market conditions,” he added.
Cadence Capital is up 1.36 per cent to $0.90 per share at 3:15 pm AEDT.