Ryder Capital Boosts Dividend 12.5% Amid $13M Income Surge
Ryder Capital Limited reports a robust $13.02 million total comprehensive income for 1H FY25, driving a 12.5% increase in its fully franked interim dividend to 4.5 cents per share.
- Total comprehensive income after-tax rises to $13.02 million
- Interim dividend increased by 12.5% to 4.5 cents fully franked
- Gross portfolio performance of 16.8% outpaces ASX Small Ordinaries Index
- Pre-tax net tangible assets per share grow to $1.5446
- Distributable profits reserve climbs 41.6% to $36 million
Strong Financial Performance Drives Dividend Growth
Ryder Capital Limited has announced a significant uplift in its financial results for the six months ending 31 December 2024, with total comprehensive income after tax soaring to $13.02 million. This represents a substantial increase from $3.16 million in the prior corresponding period, reflecting both realised and unrealised gains within its investment portfolio.
In response to this strong performance, the Board declared a fully franked interim dividend of 4.5 cents per share, marking a 12.5% increase over the previous interim dividend of 4.0 cents. The dividend ex-date is set for 24 February 2025, with payments scheduled for 19 March 2025, underscoring Ryder’s commitment to delivering steady and growing returns to shareholders.
Portfolio Outperformance and Asset Growth
Ryder’s portfolio delivered a gross return of 16.8% over the half-year period, comfortably exceeding the ASX Small Ordinaries Accumulation Index’s 5.46% return and surpassing the company’s own hurdle rate. This outperformance highlights the effectiveness of Ryder’s high conviction, value-driven investment strategy focused on small-cap Australian equities.
Pre-tax net tangible assets (NTA) per share increased to $1.5446 from $1.3875 at the end of June 2024, even after accounting for a $0.05 fully franked dividend paid during the period. This growth in NTA reflects strong portfolio gains and disciplined capital management, including active realisation of profits and share buybacks.
Robust Reserves and Dividend Sustainability
The company’s distributable profits reserve, which includes realised profits and capital gains, rose by 41.6% to $36 million. This reserve forms the financial foundation for Ryder’s dividend policy, which aims to pay steady or increasing fully franked dividends over time. The sizeable reserve and franking credit balance provide confidence in the sustainability of future dividend payments despite market uncertainties.
Ryder’s management team, led by Chief Investment Officer Peter Constable and Portfolio Manager David Bottomley, continues to focus on minimising investment mistakes and maintaining a disciplined approach that ignores market noise. Their strategy emphasizes medium to long-term value creation, aligning closely with shareholder interests.
Navigating an Uncertain Market Outlook
Looking ahead, Ryder acknowledges the increasing uncertainty in equity markets, driven by fluctuating interest rate expectations and geopolitical risks, including potential inflationary pressures from US trade policies. In response, the company is actively realising profits and repositioning its portfolio towards more defensive holdings characterized by strong cash flows, conservative balance sheets, and regular dividend payments.
This cautious yet proactive stance aims to preserve capital and maintain income streams in a volatile environment, positioning Ryder to navigate the challenges ahead while continuing to deliver value to shareholders.
Bottom Line?
Ryder Capital’s strong interim results and dividend hike set a confident tone, but market volatility demands vigilant portfolio management.
Questions in the middle?
- How will Ryder’s portfolio adjustments impact returns if market volatility intensifies?
- What sectors or stocks are Ryder prioritizing in its defensive repositioning?
- How sustainable is the increased dividend if market conditions deteriorate?
