Ryder Capital’s Dividend Boost Signals Confidence Amid Market Risks
Ryder Capital has announced a 10% increase in its FY25 final dividend, underpinned by a 20% rise in total comprehensive income and a 27.5% jump in pre-tax net tangible assets. The company’s robust portfolio performance and strategic share buybacks signal confidence in sustained shareholder returns.
- 10% increase in FY25 final dividend to 5.5 cents per share, fully franked
- 20% growth in total comprehensive income to $21.8 million
- 27.5% rise in pre-tax net tangible assets to $1.6272 per share
- Share buyback of approximately 1.64 million shares at $1.25 average price
- Portfolio outperformance driven by SRG Global, Fleetwood, and BCI Minerals
Strong Financial Results Drive Dividend Increase
Ryder Capital Limited has announced a 10% lift in its final dividend for the fiscal year 2025, raising it to 5.5 cents per share fully franked. This move reflects the company’s solid financial performance, with total comprehensive income after tax climbing 20% to $21.8 million. The pre-tax net tangible assets (NTA), a key measure of the company’s underlying value, increased by 27.5% to $1.6272 per share, signaling robust growth and capital appreciation.
Share Buybacks and Strong Reserves Support Dividend Policy
During the year, Ryder Capital repurchased approximately 1.64 million shares at an average price of $1.25, investing $2.04 million back into the company. This buyback program, alongside a record distributable profits reserve of $38.7 million (equivalent to $0.48 per share), underpins the company’s confidence in maintaining or increasing fully franked dividends over time. The franking account balance also reached record levels, enhancing the tax efficiency of dividends for shareholders.
Portfolio Performance Outpaces Market Benchmarks
The company’s investment portfolio delivered an impressive gross return of 29.45% for FY25, outperforming both its internal hurdle rate and comparable ASX indices, including the Small Ordinaries Accumulation Index. Key contributors to this strong performance included holdings in SRG Global Ltd, Fleetwood Ltd, and BCI Minerals Ltd. Ryder Capital’s strategy of medium to long-term, high conviction value investing continues to pay dividends, literally and figuratively.
Outlook Amid Global Uncertainties
Despite a positive start to FY26 and a portfolio trading below intrinsic value, the company acknowledges the uncertain global economic environment. Factors such as potential inflationary pressures in the US and evolving monetary policies could impact market valuations. However, Ryder Capital’s cautious yet confident approach, combined with strong reserves and a disciplined investment strategy, positions it well to navigate these challenges.
Management and Governance
Managed by Ryder Investment Management Pty Limited, the company emphasizes alignment with shareholders through significant insider ownership and a focus on minimizing investment mistakes. The board’s decision to increase dividends reflects both the company’s strong fundamentals and its commitment to delivering shareholder value.
Bottom Line?
Ryder Capital’s dividend increase and strong asset growth set the stage for continued shareholder value amid a cautious market backdrop.
Questions in the middle?
- How will Ryder Capital’s portfolio adapt if inflationary pressures intensify globally?
- What are the company’s plans for further share buybacks or capital management in FY26?
- Can Ryder Capital sustain its dividend growth given potential market volatility ahead?
