Ryder’s Cautious Cash Strategy Signals Market Uncertainty Ahead
Ryder Capital Limited celebrated its 10th year on the ASX with robust FY25 results, including a 27.5% pre-tax NTA growth and a new quarterly dividend policy increasing payouts by 20%. The company also renewed its investment management agreement for five years.
- 27.5% pre-tax NTA growth in FY25
- 24% share price return including dividends
- New quarterly dividend policy raising annual payout by 20%
- Five-year renewal of investment management agreement
- Portfolio benefits from broad-based small cap gains and strong cash position
A Decade of Growth and Resilience
Marking a significant milestone, Ryder Capital Limited has now completed ten years since its ASX listing in September 2015. Over this period, the company has delivered a commendable annualised outperformance of approximately 4% above key market indices, a testament to its disciplined investment approach and evolving risk management framework.
FY25 was a particularly strong year, with Ryder reporting a 27.5% increase in pre-tax net tangible assets (NTA) and a 24% total shareholder return inclusive of dividends. The NTA per share has more than doubled since listing, now exceeding $2, underscoring the company’s sustained value creation for investors.
Strategic Portfolio Management and Performance
The company’s portfolio strategy, focused on undervalued small cap companies identified through rigorous bottom-up research, delivered broad-based gains without overreliance on any single holding. Key contributors included BCI Minerals, Lumos Diagnostics, and Macmahon Holdings, each demonstrating strong operational progress and market positioning.
Ryder also prudently realised gains of $18.8 million from select long-term investments, bolstering its capital profits reserve to $31.7 million. This active portfolio management, combined with a sizeable cash holding of approximately $22 million (13% of the portfolio), positions Ryder well to navigate market uncertainties and capitalize on new opportunities.
Dividend Policy Enhancement and Shareholder Returns
In a move likely to appeal to income-focused investors, Ryder announced an enhanced dividend policy transitioning to quarterly fully franked dividends. Starting December 2025, shareholders can expect a fixed payment of 3 cents per share each quarter, representing a 20% increase in annual dividends to 12 cents per share. This change aims to provide greater income certainty while reflecting the company’s strong cash flow and distributable profits.
Since initiating dividends in 2018, Ryder has consistently paid steady or increasing dividends, reinforcing its commitment to shareholder returns alongside capital growth.
Governance and Management Continuity
Reflecting confidence in its investment management team, Ryder’s Board has renewed its agreement with Ryder Investment Management Pty Limited for another five years. This continuity supports the company’s strategic direction and investment philosophy, which have underpinned its decade-long track record.
Looking Ahead with Caution and Opportunity
Despite recent strong performance and a positive start to FY26, Ryder is adopting a cautious stance. The company is actively trimming overweight positions and recycling capital into undervalued opportunities, while maintaining a bias towards higher cash levels to manage risk and preserve flexibility. This balanced approach aims to sustain long-term growth amid evolving market conditions.
Overall, Ryder Capital’s FY25 results and strategic updates signal a company confident in its foundations yet prudent in its outlook, offering investors a blend of growth potential and reliable income.
Bottom Line?
Ryder’s decade of outperformance now pivots to delivering steadier income streams amid cautious capital deployment.
Questions in the middle?
- How will the new quarterly dividend policy impact Ryder’s share price discount to NTA?
- What specific undervalued opportunities is Ryder targeting with its increased cash holdings?
- How might market volatility in small caps affect Ryder’s cautious portfolio repositioning?
