Cadence Capital Limited returned a positive gross performance of 2.7% in the month of February, compared to the All Ordinaries Accumulation Index which was up 1.4% over the same period. The Company has had a strong year so far with the fund up 35.7% over the first eight months of FY21, outperforming the index by 18.0%. The largest contributors to performance during February were Sonos, Resimac Group, Uniti Group, Pinterest and Costa Group. The largest detractors from performance were Fastly and Redbubble.
On the 17 February the Company announced its record half year results and declared a 2.0 cents fully franked interim dividend. This 2.0c interim dividend equates to a 4.5% annual fully franked yield, or a 6.5% gross yield (grossed up for franking credits) based on the CDM share price on the day of the announcement. The Ex-Date for the interim dividend is the 29th April 2021 and the payment date is the 13th May 2021. The dividend re-investment plan (DRP) will not be in operation for the interim dividend as the Company’s shares are currently trading at a large discount to the underlying NTA per share of the Company.
The company has recently released its December 2020 Webcast. In this webcast, Karl Siegling gives an update on the company’s performance and the portfolio’s composition. Jackson Aldridge and Charlie Gray then discuss the portfolio’s top 20 positions and current investment themes. Karl then gives an update on DeepGreen Metals and finishes with the outlook for 2021.
Deepgreen Metals Update:
On the 5 March the Company updated shareholders on its investment in DeepGreen Metals via an ASX announcement. DeepGreen Metals has recently announced that it intends to list through a merger with Sustainable Opportunities Acquisition Corporation (NYSE Code: SOAC). The combined company will be renamed The Metals Company and is expected to begin trading under the NYSE ticker code TMC.
Cadence Capital Limited (ASX Code: CDM) invested in DeepGreen Metals several years ago. DeepGreen Metals was to list on the Canadian stock exchange at that time. This listing was delayed for several reasons, but has now been replaced with a much larger intended listing on New York Stock Exchange.
The DeepGreen Metals investment is approximately 2.8% of the portfolio, and is valued at the weighted average cost of the most recent purchases made in FY2020. The proposed listing is at a valuation substantially higher than our current valuation. The transaction reflects a pro forma equity value for The Metals Company (TMC) of approximately US$2.9 billion and enterprise value of US$2.4 billion. The recent raising of US$330 million was completed at a price of US$10 per share. Our investment is currently valued at US$1.38 per share. Upon listing this would equate to a substantial uplift in Pre and Post Tax NTA for CDM shares. This transaction is subject to shareholder and court approvals. Once the TMC shares are listed and trading freely we will value this investment at market price.
Importantly, the Company’s weekly and monthly NTA announcements will not include the full value accretion of the DeepGreen transaction until the proposed TMC listing.
A summary of the proposed merger transaction is available on both the DeepGreen Metals company website or on the SEC website . We will keep shareholders informed of the progress of this listing through ASX announcements and monthly newsletter announcements.
Fund NTA
* NTA’s do not include the accretion of the DeepGreen Metals transaction announced on 5th March 2021
Fund Performance
* Gross Performance: before Management and Performance Fees
Fully Franked Dividends Declared Since Listing
* Off market equal access buy back
Historic Portfolio Exposure
Portfolio Sector Analysis
Top 20 Portfolio Positions
Portfolio Market Capitalisation Analysis
Recent News
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