Ryder Capital's Impressive FY24 Performance and Dividend Increase
RYD (RYD) Share Update August 2024 Thursday 15th
Ryder Capital Announces Strong Financial Performance and Increased Dividend
Ryder Capital Limited (ASX:RYD) has announced a remarkable financial performance for FY24, including a significant increase in total comprehensive income and a boost in its final dividend.
Instant Summary:
- Total comprehensive income after tax increased by 363% to $18.1 million.
- Pre-tax NTA rose by 25.15% to $1.3875 per share.
- Final dividend increased by 18% to 5.0 cents per share fully franked.
- Annual dividend now stands at 9.0 cents per share fully franked.
- Major contributors to performance included Austin Engineering, Macmahon Holdings, and Aurelia Metals.
Financial Performance
Ryder Capital Limited reported a total comprehensive income after tax of $18.1 million for FY24, marking a 363% improvement compared to FY23. The company's pre-tax net tangible assets (NTA) increased by 25.15% to $1.3875 per share. These impressive results were driven by strong investment performance and a positive outlook across the portfolio's core holdings.
During the year, Ryder Capital bought back approximately 1.74 million shares at an average price of $1.06 per share, totaling $1.85 million. Despite a decrease in the total distributable profits reserve to $25.5 million, the company remains well-positioned to continue paying steady or increasing fully franked dividends over time.
Dividend Increase
In recognition of its strong financial performance, Ryder Capital's Board declared a final dividend of 5.0 cents per share fully franked on 11 July 2024. This represents an 18% increase from the previous final dividend, bringing the annual dividend to 9.0 cents per share fully franked. The company's solid franking account balance and retained profits reserves support this increase.
Investment Performance
The major contributors to Ryder Capital's performance included Austin Engineering, Macmahon Holdings, Aurelia Metals, Service Stream, and SRG Global. However, the gains were partially offset by detractors such as Janison Education and BCI Minerals. The company's FY24 gross portfolio performance was 27.08%, significantly outperforming both its hurdle rate (RBA Cash Rate + 4.25%) and the ASX Small Ordinaries Index.
Ryder Capital's average cash exposure through the year was approximately 6.72%. The company's portfolio hedging strategies, designed to provide portfolio insurance, had a minor negative impact on performance, dragging it down by around 1%.
Outlook
The outlook for global equity markets has become increasingly uncertain, with data suggesting that the USA could be nearing a recession. Ryder Capital is actively reviewing the potential impact of a risk-off environment on corporate profits and the recovery in small caps. Despite these uncertainties, the company is well-placed to weather any potential storms and capitalize on emerging opportunities, thanks to its permanent capital, increasing cash holdings, and a portfolio of undervalued companies with strong balance sheets and capable management teams.
The strong financial performance and increased dividend are likely to positively impact Ryder Capital's stock price. Investors may view the company's ability to deliver substantial income growth and a higher dividend as a sign of its robust financial health and effective management. This could lead to increased investor confidence and potentially higher demand for the stock.
Investor Reaction:
Analysts are likely to react positively to Ryder Capital's announcement, noting the significant improvement in financial performance and the attractive dividend yield. The company's strong investment performance and positive outlook may further bolster investor sentiment.
Conclusion:
Investors should consider Ryder Capital's impressive FY24 performance and increased dividend as a positive indicator of the company's financial health and future prospects. Monitoring the company's strategic moves and market conditions will be crucial for making informed investment decisions.