14 Jan

Net Tangible Assets as at 31 December 2021

S and on C apital Inv estme nts L imi te d AC N 10 7 77 2 4 67 Lev e l 5 , 139 Macq ua rie S tr ee t, S ydney T elephon e: ( 02) 80 14 1188 Ema il: i nfo@sa n d onc ap ital.com . au M o nth l y Report As at 3 1 December 20 21 Net Tangible Assets (NTA) The net tangible assets per share for Sandon Capital Investments Limited (SNC) as at 3 1 December were : NTA before ta x $ 1. 1 049 - 4.3 % Deferred tax asset $0. 0 0 03 Deferred tax liability on unrealised income and ga in s ( $ 0 . 0 170 ) NT A after tax $ 1. 0 435 - 4.5 % Investment Performan c e G ross Performance to 3 1 Dec 202 1 1 1 Month 1 year Since inception 2 SNC - 5.8 % 35.4 % 1 2 . 4 % All Ordinaries Accumulation Index 2.7 % 1 7 .7 % 9. 7 % O ut perf ormance 3 - 8. 4 % + 17.7 % + 2.7 % 1. T h e SNC g ross r eturns a re a fter investment management fees and brokerage expenses but before performance fees and cor porate ex penses. I n de x re t ur ns a re before all fees and expenses and before any taxes . Dividends paid du rin g the period are included wh en c a lc ulatin g SNC’ s gross i n ve stment performance. 2. A nnualised . 3. F ig u re s m a y n ot t al ly d ue to rounding. Dividends SNC has pai d 4 5 . 2 5 cents per share of fully franked dividends since listing in December 2013. The profits res erve is 29. 5 cen ts per share a nd t h e re are 7 . 3 c ent s per sha r e of frankin g credits . SNC ’ s FY21 final dividend of 2. 7 5cps was paid on 5 November 2021 and t he special dividend of 1.00 cps was paid on 20 December 2021. The Board anticipate s pa ying a n int eri m div idend for FY2 2 of 2.75 c p s, p r o v ided the Company has suffic ient profit res e rves, frankin g cre d i ts a nd i t is within prudent business practice . Ex - date Div id end Amount Franking Corporate Tax Rate Type 30 November 2021 1.00 cps 100% 25 .0 % Special 19 Oc t ober 2021 2.75 cps 100% 25 .0 % Fi na l 17 May 2021 2.5 0 cp s 100% 26.0% Interim 21 October 2020 2.5 0 cps 100% 26.0 % F inal 5 May 2020 3.5 0 cps 10 0% 27 . 5% Inter im 21 October 2019 3. 5 0 cp s 100 % 27.5 % Fi n al 16 Ma y 2019 3.5 0 cps 1 00% 27.5% Interim 23 Octob er 2018 3.5 0 c ps 100 % 27.5 % Fina l 8 M a y 2018 3.5 0 cps 100% 27.5% Interim 23 October 2017 3.5 0 cps 100% 27.5% Final 1 8 May 2017 3.5 0 cps 100% 30 .0% Inte rim 2 1 Octo ber 2016 3.0 0 cps 100 % 30.0 % Fin al S andon Cap i tal Investme nts L imited ASX Code SNC L ist ed 2 3 Dec 201 3 Gross asset s * $ 179. 1 m M a rk et c a p it al i sa ti on $ 1 3 1 . 8 m NTA be f o re t ax $ 1. 1 049 S har e price $ 0 . 98 00 Shar e s on iss ue 134, 512 ,8 48 Op tions on iss u e n il Ful ly frank ed d i vi dends $0.0 5 5 Div idend yiel d ( ann ual ise d ) 5. 6 % P rofits reserve (p er sh a re) 29. 5 cps Franking (per sh a re ) 7. 3 cps Loan - to - assets ( inc l. MV THA) 1 6 % * i n c l u d e s the face v alue of Mer cantil e 4. 8 % unsecured no te s. Co m p a ny ove r view S a n d on C apita l Invest me nts Limi ted is a s pe c i alist ‘Act i v i st’ li st e d inve stment company , ma naged by Sandon Ca p ital . S ando n Capital d evi s e s and implements activist share h old er str a te g i e s t h at seek to unlock value inhe re nt in securiti e s h eld i n o ur inv e stmen t p o rt f o lios. S NC pro vi des inve stors w ith e x p osure to a p o rtf oli o o f Aust ralian compani es t hat are typically n ot a v ai labl e to trad it ion a l investors. Through activ e eng a gem ent wi t h t h e t a r ge t company , Sando n Cap ital se ek s to release t he embe d d e d valu e for s h a r eh o l ders. Target c omp a nies are li kel y t o be in the s m all to m i d cap market segment . S andon Capital has s ucce s sf ully employed i ts A c tivist investment strateg y sinc e Se pte mbe r 2 0 0 9 . T h e wholesale Sandon Capi tal A ct iv ist Fund’s i n v es tment p e rforma n ce si n c e in c e ption i s 13. 2 % p.a. (aft er all fe es a nd expense s ) . In ves tme n t Obj ectives • To pro vide absolute positive i nve s t m ent p erforman ce ov e r the medium to long term, ensur i ng cap ita l p r e s e r v a ti on, while provid ing c apital gr owth. • To pr ov ide an i n v estmen t strat e g y t h a t few i nvesto rs hav e the capac ity to implement t h e mse lve s. • T o pro vide sha rehold ers with a growing str e a m o f f ully franked di vid e n ds. P ortfolio commentary T he P o rtfolio was down 5.8 % for the m onth, on a gross basis, after inve s t m ent ma nage ment fees and brokerage bu t before performance fees and corporate expenses , compared t o a n increase o f 2.7 % f or the A ll Ord inarie s Accumulation Index . The largest detractors to this month’s return were IDT Australia Ltd ( IDT ) , Australian Silica Quart z Group ( ASQ ) , C ity Chic Collective Ltd ( CCX ) and BCI Minerals Ltd ( BCI ) . These were only partly offset by COG Financial Services Ltd ( COG ) , Fleetwood Ltd ( FWD ) and Coventry Group Ltd ( CYG ) . The remainder of the portfolio was a small net negative contributor. During the month, the Australian government announced that it will collaborate with Moderna to build a new domestic manufacturing facility to produce mRNA vaccines. Moderna did not participate in the Approach to Market (ATM) process, instead working with the govern ment separately. As a result, ALL companies that made a submission to the ATM, including IDT, were advised that they had been unsuccessful. This resulted in a fall of ~60% in the IDT share price for the month. Whilst it is disappointing that IDT se emingl y has no role to play in the domestic manufacturing of mRNA COVID - 19 vaccines, we believe the long - term strategic value at IDT remains significant. The company has signed agreements with Australia’s pre - eminent mRNA research institutions, including Monash Institute of Pharmaceutical Sciences (MIPS), and has manufactured small batch dos es of the MIPS mRNA vaccine for its pharmaceutical trials. The Australian Government’s $800m Modern Manufacturing Initiative Collaboration Stream Grant opportunity also remai ns live. Furthermore, the need for strategic manufacturing capability fo r active p harmaceutical ingredients (APIs) underpins our views of the strategic importance of IDT. After rising 100% in N o vember , ASQ ’ s share price fell 50% in December to return to wh ere it was at the end of October. There was little tangible news flow during the month to justify the share price fall (similar to November where there was little tangible news to drive the shares up 100%) . We expect further upd ates on the drilling at ASQ ’ s Sovereign prospect in the first quarter of the calendar year and expect t he shares to remain volatile in the meantime. Notwithstanding the disappointing finish to the year, the performance of the portfolio overall for 2021 was satisfactory, deliv ering a gross return of 3 5.4 %. Major positive contributors to this return were CO G Financial Services Ltd ( COG ) , Coventry Group Ltd ( CYG ) , Fleetwood Ltd ( FWD ) , City Chic Collective Ltd ( CCX ) and BCI Minerals Ltd ( BCI ) . Pleasingly, there were very few detr actors to the year’s performance, the largest being Alterra Ltd ( 1AG ) . Whilst we d o not expect to repeat 2021’s return in 2022, we are optimistic about the outlook for the portfolio. Many of our investments have performed well operationally du ring the COV ID - 19 induced social and economic upheaval over the past two years and look set to continue their solid operating performance despite the uncertain landscape ahead. Other investments have seen changes at Board and management level and are well placed to ta ke advantage of some of the specific opportunities they have ahead of them. It wou ld also be remiss not to mention some of the companies in the portfolio that require necessary changes at Board and management level to ensure that the value oppo rtunity is m aximised. We expect to provide further updates to our investors on this front ove r the course of 2022. Our top down perspective remains unchanged; we expect financial market volatility will co ntinue, with COVID (and any future variants), interest rates and inflation, and geopolitics all likely sources of concern. In December, Sandon Capital welcomed Derek Skeen as our new C hief Operating Officer. Derek comes extremely well credentialled, having worked at Macqua rie for 25 years, including as the global head of investment operations. We look forward to introducing Derek to our investors over the course of 2022, pandemic rule s permitting. Inv est me nt Po rtf olio Dec ember 2021 Lis te d A ustra li an Equi t i e s 8 4 % Liste d Int ernat ional E q u itie s 9 % Unlist ed i nvest me nts 5 % Ca sh o r Ca sh E q uiv a lents 2 % Cont act If you h ave a ny que st i ons reg ar din g th e Com pa ny or its in v estm ents, p lease call Gab riel Radzymi ns ki on 02 8014 118 8 . If you have q ues t ions re ga r din g y o u r sh are holdi ng, p leas e cont a ct L in k, whose deta ils appea r be low . Fu rthe r in forma ti o n : S andon Capit al Investme n ts L i mited Te l : 02 80 14 11 8 8 Fax: 02 8084 9918 W ebsi te: www.s andoncapi t al. c om.au Sh a r e reg ist ry: L ink M arke t Serv i ce s Te l: 1300 554 4 74 (toll fr ee wi thin Aust r ali a) E ma i l : re gistrars@lin k mark etser vi ces.c om.au
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