Key Highlights

• Sandon keeps paying a monthly, fully franked dividend.

• Accumulated profit reserves support the payouts, not the current year's result.

• The portfolio is run by Sandon Capital Pty Ltd.

• Concentration and funding risks remain.

Sandon Capital Investments (ASX:SNC) keeps paying a monthly, fully Franked Dividend because accumulated profit reserves, rather than the current year's result, support the payout. The financial year to 30 June 2026 was a loss-making one for the listed investment company, yet the board has announced further monthly payments through to December 2026.

What the company is

SNC is a listed investment company, listed on 23 December 2013, whose portfolio is run by Sandon Capital (ASX:SNC) Pty Ltd. Shareholders own units in a pool of mainly listed securities, plus some unlisted holdings, rather than an operating business.

A difficult FY26

In its annual results on 26 August 2026, SNC reported a gross portfolio return of negative 14.6 per cent for FY26, before fees, expenses, interest and tax. The Small Ordinaries Accumulation index rose 8.1 per cent over the same year. The company said the shortfall largely reflected unrealised mark-to-market losses.

The accounts show a net loss after tax of A$17.9 million, against a profit of A$24.7 million in FY25. Pre-tax NTA fell from 95.98 cents to 72.65 cents per share between 30 June 2025 and 30 June 2026.

Detractors named in the results release included QPM Energy, Fleetwood and Coventry Group. Joyce Corporation, BCI Minerals and Magellan Financial Group were the largest positive contributors.

Where the dividend comes from

SNC declared dividends of 5.63 cents per share for FY26, fully franked. On 8 September 2026 it announced 0.47 cents a month for October, November and December, or 5.64 cents annualised.

The next ex-dividend dates are 11 November and 14 December 2026, with payments on 30 November and 31 December. The company said at 31 August 2026 that profit reserves stood at 46.7 cents per share and the franking balance at 6.8 cents, which it equated to about 3.6 years of fully franked dividends at the current rate.

Directors state that future dividends carry no guarantee and will be reviewed each quarter. Reserves are a buffer, not a promise, and the franking balance is the tighter constraint if the company pays little tax.

The new financial year began better. The company reported a gross return of 3.5 per cent for July 2026. Its 30 September 2026 report showed NTA of 81.12 cents pre-tax and 80.53 cents post-tax, which is above the 30 June pre-tax figure.

Concentration and funding risks

The portfolio is concentrated. At 30 June 2026 the largest holdings were COG Financial Services at A$17.5 million, Spectra Systems at A$15.7 million, Fleetwood at A$15.4 million, the unlisted Carbon Conscious Investments at A$14.2 million and BCI Minerals at A$12.1 million.

Unlisted holdings are harder to value and sell than listed ones, and small-cap positions can move sharply.

SNC also carries Debt in the form of unsecured notes (ASX:SNCHA). Noteholders approved new terms on 19 June 2026, lifting the Interest Rate to 8.5 per cent a year with Maturity on 10 July 2030. Holders redeemed 29,814 notes on 10 July, leaving 328,539 notes of A$100 face value, carried at A$28.9 million at 30 June.

Interest is paid monthly and sits ahead of Shareholder dividends.

What to watch

Monthly NTA releases, the November and December payments, and the company's 2026 annual general meeting, for which a notice was lodged on 14 October 2026, give the clearest checkpoints. Reported results from portfolio companies will drive whether reserves are rebuilt or drawn down. Commentary alongside those results should clarify the outlook for the portfolio's largest positions this year.