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Cadence Capital Limited (ASX:CDM) has declared a fully franked final dividend of 3.0 cents per share for the 2026 financial year, resulting in a total full-year dividend of 6.0 cents per share fully franked. Additionally, the Board approved a special fully franked dividend of 1 cent per share payable in December 2026, reflecting a strong annual performance highlighted by a 20.1% portfolio return and a 30.6% increase in share price when including dividends and franking credits. Combined, these dividends offer shareholders a significant income return, supported by the company's current profits reserve covering four years and franking credits sufficient for two years of distributions.
Key Points
- Cadence Capital Limited (ASX:CDM) operates as a listed investment company based in Sydney, NSW
- The Board declared a fully franked final dividend of 3.0 cents per share, bringing the total fully franked dividend for the year to 6.0 cents per share
- A special fully franked dividend of 1 cent per share was also announced for the December 2026 quarter, with an ex-date of 15 December 2026 and payment date of 23 December 2026
- The final dividend represents a 7.9% fully franked yield or an 11.4% gross yield based on the $0.755 share price at announcement
- CDM maintains a profits reserve of 25 cents per share (approximately four years) and franking credits of 5.4 cents per share (around two years)
- Investors should note the ex-dividend date of 29 September 2026 and the deadline for participation in the Dividend Reinvestment Plan
Cadence Capital's 6.0 Cents Per Share Fully Franked Dividend: Implications for Income Investors
On 15 July 2026, Cadence Capital Limited announced a fully franked final dividend of 3.0 cents per share for the fiscal year ending June 2026, completing a total fully franked dividend payout of 6.0 cents per share for the year. Chairman Karl Siegling signed the announcement. The final dividend's ex-dividend date is set for 29 September 2026, with payment scheduled for 15 October 2026, providing shareholders with a clear timeline for income planning.
For income-focused investors, these figures are significant. Based on the $0.755 share price at announcement, the final dividend yields 7.9% fully franked. When grossed up to include franking credits, the yield increases to 11.4%. This underscores Cadence Capital's commitment to delivering consistent, tax-effective returns through fully franked dividends—an attractive feature for Australian investors who can leverage imputation credits to reduce tax liabilities or receive refunds.
Strong Portfolio Performance Drives Special Dividend of 1 Cent Per Share
The Board attributed the special dividend decision to the company's robust 2026 financial year performance. The portfolio achieved a 20.1% return, while the share price appreciated by 30.6% including dividends and franking credits. This strong performance justified returning additional capital to shareholders via a special dividend.
The special dividend of 1 cent per share will be fully franked, with an ex-dividend date of 15 December 2026 and payment on 23 December 2026, falling within the December quarter. This special payout enhances the fully franked yield and provides additional liquidity for income-focused investors ahead of year-end.
Robust Profits Reserve and Franking Credit Position Support Dividend Sustainability
Cadence Capital revealed a profits reserve of 25 cents per share, equating to roughly four years of dividend payments at current levels, indicating a strong buffer beyond current earnings. This reserve provides dividend stability even during market downturns.
Additionally, the company holds 5.4 cents per share in franking credits, sufficient to cover about two years of fully franked dividends. This balance is crucial for Australian investors assessing after-tax returns, highlighting Cadence Capital’s focus on maintaining income distribution continuity. However, these figures represent capacity rather than guaranteed dividends, as future performance will impact distributions.
Understanding Cadence Capital’s LIC Structure and Its Impact on Dividend Policy
Cadence Capital Limited, headquartered in Sydney, NSW, trades on the ASX under ticker CDM as a listed investment company (LIC). Unlike ETFs, LICs pool investor capital to invest in securities and can retain profits in reserves to smooth dividends over time rather than distributing income immediately.
This LIC structure enables Cadence Capital to maintain substantial profits reserves and franking credit balances, granting flexibility to sustain or increase dividends during years of lower portfolio returns. This smoothing mechanism attracts income-focused investors, and Cadence Capital’s recent disclosures indicate active use of this strategy to support shareholder returns. The company’s registered office is Level 6, 131 Macquarie Street, Sydney NSW 2000.
Dividend Reinvestment Plan Available for Final Dividend
Cadence Capital confirmed its Dividend Reinvestment Plan (DRP) will be available for the final dividend announced on 15 July 2026. The DRP allows eligible shareholders to reinvest dividends into additional shares without brokerage fees, appealing to long-term investors aiming to compound holdings while benefiting from franking credits.
Shareholders not registered for the DRP but interested in participating should contact Boardroom at 1300 737 760. The company did not disclose the DRP pricing or any applicable discount in this update. Investors should review DRP terms carefully and consider tax implications or consult financial advisers. The DRP’s applicability to the December special dividend was not specified.
Ex-Dividend and Payment Dates for 2026 Final and Special Dividends
For the 3.0 cents per share fully franked final dividend, the ex-dividend date is 29 September 2026, with payment on 15 October 2026. Investors must hold shares before this date to qualify.
The special 1 cent per share fully franked dividend has an ex-dividend date of 15 December 2026 and will be paid on 23 December 2026. These two dividend events provide income distribution across different quarters, aiding shareholder cash flow planning. No information was provided on future special dividends beyond 2026.
Comparing CDM’s 11.4% Gross Yield Within the ASX LIC Market
Cadence Capital’s final dividend yield of 7.9% fully franked, rising to 11.4% gross yield including franking credits, places CDM among the higher-yielding LICs on the ASX based on gross return. This calculation uses the $0.755 share price at the announcement date. Investors should note yields fluctuate with share price changes and may differ at investment time.
The fully franked dividends provide tax advantages for Australian residents, especially superannuation funds and SMSFs, by offsetting tax liabilities or generating refunds. The announcement’s immediate impact on share price was not publicly available. Investors should evaluate CDM’s yield relative to their tax position, interest rates, and the variability of active LIC returns.
Risks Affecting Cadence Capital’s Dividend Sustainability
Despite strong reserves, CDM’s dividend capacity depends on portfolio performance. Market downturns, concentrated losses, or strategy shifts could reduce returns and erode reserves supporting dividends.
The company did not disclose portfolio composition, sector exposures, or earnings guidance in this update. Investors should consult full-year financial reports for a comprehensive assessment. Additionally, the finite 5.4 cents per share franking credit balance will decline as dividends are paid, requiring ongoing taxable income generation to sustain fully franked payments. Changes to Australian tax laws or imputation policies could also impact franking credit values, posing regulatory risks for all ASX companies paying franked dividends.
