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Washington H. Soul Pattinson Report FY19 Results

Jordan Baird

Jordan Baird is the head ASR Wealth Advisers client services desk and has been with the organisation since 2017. He first started investing in his early years. While he believes that investors should leave no stone unturned he has a particular interest in trading based on broad macroeconomic trends along with specific analysis of innovative up-and-coming companies.

Washington H. Soul Pattinson (ASX: SOL) is an investment firm with ventures in a wide range of industries including telecommunications, energy, materials, financial services and healthcare. Washington H. Soul Pattinson has been listed on the ASX since 1903 originally as a pharmaceutical company. The Company’s diversified investment portfolio has seen it pay out consistent dividends over its history.

Source https://www.whsp.com.au/

What are the FY19 results for SOL?

This morning (19th September 2019) Washington H. Soul Pattinson (ASX:SOL) released their FY19 results that are detailed below:

  • Net Profit After Tax (NPAT) down 7.1% to $247.9m
  • Net asset value up 0.6% to $5.5b
  • Net regular cash from operations up 18.1% to $169.6m
  • Total dividend distribution of 58 cents per share up 3.6% from FY18.

Segment specific results for SOL include:

  • Brickworks profit contribution up 22.9% to $54.7m
  • Income from investments, loans and equity up 63.3% due to increases in dividend payments.
  • Property portfolio profit contribution was up 1% to $11m
  • TPG profit contribution down 12.8% as a result of the NBN rollout.

What are the key drivers of this result?

Washington H. Soul Pattinson’s key goal is outperforming the All Ords index over the long term which they have managed to do through a diversified portfolio that targets long term wealth generation. The Company has experienced volatility in its investments during FY19 reflective of the decrease in NPAT as TPG generated lower returns as more consumers move to the NBN system. Furthermore, SOL’s Brickworks investment faced challenges in a slowing construction market generating lower profits, the Company’s mining subsidiary Round Oak Minerals also reported an After-Tax Loss of $54.1m as it faced delays in starting new mine operations. The Company’s financial services produced good results with $19.1m in dividends paid to SOL up 24.1%.

What is the future outlook for SOL?

The Company remains focused on delivering returns through flexible investment strategies and increasing profit through direct lending and property investment. SOL is optimistic that a TPG merger will generate greater dividends in the future, however they are cautions of high asset prices and peak economic conditions.

How has the share market reacted?

The market has responded positively with the share price of SOL moving up 2.74% to $22.9.




This article has been prepared by the Australian Stock Report Pty Ltd (AFSL: 301 682. ABN: 94 106 863 978)

(“ASR”). ASR is part of Amalgamated Australian Investment Group Limited (AAIG) (ABN: 81 140 208 288 Level 13, 130 Pitt Street, Sydney NSW 2000).

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ASR has no position in any of the stocks mentioned.

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