Today Washington H Soul Pattinson & Company Ltd (ASX: SOL) announced its results for the half-year ended 31 January 2019, reporting its highest regular (underlying) profit after tax of $186.7 million.
Washing H Soul Pattinson & Company (WHSP) is Australia’s second oldest listed company. It began as a chemist shop in Sydney in 1872, with the company listing on the ASX 30 years later.
Since listing, WHSP has paid a dividend every year, including throughout the depression of the 1930s. It is now an investment conglomerate with investments in industries such as telecommunications, building products, mining, equities, pharmaceuticals, property and financial services.
Key results
WHSP reported:
- Revenue up 32% to $723 million
- Regular profit after tax up 12% to $187 million
- Statutory net profit after tax (NPAT) up 23% to $179 million
- WHSP’s net asset value (pre-tax) up 10.2% to $6 billion
- Interim dividend of 24 cents per share (cps) fully franked.
The company said two key investments helped drive the returns:
- New Hope Corporation Ltd (ASX: NHC) up 27.3% on the back of higher coal prices and increased volumes
- Brickworks Ltd (ASX: BKW) up 73.7% on the back of strong property earnings.
Commentary
WHSP Chairman Robert Milner said, “the WHSP Group continues to improve its performance with another record regular result for the first half”.
Mr Milner pointed out the strength of the group’s portfolio, “during the first half, the value of WHSP’s portfolio increased by 10.2%, outperforming the All Ordinaries by 17%. While the equity markets suffered a correction, WHSP’s portfolio increased which shows the quality of our assets”.
Mr Milner also suggested it was no flash in the pan stating, “over the past 15 years, an investment in WHSP has multiplied in value by six times while the market has increased just two and a half times”.
Finally, after the company lifted its interim dividend for the 21st straight year, Mr Milner pointed out, “the interim dividend has grown to 24c, up from 4c in 1999. This is a compound annual growth rate of 9.4%”.
Future Outlook
WHSP is remaining cautious now with high asset prices, but the “portfolio is well positioned to deliver continued growth while being largely uncorrelated with the rest of the equity market” according to Managing Director, Todd Barlow. He further stated, “WHSP has financial capacity to make new investments and is always looking for opportunities where our long term, patient and disciplined investment approach can deliver outperformance for shareholders”.
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Disclaimer: At the time of writing, Andrew does not own shares in any of the companies mentioned.
