The Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) share price is in focus after reporting its FY25 first-half result.
WHSP owns a diversified portfolio across a range of industries including telecommunications, resources, financial services, building products, farming, swimming schools and more.
HY25 result
Here are some of the highlights from the first six months of its FY25 result:
- Net cashflow from investments rose 9.9% to $289.5 million (up 8.2% on a per-share basis)
- Group statutory net profit rose 8.1% to $326.9 million
- Regular net profit grew 18% to $284.8 million
- Pre-tax net asset value (NAV) grew 2.6% to $12.1 billion
- Interim dividend per share increased by 10% to $0.44
The company said its regular profit growth of 18% was driven by New Hope Corporation Ltd (ASX: NHC) increasing production, a stabilisation of property returns for Brickworks Ltd (ASX: BKW), and its credit portfolio delivering strong yields and a doubling of the portfolio since FY23.
Divisional breakdown
Within the strategic portfolio, the portfolio value reduced $200 million to $5.7 billion – the positive return of Tuas Ltd (ASX: TUA) was somewhat offset by the negative return of Brickworks. The strategic cashflow reduced by 1.5% to $167.1 million because of lower income New Hope.
The large cap portfolio’s portfolio value reduced $200 million to $2.2 billion, it underperformed the ASX share market because of limited exposure to major banks, gold and technology. Cashflow reduced 24% because of a changing investment mix and portfolio size.
WHSP’s private equity portfolio increased $300 million to $1.7 billion, partly through $85 million of acquisitions. Net cashflow jumped 107.9% to $27.7 million. Over the prior three years, EBITDA rose by an average of 13% for Ampcontrol (electrification of certain industries), 63% for its swimming school business and 42% for Ironbark (financial services).
The credit portfolio grew 73.2% to $1.2 billion – $266 million of new capital was deployed and $146 million of loans were repaid. Net cashflow jumped 81.4% to $94.1 million.
Its emerging companies portfolio value was largely unchanged following net sales. Net cashflow jumped 132.8% thanks to higher realised (sold) trading gains and increased dividends.
Outlook for the Washington H. Soul Pattinson share price
The business thinks its portfolio is well-positioned to outperform market dividend growth. It said it’s enhancing returns by increasing cash from the growth in private equity investments and the credit book.
It’s targeting private market opportunities offering “compelling risk-adjusted returns”. It’s also increasing an allocation to offshore markets which can provide diversification.
The company’s net cash position increased by $502 million during the period. This is good for both risk mitigation and giving a war chest of funds if it sees opportunities.
I think Washington H. Soul Pattinson is one of the best ASX shares out there and it can be a strong long-term investment.
