Washington H. Soul Pattinson and Co. Ltd (ASX:SOL) reports its highest ever regular profit

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) increases its dividend for the 18th consecutive year

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), the ASX's version of Warren Buffett's Berkshire Hathaway, reported a 17% increase in its regular profit to a record $331 million.

Here are the highlights from the company's announcement:

  • Regular profit after tax of $331.1 million (a 17.4% increase)
  • Statutory net profit after tax of $266.8 million (a 20% decrease)
  • An increase in total dividends (for the 18th consecutive year) to 56 cents per share (a 3.7% increase)
  • Pre-tax Net Asset Value of $5.4 billion (a 21.8% increase)
  • The company sold its head office at 160 Pitt Street, an office it has occupied for 140 years, for $95 million

Statutory profits decreased due to non-cash impairment and deferred tax expenses.

The increase in regular profits was due to the Group's investments materially increasing contributions including New Hope Corporation Limited (ASX: NHC) (up 75%) and Brickworks Limited (ASX: BKW) (up 8%).

The company also said that the proposed merger between TPG Telecom Ltd (ASX: TPM) and Vodafone Australia had "significant synergy potential" and that it would have a 12.6% shareholding post-merger.

What did management have to say?

Chairman Robert Millner highlighted the company's distinguished track record as a top performer for shareholders.

He said, "WHSP is a disciplined and patient long-term investor. Its diversified portfolio has again delivered outstanding results for shareholders with a Total Shareholder Return for the year of 27.5% (outperforming the All Ordinaries Accumulation Index by 12.6%).

"Over the past 15 years, an investment in WHSP has increased by more than five times while the index has increased by less than three times. The Company lifted its dividend for the 18th straight year and is one of only two companies in the ASX All Ordinaries Index to achieve that feat".

Managing Director, Todd Barlow highlighted that the company's portfolio had performed very well in the context of the current market environment.

He said, "We consider our portfolio to be relatively defensive given the large investments in consumer staples (such as telecommunications) and commodities with lower demand volatility (such as thermal coal). We are therefore really pleased to see such a strong performance in a growth market."

Foolish Takeaway

Despite the result, Soul Patts shares were down 7% following the announcement. It was perhaps a bit of profit taking given that the company's shares are up over 40% so far in 2018. Those are not returns that the company can sustain every year but if held patiently, I think this company will do well for shareholders over the long run.

Motley Fool contributor Kevin Gandiya has no position in any of the stocks mentioned. You can find Kevin on Twitter @KevinGandiya. The Motley Fool Australia owns shares of and has recommended TPG Telecom Limited and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Brickworks. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

A man sits in deep thought with a pen held to his lips as he ponders his computer screen with a laptop open next to him on his desk in a home office environment.
Share Market News

Broker gives its verdict on BHP shares

Let's see what Bell Potter is saying about the Big Australian.

Read more »

A man in his office leans back in his chair with his hands behind his head looking out his window at the city, sitting back and relaxed, confident in his ASX share investments for the long term.
Broker Notes

Top brokers name 3 ASX shares to buy next week

Brokers gave buy ratings to these ASX shares last week. Why are they bullish?

Read more »

Woman holding gold bar and cheering.
Gold

Why Macquarie expects this surging ASX 200 gold stock could leap another 40%

Macquarie forecasts another year of strong outperformance from this fast-rising ASX 200 gold miner.

Read more »

A young woman looks at here phone as she strides out in an airport dragging her wheelie bag behind her and smiling widely.
Broker Notes

Macquarie tips 15% upside for this ASX 200 industrials stock

Is this transportation business preparing for take-off?

Read more »

Red buy button on an apple keyboard with a finger on it representing asx tech shares to buy today
Broker Notes

Brokers name 3 ASX shares to buy today

Here's why brokers are feeling bullish about these three shares this week.

Read more »

Ten happy friends leaping in the air outdoors.
Share Gainers

Here are the top 10 ASX 200 shares today

It was another momentous session for ASX shares this Friday.

Read more »

Overjoyed man celebrating success with yes gesture after getting some good news on mobile.
Share Gainers

Why BHP, Catalyst Metals, Mesoblast, and Pilbara Minerals shares are shooting higher

These shares are ending the week with a bang. But why?

Read more »

Disappointed man with his head on his hand looking at a falling share price his a laptop.
Share Fallers

Why 29Metals, Atlas Arteria, DroneShield, and Yancoal shares are falling today

Let's see why these shares are ending the week in the red.

Read more »