The Washington H Soul Pattinson & Co Ltd (ASX: SOL) is gaining today, up 3.5% at the time of writing.
This comes after the S&P/ASX 200 Index (ASX: XJO) listed investment house (also known as WHSP) released its half-year results for the financial year ending 31 January 2021 (H1 FY21).
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What did Soul Patts report for the first half?
The Soul Pattinson share price is moving higher today after the company reported a 35% increase in its net profit after tax (NPAT). NPAT for the half-year came in at $68.9 million, up from $51.0 million in H1 FY20.
Regular NPAT, however, fell 27.7% from the previous corresponding period to $90.2 million. In its release, the company noted that "regular profit after tax is a non-statutory profit measure and represents profit from continuing operations before non-regular items".
Soul Pattinson pointed to a drop in revenue from New Hope Corporation Limited (ASX: NHC) for part of that decline due to lower coal prices and production in the first quarter. New Hope's contribution to regular profit fell $43 million year-on-year.
The company also stated that TPG did not contribute to regular profit following its merger with Vodafone due to its "derecognition as an equity accounted associate" of Soul Patts.
The group's pre-tax net asset value increased 1.3% during the half-year, up to $5.2 billion. Net cash flows from its investments fell 8.0% from H1 FY20 to $85.3 million.
Soul Pattinson also reported a 13% increase in its number of shareholders compared to the prior corresponding period.
Management commentary
Commenting on the results, Soul Pattinson chair Robert Millner said:
WHSP has delivered annual total shareholder return (TSR) that is 5.6% per annum higher than the All Ordinaries Accumulation Index over the past 20 years. Over this period, an investment in WHSP has grown by a factor of almost 12 times, which is triple the value of an investment in the index.
Our diversified portfolio of assets continues to perform well during the COVID-19 pandemic. WHSP has traditionally outperformed the market when the market returns are negative. Our focus on quality businesses with solid cashflows enables us to preserve capital in more difficult markets and continue paying dividends.
Soul Patts will pay an interim dividend of 26 cents per share, fully franked. That's up 4.0% from the corresponding half year. The record date is 22 April, with payment on 14 May.
Soul Patts highlighted that it was the only company in the All Ordinaries Index (ASX: XAO) to have increased its dividends every year for the past 20 years.
Looking ahead
With a look into the year ahead, Soul Patts' managing director Todd Barlow said the operating environment for most of the company's investments continued to improve from the disruptions of COVID-19.
In particular, we are seeing a strong recovery in certain commodities such as thermal coal and copper (up 42% and 73% respectively in the last 12 months in USD terms)…
We continue to have liquidity available for new investments and have a strong pipeline of opportunities which we believe will deliver superior risk adjusted returns.
Soul Pattinson share price snapshot
The Soul Pattinson share price has outperformed the wider market over the past 12 months, up 66% compared to a 36% gain on the ASX 200.
So far in 2021, the Soul Patts share price is up 6%.
