WASHINGTON H. SOUL PATTINSON PROFITS SURGE ON INVESTMENT MIX
Written on the 23 September 2016
A DIVERSE portfolio mix has paid dividends for Washington H. Soul Pattinson (WHSP), with the investment firm almost doubling full-year profits.
The Sydney-based company posted a net profit of $149.4 million in the 12 months to July 31, up 79.3 per cent from a year earlier.
WHSP has expanded beyond its traditional field of pharmacy, with investments in telecommunications, retail, property and energy.
The profit surge was bolstered by a 38.7 per cent lift in contributions from TPG Telecom Limited, 33.5 per cent increase from manufacturing group Brickworks Limited and Australian Pharmaceutical Industries Limited up 26.4 per cent.
The group's 59.6 per cent holding in New Hope Corporation declined 16.2 per cent over the 12 months.
WHSP chairman Rob Milner says the diversified portfolio has delivered consistent cash flows.
"The past year has been a good demonstration of the success our investment style, highlighting the mix and quality of WHSP's investments," Milner says.
"Group profit was up 79.3 per cent on the previous year despite a significant reduction in earnings from New Hope due to the low coal price in FY16.
"This demonstrates the robustness of our diversified investment portfolio which reduces the risk and acts to cushion us against the full impact of market volatility."
The group's net loss on non-regular items for the full-year was $27.8 million, while total assets were valued at $6.03 billion.
Total shareholder return (TSR) was 31.4 per cent in the last 12 months. Over the last 15 years, WHSP has delivered a TSR of 12.6 per cent per annum.
WHSP managing director Todd Barlow says the portfolio recorded strong performance within a volatile market.
"The acquisition of the interest in Bengalla during FY16 by New Hope was a good example of the group's investment style of being patient and acquiring assets at the low point in the cycle," Barlow says.
"We continue to look for good quality investments at attractive prices which will provide income and capital growth for shareholders over the long term."
WHSP will pay a dividend of 52 cents on December 12.