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WHSP FY19 profits down on last year despite cash increase

ASX 200
ASX:SOL      MCAP $11.48B
18 September 2019 22:38 (AEST)

Coming in slightly late to the August reporting season party, Washington H Soul Pattinson (WHSP) has highlighted nearly $250 million in profits for the 2019 financial year.

However, the $247.9 million net profit for the 130-year-old investment company fell 7.1 per cent short of last financial year’s $266.8 million.

But WHSP said in an announcement to the ASX it considers its regular profit after tax — which ended the financial year at $307.3 million — to be a better indicator of underlying profit for the company. Nevertheless, this regular profit after tax is also down just over 7 per cent on last year.

A silver lining for the company is an impressive 18.1 per cent increase on net regular cash from operations, which came in at $169.6 million for the year, and a slight 0.6 per cent increase in WHSP’s pre-tax net asset value of $5.5 billion.

WHSP said profits were driven up over the year by a 63.3 per cent increase in dividend and interest income and a whopping 157.1 per cent increase in the value of its property portfolio compared to last year.

The company paid particular homage to Brickworks, which contributed $54.7 million to WHSP thanks to strong results from property activities. In fact, Brickworks revealed to shareholders today it broke record profits over the 2019 financial year.

However, WHSP said these strong gains were offset by a lower contribution from TPG Telecom as a result of margin impact from the NBN rollout.

The company also took a hit from an increased regular after tax loss from Round Oak Minerals of $54.1 million compared to last year’s $9.7 million.

Moving forward, WHSP Managing Director Todd Barlow said while the company remains cautious about high asset prices and economic conditions, it will continue to seek long-term investments in attractive sectors.

“Some of these sectors include continued investment in financial services supported by growing superannuation funds under management; retirement living opportunities supported by an ageing population; and agricultural investment,” he said.

Shares in WHSP are up 2.78 per cent today at 3:20 pm AEST, worth $22.91 in a $5.47 billion market cap.

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