The Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) share price soared following the release of its half-year financial report. Here's what you need to know about the Washington H. Soul Pattinson result:
- Revenue rose 61% to $438 million
- Profit rose 68% to $139 million
- An interim fully franked dividend of 22 cents per share was declared, up from 21 cents
Soul Patts attributed the stellar results to the much stronger performances of its key investments, including:
- New Hope Corporation Limited (ASX: NHC)
- TPG Telecom Ltd (ASX: TPM); and
- Brickworks Limited (ASX: BKW)
Soul Patts is often called Australia's version of Warren Buffett's Berkshire Hathaway because it operates as a conglomerate style business, with big stakes in many different companies. As the company pointed out today:
"If a shareholder had invested $1,000 40 years ago in 1977 and reinvested all dividends, the shareholding would have appreciated to over $507,000 as at 31 January 2017. This equates to a compound annual growth rate of 16.8% year on year for 40 years."
That's impressive, to say the least.
During the half, Soul Patts' 20.1% holding in agriculture company, Ruralco Holdings Ltd (ASX: RHL), was the worst performing business, reporting a near 75% fall in contributions to first half profit. However, the company's holdings in Bki Investment Co Ltd (ASX: BKI), Australian Pharmaceutical Industries Ltd (ASX: API) and Apex Healthcare improved year over year.
Perpetual Limited's (ASX: PPT) Federal Court challenge to separate Soul Patts from Brickworks is ongoing.
Commentary
"We are pleased with these results," Soul Patts Chairman Rob Millner said. "We have seen most of the companies that WHSP is invested in experience strong earnings growth over the half year period, contributing to the record regular profit of the Group."
"The earnings growth and performance across the portfolio has been extremely strong over the first half and we expect most of our investments to carry this performance through for the full year," Managing Director Todd Barlow added. "We are always on the lookout for good quality investments at attractive prices which will provide income and capital growth for shareholders over the long term."
Buy, Hold or Sell
If you are looking for a bargain ASX share from which you can make a quick buck, forget Soul Patts. The company has proven to be a steady long-term investment, so rarely will its shares trade at discounted prices.
Nonetheless, if you want a share to put in the bottom drawer, look no further than Soul Patts for its steady dividends and careful management.
