In morning trade the Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) share price has pushed higher following the release of its half year results.
At the time of writing the investment house's shares are up slightly to $28.69.
What happened in the first half?
In the first half of FY 2019 Washington H. Soul Pattinson and Company (WHSP) posted a record regular profit after tax of $186.7 million, an increase of 12.2% on the previous corresponding period.
Regular profit after tax is a non-statutory profit measure and represents profit from continuing operations before non-regular items. Management believes it is a better indicator of the underlying profit of the company.
The net increase in the regular profit was attributable to a number of investments materially increasing contributions.
These include strong gains by New Hope Corporation Limited (ASX: NHC) due to higher coal prices and increased volumes from Bengalla and Brickworks Limited (ASX: BKW) thanks to very strong property earnings.
WHSP chairman, Robert Millner, was very pleased with the company's performance during the half.
He explained: "During the first half, the value of WHSP's portfolio increased by 10.2%, outperforming the All Ordinaries by 17.0%. While the equity markets suffered a correction, WHSP's portfolio increased which shows the quality of our assets."
Reported net profit after tax came in at $179.2 million for the half year, up 22.6% on the prior corresponding period.
This strong profit growth allowed the company to increase its interim dividend for the 21st year in a row. WHSP declared an interim dividend of 24 cents per share, up from 23 cents a year earlier.
Outlook.
Management is cautiously optimistic on the company's prospects in the second half.
Managing director, Todd Barlow, said that the company's portfolio is "well positioned to deliver continued growth while being largely uncorrelated with the rest of the equity market."
But warned that the company is "quite cautious at the moment with asset prices remaining high while some early warning signs are emerging with respect to consumer sentiment and economic activity."
Nevertheless, management eased concerns by advising that it "has financial capacity to make new investments and is always looking for opportunities where our long term, patient and disciplined investment approach can deliver outperformance for shareholders."
Should you invest?
I think WHSP is one of the most outstanding companies on the Australian share market. Although its shares have rallied strongly over the last 12 months, I still think it is well worth considering if you're looking to make a long-term buy and hold investment.
