Soul Pattinson (ASX:SOL) share price dips as investors digest AGM

The company presented trading highlights at its annual general meeting today.

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Shares in conglomerate Washington H Soul Pattinson & Co Ltd (ASX: SOL) spent a day in the red on Friday, closing 1.79% lower at $31.85.

The downtrodden Soul Pattinson share price performance came as investors digested the takeouts from its annual general meeting (AGM) today. Here are the investment highlights.

What did Soul Pattinson announce?

In today’s presentation, Soul Pattinson noted several key investment achievements in the past year including the merger with Milton, which chair Robert Millner said “brought together two of Australia’s great investment companies”.

The company advised that the merger provided many synergies given its “highly strategic” nature. These included portfolio diversification and additional liquidity for future investments, and higher cash generation from increased portfolio dividends.

As a result of the merger, the strategic portfolio is now less than 45% of its total portfolio, whereas the pre-tax value of the portfolio (per share) increased by 17.3% over the year to 30 November 2021.

Millner told the AGM that Soul Pattinson also increased its dividend payment this year to 62 cents per share, making it now “the only company in the top 500 listed companies in Australia to have increased its dividend every year for over 20 years”.

“We are extremely proud of the fact that the company has never missed paying a dividend since listing in 1903,” he said.

The company also has an ungeared net working capital position of $78 million as of 31 July 2021, and it raised $225 million in convertible bonds maturing in 2026. These notes will pay an annual coupon of 0.625% which are favourable terms for the company.

Finally, the company’s portfolio has a net asset value (pre-tax) of $9.25 billion as of 30 November. As such, NAV per share is up 17% for the last 12 months, per the release.

Moving forward, the company says it is focused on “key thematics” such as health and ageing, energy transition, agriculture, financial services and education.

Soul Pattinson share price summary

It’s been a difficult year for the Soul Pattinson share price, which gained just over 5% in the past 12 months, and is up 5% since 1 January.

In comparison, the S&P/ASX 200 index (ASX: XJO) has returned around 10% in the past year.

The author has no positions in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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