3 highlights from the Soul Patts (ASX:SOL) FY21 report

Here are a few of the highlights from the Soul Patts result.
The post 3 highlights from the Soul Patts (ASX:SOL) FY21 report appeared first on The Motley Fool Australia. –

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) (Soul Patts) released its FY21 report yesterday. There were a few different highlights for investors to be aware of. The Soul Patts share price rose almost 6% on Thursday after the released numbers.

Looking at the headline profit numbers, regular net profit after tax (NPAT) increased by 93% to $328 million. This was driven by Brickworks Limited (ASX: BKW), Round Oak and New Hope Corporation Limited (ASX: NHC).

However, the statutory NPAT fell 71% because the $1 billion one-off gain on changing how it accounts for its TPG Telecom Ltd (ASX: TPG) holding was not repeated.

Here are some of the three main highlights from the result:

Dividend growth continues

Soul Patts is the only company in the ASX All Ordinaries Index to have increased its dividend every year since 2000. ‘

The total dividend for FY21 was $0.62 per share, an increase of 3.3% on FY20.

Soul Patts pays for its dividend from its net cash from investments. That includes things like dividends, distributions, interest and profit from its privately-owned businesses.

FY21 net cash from investments decreased by 29% over the year to $180 million. The FY20 cash from operations included $92 million from TPG as a pre-merger dividend. But, the FY21 cash generation was 6% higher than FY19.

The total dividends paid in FY21 represents 82% of net cash flows from its investments. That leaves the 18% in the business for re-investment back into more opportunities.

Investing strategy

As part of the result, Soul Patts re-iterated its investment philosophy, but it also revealed where management are currently looking for opportunities.

It wants the portfolio to be diversified, with a range of uncorrelated investments across listed shares, private equity and venture capital, property, structured credit and cash.

Soul Patts notes that it’s unconstrained. A flexible mandate allows the company to invest in and support companies from an early stage and grow with them over the long-term.

The investment style is long-term, with a disciplined and value-focused approach to investing through market cycles to deliver returns over the long-term.

It also wants its portfolio to offer capital protection. Management believe the investment conglomerate has a portfolio of assets that generate reliable cash through market cycles which aims to protect against the downside in market corrections.

With the merger with Milton Corporation Limited (ASX: MLT) nearly complete, Soul Patts is looking at few different key investment themes including health and ageing, energy transition, agriculture, financial services and education. It invested a further $60 million in agriculture in FY21.

New chief investment officer

Milton’s CEO and managing director Brendan O’Dea will become Soul Patts’ chief investment officer.

He spent over 22 years in Citigroup’s equities division, including as a managing director, across a broad range of roles including trading, investing and business/risk management in Sydney, Hong Kong, New York and Tokyo. Some roles included being the chief operating officer of pan-Asian equities, head of Japanese equities and head of US equity proprietary investments.

This may be interesting and perhaps signals Soul Patts’ greater intent on finding global equities to add to its portfolio for long-term growth.

At the moment, the limited international exposure that Soul Patts has includes Pengana International Equities Ltd (ASX: PIA) and Apex Healthcare. Apex is a “leading healthcare group with operations in Singapore, Malaysia, Vietnam and Myanmar.” Pengana International Equities is a listed investment company (LIC) that invests in global shares.

The post 3 highlights from the Soul Patts (ASX:SOL) FY21 report appeared first on The Motley Fool Australia.

Should you invest $1,000 in Soul Patts right now?

Before you consider Soul Patts, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Soul Patts wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

Soul Pattinson (ASX:SOL) share price jumps after 93% profit growth in FY21 results
2 top quality ASX dividend shares offering reliable income growth

The Soul Patts (ASX:SOL) share price is down 3% on Friday
ASX 200 (ASX:XJO) midday update: Telstra unveils T25 strategy, Wesfarmers’ API offer

These were the best performing ASX 200 (ASX:XJO) shares last week

Motley Fool contributor Tristan Harrison owns shares of Pengana International Equities Limited and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Brickworks. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended TPG Telecom Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!