The ASX 200 rose today. Soul Patts gave a profit update.
The post ASX 200 edges higher, Soul Patts (ASX:SOL) falls, Hansen (ASX:HSN) declines appeared first on The Motley Fool Australia. –
The S&P/ASX 200 Index (ASX: XJO) went up 0.1% to 7,529 points.
Here are some of the highlights from the ASX:
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
ASX 200 investment conglomerate Soul Patts gave a profit update to the market today.
It reminded investors that key drivers of success for the business are growth of the capital value of the portfolio and a growing yield.
Soul Patts said it doesn’t consider its earnings to be a key indicator of the company’s performance. But there were a few factors today that will influence the FY21 regular profit after tax.
Soul Patts pointed out that New Hope Corporation Limited (ASX: NHC) disclosed in its quarterly report ending 31 July 2021 that it projects earnings before interest, tax, depreciation and amortisation (EBITDA) will be $372 million 8n FY21. This is primarily due to thermal coal prices being at a 10-year high, according to Soul Patts.
Next, the investment conglomerate pointed out that Brickworks Limited (ASX: BKW) gave a trading update that revealed it expects record earnings from its property division, driven by the continued increase in the value of the property trust.
The last point that Soul Patts referred to was Round Oak, a mining company that the ASX 200 share wholly owns. Round Oak expects to generate a regular FY21 net profit after tax in the range of $64 million to $68 million. Management said this was a “significant improvement” compared to the FY20 loss of $43 million as commodity prices, predominately zinc and copper, improved and the company moved from development to production at a number of its mines.
However, these higher profit contributions will be offset by a lower contribution from TPG Telecom Ltd (ASX: TPG). Following the merger of TPG and Vodafone in July 2020, Soul Patts is no longer equity accounting it share of TPG’s net profit after tax. Soul Patts only received one dividend from TPG amounting to $18 million in FY21, compared to the equity accounted profit of $72 million in FY20.
Soul Patts also said that the statutory profit in FY21 will be materially lower because FY20 included a one-off accounting gain of $1.05 billion after the derecognition of TPG as an equity accounted associate. This one-off gain will not be repeated in FY21.
Brickworks also said that Soul Patts’ profit announcement would contribute to its statutory after tax by a range of $64 million to $72 million for FY21.
Hansen Technologies Limited (ASX: HSN)
The Hansen Technologies share price fell 9.2% after the business announced that BGH Capital was not going to proceed with its takeover. Discussions have ceased.
BGH Capital’s offer was $6.50 per share.
Hansen attempted to reassure investors by saying that after having conducted extensive due diligence inquiries in relation to the company, BGH Capital has not notified Hansen of any issue which Hansen considers material in the context of Hansen’s current operations and strategy. BGH Capital has advised the company that it continues to see Hansen as a highly effective organisation with an outstanding management team and strong prospects.
David Trude, the Chair of Hansen, said:
Hansen reported a record result for the group across all key metrics in FY21.
The Hansen business continues to go from strength to strength. We were particularly pleased with the strategic customer wins during the year including Telefonica, DISH, Western Power and Nautilus Solar. Significant new business wins, coupled with a continued focus on our aggregation strategy, reinforce our commitment to, and confidence in, our long-term revenue target of $500 million in FY25.
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Motley Fool contributor Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Hansen Technologies. 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.