ASX 200 rises, Brickworks builds, Netwealth sinks

The S&P/ASX 200 Index (ASX:XJO) has risen today. However, the Netwealth Group Ltd (ASX:NWL) share price sank. Brickworks Limited (ASX:BKW) reported.
The post ASX 200 rises, Brickworks builds, Netwealth sinks appeared first on The Motley Fool Australia. –

The S&P/ASX 200 Index (ASX: XJO) went up by 0.2% today to 6,791 points.

These are some of the highlights from the ASX today:

Netwealth Group Ltd (ASX: NWL)

The Netwealth share price fell around 13% today after announcing a significant change for its business.

Describing the events leading up to the change, Netwealth said that as a result of COVID-19 and current global economic conditions the Reserve Bank of Australia (RBA) has reduced and maintained official interest rates at 10 basis points and provided substantial liquidity to the Australian banking sector at historically low rates and credit spreads.

Due to the current environment, and reduced cost of funding for banks, Netwealth said that the agreement with Australia and New Zealand Banking Group Ltd (ASX: ANZ) in relation to the interest payable on the total pooled cash transaction account is to be terminated in 12 months on 24 March 2022, pursuant to the terms of the agreement.

This agreement that’s being terminated provides a margin of 95 basis points above the overnight cash rate and will continue for 12 months.

Netwealth said that it’s in negotiations with ANZ and other banks to establish an alternate facility and deposit rate.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

Investment conglomerate Soul Patts reported in its half-year result that it saw a 27.7% decrease in regular profit after tax, whilst statutory profit increased by 35.2% to $68.9 million.

Soul Patts said that the decrease in regular profit was attributable to two areas. TPG Telecom Ltd (ASX: TPG) did not make a contribution to regular profit due to the derecognition of TPG as an equity accounted associate of Soul Patts following the merger with Vodafone.

The second area was that New Hope Corporation Limited’s (ASX: NHC) contribution to regular profit decreased 99% due to lower average coal prices and lower volumes as a result of planned maintenance at Bengalla and end of mine life at stage 2 of New Acland.

These negatives were partially offset by Round Oak’s contribution to regular profit increasing $50 million as a result of increased production levels at all operations and strengthening commodity prices together with lower ore treatment charges.

The ASX 200 share’s net asset value (pre-tax) was up 1.3% to $5.2 billion. However, net cashflows from investments fell 8% to $85.3 million.

Soul Patts grew its dividend by 4% to 26 cents.

The managing director of Soul Patts, Todd Barlow, said:

The operating environment for most of our investments continues to improve from the disruptions of COVID-19. In particular, we are seeing a strong recovery in certain commodities such as thermal coal and copper (up 42% and 73% respectively in the last 12 months in US dollar terms).

Brickworks Limited (ASX: BKW)

Brickworks also reported its FY21 half-year result to the market.

It said that group revenue fell 4% to $432 million, underlying earnings before interest, tax, depreciation and amortisation (EBITDA) dropped 4% to $163 million, underlying earnings before interest and tax (EBIT) fell 6% to 127 million and underlying net profit dropped 10% to $90 million.

The Australian building products division saw EBIT jump 60% to $16 million, but the North American division suffered a 33% decrease in EBIT to $4 million. It’s starting to see a recovery of demand in the US, whilst Australian demand remains robust.

The property division saw 3% growth of EBIT to $92 million, with the net trust income growing 7% to $16 million.

Total assets within the property trust now stands at almost $2.2 billion. After including debt, Brickworks’ share of net assets was $777 million at the end of the half, up another $50 million over the six-month period.

The Brickworks board decided to grow the dividend by interim dividend by 5% to 21 cents.

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Motley Fool contributor Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of Netwealth. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post ASX 200 rises, Brickworks builds, Netwealth sinks appeared first on The Motley Fool Australia.

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