Washington H Soul Pattinson & Company Limited
Washington H Soul Pattinson & Company Limited (ASX: SOL) is a Sydney based investment firm. It has interests in pharmacies, natural resources, telecommunication, building materials, agriculture. It has a rich legacy of being a pharmacy company and was incorporated in 1903.
The company recently announced its 1HFY19 results. The company reported a portfolio value increase of $554 million or 10.2 percent at $6.0 billion. The company received net regular cash from investments of $92.0 million, up 24.8 percent on 1H18 number. The group statutory profit after tax came in at $179 million, up 22.6 percent on 1H18. The 12-month shareholder return was 56.5 percent and was 55.8 percent above the index returns.
The company has been a consistent performer for over 15 long years. Investment in WHSP over 15 years grew by 602 percent vs. a 241 percent increase for the All Ordinaries Index. The company’s portfolio performance was hugely aided by a 25.7 percent up move (For the half yearly period) of New Hope Corporation which is the top holding in the portfolio with a current holding value of $1.6 billion, TGP Telecom which is currently at $1.6 billion also made a robust move of 21.4 percent in the past six months. The property portfolio saw the worst performance with a fall in the value of 38.2 percent.
The company declared a fully franked interim dividend of 24 cents per share, which is 4.3 percent more than the last interim dividend. This makes it the 21st consecutive increase in dividend. The dividend paid in 1H 2000 was 4.5 cents, and currently, it is 24 cents which implies a 433 percent increase in the dividend in the past 20 years.
The stock is currently trading at A$26.310 (as on 29 March 2019), and it has delivered a return of 3.58%, 7.52%, and -8.63% in the past six months, three months, and one month respectively.
Wam Research Limited
Wam Research Limited (ASX: WAX) is managed by Wilson Asset Management group and was listed on the ASX in 2003. WAX maintains a portfolio of undervalued growth companies. One of the objectives of the company is to provide investors with rising stream of dividends which are fully franked.
The equity market worldwide witnessed volatility in the six-months ended 31 December 2018 due to investor sentiments heightened by global macro and political news. Australian market, in the second half, witnessed a weaker economic growth, government instability and interventionist proposals from the opposition of the Royal Commission into the banking. Australia also witnessed a falling property pricte. All these factors weighted on the Australian equity market.
In view of this, the company’s management increased its cash level from 25.6 percent to a substantial 53.3 percent during the 1H19 to ensure portfolio liquidity. This was made possible by reducing the portfolio exposure from 45 to 38 individual companies. However, the company used the cash to make fresh investments and reduced the cash level to 35.1 percent as on 26 February, in view of relatively positive macro outlook and thus prudently building the portfolio.
The company declared a fully franked interim dividend of 4.85 cents per share, representing an annualised dividend yield of healthy 7.2 percent. Since inception, WAX has paid 94.6 cents of dividend per share (Fully franked).
The investment operations during the half year resulted in an operating loss before tax of $27,705,640 vs. operating profit before tax of $20,435,957 in 2017, and operating loss after tax of $18,573,126 in 2018 vs. operating profit after tax of $15,065,047 in 2017. The loss for the period is reflective of the underlying investment portfolio performance, since the small to mid-cap holdings were negatively impacted by the heightened equity market volatility during the six months to 31 December 2018.
The stock is currently trading at A$1.430 (as on 29 March 2019), and it has delivered a return of -15.63%, -2.05%, and 2.14% in the past six months, three months, and one month respectively.
Lendlease Group (ASX: LLC) is into retail property management, asset management, and development. LLC operates in the Asia Pacific, the Americas, and the Europe region. It has over 13,000 employees and is headquartered in Sydney, Australia.
The company has recently updated the stakeholders with regards to the global trends influencing their strategy. On the urbanisation front, as per company’s report, over 60 percent of the world’s population is expected to live in urban areas by 2030. The company has a total of $59.3b in urbanisation pipeline. It has 20 major urbanisation projects spread over ten gateway cities. The global infrastructure spending is expected to rise substantially to an average Five trillion USD per year between 2019 to 2035, and the company has cumulatively from FY12 to FY18 captured $10b PPPs.
Global assets under management are forecasted to rise from USD eighty-five trillion in 2016 to USD one-forty-five trillion by 2025. LLC has managed a 17.8 percent annual growth in FUM since FY14. On the sustainability front, the built environment is going to face increasing challenges with over two-thirds of the world’s population projected to live in Urban areas by 2050. The company’s APPF commercial fund has for the second year in a row being rated as world’s best for sustainability by GRESB.
Worldwide, people aged above 60 years are projected to grow 2.4% vs. overall population growth of 0.8% between 2015 to 2050.
LLC operates one of the worlds largest retirement living businesses in Australia. Also, the company is looking to establish a scale platform in China. And in FY18, it secured first senior living project in Shanghai. Lastly, the real estate technology has seen global venture capital grow from US$1.8b in 2015 to US$12.6b in 2017, and the company has been a pioneer of new technologies. It has used cross laminated Timer, digital design, use of pre-fab technology, etc.
The company has maintained a dividend pay-out target of around 40-60 percent, and it paid out 51% in FY17 and 50% in FY18. The current dividend yield of the company is 3.83% as per the ASX update ON 29 March’19.
The stock is currently trading at A$12.380 (as on 29 March 2019), and it has delivered a return of -37.58%, 4.60%, and -4.74% in the past six months, three months, and one month respectively.
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