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Highlights
- Washington H Soul Pattinson FY2024 profit fell 27.8% to $498.8 million, largely due to lower subsidiary contributions.
- The dividend rose 9.2% to 95 cents per share.
- Brickworks reported a $119 million statutory loss in FY2024, affected by property devaluations.
Washington H Soul Pattinson & Company Ltd (ASX:SOL) has announced a 27.8% decline in group statutory net profit for the 2024 fiscal year, totaling $498.8 million. This decrease is largely attributed to lower contributions from key subsidiaries, including Brickworks Ltd (ASX:BKW) and New Hope Corporation.
Financial Performance Highlights
Despite the profit drop, the company successfully increased its total dividend for FY2024 by 9.2%, rising to 95 cents per share from 87 cents in the prior year. Managing Director and CEO Todd Barlow highlighted the achievement of three key objectives: enhancing cash generation, expanding the portfolio, and effectively managing investment risk.
Net cash flow increased by 10.3%, reaching $468 million, driven by strong cash generation from private equity, emerging companies, and credit portfolios within the group. This focus on sustainable cash flow generation underscores the company's commitment to long-term value creation.
Challenges Faced by Brickworks
In a related note, Brickworks Ltd reported a statutory profit decline of 130%, resulting in a loss of $119 million for FY2024. This significant downturn was primarily influenced by property sales and substantial non-cash property revaluations, amounting to a loss of $231 million.
Chairman Robert Milner addressed the impact of global economic challenges on Brickworks' performance. The company experienced significant property devaluation in the first half of the fiscal year, attributed to capitalisation rate expansion driven by rising interest rates. However, Milner noted that conditions in the property industry have stabilized recently as central banks begin to adopt more expansionary monetary policies.
The final dividend declared by Brickworks was 43 cents, fully franked, reflecting a modest increase of 2% despite the challenging financial landscape.
As Washington H Soul Pattinson & Company Ltd navigates through these financial challenges, the increase in dividends and positive cash flow performance suggest a resilient strategy focused on long-term growth and value for shareholders. Meanwhile, Brickworks Ltd continues to address its operational hurdles while monitoring market conditions for recovery.
