WHSP’s shares are rising high on its day of Annual General Meeting held today in Sydney. At the time of writing, 7 December 2018 (2:12 PM AEST), the stock of the company has gone up by 1.682% to stand at $26.600.
Washington H Soul Pattinson & Company Limited (ASX: SOL) holds a diversified portfolio of major investments as well as listed equities, private equities and direct property. In the fiscal year 2018, the company has recorded its highest ever Regular Profit of $331 million, an increase of 17% over 2017. But profit after tax of the company declined by 20% to $266.8 million for the year ended 31 July 2018.
This plunge reflects the $64.3 million non-regular losses suffered by the company, mainly related to New Hope’s impairment of an undeveloped exploration project in Queensland.
In the address to shareholders, WHSP’s Chairman Robert Millner told that the value of the company’s portfolio of investment has increased by $972 million to $5.4 billion, an increase of 22% on previous corresponding year. The business portfolio of WHSP broadly comprises of TPG Telecom, Brickworks, Australian Pharmaceutical Industries (API), Round Oak Minerals, Apex Healthcare Berhad, TPI Enterprises and New Hope Corporation in which the company reduced its holding from 59.6% to 50% in FY18.
For the year ended 31 July 2018, the company announced the total dividend of 56 cents per share, fully franked and up by 3.7% on FY17.
Structural changes in 2018:
TPG Merger with Vodafone: On 30 August 2018, TPG Telecom announced a ‘merger of equals’ with Vodafone Hutchison Australia which is expected to complete in 2019. Outlining the highly complementary business, WHSP will have 12.6% shareholding post-merger. However, ACCC, FIRB and TPG shareholder approvals remain pending.
Sale of 160 Pitt Street: In May 2018, the company announced the closure of its last remaining pharmacy, 160 Pitt Street. WHSP was operating this pharmacy for 145 years before its sale in FY18. But as the sale of 160 Pitt Street will be reportedly for in the 2019 fiscal year.
Brickworks acquires Glen-Gery: In November 2018, Brickworks acquired US-based brick manufacturer Glen-Gery for US$110 million. Glen-Gery, positioned as 4th largest brick manufacturer in the US, had AU$162 million revenue and AU$18 million Normalised EBITDA for 12-months to August 2018.
But more importantly, Brickworks has sold some of its stakes in WHSP during past one month. It first sold 5.9 million shares in WHSP at a price of $26.42 per SOL share and then it sold 2 million shares more at $26.22 per share. Currently, Brickworks hold 94.3 million shares in WHSP with the voting right of 39.4%.
New Hope increases interest in Bengalla: New Hope acquired a further 40% interest in Bengalla thermal coal joint venture in New South Wales, Australia. Moreover, in November 2017, WHSP reduced its stakes in New Hope to 50.0%, from previous holding of 59.6%. The sale has been intended to assist New Hope for free float and liquidity of its shares. WHSP earned a a pre-tax gain of $172.8 million from the sale proceeds of $175.7 million.
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