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Soul Pattinson (ASX:SOL) share price in focus on solid HY24 result, dividend growth

The Washington H. Soul Pattinson and Co. Ltd (ASX:SOL) share price is in focus after the ASX share reported its FY24 half-year result.

The Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) share price is in focus after the investment ASX share reported its FY24 half-year result. The Soul Pattinson share price is slightly down at the time of writing.

It’s invested across various sectors like mining, telecommunications, building products, property, agriculture, credit and so on.

Soul Pattinson HY24 result

Here are some of the highlights from the six months to 31 January 2024:

  • The portfolio value, or net asset value (pre-tax) increased 10% to $11.5 billion
  • Net cashflow from investments grew 6.9% to $263.4 million
  • Interim dividend per share grew 11.1% to $0.40
  • Regular net profit after tax (NPAT) fell 49.3% to $241.3 million
  • Statutory NPAT declined 33.2% to $302.5 million

The declines of the regular and statutory NPAT were due to the profit contributions from its strategic portfolio investments, which are businesses in which WHSP owns a significant stake.

The Brickworks Limited (ASX: BKW) profit contribution was lower because of a lower property contribution. Soul Pattinson put the profit hit at $181.1 million.

Another hit related to the share of profit from New Hope Corporation Ltd (ASX: NHC), which amounted to s $138.4 million reduction, due to lower realised coal prices.

The cashflow increased thanks to the credit portfolio (with the portfolio growing by 44% in value) and a strong contribution from New Hope.

Its portfolio net asset value increased largely thanks to increases in the strategic portfolio, private equity portfolio and emerging companies portfolio.

The company said over the 12 months to 31 January 2024, the portfolio total return (including dividends) was 13.3%, outperforming the index by 6%.

New investments

WHSP revealed it made a strategic acquisition of a large, automated fruit processing and storage facility, which aims to deliver better control over processing efficiency and channel sales (both domestic and export).

The company now has 12 farmland assets, with 5,162 hectares land and 29,363 ML water rights. It has exposure to a variety of different crops, including 1,022 hectares of citrus, 618 hectares of apples, 344 hectares of macadamias and 1,995 hectares of support land, horticultural development land, arable land and industrial land.

Its emerging company portfolio increased in value year on year from $544.8 million to $990.9 million, partly from gains and partly from increased exposure to the energy sector, including a large investment in Nexgen Energy (Canada) CDI (ASX: NXG).

WHSP said it’s being increasingly active in how it manages the portfolio mix. It transacted $2.4 billion of value during the six-month period.

Final thoughts on the Soul Pattinson share price

The investment continues to achieve the main things we’d want to see – good dividend growth and long-term capital growth.

Despite the Milton acquisition and all of the investment changes in recent times, it’s still heavily dependent on Brickworks, New Hope and TPG Telecom Ltd (ASX: TPG) for a significant portion of its portfolio value and cashflow – thankfully, they continue to make good contributions. I’d like to see the portfolio continue to diversify into other ASX shares and unlisted assets.

It was pleasing to see the amazing dividend growth continues. It’s not at a cheap price, but I’d be happy to invest for the long-term at this level.

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At the time of publishing, Jaz owns shares of WHSP and Brickworks.
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