Washington H. Soul Pattinson and Company (SOL) H2 2024 earnings summary

Executive summary

• Portfolio value reached AUD 11.8 billion as of July 31, 2024, up AUD 900 million year-over-year, with strong performance across all segments and a 12% total return after dividends.

• Achieved 24 years of consecutive dividend increases, with a 20-year total shareholder return of 11.7% per annum, outperforming the market by 3% per annum.

• Net cash flows from investments increased 10.3% to AUD 468 million, supporting a fully franked dividend of AUD 0.95 per share, up 9.2% from the prior year, and a dividend reinvestment plan was introduced.

• Maintained a diversified portfolio of over 200 investments, with significant growth in private equity, emerging companies, and credit segments.

• Over the past three years, cash flow per share grew at 20% per annum, dividends at 15.3% per annum, and net assets at 13.5% per annum, outperforming benchmarks.

Financial highlights

• Net profit after tax was AUD 499 million, down 28% year-over-year, mainly due to lower results from Brickworks (property devaluations, impairments) and New Hope (lower coal prices).

• Net asset value per share increased 12% after adding back dividends, slightly underperforming the market by 1.4%.

• Net Asset Value (pre-tax) increased 8.7% to AUD 11.8 billion, with a 12% return after adjusting for dividends.

• Total shareholder return over 20 years averaged 11.7% per annum, 3% above the market, with an 820% increase in value versus 434% for the All Ordinaries Accumulation Index.

• Ordinary dividends have increased every year since 2000, with a 24-year CAGR of 9.6%.

Outlook and guidance

• Focus remains on increasing cash generation, portfolio growth, and risk management, with continued reinvestment in private equity and credit.

• Capital raising in August 2024 strengthens cash position for new investments and supports ongoing dividend growth.

• The company is positioned to withstand macroeconomic uncertainty, with flexibility to rebalance and pursue new opportunities.

• Light gearing and strong liquidity are maintained, with willingness to use up to 10% gearing for new investments.