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SOL - WASHINGTON H SOUL PATTINSON & COMPANY LIMITED


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SOL .... paying a fully franked final dividend of 34 cents per share, an increase of 3.0% over last yearâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s final dividend of 33 cents per share. This brings the total dividend for the year to 58 cents per share, up 3.6% - record date 18 November 2019 with payment due on 9 December 2019.

 

WHSP Chairman, Robert Millner said:

âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“WHSP aims to pay a stable and growing dividend through its diversified portfolio of assets. The Company has lifted both its interim and final dividend every year since 2000. Only two companies in the ASX All Ordinaries Index have been able to achieve this. The final dividend in 2000 was 6 cents and has grown to 34 cents, a compound annual growth rate of 12.3%.

 

âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“The driver of our ability to pay dividends is the regular cash generated from our portfolio. In FY19, regular cash from our operations increased 18% on the previous year. This means that WHSP is well positioned to continue the growth in its dividends.

 

âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“Our major investments continue to be impacted by regulatory issues. After 12 years New Hope continues to await approval for its New Acland extension, TPG is before the Federal Court seeking approval for its merger with Vodafone and Brickworks continues to be impacted by the higher gas and energy prices in Australia.

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Aside from outlining how its current investments went over the past 12 months, Soul Patts also gave some insight into areas where itâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s looking for value across asset classes.

 

Those five areas are:

- Private equity

- Private credit

- Retirement living

- Financial services

- Agriculture

 

Obviously itâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s quite difficult to find private equity on the ASX as well as private credit. Perhaps Soul Patts is thinking about stepping into the credit space where some banks arenâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢t really willing to lend any more âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ thereâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s still money to be made.
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  • 4 weeks later...
The bricks business underpins Soul Pattinsonâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s core earnings. In Australia some 2000 acres of land bought for clay in the last century have delivered a property portfolio worth over a billion dollars. Yet the latest market interest in Soul Pattinsons has as much to do with its two other big listed investments, New Hope Coal and David Teohâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s TPG Telecom, whose own share values might be depressed. That depression, insists Rob Millner, rather more exercised, is all about regulation.

 

âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“Obviously we are constrained at the moment. We have got TPG in front of the ACCC. New Hope, where we are looking to get the Ackland stage three approval, that has been going on for 12 years. We have ticked all the boxes, we have just had the Court of Appeal give us another tick. We are just waiting for them to come down with their final decision and then hopefully the government will endorse that decision.âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ÂÂ

 

Millner wonâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢t be drawn on the controversial TPG-Vodafone merger case beyond arguing strongly that it would increase competition among telcos. If he does lose, however, he says it will be another knock on the head. This is a reference to the $100m that was sunk into building a new mobile network with Huawei technology and buying government spectrum, only to have Huawei black-listed by the government. âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“We spent $100m. I bet we donâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢t get any compensation back from them. There is too much control here. Every business we are involved in âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€šÃ‚ New Hope, TPG, we are constrained in pharmacy in what API can do. We have got people telling us how to do it, when to do it and why to do it. Itâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s making it very, very difficult.âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ÂÂ

 

In stark contrast, internationally Rob Millner is also living the American Dream.

 

In the past 12 months, he has bought the fourth-largest brick company in America, added a bolt-on and is looking at one more. Millner says that the team can now produce a brick in America and deliver it to Australia more cheaply than one made here. âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“And also we get a tax incentive from the American government to do that,âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ he adds. âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“Our energy costs here are three times more than America and our electricity costs are twice Americaâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s.âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ÂÂ

 

As if Millner needed any more convincing, a trip two months ago to Philadelphia with Brickworks chief Lindsay Partridge showed just how open for business America wants to be. âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“On a Monday night we had three senior people from the Pennsylvania government come and speak to us, asking us how can they help us and what can they do for me. And I said to this gentleman, âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‹Ã…“Sir, I have never had anything like this in Australia. You guys are unique wanting to help us. Everywhere around Australia we are getting headbutted âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€šÃ‚ we have got headwinds in how we are going to do businessâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢.âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ÂÂ

 

Shareholders of Soul Pattinson might find Millnerâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s railing against state and regulatory intervention disconcerting but he is not alone. Many in business are exasperated by energy prices and the âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“big stickâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ intervention power that threatens to creep across to sectors beyond energy. Yet unlike many top floor leaders in this low-growth environment, Rob Millner is confident that he can still grow the dividend. Remarkably, the Soul Patts dividend has now been growing continuously since 2000.

 

âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“I think it can. We have some very good cash-generating businesses, some excellent people. It is also a track record that since floating in 1903, we have never missed paying a dividend,âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ he reminds proudly.

 

âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“I am constrained by people telling us what to do. If we can get New Hope approved and we get the Federal Court to give us the tick (on TPG) we are going to have an excellent year.âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ Then he pauses a second before adding: âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“I think weâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢ll have an excellent year anyway.âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ÂÂ

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  • 1 month later...

SOL AGM today - Stephen Mayne (serial pest according to Gerry Havey) was at the meeting - his comments - https://twitter.com/MayneReport

 

What is it about billionaires & the way they chair public company AGMs? Gerry Harvey was worst ever last week and his mate Rob Millner was terrible today. Promised all general questions after formal business then broke the promise by shutting meeting after 10mins with 6 in queue.

 

Rob Millner will cop some serious negative PR for the dictatorial and disrespectful way that he ran that Soul Patts AGM. Treated legitimate climate questions with disdain and just shut the meeting prematurely on some dodgy show of hands. Multiple shareholders didnâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢t get to speak.

 

Appalling performance by Soul Patts chair Rob Millner to close the meeting prematurely because he didnâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢t like anti coal questions. Never seen this before

 

âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“You people are denying 15% of your fellow humans power,âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ says cranky chair.

 

Cranky Soul Patts chair Rob Millner is getting quite a few climate change questions after the formal business has all been dealt with. Should they sell their New Hope Coal stake, which is currently worth $800m.

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  • 4 weeks later...
âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚¢ WHSP has an excellent track record of paying dividends and actively manages its portfolio to achieve its goal of paying a steady and increasing dividend over time.

âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚¢ WHSP has increased both its interim dividend and final dividend every year since 2000.

âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚¢ We are one of only two companies to do this of the 500 odd companies in the All Ordinaries Index.

âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚¢ Total ordinary dividends have increased from 10 cents per share in the year 2000 to 58 cents this year.

âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚¢ Dividends are declared based on the Companyâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s regular cash inflows less regular operating costs.

âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚¢ This year we will pay out as dividends, 82% of the net regular cash inflows from operations.

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  • 1 month later...
  • 1 year later...

• Group profit after tax up 35% to $68.9 million (1H FY20: $51.0 million)

• Diversified portfolio showing resilience against market volatility

• Interim Dividend up 4% to 26 cents per share (1H FY20: 25cps)

.... Grown at a compound annual growth rate of 8% for 20 years

• The only company in the All Ordinaries to have increased its dividends every year for the past 20 years

• Total shareholder return of 1,189% over 20 years

.... o Total Shareholder Returns have outperformed the market by 5.6% per annum for 20 years

• Number of shareholders increased 13% on previous corresponding period

 

Outlook

 

WHSP Managing Director, Todd Barlow, said: “The operating environment for most of our investments continues to improve from the disruptions of Covid-19. In particular, we are seeing a strong recovery in certain commodities such as thermal coal and copper (up 42% and 73% respectively in the last 12 months in USD terms).â€

 

“Our investment in Round Oak Minerals (wholly owned) is performing very well in this environment. The development of Round Oak’s projects has been well timed with current increased production across all three operating mines at a time where commodity prices are strong and ore treatment charges have reduced.â€

 

“While we are disappointed with the lack of approvals for the extension of New Acland in Queensland, New Hope’s Bengalla asset in NSW is performing strongly and at current spot thermal coal prices generates strong cashflows.â€

 

“The integration of TPG and Vodafone appears to be proceeding well and, despite some reduction in earnings from lack of international travel impacting roaming and travel cards, we expect sustained growth in earnings over time.â€

 

“For Brickworks, we are seeing very strong detached housing building approvals in Australia. The US market is still subdued from the impacts of Covid-19 but supportive government policy and low interest rates should be positive for the market. The demand for industrial property to service the growth in online shopping and logistics is also a key driver for increased earnings from Brickworks’ property division.â€

 

“WHSP maintained good cash generation across the portfolio throughout the period impacted by Covid-19. Cash generation from the portfolio continues to be strong and supports our ambitions to maintain increasing dividends over time.â€

 

“We continue to have liquidity available for new investments and have a strong pipeline of opportunities which we believe will deliver superior risk adjusted returns.â€

 

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  • 4 months later...

Court approves convening of Scheme meeting ... expect documents in a week or so

 

MILTON AND WASHINGTON H. SOUL PATTINSON AGREE TERMS OF A PROPOSED MERGER

 

• Milton Corporation Limited has entered into a Scheme Implementation Agreement with Washington H. Soul Pattinson and Company Ltd, under which it is proposed that WHSP will acquire 100% of the share capital in Milton it does not already own by way of a Scheme of Arrangement

• Milton Shareholders will receive WHSP scrip as consideration with Milton shares to be valued at a 10% premium to pre tax net tangible assets adjusted for Milton final and special dividends. In addition, Milton shareholders will receive a fully franked special dividend (which Milton estimates will be up to 37cps), the fully franked final dividend (which Milton estimates will be approximately 8cps) and the fully franked FY21 final dividend from WHSP (which WHSP indicatively estimates to be 36cps, of which, based on the exchange ratio, and at current prices, Milton shareholders are estimated to be eligible for 7cps)

• Based on current prices, the proposal implies a value of $6.00 per Milton share, equivalent to an enterprise value of $3.99 billion based on a $4.05 billion equity value and $59.7 million net cash balance

• Implied value of $6.00 per Milton share represents a significant premium of 20.0% to Miltons last closing price of $5.00 per share, a 9.9% premium to the Milton pre tax NTA of $5.46 per share, a 28.5% premium to the Milton post tax NTA of $4.67 per share and a 20.2% premium to the one month volume weighted average price of $4.99 per Milton share.

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Consistent with its function as an investment vehicle, key drivers of WHSP success are growth in the capital value of the portfolio and a growing yield. While WHSP does not consider its earnings to be a key indicator of Company performance there are a range of factors that have had a material impact on the Group Consolidated Regular NPAT in FY21, notably the following:

 

â–ª New Hope disclosed in its 31 July 2021 Quarterly Report that they expect an EBITDA of $372m for FY2021, primarily as a result of thermal coal prices currently being at a 10-year high. This result is unaudited. New Hope is expected to release its full year results on 21 September 2021.

â–ª Pursuant to a trading update from Brickworks on 09 June 2021, the company highlighted that it expects record earnings from its property division, driven by the continued increase in the value of its property trust. The company is due to report their full year results on 23 September 2021.

â–ª Round Oak, a base metal mining company, is a wholly owned subsidiary of WHSP. Round Oak expects a Regular NPAT for FY2021 in the range of $64 to $68 million. This is a significant improvement on the FY2020 Regular NPAT loss of $43 million as commodity prices (primarily zinc and copper) have improved and the company moved from development into production at a number of its mines.

 

As a result, WHSP currently expects the Group Consolidated FY21 Regular NPAT to be in the range of $316 million to $336 million (FY20: $170 million). The higher earnings contributions from New Hope, Brickworks and Round Oak will be partly offset by a reduced contribution from TPG. Following the merger of TPG and Vodafone in July 2020, WHSP no longer equity accounts its share of the TPG NPAT. WHSP received only one dividend from TPG amounting to $18m in FY21 (compared to the equity accounted profit of $72m in FY20).

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