Washington H. Soul Pattinson And Company Limited · ASX:SOL
Washington H. Soul Pattinson And — H1 FY2022 Earnings Presentation
21 slides from Washington H. Soul Pattinson And's earnings presentation, Mar 24, 2022
Slide 1: Financial Results Half Year FY2022
Financial Results Half Year FY2022
Slide 2: WHSP is a unique investment product in the Australian market
WHSP is a unique investment product in the Australian market Through WHSP, an investor has the opportunity to gain exposure to: — A range of asset classes across sectors, including private equity, private credit and property — Investment strategies that have delivered above market returns for decade
Slide 3: Our Investment Philosophy
Our Investment Philosophy DIVERSIFIED UNCONSTRAINED LONG TERM Diverse range of uncorrelated A flexible investment mandate allows Disciplined and value focussed investments across listed equities, WHSP to invest in and support approach to investing through market private equity & venture capital, com
Slide 4: Half Year Performance
Half Year Performance Period ending 31 January 2022 Half Year Results January 2022 4
Slide 5: Half year ended January 2022 – Profit After Tax
Half year ended 31 January 2022 – Profit After Tax Group Regular profit excludes one-off events and better reflects underlying performance of major investments Group Regular NPAT significantly increased ▪ Increased commodity prices (New Hope, Round Group Regular $343.7m Oak) NPAT1 ▲ 281% on pcp ▪ Pr
Slide 6: Half year ended January 2022 – Key Performance Indicators
Half year ended 31 January 2022 – Key Performance Indicators WHSP is focused on increasing the asset value of the portfolio and generating increasing cash from investments to fund dividends Strong increase in cashflow supports dividends Net Cash from $182.6m ▪ Net Cashflow From Investments up 114% o
Slide 7: Merger with Milton Corporation
Merger with Milton Corporation Milton has successfully been integrated and is already providing significant benefits INCREASED NAV After-tax Net Asset Value per share increased 17.7% through the half (compared to -5.2% for the Index). Pre-tax NAV increased 3.4% INCREASED CASHFLOW GREATER DIVERSIFICA
Slide 8: Dividends
Dividends FY22 Interim Dividend up 11.5%. Over 20 years of Interim Dividend growth ▪ Strong operating cashflow permits higher dividends ▪ WHSP has declared an FY22 Interim Dividend of 29cps, fully franked (up 11.5%) ▪ 24th consecutive increase in 29 25 26 Interim Dividends 22 23 24 20 21 18 19 17 14
Slide 9: Total shareholder returns
Total shareholder returns An investment in WHSP over the last 20 years has increased over 10 times Annualised TSRs 1 Year 5 Year 10 Year 15 Year 20 Year WHSP 2.5% 14.7% 10.2% 11.0% 13.0% +1,054% All Ordinaries Accumulation Index 9.7% 9.1% 9.7% 5.8% 8.2% Relative performance (7.2%) 5.6% 0.5% 5.2% 4.8
Slide 10: Long-term total shareholder returns
Long-term total shareholder returns WHSP has provided strong equity returns over the last 40 years $1,000 invested in 1981 worth $221,802 a Compound annual return of 14.5% for 50 years Jan-1982 Jan-1987 Jan-1992 Jan-1997 Jan-2002 Jan-2007 Jan-2012 Jan-2017 Jan-2022 Source: Capital IQ Cumulative perf
Slide 11: Portfolio overview
Portfolio overview 11
Slide 12: Portfolio overview
Portfolio overview Net Asset Value (pre-tax) as at 31 January 2022 was $9.0 billion, an increase of 56% over the last 6 months Portfolio Value ($m) ▪ WHSP Strategic portfolio is now 45.6% of total portfolio, down from Strategic portfolio (1) 68.5% $4,125m Large cap portfolio (1) $3,376m ▪ Pre-tax va
Slide 13: Investment environment
Investment environment Asset markets will remain volatile with rising interest rates favouring profitable assets with robust cash flows Average Average Performance in Performance in ▪ Volatile asset markets entering a period of uncertainty with “Down months” “Up months” elevated valuations (equity m
Slide 14: Strategic portfolio
Strategic portfolio WHSP has a portfolio of cornerstone shareholdings in diversified industries with low correlations Value $4,125 million ▪ API stake sold to Wesfarmers (further top-up payment to be % of portfolio 46% received in March 2022) Net cash flow $87.6 million ▪ Delivered a total return (n
Slide 15: Large caps
Large caps Large Caps portfolio aims to generate long-term capital and income growth Value $3,376 million ▪ Sold Milton’s stake in Brickworks and WHSP, as required by the % of portfolio 37% Scheme of Arrangement Net cash flow $36.9 million ▪ Delivered a total return (net asset growth plus dividends)
Slide 16: Private equity
Private equity WHSP has a growing portfolio of private companies which are platforms for further growth Value $650 million ▪ NPAT contribution of $30.5 million in 1H FY22 % of portfolio 7% ▪ Contribution to Net Cash flow from Investments increased 274% on pcp Net cash flow $37.4 million Round Oak, A
Slide 17: Emerging companies
Emerging companies WHSP is an active investor and partner in both listed and pre-IPO emerging companies Value $531 million ▪ Delivered a total return (net asset growth plus dividends) of 6.5% over % of portfolio 6% 1H FY22 Net cash flow $20.9 million ▪ Outperformed the ASX Small Ordinaries Accumulat
Slide 18: Structured yield
Structured yield Investing across the capital structure to optimise risk adjusted returns on attractive opportunities Value $359.7 million ▪ Net Cash Flow From Investments of $10.9m, up 19% over pcp % of portfolio 4% ▪ 27 investments across a range of industries Net cash flow $10.9 million Portfolio
Slide 19: Property
Property The property portfolio comprises actively managed direct property investments Value $174.2 million ▪ Underweight direct property due to look-through interest in % of portfolio 2% Brickworks’ industrial portfolio Net cash flow $nil ▪ Tight supply of industrial property Portfolio Direct prope
Slide 20: Net working capital
Net working capital WHSP has access to significant liquidity for new opportunities Value ($175.1 million) ▪ Net working capital position of negative $175 million % of portfolio (2%) ▪ $411m of interest-bearing debt with an average cost of 0.72% p.a. Net cash flow ($2.0 million) Portfolio Net interes
Slide 21: Disclaimer
Disclaimer Disclaimer This document has been prepared by Washington H. Soul Pattinson and Company Limited (‘WHSP’). All information contained in this document (including this notice) Any forward looking statements included in the Information This Information does not constitute an offer, invitation,
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