Soul Patts, Brickworks deliver as expected

Company News

by Glenn Dyer

After thermal coal miner and exporter New Hope Corporation revealed a massive surge in net profit (more than 1,100%) for the year to July 31, a big rise in the earnings of major shareholders and associated companies Washington H Soul Pattinson (ASX:SOL) and Brickworks (ASX:BKW) was always on the cards.

And that’s what the two linked companies revealed on Wednesday.

Washington Soul Pattinson reported that underlying earnings (excluding one-offs) rose 154% to $834.6 million.

The result was not only boosted by the higher contribution from New Hope (61% owned by Soul Patts), but was also the company’s first full financial year report since taking over smaller Sydney investment group Milton.

Soul Patts – which also owns nearly 44% of Brickworks – lifted its final dividend more than 19% to 43c a share and said it was “well positioned for rising interest rates, inflation and any potential downturn in the business cycle”.

Total dividend for the year is 72 cents a share, up 16% polus a special 15 cents a share payment.

Soul Patts reported a statutory net loss of $12.9 million after tax. It said its group loss reflects a nonrecurring goodwill impairment charge of $984.56 million on the4 takeover and merger of Milton Corp in October of last year.

Brickworks, which owns 26% of Soul Patts, reported a 28% lift in revenue to $1.1 billion, a 256% lift in statutory profit to $854 million and a final dividend of 41cents a share. That took the full year payout to 63 cents a share, up a miserly 3% over 2020-21.

Brickwork’s standout operating segment for the year was property – especially its industrial property portfolio around Sydney and Brisbane. Total earnings for the segment increased 155% year on year to $644 million, including property revaluations.

Revenue for building products in Australia grew 7% to $694 million, and EBITDA rose 110% to $205 million, despite the slowdown in building approvals and housing starts in the closing months of the July 31 year.

Over the same period, revenue for North American building products grew considerably more, recording a 97% gain to $399 million while EBITDA rose 84% to $48 million.

EBIT from Brickworks investments (mostly Soul Patts) rose 86% to $181 million.

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