Sydney-based investment group Soul Pattinson (SOL) has raised its final dividend, even though it suffered a fall in earnings in the year to July.
The company, which sits at the heart of a group of companies including Brickworks, API, TPG, New Hope, Clover Corporation and several smaller companies, will pay a final dividend of 28c a share, up from 27c after net profit fell to $105.4 million from $143 million in 2011-12.
The higher final followed a higher interim and boosted the full year payout by 4.5% to 46c a share from 44c.
Revenue was down by 13.3% to $791.3 million, compared with $912.4 million in the previous year.
Profit before the write-downs eased $1 million in the year to $160.6 million.
The reason for the fall in net earnings was mainly due to impairment losses on its exposure to coal miner New Hope Corp. They totalled $30.7 million of the $55.2 million loss reported yesterday (up from the $18.6 million loss for the previous year).
New Hope reported a sharp slide in earnings for the year earlier in the week and warned the current year will see lower earnings again. But New Hope has a handy $1.25 billion in cash on hand, so the impairment by Soul Pattinson is book-keeping.
The lower contribution from New Hope was offset by the contribution from other investments such as TPG Telecom and Brickworks, which also reported its 2012-13 results yesterday.
Soul Pattinson shares rose 30c or 2.2% to $13.90 in yesterday’s upbeat market.
SOL YTD – Soul Patts raises dividend despite earnings slide
Brickworks (BKW) shares rose – up 35c or 2.8% to $12.85 yesterday after the company reported higher profits, thanks to its property development activities and a one-off property sale.
Brickworks said net profit for the year to July rose to $100 million up from $78.9 million in 2011-12.
Revenue rose 10% to $606.5 million from $556.9 million.
The company’s property division trebled its contribution in the year to $49 million from $16.4 million in the previous year.
That was after it sold property at Oakdale South in NSW for a profit of $23.4 million during the year. Earnings from investments dipped to $60 million from $67.7 million.
A steady final dividend of 27c a share has been declared, taking the total for the year to an unchanged 40.5c a share.
Brickworks confirmed that a modest recovery in home building was underway, especially in NSW.
It said housing starts nationwide remains mixed, with a strong performance in NSW offset by continued weakness in other states such as Victoria and Queensland.
Overall starts of detached dwellings in Victoria fell another 10.6%, it said, and are now down 29% from the peak three years ago.
Activity in NSW was more robust with starts up 18.2%, but still below long term levels, it said.
As a result, the group’s Austral Bricks division saw a 20% rise in sales, and order volumes for 2013 to date were comparable with the same period last year.
CEO Lindsay Partridge said the business was still taking a cautious approach, despite the optimism, if case conditions did not improve, and would remain focused on cost-cuts and strategic moves to boost margins.
Earnings before interest and tax from the Building Products arm was up 15% to $32.8 million.
Brickworks owns 43% of Soul Pattinson, which in turn owns about 45% of Brickworks.
BKW YTD – Brickworks result up on higher property profits
