Shares in Soul Pattinson have fallen more than seven per cent after the investment firm reported a 20 per cent drop in its full-year net profit.
Profit for the year to July 31 was $266.8 million, down from a $333.1 million FY17 figure, while impairments to coal miner New Hope, which it has a 50 per cent stake in, also impacted the FY18 result.
The investment firm, which also holds major interests in TPG Telecom, Brickworks, Australian Pharmaceutical Industries and Apex Healthcare, says its underlying profit was up 17.4 per cent to a record $331 million.
It said this figure was boosted by one-off gains in FY17, mainly driven by New Hope, which benefited from higher coal prices and its Bengalla joint venture.
A lift from the Financial Services Portfolio, Apex Healthcare and Brickworks further contributed to the company’s strong underlying profit growth.
Managing director Todd Barlow said the pending merger between TPG and Vodafone Australia has added more value to its portfolio since the end of the financial year.
The creation of a $15 billion business will take on major telcos Telstra and Optus, he said.
“The assets that both companies have are complementary and it’s a much stronger and more robust business to be able to compete,” Mr Barlow told AAP.
New Hope’s net profit for FY18 was up seven per cent to $149.5 million despite significant impairments from an exploration asset in Queensland.
API’s growth had stagnated due to softer retail sales.
It also acquired a cosmetic laser and hair removal business called Clearskincare.
“We’re seeing a lot more growth in the services segment of the health and beauty space, more so than the products side of things,” Mr Barlow said.
Soul Pattinson has lifted its final dividend one cent to 33 cents per share, fully franked.
Its shares were down 7.3 per cent to $23.80 at 1220 AEST.
SOUL PATTINSON PROFIT
* Full-year net profit down 20 per cent to $266.8
* Revenue up 21.4 per cent to $1.17 billion
* Final dividend of 33 cents, fully franked