Soul Patts builds FY27 firepower after lifting dividend to 63 cents

Merger accounting drives record profit

Soul Patts’ first full-year result as the merged owner of Brickworks arrived with a spectacular headline number and a large footnote. Statutory net profit attributable to shareholders jumped 502% to $2.191 billion from $364 million, but $1.529 billion of that result came from non-recurring items, including a $1.3 billion merger-related accounting gain and tax cost-base reset. The company has explicitly warned that those benefits are not expected to recur in FY27.

The underlying investment picture was less theatrical but still constructive. Operating NPAT was $319 million, down from $355 million, while portfolio gains contributed $343 million. Lower realised coal pricing reduced Soul Patts’ share of New Hope’s result, and the enlarged group also recorded $221 million in impairment, restructuring and other non-recurring costs. In other words, the earnings headline is not a useful proxy for the group’s recurring earning power.

Cash generation supports another dividend increase

The more important number for income-focused shareholders was Net Cash Flow From Investments, which rose 11.5% to $571.5 million. Credit, Private Companies and Real Assets supplied the main lift, while NCFI per share increased 8.3% to $1.51 despite the larger post-merger share count. The board responded with a fully franked final dividend of 63 cents per share, up 6.8%, taking FY26 ordinary dividends to 111 cents and extending Soul Patts’ dividend-growth record to 28 consecutive years.

The payout represents 73% of NCFI. The final distribution is scheduled for payment on 5 November 2026, with the shares trading ex-dividend from 12 October. Soul Patts has also reactivated its dividend reinvestment plan without a discount, with reinvestment shares expected to be issued rather than acquired on-market. That may modestly increase the share count, but the filing presents it primarily as a way to give shareholders continued access to the group’s compounding model.

Balance sheet leaves capital waiting for work

Post-tax NAV rose 27.2% per share to $38.17, helped by portfolio performance and the merger-created $792 million estimated net capital gains tax asset. Pre-tax NAV finished at $13.7 billion, a 10.2% return for the year against a 6.0% return from the ASX200 Total Return Index. The figures are non-statutory measures, and the post-tax uplift includes tax benefits that reflect the merged structure rather than a simple increase in operating earnings.

Soul Patts finished with $2.7 billion in cash and liquid investments and total available liquidity of $3.8 billion, including undrawn facilities. The balance expanded after the group received $1.9 billion in net proceeds from selling its industrial property interests in June and placed much of the capital into a new Fixed Income allocation. That portfolio held $2.7 billion at year-end, with an average AA credit rating and currency exposure hedged into Australian dollars, giving the group a liquid holding bay while it searches for new investments.

FY27 test shifts from integration to deployment

The merger is now less a transaction to complete than a capital-allocation platform to prove. Soul Patts says it has approved a further $662 million of offshore private-market commitments since 31 July, weighted towards global credit funds, while global commitments across private partnerships have reached $2.0 billion. The portfolio is spread across listed companies, fixed income, private companies, credit, emerging companies and real assets, but the allocation choices will determine whether diversification translates into durable cash returns.

There are also clear points of sensitivity. Energy exposure represents about 17% of NAV, primarily through New Hope, while the annual report says climate-related data and scenario modelling remain subject to limitations. Management expects FY27 markets to remain uncertain around interest rates and bond yields. With the merger gain behind it and billions of dollars still awaiting deployment, the next result will show whether Soul Patts can convert balance-sheet optionality into recurring NCFI and NAV growth rather than another accounting spectacle.