Ann: Soul Patts Shareholder Briefings, page-10

Personally, and obviously quite a contrarian view, I am losing faith in Soul Patts.

1. Their rationale for the merger with Milton was that size will give them more opportunities. Ever sensible investor knows that increased size makes returns above the benchmark harder not easier.
2. To achieve the merger, they paid with SOL scrip. Milton shareholders were dudded because the SOL share price was historically expensive (3 years later we are below where SOL was then).
3. They are moving their portfolio from listed securities which get marked daily, to unlisted assets where the marks are less clear. It's so unclear what is in this bucket and how they have been valued.
4. For a "family office" type of company, the number of non-deal roadshow style events they hold, which serve no fundamental business purpose other than to pump a share price is worrying. Especially for a company that presumably should not need to raise capital from shareholders ever.
5. They've mentioned their Swim Centre roll up a million times. In what world is a swim centre roll up a good business or one that could move the dial for a $9bn company.....
6. The weird convertible note structure for New Hope - a company with a heap of cash already, and owned by Sol, who itself is well capitalised, is very odd.
7. They've managed to increase dividends significantly in the last few years because of 2 things - high coal prices and getting very juicy returns on credit investments. Neither will last long term and I believe they may have extended dividend increases too quickly and will regret not moving slower with increases.

I want to love sol patts but they are doing too many things that concern me and it reduces my confidence in their ability to generate real returns.