Seven Group shares advance on 20% earnings boost
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More news: Shares in Seven Group Holdings were up on the ASX after the investment conglomerate reported a 20% rise in full-year earnings, boosted by an expansion to its industrial services businesses.
Seven shares were up 6.2% to $38.99 by 11:25am AEST, having added more than 45% in the last year.
Seven Group posts earnings lift on industrial services growth
The news: Seven Group Holdings reported a 20% rise in full-year earnings, boosted by an expansion to its industrial services businesses, and guided "high single-digit EBIT growth" in FY25.
The numbers: Seven reported net profit after tax of $850 million, up 30% year on year, while statutory NPAT lowered 23%.
The group said the difference relates primarily to Seven's share of impairments on production assets at Beach Energy and a mark-to-market impairment of Seven West Media interests.
Earnings per share increased by 28% to $2.31, while revenue added 10% year on year to $10.6 billion. EBIT was up 20% to $1.419 billion — boosted by a 28% rise from its industrial services businesses — but fell short of Visible Alpha forecasts of $1.44 billion.
In February, the company upgraded its full-year earnings forecast to "mid to high-teen EBIT growth in FY24" from a previous estimate of "high single to low teen EBIT growth".
Operating cash flow decreased by 16% to $1.3 billion, partly attributed to the group's $527 million investment in inventory at WesTrac .
Seven declared a final dividend of 30 cents per share, announced last month, representing a 30% uplift on the previous year's payout. The group said it expects "high single-digit EBIT growth in FY25".
The context: Seven managing director and CEO Ryan Stokes called the group's buyout of listed construction materials supplier Boral as a "key strategic outcome for the year".
The Stokes family-controlled investment conglomerate said the acquisition is a "significant milestone in [Seven's] evolution towards becoming a leading Australian Industrial Services company, with WesTrac, Boral and Coates among the top industrial businesses in the country."
What they said: "Over the last decade, [Seven] has delivered an 18% compound annual growth rate in EBIT, highlighting the quality and core-plus nature of our industrial services businesses, enhanced by operating discipline and financial agility," Stokes said.
"Our investment in people, technology, and capacity through the year has positioned us to meet growing customer demand and underpins our positive outlook and FY25 EBIT growth guidance," he said.
"We are also excited about investment opportunities within our existing portfolio to drive growth over the medium to long-term, including adjacencies at Boral in recycling and property."
The source: ASX announcement
