SGH shares plunge amid lower than expected FY26 guidance
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More news: Shares in Kerry Stokes’ SGH fell in morning trade after the diversified operating company posted earnings before interest and tax guidance for financial year 2026 that was lower than consensus estimates.
At 10:29am AEST, SGH shares were the worst performing on the ASX 200 having slipped 7.4% to $48.
UBS analysts flagged in a research note that EBIT growth guidance for FY26 was 5% below Visible Alpha consensus and 1% below the mid-point of the bank’s forecast.
The analysts said this “likely reflects a drag “ from subsidiary companies Beach Energy and Coates although this would be “offset by [mid-single digit] EBIT growth at WesTrac and Boral”.
Otherwise, the UBS analysts flagged that FY25 EBIT growth of 8% was in line with guidance and consensus.
SGH posts 5% uptick in full-year profit, lifts dividend
The news: SGH has reported statutory net profit after tax of $486 million, up 5% compared to the $464 million posted by the Kerry Stokes-led diversified operating company last year.
The numbers: Before significant items, net profit after tax came in at $924 million, up 9% year on year. Revenue increased 1% to $10.7 billion.
SGH posted a second-half dividend of 32 cents per share, up from the 30 cents per share declared in the previous corresponding period.
Market consensus estimates, according to Visible Alpha, had anticipated statutory net profit after tax of $893.20 million, and net profit after tax of $902.90 million before significant items. Consensus also expected an interim dividend of 28.85 cents.
The context: Managing director and CEO Ryan Stokes said earnings growth during the year was driven primarily by the performance of its Boral and Westrac businesses. SGH completed its acquisition of construction material producer Boral in July 2024.
The group expects to deliver "low to mid single-digit" growth in earnings before interest and taxes in FY26, supported by margin improvements achieved in FY25 and "robust customer activity" across its core markets.
In October 2024, shareholders voted to rename the company from Seven Group Holdings to SGH Holdings to reflect the company’s changing core operations since a 2010 merger between Seven Network and WesTrac Holdings. This involved an ASX listing code change from SVW to SGH.
The source: ASX
