Seven Group Holdings Limited (SGH) is an Australian diversified operating and investment group with businesses and investments in industrial services, media, and energy. The principal activities of the Group are those of a diversified operating and investment group; with interests in heavy equipment sales and service, equipment hire, construction materials, media, broadcasting, and energy assets.
Seven Group (SVW), a current holding within the momentum component of the ASX Growth portfolio, this morning has reported first-half results, with shares rising as investors react positively to upgraded guidance.
The results for the half-year reflect a robust performance across SVW’s diverse portfolio. The company reported a net income of A$188.9 million, a fall of 41% compared to the previous year’s A$319.6 million driven by impairments in the groups exposure to Beach Energy as well as a decrease in the value of its stake in Seven West Media. Despite this, the underlying profit exhibited a notable increase of 27% year-on-year, amounting to A$433.1 million.
The revenue was also a positive note, rising by 17% to A$5.39 billion above estimates of $5.022 billion. This increase underscores the strength of Seven Group’s core businesses, particularly in the Industrial Services sector, including WesTrac, Coates, and Boral, which have been pivotal in driving the results. These subsidiaries have outperformed expectations, contributing to the group’s decision to upgrade its EBIT growth forecast for FY24 to a mid to high-teens range, with a specific guidance uplift for the Industrial Services segment to anticipate 20 – 25% EBIT growth. EBIT itself saw a solid rise of 28% to A$764 million highlighting SVW’s operation success. The interim dividend was maintained at $0.23.
Overall, the results are positive and understandably the market is reacting well with shares up 6.02% compared to a -1.3% fall in the broader ASX200. As the company looks ahead, its upgraded guidance and strong half-year performance point to a positive outlook for FY24, underpinned by strategic initiatives across its core business segments. As a reminder, SVW’s inclusion in the ASX Growth portfolio is based on share price momentum and given the gains today it would be incredibly unlikely for the stock to be removed at tomorrow’s rebalance. Since SVW’s inclusion in May 2023, it has returned 55%.
