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“There’s been no discussion on that target today.”
Seven Group, which controls businesses as diverse as the Seven Network, construction materials builder Boral and mining equipment company WesTrac saw its shares jump to a year high of $24.53 after it raised its earnings guidance for the 2023 financial year.
RBA boss Philip Lowe says inflation remains “way too high and needs to come down”.Credit:Alex Ellinghausen
The company posted higher profit margins on the back of robust performances across its resources, infrastructure and construction businesses, despite rising interest rates and inflation.
Seven’s revenue for the half landed at $4.6 billion, up 16 per cent, while earnings before interest and tax (EBIT) also rose 16 per cent to $595 million. It forecast EBIT growth for the year to June 30 to be in the low to mid-teen per cent. Net profit for the half year was down 7 per cent to $341 million.
“The growth in infrastructure and construction activity, coupled with the outlook for resources, supports our confidence in the opportunity for our industrial services businesses,” Stokes said.
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However, he cautioned that the supply of energy, particularly domestic gas, remains an important issue for the long-term health of the Australian economy.
UBS analyst Nathan Reilly said Seven’s half-year result was ahead of market expectations, but the higher full-year guidance merely brought Seven Group earnings forecasts in line with market consensus.
Reilly added the better than expected half year result was “driven by stronger than forecast performance across Seven’s premium assets, WesTrac and Coates.”
UBS also noted that the 2023 EBIT guidance for WesTrac is now for “mid-teen” growth – it was previously low-teen – on strong customer activity and delivery pipeline support. Coates’ guidance also upgraded from low-teen EBIT growth to “high-teen” EBIT growth on strong infrastructure activity.
UBS said the upgraded full-year guidance may be conservative – and may reflect potential volatility across both Media and Energy in the current half year.
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