The Seven Group Holdings Ltd (ASX: SVW) share price is slipping in early trade, down 4.25%.
Seven Group shares closed yesterday trading for $22.36 and are currently at $21.41.
It’s not just the Seven Group share price under pressure today though. The S&P/ASX 200 Index (ASX: XJO) is down 1.1% as well.
Below we look at the highlights from the diversified investment group’s half-year financial results (1H FY22).
Seven Group share price slides despite profit lift
- Group revenue of $4.84 billion, up 105.3% year-on-year
- Underlying net profit after taxes (NPAT) lifted 21.5% to $302 million
- Earnings before interest, taxes, depreciation, and amortisation (EBITDA) of $749 million, up 42.3% from $527 million in the prior corresponding period
- Interim dividend of 23 cents, fully franked, equal to what was paid in 1H FY22.
What else happened during the half-year?
Atop the impressive 21.5% increase in underlying NPAT, Seven Group reported an even more impressive 235.6% boost in statutory NPAT, which came in at $1.22 billion. This figure includes a gain of $757 million relating to the Group’s acquisition of Boral Limited (ASX: BLD) during the half-year.
The group’s diverse holdings – including Seven West Media Ltd (ASX: SWM), 38.9% owned – continued to deliver growth during the period, with energy a particularly strong performer.
Seven Group holds a 30% interest in Beach Energy Ltd (ASX: BPT). Despite a drop in production during the half-year, due to natural field decline and maintenance in the Cooper Basin JV and Western Flank, Beach’s EBIT contribution of $66.7 million was up 82.2% year-on-year. Higher energy prices also helped boost sales revenue 11.5% to $786 million.
The company’s operating cash flow was down from the prior corresponding period to $221.5 million. This was primarily due to investment in working capital in WesTrac, helping support growth amid supply chain disruptions.
What did management say?
Commenting on the results, Seven Group CEO Ryan Stokes said:
Today’s result demonstrates the benefits of our strategy to own a diversified portfolio of high-quality businesses across varied segments of the economy.
We like to assess our performance on a like-for-like, continuing operations basis, but I do note that in this period we consolidated Boral following our acquisition of a 69.6% stake during 2021. We are excited by the opportunity Boral presents. With the company having successfully pivoted back to Australia, we are supporting management to drive financial performance and deliver margins that are commensurate with Boral’s industry-leading position.
Importantly for SGH, we made a commitment to repay the transaction bridge facility of $2.97 billion within the financial year and are pleased to confirm that, following the Boral capital return, the bridge has been substantially reduced and will be fully repaid in March.
What’s next?
Looking ahead, Seven Group offered guidance saying it expects pro-forma EBIT for FY22 from continuing operations (excluding property) to increase between 8% and 10%.
It stated the businesses it has invested in are “well placed to capitalise on the expansion in mining production, infrastructure investment, media and energy markets”.
Seven Group share price snapshot
Over the past 12 months, the Seven Group share price is down 4%, trailing the 5% gains posted by the ASX 200 in that same period.
So far in 2022, Seven Group shares are down 2.7%, outperforming the 6% loss on the ASX 200.
The post Soaring profits fail to lift Seven Group (ASX:SVW) share price today appeared first on The Motley Fool Australia.
Should you invest $1,000 in Seven Group right now?
Before you consider Seven Group, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Seven Group wasn’t one of them.
The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
*Returns as of January 13th 2022
More reading
- Strong profit and sales growth can’t stop the ARB (ASX:ARB) share price from sinking today
- This ASX telco just reported 62% revenue growth
- Fruitful earnings: Costa Group (ASX:CGC) share price surges 8% on full-year results
- HUB24 (ASX:HUB) share price lifts 6% amid record platform inflows
- Nanosonics (ASX:NAN) share price sinks amid 45% half-on-half profit decline
The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
from The Motley Fool Australia https://ift.tt/u12wrAb
Leave a Reply