Earnings season wrap-up: 28 August
Page 1 of 4
Nicholas Grove is a Morningstar journalist.
Companies covered in this report:
Seven Group records 38pc rise in profit
Seven Group Holdings' (SVW) net profit before one-off items for fiscal 2012 rose 38 per cent on the previous year to $343.2 million, the industrial equipment and investment company said on Tuesday.
The result was achieved on the back of a 41 per cent rise in revenue to around $4.4 billion, the company said.
The significant items during the period included a gain on the sale of vividwireless to Optus and a marking to market of the carrying value of the group's investment in Seven West Media (SWM).
This was offset by an impairment reversal in respect of the company's investment in Consolidated Media Holdings (CMJ).
Seven Group, which is 68 per cent-owned by billionaire Kerry Stokes, holds significant stakes in Seven West Media, Consolidated Media Holdings and Prime Media Group (PRT).
On an after-tax basis, significant items gave rise to a $166.5 million reduction in net profit. Statutory net profit after significant items rose 121 per cent to $176.7 million.
Seven Group declared a final dividend of 20 cents a share, fully franked and payable in October. This took full-year dividends to 38 cents a share, up 2 cents on the prior year and in line with Morningstar's forecast.
Morningstar senior equities analyst Ross Macmillan described the result as "extremely complex" and explained that changes in the company's structure make meaningful comparisons with prior periods "pretty difficult".
"The bottom line is that operating revenue was up 41 per cent," he said.
Macmillan explained that the WestTrac Australia and WesTrac China businesses, which supply Caterpillar equipment, make up around 95 per cent of the group's trading revenue.
WesTrac Australia's revenue was up 57 per cent, but Westrac China's revenue was down 8 per cent on a soft Chinese construction market, Macmillan said.
Seven Group CEO Peter Gammell said while the current level of activity in the resources sector put its WesTrac Australia, AllightSykes and Coates Hire businesses in position for a strong first half, the group remains "very cautious regarding trading conditions in China and the outlook for media markets over the next six months is soft".