Soaring profits fail to lift Seven Group (ASX:SVW) share price today

Revenues and profits were both well up from the prior corresponding half-year.

| More on:
A young businesswoman looks shocked at what she's reading on the paperwork in her hand, with colleagues in the office in the background.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Seven Group share price slides amid wider ASX 200 selloff
  • Revenues and profits lift off
  • Boral acquisition completed during the period

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

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 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.

More on Earnings Results

Two happy excited friends in euphoria mood after winning in a bet with a smartphone in hand.
Earnings Results

ASX 200 stock jumps 10% on strong FY24 results

How did this KFC restaurant operator perform in FY 2024?

Read more »

A male investor wearing a white shirt and blue suit jacket sits at his desk looking at his laptop with his hands to his chin, waiting in anticipation.
Consumer Staples & Discretionary Shares

Guess which ASX 200 stock just slashed its final dividend by 23%

This retailer had a tough time during the 12 months. Here's how it performed.

Read more »

Man jumps for joy in front of a background of a rising stocks graphic.
Earnings Results

Catapult shines: 20% sales growth propels ASX tech stock to new 52-week high

A strong annual result from this tech player has caught investor attention.

Read more »

A man in his 30s holds his laptop and operates it with his other hand as he has a look of pleasant surprise on his face as though he is learning something new or finding hidden value in something on the screen.
Earnings Results

Xero share price leaps 8% on staggering earnings upheaval

A major turnaround in profitability is sending investors into a frenzy over Xero shares today.

Read more »

a construction worker sits pensively at his desk with his arm propping up his chin as he looks at his laptop computer while wearing a hard hat and visibility vest in a bunker style construction shed.
Materials Shares

Which ASX 200 stock just plunged 12% despite record full-year earnings?

It looks like an impressive report card but UBS doesn't like the FY25 guidance.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Earnings Results

ASX 200 tech stock lifts off on another record-setting half-year profit

Investors are bidding up the ASX 200 tech company following its half-year results.

Read more »

increasing rural asx share price represented by happy looking sheep
Earnings Results

Why is this ASX All Ords stock staying strong as profits crash 76%

How is this company's share price marching higher after mowing down more than three-quarters of its profits compared to a…

Read more »

Two men sit side by side on a couch with video game controls in their hands and expressive looks on their faces as they react to the action in front of them in a home setting.
Earnings Results

Guess which ASX 200 stock is surging 11% on an 'outstanding' result

This ASX gaming giant just posted a 17% jump in profits, and its shareholders are basking in the glory.

Read more »