SGH boss Ryan Stokes on the lookout for deals after posting bumper $655m profit

SGH chief executive Ryan Stokes has expressed “genuine frustration” Australia does not have a greater focus on boosting productivity to fire up the economy.

Mr Stokes also warned east coast manufacturers against “cheap shots” about gas prices but was confident there would be a “constructive pathway” forward on the Federal Government’s hotly-debated proposal for a reservation scheme.

The comments came as the Reserve Bank’s quarterly economic outlook warned productivity growth had been “very weak”, ultimately slowing wage growth and cutting long-term living standards.

Improving productivity means getting more value out of each hour worked and dollar invested but Australia went backwards last year.

“It’s a genuine frustration we don’t have a greater focus on productivity,” Mr Stokes said.

“It’s slipped off the priority list of governments across Australia. We think it needs to be squarely back on.

“Productivity is not the responsibility of government. However, government has a role to ensure the regulatory framework is set to support productivity.”

Treasurer Jim Chalmers made productivity at the centre of his economic agenda after the 2025 election with a Canberra summit and series of reports authored by experts from the Productivity Commission.

Yet many of the bigger recommendations were not pursued, like a plan to shift the corporate tax system away from investment towards cash flow, which would have benefited the vast majority of businesses.

Mr Stokes also on Tuesday said upcoming changes to the tax regime would create concerns for investors — echoing comments he made in May that the overhaul would “punish aspiration” — and constrictive interest rate rises were working.

ASX-listed SGH on Tuesday posted a statutory profit of $692 million in the year to June, up more than 30 per cent on the 2025 financial year.

That was particularly driven by rising earnings at construction materials company Boral, which were up 14 per cent.

But it was below the target of analysts and shares dropped 10 per cent to $41.58.

A forecast data centre investment boom of $150b through to 2030 will be a top target for further growth.

Mr Stokes said there had been “genuine interest” from the sector in Boral’s surplus property portfolio which could be used to house the tech equipment that underpins artificial intelligence.

Across SGH’s industrial businesses of Westrac, Boral and Coates there would be opportunities for supplying equipment, materials and energy to the projects.

“We don’t have chips,” he said.

“But most of the other things we can help with.”

SGH’s other business interests include a 20 per cent stake in Southern Cross Media, which owns WA Newspapers, publisher of The Nightly, The West Australian and The Sunday Times. Mr Stokes is a director of Southern Cross.

It holds 30 per cent of oil and gas play Beach Energy. Mr Stokes said the domestic gas sector was “threatened” and “vulnerable” under the Federal Government’s proposed reservation scheme.

That policy will require exporters across the country to pump 20 per cent of production into the local market regardless of demand. It was largely driven by concerns of a shortfall in the east coast wholesale gas market.

“I understand there’s a need to do something to ensure (businesses) accessing the wholesale gas market can have reliable long-term contracts,” he said.

“There’s a role for LNG producers to play into that. There is a constructive pathway that works for all parties.”

He stopped short of urging manufacturers in need of gas to stump up their own cash to fund exploration work but said critics needed to understand the risk and cost of developing energy projects.

“We have (invested in new supply), not because we needed to, but because we thought it was sensible,” he said.

“If you’re not prepared to put money up and understand the risks involved with bringing gas to market, its pretty easy to take cheap shots and say ‘I want something cheaper’.”

Manufacturers have long been pushing for the reservation policy as it will push down input costs. But oil and gas companies say driving down the price of gas too far will worsen shortages by forcing local producers out of the market.