SGH reaches a new share price record on growth trajectory towards ‘simplified’ FY25

SGH chief executive Ryan Stokes says the diversified business is on track for strong earnings growth this financial year and is distilling its strategic direction down to two themes.

Speaking on Thursday at the annual general meeting of SGH, formerly known as Seven Group Holdings, Mr Stokes said the conglomerate is still expecting “high single-digit” growth in its earnings before interest and tax for FY2025.

SGH has wide-ranging interests across the construction, mining, energy and media sectors.

“We are seeing strong service activity at WesTrac, partially offset by a low single-digit effective parts price reduction, supporting improved total cost of ownership for our customers,” he said.

“At Boral and Coates, customer activity has remained resilient, with volumes largely consistent with second half FY2024; and Beach (Energy)’s first quarter results support their FY2025 production guidance.

“At Seven West Media, they have completed a comprehensive organisational restructure, aimed at sharpening focus on commerciality and fostering a performance culture. They have also progressed a significant cost efficiency program to position the business for growth in the medium term.”

Mr Stokes says the group’s “consistent outperformance” has been supported by its focus on “disciplined execution and capital allocation” into three growth sectors — mining production, infrastructure and construction, and transitional energy.

“While these thematics continue to present opportunities and long-term demand tailwinds, we are evolving and simplifying these themes in FY25 to industrials and energy,” he said.

“This change better reflects our long-term sectoral demand outlook, and where we will look to deploy incremental capital going forward to maximise growth and returns to stakeholders.”

The SGH chief believes the company is well-poised via construction materials manufacturer Boral and equipment hire business Coates to help the government fix the housing shortage in many parts of Australia.

“In residential, the medium to long-term outlook is supported by positive macro-thematics, such as population growth, and the approximate 50 per cent increase from the current dwelling commencements levels required to meet the government’s national housing accord.”

SGH is coming off a stellar FY2024, delivering EBIT of $1.4 billion and net profit after tax of $850 million — a 30 per cent rise on the financial year prior.

Gaining complete ownership of Boral “was the key strategic outcome for the year”, Mr Stokes stated in August.

“With full ownership, we now have complete access to Boral’s strong cash flow generation and quality assets, including the significant long-term value potential in the property assets,” he said at the time.

The strong momentum across SGH has continued so far in FY2025 and on Thursday the company reached a new share price record of $45. The stock has more than doubled since the start of 2023 and it now has a market capitalisation of nearly $20b.

“Over the past 10 years, we have outperformed the ASX100 by more than 600 per cent,” Mr Stokes said.

Shareholders on Thursday signed off on the company’s name change from Seven Group Holdings to SGH, which it was already commonly known as in the market, and its ASX-ticker will change from SVW to SGH.

“The proposed change aligns our company name with the evolved nature of our core operations. It also maintains a strong connection to our heritage, while orienting us towards an industrial-focused future,” Mr Stokes said.

SGH has a major stake in WA Newspapers, the publisher of The West Australian, thewest.com.au and The Nightly.