The Seven Group Holdings Ltd (ASX: SVW) share price is catching a strong bid on Wednesday after the media giant posted its FY24 earnings results.
At the time of writing, Seven Group shares are trading at $39.93 apiece, nearly 9% higher on the day.
For context, the S&P/ASX 200 Index (ASX: XJO) is up less than 1% at the same time.
Let's see what the company posted.
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Seven Group share price jumps on strong FY24 results
The major highlights from Seven Group's year include:
- Revenue of $10.6 billion, up 10% year on year.
- Earnings before interest, tax, depreciation and amortisation (EBITDA) of $1.9 billion, an increase of 14% year over year.
- Industrial Services Businesses EBIT came to $1.3 billion, up 28%
- WesTrac posted $623 million in pre-tax income, up 25% year over year
- Boral EBIT was $372 million, up 61%
- Net profit came to $850 million, reflecting a 30% increase
- Final dividend for the Seven Group share price of 30 cents per share, fully franked, a 30% increase
What else happened in FY24?
During FY24, Seven Group made several acquisitions and grew its net profit by 30% year over year.
One standout is the company increasing its ownership of Boral to 100%. The acquisition gives it full access to Boral's cash flow and assets. Management says this could benefit the Seven Group share price.
Revenue growth of 10% was underscored by "growth in customer activity and demand", most notably at its WesTrac business.
The company also invested $537 million in inventory at WesTrac to support increased customer activity and growth in FY25.
With the profit growth, operating margins increased by 106 basis points to 13.4%, driven by operating performance in all the company's portfolio businesses.
Meanwhile, the board declared a final dividend of 30 cents per share, up 30% from the previous year.
What did management say?
Seven Group Holdings' Managing Director and CEO, Ryan Stokes, expressed satisfaction with the company's performance:
We are very pleased to have delivered another strong result this year, with increasing operating leverage resulting in a 20% growth in SGH EBIT.
Our Industrial Services businesses, which delivered 28% EBIT expansion, underpinned SGH's results, with outstanding performance in FY24 from WesTrac and Boral.
Over the last decade, SGH has delivered an 18% compound annual growth rate (CAGR) in EBIT,
highlighting the quality and core-plus nature of our Industrial Services businesses, enhanced by operating discipline and financial agility..
What's next?
Looking forward, management has provided guidance for "high single-digit EBIT growth in FY25". This could impact the Seven Group share price.
It says it is well-positioned to capitalise on growth opportunities across its core sectors, including infrastructure, construction, and industrial services.
WesTrac, Boral, Coates and Beach are each expected to contribute. In particular, WesTrac has " one of the strongest capital sales pipelines in a decade supports the growth outlook".
Seven Group share price snapshot
The Seven Group share price has demonstrated strong momentum following its FY24 results.
After a choppy year, the stock is up nearly 8% since January and more than 49% in the past year.
