Seven confident of FY earnings rise

Seven Group Holdings has flagged a rise of up to 20 per cent in full year profit despite being cautious about current trading conditions.

The media and industrials business on Tuesday reported a net profit of $256.8 million in the six months to December 31, up from $52.1 million in the previous corresponding period.

The surge in profit was largely a result of a $50.1 million gain from the group's stake in Consolidated Media Holdings to Rupert Murdoch's News Corp.

Large fleet deliveries by the group's heavy equipment business WesTrac also help boost the first half result.

Underlying profit, which excludes one-off financial items, rose 39 per cent to $235.1 million, from $169.3 million, beating the group's own forecasts.

Seven said that while it remained cautious about trading conditions in the second half, it still expects to lift full year earnings.

"Our current expectation is that underlying group NPAT (net profit after tax) for the 2013 full year will be up approximately 10-20 per cent on the prior year but would note that this is also subject to the timing of deliveries for large mining projects," Seven said in a statement.

"The 2013 full year statutory results may also be impacted by the share price movement of Seven West Media."

The group owns 33 per cent of Seven West Media, which comprises the Seven TV network, West Australian Newspapers, Pacific Magazines and Yahoo!7.

Seven Group also holds an 11.4 per cent stake in Prime Media.

Seven said revenues and earnings from its core WesTrac business both rose strongly in the first half thanks to demand for heavy equipment from the coal and iron ore miners.

However, looking ahead to the second half, Seven said that while a rise in the iron ore price had increased activity from WesTrac's iron ore customers, the coal sector was subdued and would have an impact on WesTrac's second half earnings.

Elsewhere, earnings contributions from the group's media investments fell nine per cent to $65.8 million.

Seven said the lower earnings contribution reflected the weaker advertising market and the sale of its ConsMedia stake.

Seven also said progress was being made on a strategic review of ownership alternatives for its 45 per cent stake in the Coates Hire equipment business.

Seven has previously flagged a possible sale of its 45 per cent stake.

Coates is co-owned with private equity outfit Carlyle Group.

Seven increased its fully-franked interim dividend by two cents to 20 cents a share.

Market Data

  • Currencies
    Currencies
    NamePriceChange% Chg
    0.9366+0.0008+0.08%
    AUDUSD=X
    0.5574-0.0022-0.40%
    AUDGBP=X
    0.6771-0.0006-0.08%
    AUDEUR=X
  • Commodities
    Commodities
    NamePriceChange% Chg