Seven Group up on WesTrac

Seven Group Holdings has lodged a big increase in earnings for the half year, as improvements in the mining industry aided the strong performance of WesTrac.

Underlying earnings before interest and tax increased 42 per cent compared with last year, while revenue increased 31 per cent to $1.39 billion.

Net profit was $168.6 million, up from a $41 million loss last year, with the company attributing the positive results to solid output from WesTrac and Coates Hire.

“The continued strength of the mining production cycle with greater utilisation of fleets has supported parts growth and component demand at WesTrac,” managing director Ryan Stokes said.

“Coates Hire remains well positioned to benefit from the strong east coast infrastructure demand and our increased stake in Beach Energy provides the group with increased exposure to east coast gas demand.”

After accounting for changes in ownership in Coates and Beach, the group’s earnings had increased 23 per cent on the previous corresponding period.

The company also announced a 5 per cent increase in its interim dividend to 21 cents per share.

WesTrac recorded revenue growth of 16 per cent while earnings before interest and tax was up 35 per cent.

Mr Stokes said the company expected sustained growth from WesTrac.

“We anticipate continued momentum from our WesTrac and Coates businesses into the second-half, which supports our upgrade to full year guidance that FY18 underlying EBIT from continuing operations will now be 15 per cent up on FY17 on a pro-forma basis,” he said.

Shares in Seven were up 11.5 per cent at $18.40 at 3pm AEDT.