Seven Group Holdings has upgraded earnings guidance thanks to a recovery in television advertising and a better performance by its WesTrac division.
Seven Group Holdings has upgraded earnings guidance thanks to a recovery in television advertising and a better performance by its WesTrac division.
Seven Group Holdings group chief executive Peter Gammell said underlying group earnings before interest, tax, depreciation and amortisation and net profit for 2010-11 now were expected to be about 15 per cent higher than previously forecast.
The guidance was in Mr Gammell's prepared remarks to the company's first annual general meeting, in Sydney.
Seven Group Holdings is the media and earthmoving equipment company that was formed in April this year after Kerry Stokes brought together his mining and television interests under one roof in a $3 billion merger.
The all-scrip merger joined Seven Network and WesTrac, the Caterpillar dealership that was held by Mr Stokes's private company, Australian Capital Equity.
Mr Stokes is executive chairman of Seven Group.
The merger scheme booklets, released in February, forecast Seven Group would report EBITDA of $312 million and net profit of $187 million in 2010-11.
The company reiterated the guidance at its full year results in August.
Mr Gammell said WesTrac was performing well, "with a strong mining market driven by NSW coal and WA iron ore underpinning a positive outlook for the remainder of FY11.
"We now expect WesTrac to exceed the forecasts outlined in the Scheme booklet and to deliver an EBITDA of approximately $240 million excluding any earnings from National Hire (consistent with the Scheme Booklet assumption)," Mr Gammell said.
The scheme booklet had forecast WesTrac to report EBITDA of $231 million in 2010-11.
Seven's television, publishing and online interests are housed within its 47 per cent owned Seven Media Group.
Mr Gammell said Seven Group's share of Seven Media Group's earnings for 2010-11 "could be $80 million", according to internal estimates.
"This estimate exceeds the forecasts at the time of the Scheme due to the strong recovery in the advertising market and now includes an allowance of $17 million for the temporary licence fee rebates that were not included in the Scheme Booklet assumptions," he said.
Mr Stokes told shareholders both businesses were "performing strongly and have terrific opportunities for growth".
