SGH (SGH) H2 2024 earnings summary

Executive summary

• Revenue grew 10% year-over-year to AUD 10.6 billion, with underlying EBIT up 20% to AUD 1.42 billion and NPAT up 30%, driven by strong Industrial Services performance at WesTrac, Boral, and Coates.

• Completed compulsory acquisition of Boral, fully integrating it and enhancing access to cash flows and strategic alignment.

• Statutory NPAT declined 23% due to impairments at Beach Energy and Seven West Media.

• Total shareholder return of 56% for FY24, with a 10-year EBIT CAGR of 18%.

• Declared fully franked dividends of AUD 0.53 per share for FY24, with a 30% increase in the final dividend.

Financial highlights

• Revenue up 10% to AUD 10.6 billion; EBITDA up 14% to AUD 1.93 billion; EBIT up 20% to AUD 1.42 billion; underlying NPAT up 30%.

• Statutory NPAT of AUD 464 million, down 23% due to significant item losses.

• Operating cash flow down 16% to AUD 1.31 billion, impacted by AUD 537 million working capital investment at WesTrac.

• Net debt increased to AUD 4.3 billion, with leverage at 2.2x post-Boral acquisition; 48% of debt fixed at 4.8% average rate.

• Return on equity of 20.8%, up 406 basis points.

Outlook and guidance

• FY25 guidance for high single-digit EBIT growth, supported by strong demand, robust project pipelines, and productivity gains.

• WesTrac expects growth from robust capital sales pipeline and working capital investment; Boral and Coates to leverage infrastructure pipeline and productivity gains.

• Group leverage expected to decline to around 2.1x by end of FY25, assuming no major transactions.

• Boral EBIT margin expected to continue improving, with mid-teen margins as a longer-term ambition.

• Beach Energy targets 17.5–21.5mmboe production, with strategic refresh underway.