The SGH Ltd (ASX: SGH) share price has sunk 8% diversified industrial business announced its FY25 result.
SGH is the owner of Coates, Boral, WesTrac, a 30% stake of Beach Energy Ltd (ASX: BPT), other SGH Energy businesses, and a 40% stake in Seven West Media Ltd (ASX: SWM).
SGH FY25 result
Here are some of the highlights from the 12 months to 30 June 2025:
- Total revenue up 1% to $10.7 billion
- EBITDA (EBITDA explained) grew 6% to $2.05 billion
- EBIT rose 8% to $1.54 billion
- Underlying net profit after tax (NPAT) grew 9% to $924 million
- Statutory net profit rose 5% to $486 million
- Operating cashflow jumped 49% to $1.95 billion
- Final dividend of $0.32 per share, up 6.7%
- Full-year fully franked dividend of $0.62 per share, up 17%
The key difference between the underlying and statutory result was primarily impacted by impairments and the share of results on its equity-accounted interests. In other words, those impacts relate to SGH’s investments, not its operating units.
Let’s take a look at how the SGH operating units performed.
WesTrac
WesTrac grew revenue by 4% to $6.1 billion and increased EBIT by 2% to $639 billion. This was supported by growing customer activity, particularly in the WA resources sector. Expansion and fleet replacement activity underpinned demand.
The business continued its focus on sourcing, attracting and building “a robust talent pipeline of skilled technicians” which saw total chargeable full-time equivalent employees increase 2% to 2,305.
Boral
Boral’s revenue increased by 1% to $3.6 billion and EBIT increased 26% to $468 million.
“Pricing traction”, higher concrete volumes and resilient demand in the commercial and engineering sectors offset lower quarry volumes and softer residential and road activity, particularly in regional markets.
The profit margin increased because of pricing discipline across all product lines and the carrying out of optimisation and efficiency programs.
Coates
Coates revenue declined 9% to $1 billion and EBIT dropped 9% when ‘normalised’ for the sale of Coates Indonesia in FY24.
Revenue declined on lower customer activity. Despite that, it managed to maintain its EBIT margin thanks to disciplined cost control, ongoing workforce and footprint ‘rationalisation’ and efficiency gains.
In late FY25, it launched its Grow30 strategy, focused on growing markets share of the infrastructure and construction pipeline through “improved sales execution”.
It’s targeting high-growth sectors such as renewables, utilities, defence and residential construction.
Energy and Media
SGH noted that Beach Energy delivered 19.7 million barrels of oil equivalent (MMboe) in FY25, a 9% increase year on year. It included a 64% increase from the Otway Basin and a 91% rise in the Bass Basin. Revenue rose 13% to $2 billion and underlying net profit increased 32% to $451 million. Development progressed across SGH Energy.
Seven West Media – the TV channel and other media business – maintained its position as Australia’s number one total TV network for the fifth consecutive year, though revenue declined 4% because of a softer advertising market, partially offset by a higher share of total TV advertising revenue. Digital growth remained strong.
Outlook for the SGH share price
The company said it would remain focused on driving operational excellence through “sales effectiveness, operating leverage, cadence and innovation.”
At WesTrac, growth is expected to continue in services, supported by rebuild demand. Major deliveries are expected to moderate.
For Boral, positive operating momentum has continued into FY26, with earnings growth expected to be driven by an improving strategy, customer service differentiation, and ongoing cost efficiencies.
Coates’ near-term market conditions remained mixed. SGH said the business is well-placed to capture an expected medium-term uplift in rental demand.
Beach is expected to deliver total production of between 19.7 MMboe to 22 MMboe in FY26.
Overall, the company is expecting to deliver “low-to-mid single-digit EBIT growth”, supported by margin improvements achieved in FY25 and robust customer activity across core market exposures.
Clearly, the market was expecting more from the business. It’s not one of the businesses on my watchlist, but it has performed strongly and this could be a good time to invest while the SGH share price is lower and earnings growth is expected.
