SGH - SGH Limited

[Joe Blow]

Seven Group Holdings (SVW) is made up of the Seven Network and the WesTrac Group. Seven Network owns interests in a commercial television network, Seven Network; the second largest publisher of magazines in Australia, Pacific Magazines; and has a presence in online and new communications technologies. WesTrac Group is an authorised Caterpillar dealer in its Western Australia and New South Wales/ACT Service Territories and in its North Eastern China Service Territory.

 

[Dutchy3]

Possible flag forming up ....

 

[notting]

Netflix and co. Is it the game changer?

Jury is deliberating. Being below the 200 day is obviously a little troubling.

Personally I think it's worth a positive shot about here.

 

[notting]

Back about there again, however this time, it's based on having stopped buying back it's own shares and by the looks of it, no one else was!

 

[greggles]

A surge in interest today and a corresponding 6% rise in share price.

No news out recently but perhaps there's some around the corner?

 

[skc]

A surge in interest today and a corresponding 6% rise in share price.

No news out recently but perhaps there's some around the corner?

The surge started Wednesday was in response to Caterpillar (US listed company) giving a good result. SVW holds the Caterpillar dealership in a few states and China, among other assets.

 

[notting]

Thing about the big CAT however is that it tends to be a one quarter wonder.
Falling USD or a new commodities boom, is the question as to what SVW does at resistance from here.
All eyes on the CAT for that!
Heads up yesterday was a good call woofer.

 

[kid hustlr]

SVW starting to look good again. Stock has been in a strong uptrend for a while and whilst it can be a little whippy, it appears to be looking to have another going at the previous highs at $19 after a strong day today in the context of some strength over the past several weeks

 

[greggles]

Seven Group Holdings has bounced off support at $18.50 and is now heading back towards $20. SVW has tripled in price in the last couple of years and has maintained a solid uptrend since February 2017. In the last couple of months it has been going through a period of consolidation but it is looking like it might be gathering the momentum to head back towards recent highs of $20.60.

 

[peter2]

SVW was sold off with the rest of the market Sep18 - Dec18. Price is 20% off the recent low.
I've linked this company to the price of oil due to it's significant investment in oil/gas companies. The price of SVW has bounced with the price of oil (thin grey line on daily chart is the oil ETF OOO.)

The chart below is part of a research project and should not be considered a recommendation to buy this stock. If you want to read more about the project log in to read the P2 Weekly Portfolio thread.

Setup: Reversal 20% off recent lows, I'd prefer to see a HL on the daily chart, but price can move quite quickly when demand is strong. Grade B since there's no HL.
Buy limit: 15.90, iSL 14.00, trail price up

 

[Skate]

SVW was sold off with the rest of the market Sep18 - Dec18. Price is 20% off the recent low.
I've linked this company to the price of oil due to it's significant investment in oil/gas companies. The price of SVW has bounced with the price of oil (thin grey line on daily chart is the oil ETF OOO.)

The chart below is part of a research project and should not be considered a recommendation to buy this stock. If you want to read more about the project log in to read the P2 Weekly Portfolio thread.

Setup: Reversal 20% off recent lows, I'd prefer to see a HL on the daily chart, but price can move quite quickly when demand is strong. Grade B since there's no HL.
Buy limit: 15.90, iSL 14.00, trail price up

View attachment 91681

SVW
From my perspective I would like to make a comment on this stock'

Disclaimer
I like SVW & this stock has been kind to me in the past, but it's in a no zone for me at the moment, traders will continue to sell into any growth (IMHO) meaning there will be no joy in this stock for me in the near future.

Skate.

 

[Miner]

SVW
From my perspective I would like to make a comment on this stock'

Disclaimer
I like SVW & this stock has been kind to me in the past, but it's in a no zone for me at the moment, traders will continue to sell into any growth (IMHO) meaning there will be no joy in this stock for me in the near future.

Skate.

View attachment 91698

@Skate
Market listend to your call made on Sunday and so did Caterpillar with whom SVW has a large holding and owning full Westrac business in Australia.
So SVW sent south today.
DNH but do hold SWM - same group but high on media .

 

[peter2]

Like miner I was put off placing the buy order on SVW due to CAT's poor earnings*. Today's drop in price makes it easier for me to frame my trade using a conditional order.

Cond order triggers once price trades at 15.90 and I'll place a limit order to buy at 16.00.
iSL at 14.00 although this may rise a little once the HL is formed.
Naturally if a HL doesn't form and price falls <13.00. The setup is invalid.

* I should add I haven't looked for any evidence that this is a good decision. I might do it today. Had a quick look and there is some minor correlation on CAT earnings downgrades.

 

[peter2]

This reversal trade setup triggered two days after I posted the chart. Price went from 16.00 to 19.94 quite quickly before pausing. The rectangle depicts the 50-62% retracement level of the prior move down. JIC the move down was the first wave of a big ABC correction. Price has traded in a ledge since then (shallow consolidation after an impulsive move up is bullish).

SVW released an upgrade to its guidance today sending the price higher still.

 

[divs4ever]

Kerry Stokes retiring from Seven Group​

Kerry Stokes retiring from Seven Group

Self-made billionaire Kerry Stokes is retiring from the board of his media and investment company, Seven Group Holdings.Seven on Wednesday said Mr Stokes will step down as executive chairman after 11 years, following an annual general meeting in November.

au.finance.yahoo.com

i hold SVW and BPT

DYOR

i have done very well in SVW and BPT

i hope Kerry has a wonderful time in semi-retirement

 

[Miner]

Kerry Stokes retiring from Seven Group​

Kerry Stokes retiring from Seven Group

Self-made billionaire Kerry Stokes is retiring from the board of his media and investment company, Seven Group Holdings.Seven on Wednesday said Mr Stokes will step down as executive chairman after 11 years, following an annual general meeting in November.

au.finance.yahoo.com

i hold SVW and BPT

DYOR

i have done very well in SVW and BPT

i hope Kerry has a wonderful time in semi-retirement

Ryan Stoke has got excellent training not to follow Jamie Packer's foot steps

 

[Dona Ferentes]

A hard one to drill down into. Also, lack of free float would tend to exacerbate SP movement. This is one fund manager's view:

At Airlie, we look to invest in quality companies that we believe are undervalued by the market. Often these opportunities emerge when a great business sits within an otherwise mediocre sector, or when the market assigns an arbitrary discount to a type of business. For us, Seven Group Holdings (SVW) falls into both categories.

Seven is a conglomerate of industrial businesses. Two of these businesses sit in sectors often unloved by investors for their volatile returns and capital intensity – mining services (WesTrac) and equipment rental (Coates). Furthermore, in listed equities ‘conglomerate’ is a dirty word. It can imply complexity, opacity and bloat, where the corporate structure of the company sits at odds with interest of the shareholders, and many investors choose to avoid conglomerates for these reasons. In our mind, WesTrac and Coates are quality businesses sitting within mediocre industries, pushed further out of sight by the conglomerate structure of Seven. While investors digest the highly publicised on-market takeover of Boral or lament the decline of the namesake Free To Air TV business (Seven West Media), WesTrac and Coates quietly demonstrate their quality and form the majority of our valuation of Seven.

WesTrac – Less cyclical than it appears?

WesTrac is the authorised Caterpillar dealer in Western Australia, New South Wales and the Australian Capital Territory, providing heavy equipment sales and support to customers. Caterpillar employs an independent dealership sales model for its heavy machine sales and support services. Caterpillar thinks this model fosters a stronger relationship between dealers and local customers (acknowledging the importance of high-quality after-sales service and support) and allows Caterpillar to focus its capital allocation on product development and innovation.

WesTrac sales are given in two segments – product sales (i.e. machine sales) and product support. Product sales have been reasonably cyclical, tied to future production volumes and the fleet replacement cycle of the tier-1 and tier-2 miners (and at a second derivative, commodity prices and miner profitability). Product support sales have been far more steady, growing at a 10-year rate of 7.0%, as new sales enter the maintenance program and old equipment sees parts intensity increase and its life extended.

Through the cycle, WesTrac has had a return on invested capital ranging from about 14% (2015, 2016) to 30% (2012, 2021) and EBIT margins between 7% to 11%.

WesTrac does not disclose earnings by segment, but our analysis suggests the earnings of the business have shifted materially towards product support over the past decade. Given product-support revenue is more predictable and still growing, this should mean that even if new sales decline the earnings of the business is more sustainable (versus a decade ago) with arguably a higher ‘mid-cycle’ earnings base.

Finally, Caterpillar has an internal target of doubling its revenue from product services (via the dealership network) by 2026, as it looks to take advantage of fleet-replacement cycle extensions and expanded product lifecycle offering.

The net of this is that we believe WesTrac is far less cyclical than typical mining-services businesses, and earns stronger returns through the cycle, and should be valued as such.

Coates – Impressive transformation ahead of a revenue inflection?​

Coates Hire is Australia’s largest general equipment hire company and provides a range of general and specialist equipment to a variety of markets including engineering, building construction and maintenance, mining and resources, manufacturing, government and events. The business is primarily exposed to east coast infrastructure, industrial and residential projects, as well as resources activity.

The Coates business is thriving. Following the resources boom earlier in the decade, Coates’ margins slumped from about 25% to about 11% as revenue fell from about A$1.3 billion to A$870 million (-32%) from FY12 to FY16. Management has since undertaken a material cost-out, transformation program that has been delivered incredibly successfully:

• In FY15, Coates delivered A$104 million of EBIT on A$919 million of revenue (11.4% margins). In FY21, on essentially flat revenue (A$946 million), Coates delivered A$212 million of EBIT (22.4% margins).
• Since FY15, EBIT has grown at a CAGR of 12.5%, while revenue growth has been benign at a CAGR of 0.5%.

For FY22, management has guided to high single-digit EBIT growth. Looking further out, management is driving the business towards the internal ‘Team25’ project goals. Team25 is a continuation of the existing transformation strategy within Coates with the business targeting A$1.25 billion of revenue and a 25% EBIT margin. Part of the success of the Team25 targets will rely on revenue growth driven from increased market share and east coast infrastructure spend, however cost-out initiatives still form part of the strategy. Were management to successfully execute on the Team25 targets, Coates would deliver about $313 million of EBIT, versus A$212 million in FY21 (+48% overall, or a 10% CAGR to FY25).

The takeaways for us are two-fold:

• First, Coates management has built an impressive track record of cost management and margin growth in a benign revenue environment; and
• Second, given the above, Coates should see material operating leverage in its earnings should revenue start to grow.

Coates’ margins and returns sit in the top-quartile of the global equipment rental sector, and there remains the potential for considerable earnings growth over the next two to three years (on top of that delivered steadily since 2016). Both of these factors suggest to us that the business is of higher quality than most would expect of typical rental equipment companies.

Valuation

Of course, Seven does not just consist of WesTrac and Coates. Within the conglomerate also sit stakes in listed companies Boral (70%), Beach Energy (30%) and Seven West Media (40%), as well as unlisted energy, media and property holdings. Of these investments, the recently acquired 70% stake in Boral is the most material (and where valuation is arguably most up for debate). Including the Boral investment, we estimate Seven is trading on a P/E multiple of sub 14x FY22 earnings, which is a about a 25% discount to the S&P/ASX 200, and in our mind an undemanding valuation.

In our ‘sum of the parts’ analysis of the business, we see upside to the current share price when taking a more mid-cycle view of the earnings of WesTrac and Coates, and before including any material valuation upside to the Boral business, should management successfully execute the transformation program and unlock additional value in the non-core property portfolio. Finally, our confidence in the conglomerate structure comes back to ownership. Seven remains 60% owned by the Stokes family, with Kerry Stokes in the chairman role and his son Ryan as CEO. In our view this gives shareholders significant alignment with the board and management, and we have found that through time founder-led businesses tend to consistently outperform the broader index.

 

[peter2]

Yep, SVW has been a difficult one, even for the chart based traders. It remains a buy the dip short term trading opportunity as there's lots of dips. I trade this one long and loose.

 

[divs4ever]

SGH DELIVERS SOLID GROWTH ACROSS ALL SEGMENTS

Boral included as a consolidated subsidiary
• Trading revenue from continuing operations of $3,956m, up 3.1% on a pro-forma basis
• EBIT from continuing operations $510.9m, up 28.9%
• WesTrac EBIT of $209.9m, on track to deliver FY22 EBIT guidance
• Coates EBIT of $119.4m, guidance increased to ’low double-digit’ FY22 EBIT growth
• Group FY22 EBIT guidance of 8% to 10% increase on the pro-forma FY21
• Deleveraging following post balance date Boral capital return
• Interim dividend of 23 cents per share, fully franked
• Statutory NPAT $1,221m, up 235.6%
• Statutory EBIT $1,471m, up 187.5%
Seven Group Holdings (‘SGH’) (ASX:SVW) today reported its financial results for the six months ended
31 December 2021 (HY22) delivering strong revenue, earnings and profit growth.
The statutory net profit after tax of $1,221 million, up 235.6%, included a gain of $757 million relating to the
Boral acquisition. On an underlying continuing operations basis, the net profit after tax of $302 million is up
21.5% for the half-year.
The Group continues to adapt effectively to evolving market conditions, delivering strong results across the
portfolio. WesTrac remains on track to deliver its FY22 guidance of low single digit EBIT growth and Coates
EBIT guidance has been upgraded to low double-digit growth. Group guidance is for FY22 underlying EBIT
from continuing operations to be up between 8% to 10% on a pro-forma basis.
Ryan Stokes, Managing Director and Chief Executive Officer said:
“We have achieved strong growth and maintained our focus on financial discipline and operational excellence
in what has been a challenging environment. Across the portfolio, we have delivered on our strategy, working
to support our network of business leaders and their highly engaged teams. I continue to be incredibly proud
of the agility demonstrated by our people as they support our customers and deliver results in demanding
conditions.”
“Today’s result demonstrates the benefits of our strategy to own a diversified portfolio of high-quality
businesses across varied segments of the economy.”
“We like to assess our performance on a like-for-like, continuing operations basis, but I do note that in this
period we consolidated Boral following our acquisition of a 69.6% stake during 2021. We are excited by the
opportunity Boral presents. With the company having successfully pivoted back to Australia, we are
supporting management to drive financial performance and deliver margins that are commensurate with
Boral’s industry-leading position.”
“Importantly for SGH, we made a commitment to repay the transaction bridge facility of $2.97 billion within
the financial year and are pleased to confirm that, following the Boral capital return, the bridge has been
substantially reduced and will be fully repaid in March.”

Group EBIT from continuing operations 510.9 396.4 28.9%
Industrial Services
WesTrac delivered growth in capital sales and parts revenue, demonstrating the robustness of the Caterpillar
model and its leverage to mining production and construction activity in Western Australia and New South
Wales.
Customer demand, particularly for construction machinery, has continued to increase with revenue up 4.0%
to $1,921 million. A shift in product mix and the impact of a parts price decrease on 1 January 2021
contributed to a small reduction in EBIT to $209.9 million. The EBIT margin of 10.9% was lower than the prior
comparative period but higher than the overall level of 10.5% in FY21. In response to the increasing customer
activity, working capital has been increased to ensure WesTrac is well placed to meet future demand.
Coates continued to benefit from its market-leading position and productivity focus with revenue and EBIT
up 5.7% and 13.7% respectively. Utilisation improved 8.8% during the six months.
SGH acquired a 69.6% controlling interest in Boral during the half and is now fully consolidating Boral’s
financial results. Boral completed its portfolio realignment with the exit of US operations and domestic timber
and roofing businesses. As a result, Boral returned $3 billion of capital to all shareholders on 14 February
2022, allowing SGH to effectively deleverage and repay its bridge facility.
Boral’s continuing operations revenue of $1.5 billion, up 1.5%, was impacted by construction shutdowns in
New South Wales and Victoria. EBIT, excluding property sales, was $77.6 million. SGH is now supporting
Boral to improve its margins to reflect the strength of its position in the construction materials industry.
Media
Seven West Media (SWM, 38.9% owned) continued to deliver improved results during the half, benefitting
from its transformation strategy. Revenue of $820 million was up 27.3% with Seven the most watched freeto-air Australian network in 2021 and 7plus the most watched BVOD. SWM EBIT of $204 million and NPAT
of $129 million were up 33.5% and 47.8% respectively. The acquisition of the Prime Media Group, completed
in December 2021, will deliver significant value creation providing the potential to reach more than 90% of
the Australian population.
SGH’s underlying results included SWM EBIT of $50.8 million, up 44.7%, and the statutory results include a
$76 million benefit from the mark-to-market impairment reversal in the value of the investment in SWM.
3
Energy
Beach Energy (BPT, 30.0% owned) contributed EBIT of $66.7 million, up 82.2%, with an 11.5% increase in
sales revenue to $786 million as a result of improved energy prices. Production for the half was 19.7% lower
at 11 MMboe due to natural field decline and planned and unplanned maintenance in the Cooper Basin JV
and Western Flank. The first delivery of gas from the Otway offshore development will support Beach
delivering its FY22 production guidance of 21.0 to 23.0 MMboe. Furthermore, the progress on the Waitsia
project will support its transition to an LNG exporter.
SGH Energy is continuing to work with joint venture partners at the Crux natural gas field to move towards a
Final Investment Decision (FID) in the second half of this financial year. SGH is also exploring divestment
options for Crux.
Balance Sheet and Cash Flow
Investment in working capital in WesTrac to support growth and respond to disruptions in the supply chain
resulted in a slight reduction in Operating Cash Flow to $221.5 million. During the half, the Group successfully
launched its first US Private Placement for its Coates operations raising $905 million with an average tenor
of 9.6 years at a fully hedged fixed cost of 4.1%, demonstrating the strength of the Coates business and
investor familiarity with the rental business model.
SGH has retained its interim dividend at 23 cents per share fully franked. The Group has available franking
credits of $237 million as at 31 December 2021.
Environmental, Social and Governance (ESG)
Ensuring the safety of the Group’s 13,500 employees is a top priority and, responding to an increase in safety
incidents during the half, the Group has implemented a range of initiatives that are delivering improved safety
performance.
During the half, Seven Group released its first Sustainability Report. The report outlined the ten material
issues of forward focus for the Group, adopted disclosures in line with TCFD recommendations, and
documented the Group’s actions to achieve its targets. In terms of the Group’s commitment to achieve net
zero carbon emissions by 2040 for wholly owned and operated businesses, interim targets of a 30% reduction
from 2020 levels by 2026 and a 50% reduction by 2030 have been set for Coates and WesTrac.
Outlook
SGH increased its FY22 guidance for Coates EBIT to ‘low double digits’ from ‘high single digits’ reflecting the
strong momentum during the first half. Guidance for WesTrac ‘low single digit’ EBIT growth is retained.
Group guidance is for FY22 pro-forma EBIT from continuing operations excluding property to be up between
8% to 10%. This guidance reflects the quality of the Group’s businesses which are now well placed to
capitalise on the expansion in mining production, infrastructure investment, media and energy markets.
Guidance is subject to no material change to market conditions.
This announcement has been authorised for release by the Board of Seven Group Holding Limited.


====================================================================================================

( DYOR )

i hold SVW ( i also hold BPT 'free-carried' )

now i was buying these in the dips before the conversion of SVWPA ( which i also held ) now it looks like i will just hold and collect the divs ( unless there is another BIG dip )

i doubt i will be buying these sub $6 any time soon ( like i was in 20115 )

 

[DrBourse]

5/5/23 11am – SVW looks interesting……

Note the Entry Signals, Blue Triangles & the Thin Blue Vertical Lines, then note the Candle Colours & the CCI Indicator movements…..

Same with the Exit Signals, Red Triangles & the Red Dotted Vertical Lines, then note the Candle Colours & the CCI Indicator movements…..


The Triangle code is Blue B, P or K = Buy, ….. Red S, P or K = Sell….

The Blue B = Buy, the Blue P = Piercing Candle Formation Signal, the Blue K = Kicking Candle Formation,

The Red S = Sell, the Red P = Piercing Candle Formation Signal, the Red K = Kicking Candle Formation…..

Explanation Snapshots of those above Blue & Red codes is below….

Been 3 reasonable trades since early Feb 23, could there be another one starting today…. Or should we wait for tomorrows TA B4 a decision is made…. Your Call.....

This mornings Chart is below…..

Again it’s a bit slow t’day, tomorrow will probably be the same, so I have to do something, may as well bore everyone to tears with some Educational ‘bits n pieces’….

REMEMBER THAT THIS TYPE OF TA WORKS FOR ME, IT MAY NOT SUIT YOUR NEEDS, SO DYOR….

Cheers...
DrB.