Seven Group plunges on outlook

Group tips fall of 40% in EBIT for current year amid mining, advertising slowdowns, after posting steep rise in FY net profit.

Seven Group Holdings (SVW) is tipping a fall in earnings of up to 40% in the current year as it warned on trading conditions across its industrial and media divisions, after posting a sharp rise in profit for the year to June.

At 1045 AEST, shares in the group fell 9.48% to $6.97, after touching an intra-day low of $6.85 against a benchmark fall of 0.25%.

Net profit jumped to $488.6 million, from $176.7 million in the previous year, when it took $483.5 million in impairments.

The huge increase was helped by $89.7 million in significant items, including a $50 million gain on the $491 million sale of its share in Consolidated Media Holdings and a $77.9 million in reversal on the prior year's impairments.

Excluding significant items, underlying net profit grew 19.33% to $396.6 million.

Revenues grew 6% to $4.75 billion in the period, from $4.46 billion.

It will pay a fully-franked final dividend in line with the 20 cents paid last year.

Seven said the rise in underlying profit was driven by large fleet deliveries for its caterpillars subsidiary WesTrac in the first half. Westrac EBIT increased by 15% to $446.7 million.

But the mining downturn had hurt its industrial services business in the second half, and the group remained cautious on trading conditions.

It expected underlying EBIT to be down between 30 and 40% on 2012-13.

For Seven West Media, which Seven Group has a 35 stake in, advertising markets were expected to remain subdued. EBIT for its media arm fell 9% to $105.8 million.

"Seven West Media is anticipating that overall advertising markets will remain subdued with low single digit growth in television, and a continuation of the current trend experienced in newspapers, but the rate of decline in magazines is expected to lessen," the group said.