Seven shares dumped on bleak outlook
Shares in Seven Group Holdings plunged after the mining equipment and media company forecast a fall of up to 40 per cent in earnings this financial year, following a weak start to calendar 2013.
Seven Group owns the WesTrac Caterpillar dealerships in Australia and China, a 45 per cent stake in equipment hire firm Coates Hire, and a 35 per cent stake in Seven West Media.
The result was boosted by a $50 million gain on the sale of its investment in Consolidated Media Holdings last year for $491 million.
Seven West Media's free-to-air network, Channel Seven, was also allocated $13.2 million from the Department of Broadband, Communications and the Digital Economy, to help it to acquire new equipment to move to digital news gathering.
The other free-to-air TV stations, Channels Nine and Ten, received $14.5 million and $13.2 million each, a grant report from the department on June 28 shows.
Seven Group said it was cautious about trading conditions, with WesTrac dragged down by falling commodity prices and a subdued coal sector.
"As highly publicised, 2013 was a story of two halves, with our industrial services business delivering an exceptional performance in the first half of the year, followed by a softening in the second half," new chief executive and managing director Don Voelte said.
"Assuming current market [conditions] continue we expect underlying EBIT to decline between 30 and 40 per cent in 2014 from the exceptional result that was delivered in 2013."
Shares in the Kerry Stokes-chaired company fell by 7.5 per cent, or 58¢, to close at $7.12 - well below analysts' average target price of $8.84, Bloomberg said. Tuesday's slide takes the year-to-date decline to 15.7 per cent.
For the year to June 30, the company reported a 193 per cent rise in full-year profit to $486.4 million.
Revenue grew by 6 per cent to $4.75 billion, and underlying net profit was $399 million - within the forecast range provided at its half-year results.
The media arm was down 9 per cent to $106 million.
A steady 20¢ fully franked dividend was declared.