Kerry Stokes’ Seven Group Holdings will undertake another share buyback after tough market conditions saw first half profit tumble.
The company, which has interests in industrial services, media, property and resources, announced net profit fell 90.5 per cent in the half year to December 31 to $6.5 million.
Seven West Media, in which Seven Group has a 41 per cent stake, last week reported its earnings fell more than nine per cent to $205 million.
Seven Group's results were also dragged down by significant items of $104.5 million after tax, primarily relating to an impairment of $182.2 million to the carrying value of the company's investment in Seven West Media.
Aside from Seven's media interests, equipment hire business Coates Hire saw underlying earnings fall to $53 million from $68 million in the corresponding period, hurt by a slowdown in major mining projects.
WesTrac Australia, which deals Caterpillar heavy mining equipment, partly offset the impact of depressed sales in the mining sector through an upswing in NSW infrastructure construction which boosted new and used sales.
As a result, WesTrac Australia earnings were down $2 million to $85 million for the half.
Looking forward, Seven Group reaffirmed its forecast from August that full year earnings would fall 10 per cent.
Seven said it would buy back up to 16.6 million shares, including three million remaining in its current program.
Shareholders welcomed the news, pushing Seven's shares up 48 cents, or 10.39 per cent, to $5.10.
Despite the profit slide, Seven held its interim dividend steady at 20 cents a share.
Seven chief executive Ryan Stokes described the first half result as "robust".
"We are building strength into all of our businesses through the cycle as we continue to streamline our operations and drive working capital efficiency, while maintaining our market leadership and balance sheet flexibility," Mr Stokes said it a statement.
SEVEN GROUP'S PROFIT SLIDES
- Net profit down 90.5pct to $6.5m
- Revenue down 2.0pct to $1.37bn
- Interim dividend steady at 20 cents a share