SGH Reports 46% TSR, Reaffirms FY26 EBIT Growth Amid Board Changes

Record Earnings and Operational Strength

SGH Ltd, a leading Australian diversified industrial and energy company, showcased its robust financial and operational performance during its 2025 Annual General Meeting. The company highlighted a decade of consistent growth, with a 20% compound annual growth rate in EBIT and a tenfold increase in market capitalization since 2010. FY25 saw record earnings, enhanced return on capital, and successful deleveraging, underpinning a 46% total shareholder return for the year.

Safety Challenges and Executive Accountability

Despite operational successes, SGH confronted serious safety challenges with two workplace fatalities in FY25, one at Boral’s Montrose Asphalt facility and another involving a contractor at Coates’ Roxby Downs branch. These tragic incidents have deeply affected the company and its workforce. In response, SGH has implemented strengthened safety controls, intensified consequence management, and enhanced risk detection protocols. The Board has also adjusted short-term incentives for executives to reflect accountability and is reviewing its incentive frameworks to better align rewards with safety outcomes.

Strategic Growth and Market Positioning

SGH’s diversified portfolio includes market-leading businesses such as WesTrac, Boral, Coates, and significant stakes in Beach Energy and Seven West Media. The company remains focused on sectors with long-duration demand, including infrastructure, mining production, and transitional energy. While infrastructure activity faces a near-term slowdown due to project timing, medium to long-term prospects remain positive, supported by a $213 billion five-year public project pipeline and a recovering residential market.

WesTrac continues to leverage its exclusive Caterpillar dealership to support mining customers, while Boral advances operational efficiency programs targeting mid-teen EBIT margins. Coates is optimizing asset utilization amid softer trading conditions, confident in the long-term infrastructure investment outlook. In energy, SGH is progressing the Crux LNG backfill project, expected to start delivering gas in 2027, and advocating for pragmatic policy reforms to unlock new domestic gas supply.

Property and Media Initiatives

SGH is unlocking value from surplus Boral property assets, including the strategically located Ravenhall Logistics Precinct near Melbourne, with advanced partner selection underway for its long-term development. Additionally, SGH supports the proposed merger of Seven West Media with Southern Cross Media Group, which is expected to create a leading integrated media platform and deliver significant cost synergies and growth opportunities. Post-merger, SGH would hold approximately 20% of the combined entity.

Board Transitions and Governance

The AGM also announced key Board changes – Chair Terry Davis and Audit and Risk Committee Chair Annabelle Chaplain will retire in 2026, with Mark Johnson succeeding Chaplain and former Boral CEO Vik Bansal joining the Board. The company emphasized its strong governance framework, disciplined capital allocation, and alignment of executive remuneration with long-term shareholder value creation.