Company Interview / SGH builds on Boral's strength and eyes further M&A

Key points:

Boral delivers strong earnings for SGH (ASX:SGH) in the first half Ongoing interest in BlueScope (ASX:BSL) and Whyalla steelworks, with focus on value-adding M&A Interim dividend rises to $0.32 per share Continued investment in industrial and logistics projects for long-term growth

SGH (ASX:SGH) posts solid first half as Boral drives growth, eyes M&A opportunities. SGH CEO Ryan Stokes highlights a strong first half performance, noting a 2% rise in net profit to $518 million and flat earnings of $844 million. The standout performer is Boral, with earnings before interest and tax up 10% to $284 million, reflecting robust momentum in construction. Conversely, Coates and WesTrac experienced earnings softness, largely attributed to normalisation in capital sales. Shareholders will benefit from a fully franked interim dividend of $0.32 per share, representing a 7% increase.

Stokes outlines a disciplined approach towards mergers and acquisitions, particularly in response to market speculation around BlueScope (ASX:BSL) and the Whyalla steelworks. He regards the $29 dividend-adjusted bid for BlueScope as full and fair, emphasising a readiness to explore alternative opportunities if the offer is not accepted. Stokes reiterates SGH's commitment to identifying value-adding industrial businesses, with Australian scale and privileged assets at the core of their criteria.

Looking to growth, Stokes maintains that both organic initiatives and acquisitions will drive mid to high single digit EBIT growth. Investments underpin long-term prospects. Stokes underscores the group's balanced approach to shareholder returns and ongoing focus on value creation through strategic expansion.