1 October we become SureStone CapitalSame team, same ABN. Our website and email addresses move to surestone.com.au.
Preparing video
Key points:
Outlook centred on industrial portfolio with low single-digit EBIT growth for FY27Stronger performance focus on Boral, WesTrac and turnaround in Coates pricingActive capital management via $500m buyback, disciplined industrial M&A pipeline
Ryan Stokes from Seven Group Holdings outlines a cautious but constructive outlook for FY27, pointing to a “core industrial portfolio” as underpinning low single-digit EBIT growth guidance. Stokes highlights infrastructure and construction exposure, with Boral (ASX:BLD), Coates and WesTrac positioned, in his view, to benefit from strong activity levels. He notes that parts price adjustments at WesTrac are a temporary drag on earnings, arguing that underlying business quality and demand are not fully reflected in market reactions to the result.
On portfolio performance, Stokes points to Boral’s 14% EBIT lift and ongoing margin expansion, attributed to strong volume, price discipline and operational improvement, with further upside targeted through network investment. Coates is described as the weak spot, with competitive pressures and pricing execution needing work, although stable EBIT margins are seen by Stokes as evidence of underlying strength and operating leverage potential.
Capital allocation remains a key focus. Stokes defends the up to $500 million on-market buyback as attractive given what he regards as a discounted share price, while stressing significant M&A “firepower” following deleveraging. He reiterates a preference for industrial assets with structural tailwinds, a bias to Australia, and a commitment to sustainable, growing dividends supported by strong free cash flow.
