Kerry Stokes steps down as Seven Group chairman
Kerry Stokes is retiring as Seven Group chairman in a major changing of the guard in corporate Australia, to be succeeded by Terry Davis.
Billionaire Kerry Stokes will step down as chairman of Seven Group in a major changing of the guard in corporate Australia following an audacious takeover raid on construction materials giant Boral.
The 80-year-old will retain his 57 per cent controlling stake in the conglomerate that spans heavy machinery operator WesTrac through the Coates equipment leasing business and a string of interests spanning energy and, most recently, construction materials with its Boral buyout.
His son, Ryan Stokes, said the self-made billionaire would enjoy time away from the boardroom although he has no plans to step back from the Seven West Media board. His retirement from Seven Group followed less than a month after Ryan was appointed chairman of Boral, a company scooped up by the Seven camp in just over a year after it pounced on a string of profit downgrades that had hit Boral’s share price.
“With the action complete with Boral, it’s a key juncture,” Ryan Stokes said. “I’m sure he’ll be called upon in terms of the progress of the company, but not needing to get into the detail of board meetings is probably an aspect he is looking forward to.”
Kerry Stokes, who assumed the role when the company was formed in April 2010, will pass the baton to former Coca-Cola Amatil boss Terry Davis, an existing board member of Seven Group.
Mr Stokes has no plans to step down from the Seven West board, according to his son, and will also remain chairman of Australian Capital Equity Group, which owns a 57 per cent share in Seven Group.
“I think the move shows confidence in the board and I dare say in management,” Ryan Stokes said. “We have a high calibre and really strong group of independents for him to feel comfortable about stepping back, but not completely away. Clearly, the holding will still be a key interest for him and that should suggest the confidence he has in the company and the position we’re in.”
Seven Group now has extra incentive for a long-discussed infrastructure pipeline to be rolled out in Australia, given the potential for Boral and the broader conglomerate to boost revenues from any uptick in construction.
Seven Group, which owns 70 per cent of Boral, said it was aligned with the Sydney building operator on strategy and now backed boss Zlatko Todorcevski to deliver on its Australian goals after selling off much of its US business.
“Our focus now with management is how to execute the strategy,” Ryan Stokes said. “That’s the key for us and focus on the opportunities that are in Australia, release capital and realise the potential here. That assets in the US are very different to what we have in Australia and that’s the part we are quite excited by.”
Ryan Stokes also joined criticism of decisions made by governments to shut down the building sector during ongoing lockdowns, following a similar complaint made by Boral on Tuesday.
“We were disappointed to see the NSW construction pause in Greater Sydney,” Ryan Stokes said. “We didn’t think that was required to minimise transmission.”
Boral said the shutdown at short notice had blindsided operators and forced it to stand down 800 staff across its NSW and South Australian operations, noting the building sector could take more than a month to get back up to full strength after lockdowns ended.
Seven Group lifted its annual earnings by 7 per cent due to strength in mining and construction with its key WesTrac and Coates units to deliver further growth in the 2022 financial year.
Underlying earnings before interest and tax rose to $792m, while net profit after tax also increased 7 per cent to $504m.
Earnings from WesTrac jumped 8 per cent to $400m, Coates increased 4 per cent to $211m while its media earnings rose 22 per cent to $57m for the 12-month period. That helped offset a 19 per cent fall from its energy division to $102m.
Group revenue of $4.83bn was up 6 per cent on last year, while an annual dividend of 23c a share was 10 per cent higher than 21c a year ago.
For 2022, it expects low-single-digit growth for WesTrac and high-single-digit growth for Coates – assuming lockdowns and construction restrictions are not prolonged – disappointing some investors, who saw the outlook as neutral for earnings.
The conglomerate owns a diverse range of Kerry Stokes’ interests, including 70 per cent of Boral, a controlling Seven West Media stake, Caterpillar dealerships in NSW, Western Australia and the Australian Capital Territory, Coates Hire and a 30 per cent share in east coast gas producer Beach Energy.
Seven Group shares fell 7.6 per cent to $21.15.
More Coverage
Businesses’ late bill payments at their worst since Covid
Late payments by businesses are at their highest level since the depths of Covid-19, and it’s the hospitality and construction sectors faring worst.
Atlassian calls for AI ‘clearinghouse’
Tech giant Atlassian has called for a central ‘clearinghouse’ instead of a new regulator to deal with artificial intelligence issues related to consumer law.