SGH (ASX:SGH) has delivered a sound financial performance for the half-year ended Dec. 31, 2025, characterised by margin expansion and powerhouse cash flow.
The industrial services giant reported a stable underlying EBIT of $844 million, representing a sharp 22% increase when compared to the second half of FY25.
The growth was underpinned by the "SGH Way" operating model, which successfully drove the group’s EBIT margin up by 30 basis points to 15.6%, with particularly strong contributions from subsidiaries Boral and WesTrac.
On the bottom line, underlying NPAT rose 2% to $518 million, supported by a total revenue of $5.4 billion.
Perhaps the most striking highlight of the report was the 32% surge in operating cash flow, which reached $1.1 billion.
The liquidity allowed SGH to aggressively deleverage, reducing its adjusted net debt to EBITDA ratio to 1.9x—placing it safely below the company's target range and providing ample "dry powder" for future value-accretive acquisitions.
Managing Director and CEO Ryan Stokes expressed confidence in the momentum, noting that a high EBITDA cash conversion of 98% demonstrates the resilience of the diversified portfolio.
Shareholders are set to benefit from this disciplined execution, as the board declared a fully franked interim dividend of 32 cents per share, a 7% increase from the previous year.
As SGH enters the second half of FY26, the company remains focused on maintaining cost discipline while capitalising on recovering customer activity across its core industrial sectors.