The Seven Group Holdings Ltd (ASX: SVW) has climbed more than 2% higher in early trade after a key subsidiary posted strong full-year results.
Why is the Seven Group share price climbing higher?
With no significant market announcements from Seven this morning, I think the biggest catalyst driving the share price is the strong Beach Energy Ltd (ASX: BPT) earnings result.
Beach Energy reported its full-year earnings for the year ended 30 June 2019 (FY19) this morning, which was punctuated by a 190% increase in net profit after tax (NPAT).
Seven holds a significant stake in Beach Energy through its subsidiary, which currently sits around 29% of the Aussie energy company's free float.
What were Beach Energy's full-year highlights?
Australia's largest onshore oil producer reported statutory NPAT up 190% to $577 million, while underlying NPAT climbed 86% to $560 million in FY19.
The company also highlighted that higher average realised prices for both oil and gas helped boost revenue 54% higher than the prior corresponding period (pcp) to $1.93 billion.
Beach Energy's operating cash flow rocketed 57% higher to $1.04 billion, while the company improved its balance sheet strength to turn its $639 million net debt into a $172 net cash position as at year-end.
On top of the strong financial result, operational performance was solid with production increases from both its Western Flank and Cooper Basin assets during the year.
What else has been happening for Seven Group?
At the time of writing, the Beach Energy share price has surged more than 7% to $1.94 per share while the Seven Group share price is trading at $16.06 per share.
Seven Group currently trades at 13x earnings, albeit with a 2.6% per annum dividend, and has climbed 16% higher since the start of the year.
The Seven Group share price jumped back in February following a solid earnings result of its own, and is expected to announce its FY19 full year results later in August.
