Finance Finance News Seven Group on the hunt for acquisitions
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Seven Group on the hunt for acquisitions

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Seven Group is on the hunt for new acquisitions as it sheds more than a 1,000 jobs at its earthmoving company WesTrac.

Seven Group chief executive Don Voelte said there were “tremendous opportunities” to increase value from the company’s existing portfolio, which includes a stake in Seven West Media, and add new assets and businesses.

“Our executive team is actively looking at, analysing and negotiating new organic or acquisition targets associated with industrial services, energy, food and water,” Mr Voelte told the company’s annual general meeting.

“We have several parties that want to partner with us.”

Partnerships would allow more leverage and improve management of financial risk, Mr Voelte said.

Shares in Seven Group were up four cents, or 0.5 per cent, at $7.51 at 1303 AEDT.

WesTrac, a distributor of Caterpillar heavy machinery in Australia and China, will to cut more than 1000 jobs and spend $21 million on restructuring this year as the mining investment downturn hits machinery sales.

Mr Voelte said Westrac had reduced costs by more than $135 million on an annual basis.

“We are reducing costs, but we will still ensure delivering great service and quality to enable WesTrac to not only maintain, but grow our revenues,” Mr Voelte said.

Seven Group chairman Kerry Stokes said WesTrac’s coal customers were still hurting, and looking for cost cuts and more efficiencies due to lower prices and a high Australian dollar.

WesTrac had experienced a challenging time, with the prices of gold, nickel and aluminium affecting customers dramatically and reducing activities and profits, he said.

But the group said iron ore in Western Australia was producing record tonnes of exports and continued to provide opportunities for WesTrac.

Seven Group reiterated its previous guidance of a drop in earnings before interest and tax (EBIT) of between 30 to 40 per cent in the 2013/14 year.