Despite less sales revenue, construction bellwether company
Steel and Tube booked an almost 20% increase in after-tax
profit, underpinned by impetus in Canterbury's rebuild.
Craigs Investment Partners broker Peter McIntyre said Steel
and Tube's result for the full year to June was in line with
guidance. Improved cash flow was a highlight.
''It was a positive performance signalling the recovery is
well under way and will continue to improve into 2014,'' Mr
Shares in Steel and Tube were up 2.3%, at $2.57 after the
announcement. The final 8.5c dividend yesterday boosted the
full year to 15c, up 3c on last year.
Forsyth Barr broker Haley Van Leeuwen said the earnings
before interest and tax at $22.6 million, was ''on the back
of a solid margin increase'' up from 4.9% a year ago to 5.7%
in for 2013.
''Christchurch's residential and infrastructure activities
underpinned revenue, but they're still waiting for
significant commercial activity. There's no sign yet of a key
anchor project,'' Ms Van Leeuwen said.
A reduction in steel prices resulted in a decline in sales
from $405 million to $393 million on a year ago, while
operating cash flow rose $8.7 million to $27.5 million, on
the back of the cost of steel dropping. After-tax profit rose
19% from $13.1 million to $15.6 million.
Mr McIntyre said although revenue was down 3% on a year ago,
and below Craigs' expectations due to the weaker steel price
and flat volume, that decline was offset through profit
Earnings before interest and tax were up 70 basis points.
''The company's focus on supply-chain initiatives is clearly
paying off, as seen in the margin expansion,'' he said.
A ''key highlight'' was the sharp improvement in operating
cash flows, which were up $27.5 million on a year ago,
although slower in second-half trading at $8.4 million, he