Steel & Tube's $8 million after-tax profit came in ahead
of analysts' expectations and the robust economic
construction conditions bode well for its full year's
Total revenue for the half year to December was up from
$199.6 million a year ago to $211.7 million.
Earnings before interest and tax (Ebit) were up from $11
million to $12 million, and the $8 million after-tax profit
up from last year's $7.3 million.
The interim dividend rose from 6.5c last year to 7c and its
shares rose 1.3% to trade around $3.14 after the
Both Craigs Investment Partners broker Peter McIntyre and
Forsyth Barr broker Andrew Rooney said the result was ahead
of their respective forecasts and both saw a positive second
half trading flowing into the full-year results.
Mr Rooney said: ''Construction and rural activity are both
robust, while manufacturing activity is picking up slowly,
some of which is from flow-through construction''.
He noted new capabilities had been commissioned in
Christchurch, which was in line with the boost in building
activity, but a mid-year price increase had a ''mixed
impact'', due to intense competition in the sector.
He expects a pick-up in capital expenditure, possibly from a
niche business for growth, which would ensure Steel &
Tube remains competitive.
Mr McIntyre said the better results were driven by higher
volumes and productivity, but partially offset by lower
''Steel & Tube is still operating below its full
potential,'' he said.
For Mr McIntyre, a key issue to note was a weaker cashflow,
down $2.5 million, due to the stepping up on working capital,
up 13% on a year ago to $128 million.
''The outlook's positive on construction and rural, and mixed
on manufacturing. The global steel outlook is also slightly
more upbeat,'' Mr McIntyre said.