Strong housing market helps Steel & Tube profit

By ELLEN READ

The strong housing market has outweighed the negative effects of a higher New Zealand dollar to increase Steel & Tube Holdings' annual profit.

The Christchurch-based firm posted a June year net profit after tax of $21.52 million, up 18 per cent or $3.23 million on the previous year.

Earnings per share rose 3.7c to 24.5c for the year, while the 12c a share final dividend took the total payout to 23c. Last year's total dividend was 19c.

Steel & Tube, half-owned by Australia's OneSteel, processes and distributes steel roofing and pipes, wire products and metal fasteners.

Chief executive Nick Calavrias said the company's New Zealand operation increased its net profit by 17 per cent to $3.04 million on sales revenue of $26.63 million - a 9 per cent increase.

Calavrias said the company's roofing operations posted an improved profit due to the strong demand for new residential housing.

Although the commercial construction sector remained flat, the reinforcing operations, helped by a better mix of projects, increased its earnings substantially, he said.

The company's steel distribution operations, aided by a full year's inclusion of the Piping Systems business bought last year, increased both profitability and volumes.

Calavrias said demand for new housing and for commercial construction should remain at similar levels for some time and demand from the rural sector had been more resilient than expected.

Provided there was no significant change to these sectors, the company expected an improved result for this financial year.

This would be partly because of the inclusion of a full year's trading for Hurricane Wire Products, the distribution company Steel & Tube bought in March.

Steel & Tube shares eased 2c to close at $3.77 yesterday.