NZ Herald
  • Home
  • Latest news
  • Herald NOW
  • Video
  • New Zealand
  • Sport
  • World
  • Business
  • Entertainment
  • Podcasts
  • Quizzes
  • Opinion
  • Lifestyle
  • Travel
  • Viva
  • Weather

Subscriptions

  • Herald Premium
  • Viva Premium
  • The Listener
  • BusinessDesk

Sections

  • Latest news
  • New Zealand
    • All New Zealand
    • Crime
    • Politics
    • Education
    • Open Justice
    • Scam Update
  • Herald NOW
  • On The Up
  • World
    • All World
    • Australia
    • Asia
    • UK
    • United States
    • Middle East
    • Europe
    • Pacific
  • Business
    • All Business
    • MarketsSharesCurrencyCommoditiesStock TakesCrypto
    • Markets with Madison
    • Media Insider
    • Business analysis
    • Personal financeKiwiSaverInterest ratesTaxInvestment
    • EconomyInflationGDPOfficial cash rateEmployment
    • Small business
    • Business reportsMood of the BoardroomProject AucklandSustainable business and financeCapital markets reportAgribusiness reportInfrastructure reportDynamic business
    • Deloitte Top 200 Awards
    • CompaniesAged CareAgribusinessAirlinesBanking and financeConstructionEnergyFreight and logisticsHealthcareManufacturingMedia and MarketingRetailTelecommunicationsTourism
  • Opinion
    • All Opinion
    • Analysis
    • Editorials
    • Business analysis
    • Premium opinion
    • Letters to the editor
  • Politics
  • Sport
    • All Sport
    • OlympicsParalympics
    • RugbySuper RugbyNPCAll BlacksBlack FernsRugby sevensSchool rugby
    • CricketBlack CapsWhite Ferns
    • Racing
    • NetballSilver Ferns
    • LeagueWarriorsNRL
    • FootballWellington PhoenixAuckland FCAll WhitesFootball FernsEnglish Premier League
    • GolfNZ Open
    • MotorsportFormula 1
    • Boxing
    • UFC
    • BasketballNBABreakersTall BlacksTall Ferns
    • Tennis
    • Cycling
    • Athletics
    • SailingAmerica's CupSailGP
    • Rowing
  • Lifestyle
    • All Lifestyle
    • Viva - Food, fashion & beauty
    • Society Insider
    • Royals
    • Sex & relationships
    • Food & drinkRecipesRecipe collectionsRestaurant reviewsRestaurant bookings
    • Health & wellbeing
    • Fashion & beauty
    • Pets & animals
    • The Selection - Shop the trendsShop fashionShop beautyShop entertainmentShop giftsShop home & living
    • Milford's Investing Place
  • Entertainment
    • All Entertainment
    • TV
    • MoviesMovie reviews
    • MusicMusic reviews
    • BooksBook reviews
    • Culture
    • ReviewsBook reviewsMovie reviewsMusic reviewsRestaurant reviews
  • Travel
    • All Travel
    • News
    • New ZealandNorthlandAucklandWellingtonCanterburyOtago / QueenstownNelson-TasmanBest NZ beaches
    • International travelAustraliaPacific IslandsEuropeUKUSAAfricaAsia
    • Rail holidays
    • Cruise holidays
    • Ski holidays
    • Luxury travel
    • Adventure travel
  • Kāhu Māori news
  • Environment
    • All Environment
    • Our Green Future
  • Talanoa Pacific news
  • Property
    • All Property
    • Property Insider
    • Interest rates tracker
    • Residential property listings
    • Commercial property listings
  • Health
  • Technology
    • All Technology
    • AI
    • Social media
  • Rural
    • All Rural
    • Dairy farming
    • Sheep & beef farming
    • Horticulture
    • Animal health
    • Rural business
    • Rural life
    • Rural technology
    • Opinion
    • Audio & podcasts
  • Weather forecasts
    • All Weather forecasts
    • Kaitaia
    • Whangārei
    • Dargaville
    • Auckland
    • Thames
    • Tauranga
    • Hamilton
    • Whakatāne
    • Rotorua
    • Tokoroa
    • Te Kuiti
    • Taumaranui
    • Taupō
    • Gisborne
    • New Plymouth
    • Napier
    • Hastings
    • Dannevirke
    • Whanganui
    • Palmerston North
    • Levin
    • Paraparaumu
    • Masterton
    • Wellington
    • Motueka
    • Nelson
    • Blenheim
    • Westport
    • Reefton
    • Kaikōura
    • Greymouth
    • Hokitika
    • Christchurch
    • Ashburton
    • Timaru
    • Wānaka
    • Oamaru
    • Queenstown
    • Dunedin
    • Gore
    • Invercargill
  • Meet the journalists
  • Promotions & competitions
  • OneRoof property listings
  • Driven car news

Puzzles & Quizzes

  • Puzzles
    • All Puzzles
    • Sudoku
    • Code Cracker
    • Crosswords
    • Cryptic crossword
    • Wordsearch
  • Quizzes
    • All Quizzes
    • Morning quiz
    • Afternoon quiz
    • Sports quiz

Regions

  • Northland
    • All Northland
    • Far North
    • Kaitaia
    • Kerikeri
    • Kaikohe
    • Bay of Islands
    • Whangarei
    • Dargaville
    • Kaipara
    • Mangawhai
  • Auckland
  • Waikato
    • All Waikato
    • Hamilton
    • Coromandel & Hauraki
    • Matamata & Piako
    • Cambridge
    • Te Awamutu
    • Tokoroa & South Waikato
    • Taupō & Tūrangi
  • Bay of Plenty
    • All Bay of Plenty
    • Katikati
    • Tauranga
    • Mount Maunganui
    • Pāpāmoa
    • Te Puke
    • Whakatāne
  • Rotorua
  • Hawke's Bay
    • All Hawke's Bay
    • Napier
    • Hastings
    • Havelock North
    • Central Hawke's Bay
    • Wairoa
  • Taranaki
    • All Taranaki
    • Stratford
    • New Plymouth
    • Hāwera
  • Manawatū - Whanganui
    • All Manawatū - Whanganui
    • Whanganui
    • Palmerston North
    • Manawatū
    • Tararua
    • Horowhenua
  • Wellington
    • All Wellington
    • Kapiti
    • Wairarapa
    • Upper Hutt
    • Lower Hutt
  • Nelson & Tasman
    • All Nelson & Tasman
    • Motueka
    • Nelson
    • Tasman
  • Marlborough
  • West Coast
  • Canterbury
    • All Canterbury
    • Kaikōura
    • Christchurch
    • Ashburton
    • Timaru
  • Otago
    • All Otago
    • Oamaru
    • Dunedin
    • Balclutha
    • Alexandra
    • Queenstown
    • Wanaka
  • Southland
    • All Southland
    • Invercargill
    • Gore
    • Stewart Island
  • Gisborne

Media

  • Video
    • All Video
    • NZ news video
    • Herald NOW
    • Business news video
    • Politics news video
    • Sport video
    • World news video
    • Lifestyle video
    • Entertainment video
    • Travel video
    • Markets with Madison
    • Kea Kids news
  • Podcasts
    • All Podcasts
    • The Front Page
    • On the Tiles
    • Ask me Anything
    • The Little Things
  • Cartoons
  • Photo galleries
  • Today's Paper - E-editions
  • Photo sales
  • Classifieds

NZME Network

  • Advertise with NZME
  • OneRoof
  • Driven Car Guide
  • BusinessDesk
  • Newstalk ZB
  • Sunlive
  • ZM
  • The Hits
  • Coast
  • Radio Hauraki
  • The Alternative Commentary Collective
  • Gold
  • Flava
  • iHeart Radio
  • Hokonui
  • Radio Wanaka
  • iHeartCountry New Zealand
  • Restaurant Hub
  • NZME Events

SubscribeSign In
Advertisement
Advertise with NZME.
Home / Business

Steel & Tube turnaround continues with 49% jump in first-half net profit

BusinessDesk
17 Feb, 2019 10:51 PM4 mins to read

Subscribe to listen

Access to Herald Premium articles require a Premium subscription. Subscribe now to listen.
Already a subscriber?  Sign in here

Listening to articles is free for open-access content—explore other articles or learn more about text-to-speech.
‌
Save

    Share this article

Steel & Tube will resume paying dividends. Photo/File.

Steel & Tube will resume paying dividends. Photo/File.

Steel & Tube Holdings believes it is on the road to recovery, reporting a 48.7 per cent jump in first-half net profit and delivering operating profit in line with previous guidance.

It will resume paying dividends, reflecting a "solid improvement in cash flows to $11.1 million." That compares with a negative $16.4 million cash outflow in the six months ended June 2018.

Nevertheless, the company still has some way to go to fully convince investors - and regulators - it has put its past behind it.

The steel products distributor reported a $5.6 million profit for the six months ended December, up from $3.8 million in the same six months a year earlier.

The result is also a significant turn-around from the $35.9 million net loss it reported in the second half of last year.

Advertisement
Advertise with NZME.
Advertisement
Advertise with NZME.

The company had previously said earnings before interest and tax would be about 40 per cent of its full-year earnings target and first-half ebit came in at $9.8 million, up from $7.5 million the previous year.

In today's statement, the company reaffirmed its guidance that ebit for the full year will be $25 million, up from normalised ebit of $16.5 million the previous year.

That will still be below the $31.2 million ebit it reported for the year ended June 2017.

Advertisement
Advertise with NZME.

The company says the turn-around reflects both increased sales and reduced operating costs.

Revenue rose to $258.2 million in the latest six months, from $227.9 million in the second-half of last year, but was still down from $267.9 million in the previous December half-year.

Steel & Tube says the result also "reflects building momentum with benefits from Project Strive business transformation initiatives being realised."

Net debt fell to $16 million from $104.4 million at June 30, reflecting the $81 million capital raising last year, improved operating cash flows, tighter working capital management and prudent capital spending, the company says.

Discover more

Business

Steel & Tube uninsured for any future mesh problems

25 Oct 05:34 AM
Business

Researchers reveal best and worst NZ companies for women on boards

28 Oct 02:13 AM
Business

Fletcher sells Roof Tile Group for $60m

01 Nov 02:58 AM
Business

Steel & Tube, ComCom appeal record mesh fine

19 Nov 08:38 PM

Steel & Tube will pay a first-half dividend of 3.5 cents per share, down from 7 cents a year earlier. The company didn't pay a final dividend last year.

In the four years ended June 2017, Steel & Tube had spent about $80 million on acquisitions, as well as another $32 million upgrading its operations, and yet profits were falling.

The company was fined a record $1.89 million last year for false and misleading representations in relation to steel mesh, a fine Steel & Tube has said is excessive, but the Commerce Commission is also appealing the fine, saying the fine was too low.

The charges covered 482 batches and about 480,000 sheets of steel mesh which Steel & Tube sold for about $24 million.

The company says that, excluding the S&T Plastics business that it announced last year it was quitting, and non-trading adjustments, ebit was up 116 percent. The business is also recovering from the trading issues caused by the new enterprise resource planning – ERP – system that went live in October 2017.

"The execution of business transformation initiatives is having a positive impact. Sales and volumes have continued the upwards trajectory seen in the last 12 months on the back of a strong focus on customer needs, improved product availability and delivery performance," it says.

Advertisement
Advertise with NZME.

"The market remains very competitive, keeping pressure on gross margins which have also been dampened by a shift in sales mix in some businesses."

The company says costs fell 3 percent as a function of sales compared to the second half last year. The business has also absorbed inflationary and wage and salary cost increases without increasing overall operating spending.

Steel & Tube is still working on getting value for money from the ERP IT platform, and restructuring and strengthening of its leadership team.

"We have made good progress across most areas of the business," chief executive Mark Malpass says, adding that the transformation strategy, which included optimising the company's property footprint, contributed about $5 million to first-half ebit.

"While a combination of competitive pressures and product mix has impacted gross margins in the half-year period, we are now seeing a turnaround in our business performance," Malpass says.

The economic outlook remains positive and product pricing remains firm and the company's staff morale is strong, he says.

Advertisement
Advertise with NZME.

"There remains work to be done, but we are confident we are on the right track."

The company referred to last year's failed takeover attempt by Fletcher Building only in passing.

Steel & Tube shares ended last week at $1.22 - down on Fletcher's non-binding $1.90 a share offer but above the rights issue price of $1.05 and the placement price of $1.15.

- BusinessDesk

Save

    Share this article

Latest from Business

Premium
Airlines

Pilot sacked over Covid-19 vaccine wins Employment Court case

08 Jul 07:09 AM
Premium
Manufacturing

On The Up: Freeze-dried food maker aims for major growth with Rebel Sport, Foodstuffs deals

08 Jul 07:00 AM
Premium
Shares

Market close: NZX not crying over spilt a2 Milk, gains 0.74%

08 Jul 05:51 AM

Audi offers a sporty spin on city driving with the A3 Sportback and S3 Sportback

sponsored
Advertisement
Advertise with NZME.

Latest from Business

Premium
Pilot sacked over Covid-19 vaccine wins Employment Court case

Pilot sacked over Covid-19 vaccine wins Employment Court case

08 Jul 07:09 AM

'Great' pilot was sacked despite doctor's vaccine advice, request for Novavax.

Premium
On The Up: Freeze-dried food maker aims for major growth with Rebel Sport, Foodstuffs deals

On The Up: Freeze-dried food maker aims for major growth with Rebel Sport, Foodstuffs deals

08 Jul 07:00 AM
Premium
Market close: NZX not crying over spilt a2 Milk, gains 0.74%

Market close: NZX not crying over spilt a2 Milk, gains 0.74%

08 Jul 05:51 AM
Reserve Bank of Australia surprises markets, holds cash rate at 3.85%

Reserve Bank of Australia surprises markets, holds cash rate at 3.85%

08 Jul 05:45 AM
Gold demand soars amid global turmoil
sponsored

Gold demand soars amid global turmoil

NZ Herald
  • About NZ Herald
  • Meet the journalists
  • Newsletters
  • Classifieds
  • Help & support
  • Contact us
  • House rules
  • Privacy Policy
  • Terms of use
  • Competition terms & conditions
  • Our use of AI
Subscriber Services
  • NZ Herald e-editions
  • Daily puzzles & quizzes
  • Manage your digital subscription
  • Manage your print subscription
  • Subscribe to the NZ Herald newspaper
  • Subscribe to Herald Premium
  • Gift a subscription
  • Subscriber FAQs
  • Subscription terms & conditions
  • Promotions and subscriber benefits
NZME Network
  • The New Zealand Herald
  • The Northland Age
  • The Northern Advocate
  • Waikato Herald
  • Bay of Plenty Times
  • Rotorua Daily Post
  • Hawke's Bay Today
  • Whanganui Chronicle
  • Viva
  • NZ Listener
  • Newstalk ZB
  • BusinessDesk
  • OneRoof
  • Driven Car Guide
  • iHeart Radio
  • Restaurant Hub
NZME
  • About NZME
  • NZME careers
  • Advertise with NZME
  • Digital self-service advertising
  • Book your classified ad
  • Photo sales
  • NZME Events
  • © Copyright 2025 NZME Publishing Limited
TOP