STU - Steel & Tube Holdings

[Shareguy]

This site looks interesting.  What's current thoughts on Stu share price .  Value or not.?

[Benji]

I think value. What about you?

[lorraina]

ChCh building consents remain at an all time high.[expect the same through out NZ]
CEO and CFO recent purchases are positive,as was their recent update,which included a strong out look..
PE of 7.62 and a high dividend yield of 7.33% makes this stock look great value to me.

[Shareguy]

I agree with you. The market does not think so. The whole market is in the doldrums. Time for a buyback and dividend reinvestment plan?

[lorraina]

With current dividends not being imputated a share buy back would make sense.

https://sendy.tarawera.co.nz/l/J6oLVth2f3f6IXNYvUBQEg/zOtur6rxt7CGZ27Ijh6wVw/wsEwBdD5WgApsKhMZyT47A

[Keyser Soze]

buyback or modest return of subscribed capital

in either scenario need to keep the dividends going so aren't treated as in lieu of a dividend, per the brightline tests.

am sure SKY board is being mindful of that too as they consider their capital plans

[Arbroath]

Interesting that FBU have bounced hard this week but STU just sitting on recent lows. Seems cheap given earnings and dividend imminent and that this company is not just a residential building play.

[Left Field]

...  What's current thoughts on Stu share price .  Value or not.?

The May FY22 update and guidance by STU say's it all IMHO.

See it here. https://steelandtube.co.nz/investor/media/2022/steel-tube-fy22-guidance.

This plus a div yield of approx 7.5%. 

Currently 7% of my portfolio.

[Shareguy]

Insert from NZ Investor

Procurement edge for
Steel & Tube pipeline
The critical shortage of building materials and supply
chain concerns have caught the headlines in recent
weeks. In the recent annual report flow we noticed
several CEO s making an effort to explain their corporate
response to supply chain congestion.
Steel & Tube Holdings, is one of New Zealand's
largest importers on a tonnage basis. The company is
centre stage in the industrial manufacturing for steel
products used in construction. Management says, in
their 2022 annual report, that they've secured full
container allocations, and this, along with as well cost
security, is providing additional stability for customers.
Chief executive Mark Malpass says "We are well
positioned to respond to supply and logistics headwinds.
Our strong, long term relationships with mills,
and our No 1 or 2 market position in most segments has
helped us ensure supply continuity for our customers.
"We have a highly experienced procurement team
with a number having over 20 years' steel procurement
experience throughout cycles."
Together with strong margin growth and the benefits
of prior year cost initiatives, STU's earnings have almost
quadrupled in the latest year.
Gross margin dollar improvement has been a
priority focus and has increased 65% year to date driven
by investment in high demand products, focus on
improved margin mix and use of data analytics,
according to the report.
Steel & Tube are currently commissioning new plate
processing equipment in Auckland which will allow the
company to grow in this higher margin market.
Malpass says, "We have also introduced a number of
new high value products and have a pipeline of further
opportunities to support our continued revenue growth
"Looking forward, our larger customers are generally
reporting solid forward workloads with strong infrastructure
markets and a steady manufacturing sector,
partially offset by the expectation of a softening residential
market in 2H23."
Roofing is the biggest contributor to Steel & Tube's
Rollforming business, providing 60% of revenue and
delivered from six branches around New Zealand.
Steel & Tube is now in its second year of a four year
supply agreement with Kainga Ora, supplying 1,600
roofs annually, with these volumes expected to double
in FY23.
The Purlins business has experienced strong growth
over the past ten months, with early identification of
supply chain constraints and smart procurement planning
ensuring stock availability for our customers.
"Onboarding new, large customers has meant our
secured works pipeline is very healthy for FY23. With
increased demand, we are investing into new
machinery which is expected to increase our share of
the market."
Coil processing has seen significant growth due to
increased demand for steel framing in both residential
and commercial sectors. STU currently supplies significant
volumes of sheeting and coil for light steel framing.
Malpass says the company has identified an opportunity
to move further into this sector "and leverage our
relationships with large roofing customers as well as
working directly with designers and architects."
"Two machines will be up and running this quarter
and increased volumes may warrant investment into
further units over the coming years.
The headwinds include the current market of
constrained labour resources, materials shortages and
price escalations
Malpass says they're talking with clients early and
solving these challenges, the emphasis on delivering
smart fabrication solutions and efficient installation
methods.
"We have invested heavily in 3D software to enable
modelling of all the reinforcing projects with far greater
sophistication than traditional 2D paper drawings.
"This improves the accuracy of detailing with the
ability for the digital model to be integrated directly
into our manufacturing system.
"Digital design and workflow software allows us to
share 3D models of reinforcing design with construction
companies and structural engineers to identify prefabrication
opportunities, avoid clashes with other services
and to confirm the installation meets the design brief."
Supply Lines
There are substantial headwinds in terms of supply
lines – increased uncertainty and ongoing disruption
whether it be due to the Russia/ Ukraine conflict or
ongoing pandemic impacts.
"This means we must remain vigilant in terms of our
planning processes and be even more attuned to global
and local developments.
He's clearly proud that during some of the most
disruptive times in recent memory, STU maintained our
service levels. "DIFOT (delivered in full on time metric)
has not only remained above 98%, but with a very high
level of consistency which is of critical importance to
our customers and their businesses, particularly during
uncertain or volatile times."
Steel & Tube operates a "backbone network" which
means it has major centres / nodes with branches or
smaller operations to provide reach and local servicing.
Current share price: $1.21. PE 8.06x Gross Dividend
Yield 6.9

[Poet]

I'd expect to see a significant increase in dividend at the fy result. Maybe to around 8c which, if sustained, would increase gross yield to 13% at current prices
Let's see what that does to sp (Currently at $1.21)

[Shareguy]

Big increases

https://blog.steelandtube.co.nz/price-increase-notification-may-2022

[winner (n)]

Big increases

https://blog.steelandtube.co.nz/price-increase-notification-may-2022

Hope they maintaining margin % and not just passing on $ cost

No wonder construction / building grinding to a halt

[nztx]

Big increases

https://blog.steelandtube.co.nz/price-increase-notification-may-2022

Hope they maintaining margin % and not just passing on $ cost

No wonder construction / building grinding to a halt

hope so for sure, after what's been seen in past with STU on inventory matters

[Shareguy]

My thoughts on YEJ22 result

EPS=19 CPS
DPS=13 CPS (min)

Current price $1.31=PE of 6.39 and a respectable fully imputed dividend of 10 percent.

Will there be a share buy back or DRP introduced.

I think it's a STEEL.  We will soon see

[Cod]

My thoughts on YEJ22 result

EPS=19 CPS
DPS=13 CPS (min)

Current price $1.31=PE of 6.39 and a respectable fully imputed dividend of 10 percent.

Will there be a share buy back or DRP introduced.

I think it's a STEEL.  We will soon see

I believe the MHJ results will be very good, I think the STU results will be stunning.