This site looks interesting. What's current thoughts on Stu share price . Value or not.?
I think value. What about you?
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.
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?
With current dividends not being imputated a share buy back would make sense.
https://sendy.tarawera.co.nz/l/J6oLVth2f3f6IXNYvUBQEg/zOtur6rxt7CGZ27Ijh6wVw/wsEwBdD5WgApsKhMZyT47A
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
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.
Quote from: Shareguy on Jun 24, 2022, 03:13 PM... 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.
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
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)
Big increases
https://blog.steelandtube.co.nz/price-increase-notification-may-2022
Quote from: Shareguy on Jun 29, 2022, 06:22 AMBig 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
Quote from: winner (n) on Jun 29, 2022, 08:07 AMQuote from: Shareguy on Jun 29, 2022, 06:22 AMBig 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 :)
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
Quote from: Shareguy on Jul 08, 2022, 12:26 PMMy 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.
I'm going with 17.5-18.0cps for earnings and 13.0cps for the FY Div.
The interesting part will be how confident they are that FY23 can be near the FY22 result. If that is the case then $1.50+ is likely imho.
My calculated EPS forecast for F22 is 18.2 cents
Pretty cool eh ....esp if thy dish most of it out before they get excited and spend it
It seems we all on same page so far. Will be interesting re any forecast or insights into 2023.
Good stuff. Go STU you beauty
Vulcan acquire Urlich at 3.3 times ebitda
Same multiple applied to STU is $1.27
And same multiple applied to VSL would be about $5.00 or just over half their current share price
Share price starting to show promise. Result on Monday
Fletchers saying Steel division up 40 percent for FY23.
Also looking at Bluscope result. NZ Steel EBIT Year June 22 was $229m - UP 76% on prior year.
STU looking undervalued in my opinion. It's going to be a great result and based on FBU guidance expecting STU to be also positive.
Been steadily accumulating small dollops over last year. Excellent divvy and reasonable SP gain prospects.
Waiting for results ...
Quote from: Shareguy on Aug 17, 2022, 11:12 AMFletchers saying Steel division up 40 percent for FY23.
Also looking at Bluscope result. NZ Steel EBIT Year June 22 was $229m - UP 76% on prior year.
STU looking undervalued in my opinion. It's going to be a great result and based on FBU guidance expecting STU to be also positive.
We can expect an increase in the dividend then like FBU.
Stu forecasts for FY22 result
NPAT. EPS. DPS
Craig's $30m. 18c. 12.5
Jarden. $29.4. 17c. 12.4
Forbar. $30.2. 18.3. 11.0
Shareguy $32m. 19c. 13 min
FY21. $16.1. 9.8 4.5. Actual from annual report
After Fletchers bullish FY23 forecast much will depend on what is said going forward. Brokers have FY23 going backwards.
The outlook statement will be all important.
Quote from: Shareguy on Aug 17, 2022, 05:23 PMStu forecasts for FY22 result
NPAT. EPS. DPS
Craig's $30m. 18c. 12.5
Jarden. $29.4. 17c. 12.4
Forbar. $30.2. 18.3. 11.0
Shareguy $32m. 19c. 13 min
FY21. $10m. 5.92. 4.5. Actual
After Fletchers bullish FY23 forecast much will depend on what is said going forward. Brokers have FY23 going backwards.
Typo shareguy ...F21 was $16.1m and 9.8 cents/share
Whoops. Good spotting winner. Got that information from Craig's research report which is a worry. Have amended now.
Just in..... gotta love that Divvy....11.4% ! Holders be happy.
https://www.nzx.com/announcements/397310
RECORD RESULTS AND DOUBLING OF PROFIT FOR STEEL & TUBE
• Record results with revenue of $599.1m, strong uplift in gross margin and net profit after tax almost doubling to $30.2m.
• Earnings momentum driven by a focus on customer service, trading disciplines, operational excellence, supply chain management and positive market conditions.
• Final, partially imputed, dividend of 7.5 cents per share (50% imputed), taking total dividends to 13.0 cents per share, equating to a gross yield of 11.4% (*1).
• Strategic focus on strengthening the core and growing high value products, services and segments.
• Well positioned to deliver through the economic cycle while continuing to invest in growth and deliver sustainable double-digit ROFE.
$m / FY22 / FY21 (*2) / Variance %
Revenue / $599.1 / $481.0 / 24.6%
Volume (Ktonnes) / 167 / 158 / 5.7%
EBITDA / $66.6 / $38.6 / 72.5%
Normalised EBITDA (*3) / $66.9 / $37.6 / 77.9%
EBIT / $47.6 / $20.7 / 130.0%
Normalised EBIT (*3) / $47.9 / $19.7 / $143.1%
NPAT / $30.2 / $15.4 / 96.4%
EPS / 18.3 cps / 9.3 cps / 96.8%
Dividend / 13.0 cps / 4.5 cps / 188.9%
As I had hoped.....stunning, highest revenue ever.
I'm a happy camper. Upwards and onwards. PE of 6.9 must be a mistake. And that yield......
Insert from report
The Board is pleased to have declared a final dividend of 7.5 cents per share. This takes full year dividends to 13.0 cents per share, representing 71% of Adjusted NPAT and equating to a gross yield of 11.4%. This is in line with Steel & Tube's policy to pay out 60% - 80% of Adjusted NPAT to shareholders
Shareholder Returns
Steel & Tube delivers a high dividend yield
FY22 Dividend: 13.0 cps
Represents a dividend yield of 11.4%*
Payment of 71% in line with Steel & Tube's dividend policy of 60% - 80% of Adjusted NPAT
Earnings per share (cps): 18.3
Net Tangible Assets per share: $1.22 Price earnings ratio: 6.9
Total Shareholder Return: 19.1%
* Based on share price of $1.27 as at 30/06/2022
TSR: Total Shareholder Return. This is calculated using (Closing share price – opening share price +
An excellent result.
Excellent but expected given there guidance after 10 months...
Partially imputed dividend is good and FY23 should see fully imputed dividends
Solid result and came out as expected
They keep on about how great gross margin is improving
Great chart they put in their presentation - pretty cool eh
0000stugm1.JPG
I've amended that Gross Margin 'improvement' chart to tell a more realistic picture of how things are going -improvement still needed
T
oooostugm2.JPG
Some big volumes going through. Looks like institutions have woken up maybe.
Investor forum today.....
Presentation here; http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/STU/398298/378442.pdf
FY22 Dividend: 13.0 cps
Represents a dividend yield of 11.4%*
Payment of 71% in line with Steel & Tube's dividend policy of 60% - 80% of Adjusted NPAT
Earnings per share (cps): 18.3
Net Tangible Assets per share: $1.22 Price earnings ratio: 6.9
Total Shareholder Return: 19.1%
Last day to bag that divi.
Copy of invester call
https://finance.yahoo.com/news/edited-transcript-stu-nz-earnings-210000954.html
Note fully imputed divi going forward.
The benefits of the current strategic initiatives are expected to commence in this financial year and be fully reflected in results from 2024 financial year. Our goal is to continue to deliver sustainable double-digit growth
I sent in a question asking their thoughts on Jarden's research that stated STU's revenue and NPAT would reduce in the next couple of years.
The question was never asked,however your post answers it.
"The benefits of the current strategic initiatives are expected to commence in this financial year and be fully reflected in results from 2024 financial year. Our goal is to continue to deliver sustainable double-digit growth"
I suspect that it is the digitization of their supply workflow which allows them to better react to changes in demand and focus on high value add products that has been the biggest result of "project strive", it is their ability to pivot and preorder, that's where the profits are coming from.
Divvie thru today
https://www.rnz.co.nz/news/national/475802/uplift-of-15pc-in-earnings-for-steel-and-tube-holdings
STU are going to have another great year. I'm picking will re rate once first half announcement out. Happy holder
Volumes were unchanged and prices up again but so are their input costs.
I hope they have another great year but it's definitely not a sure thing at this stage.
Business Outlook
• Clear focus on strengthening the core and
investing in high value products, services
and segments
• Business growth through organic
expansion and programmatic smaller
M&A
• Further strategic initiatives expected to be
reflected in results from FY24 onwards
• Goal to continue to deliver sustainable
double-digit ROFE
I have been talking to a few people in the industry who confirm that demand has not changed and more importantly are forecasting an even better year than 2022.
I'm thinking FY23 will be close to FY22 as far as earnings
So my forecast is
EPS 18 cents
Divi. 14 cents fully imputed
Feeling ... 'well positioned.' 8)
I hope you're right Shareguy. It's my biggest position and 14 cents imputed would be about a 16% yield on cost.
Based on last years announcements we should have an earnings update soon.
TRADING UPDATE
The strong demand for steel we have seen over the last two years has continued into the first half of our FY23 financial year, despite challenging macro trends, including higher interest rates, increased labour costs and elevated steel pricing.
https://steelandtube.co.nz/sites/default/files/attachments/Steel%20%26%20Tube%20-%20Shareholder%20Newsletter%20December%202022.pdf
Steel prices ex Korea are coming back to more realistic prices which can be a double edged sword depending on stocks and contracts.
FY23 interim results to be announced on 15 Feb
I've sold up and moved on...having enjoyed my time with Ol' STU. Too many of these kind of headlines for me.
https://www.stuff.co.nz/business/300780622/residential-building-cost-increases-slowing-as-consents-drop
Quote from: Hectorplains on Jan 13, 2023, 10:26 AMFY23 interim results to be announced on 15 Feb
I've sold up and moved on...having enjoyed my time with Ol' STU. Too many of these kind of headlines for me.
https://www.stuff.co.nz/business/300780622/residential-building-cost-increases-slowing-as-consents-drop
But then there's headlines like this in the NBR yesterday
Apartments drive building consent growthWho do you believe
Quote from: Hectorplains on Jan 13, 2023, 10:26 AMFY23 interim results to be announced on 15 Feb
I've sold up and moved on...having enjoyed my time with Ol' STU. Too many of these kind of headlines for me.
https://www.stuff.co.nz/business/300780622/residential-building-cost-increases-slowing-as-consents-drop
thought about trimming my holding in Stu but decided to hold.
It's one of a few shares paying dividend above inflation and for sure they will get slowdown from residential sector but they are pretty diversified in revenue streams.
Shareguy rates them and I think there fair value at present but not without some risk. I think next report will be good but it's the forward projections if given will determine where these go in near term imho.
Happy to hold and review after next report.
With logistics improving STU should be able to reduce their stock holding to a more "normal" figure.
From their last newsletter;
We remain focused on our growth pathways -
continuing to strengthen our core foundation
and investing in higher value products,
services and sectors to drive gross margin
improvement. The investments we made
in the past six months in expanded plate
processing and the acquisition of Kiwi Pipe
and Fittings are delivering value, with robust
demand for these new offerings.
I therefore am expecting a solid result with a strong outlook.
One of my sons is working in the steel industry (not for STU, but for one of the competitors). When I mentioned recently the slow down of the housing market to him, he said ... no problem - climate change will always make sure we have enough work. One needs lots of steel to rebuild bridges and stabilise roads after landslips ...
On top of that ... our water infrastructure is thoroughly broken, and we will need lots of tubes to fix that.
I recon the future for this industry is safe, no matter whether housing might have a temporary dip.
A different perspective
https://steelandtube.co.nz/sites/default/files/report/1993_AR.pdf
30 years ago they were making 28 cps, (54 cps in 2023 money, source RBNZ inflation calculator)
This year people are getting excited about the prospect of making just one third of that in today's money, 18 cps. No wonder this has been a serial underperformer, share price was ~ $2.10 5 years ago and $5, 18 years ago in 2005!
Maybe shareholders get lucky and FBU revive their scheme of arrangement the board so "wisely" rejected many years ago at $1.90.
Quote from: Basil on Jan 15, 2023, 09:38 PMA different perspective
https://steelandtube.co.nz/sites/default/files/report/1993_AR.pdf
30 years ago they were making 28 cps, (54 cps in 2023 money, source RBNZ inflation calculator)
This year people are getting excited about the prospect of making just one third of that in today's money, 18 cps. No wonder this has been a serial underperformer, share price was ~ $2.10 5 years ago and $5, 18 years ago in 2005!
Maybe shareholders get lucky and FBU revive their scheme of arrangement the board so "wisely" rejected many years ago at $1.90.
Thi
It's old like Hlg and with disciplined management now, what's not to like.
They were always great dividend payers.
Can you name a stock with a higher(prospective) dividend yield on the NZX?
BTW they canceled half the shares in '93.
QuoteIt's old like Hlg and with disciplined management now, what's not to like.
They were always great dividend payers.
Can you name a stock with a higher(prospective) dividend yield on the NZX?
BTW they canceled half the shares in '93.
For what its worth mate I will always stick with my belief that the best guide to the future is the recent past and they have a very poor dividend track record on average over the last 5 years.
Sure its an old company but you can very easily make the case its best days are behind it, for example they paid dividends of 40 cps for years in the late 1990's and eps was as high as 63 cps in 1995, page 30 of the 1997 annual report https://steelandtube.co.nz/sites/default/files/report/1997_AR.pdf
I believe the building industry has always been historically cyclical and it will always be that way going forward so going fishing in this sector for reliable dividend payers is fraught with significant risk around the cyclicality of the industry. As a semi-retired income investor I am far less concerned with what their prospective yield might be in FY23. My focus is on what it will average across the economic cycles going forward.
In my view the board made a complete hash of the FBU $1.90 offer several years ago and in the intervening time the NZX50 is up more than 50% so shareholders could have had $1.90 + 50% = $2.85 in value now plus more reliable income since then in other high yield stocks. Adding that difference back in, let's call it $3 just for the sake of simplicity, (it's probably more), in value now shareholders could have had if the board approved the FBU deal but thanks to the "rocket scientists" on the board they now have only $1.30. Why would anyone trust a board that did that to them?
I also note they did a 1:1 bonus issue in 2017.
I was a shareholder for a while in early 2022 and bought into the hype on the other forum at the time. It cost me a few thousand to liquidate that position in May 2022. My losses would have been four times as much if I was still holding now. I only post to put some background and realism into this thread so that others can reflect on a counter point of view.
I believe over the medium to long term I will get a higher and more reliable source of retirement income from the likes of HLG and TRA. Both companies have a 10% prospective yield and a clear plan for growth in the long run that will grow those dividends over time.
If holders believe all STU's past problems are behind them and they're headed back to the former days of glory. good for you and good luck with that.
yes basil - there's an old saying 'Believe the past to foresee the future'
Suppose that'sgood advice
Basil, some of us didn't own STU 5 yrs ago. Some off us bought it 3yrs ago when the big steel barge was on the turn
The trend is our friend until the bend at the end...
TRA is bending the wrong way
TRA Share price down 30% in last 52 weeks
TRA last 3 dives 6c, 7c, 5c ..oh dear that's a 30% drop from last qtr
STU share price down 24% in last 52 weeks
STU last 3 divies 3.3c , 5.5 c, 7.5c + imputation...oh lordy that's a 40% increase from last half
Theres some Strength in that STU dividend.
Discl. This is a bit of Wind up
I actually think both STU and TRA are good long term shares but at the moment I personally prefer STU and you prefer TRA
Quote from: Basil on Jan 16, 2023, 11:16 AMFor what its worth mate I will always stick with my belief that the best guide to the future is the recent past and they have a very poor dividend track record on average over the last 5 years.
Sure its an old company but you can very easily make the case its best days are behind it, for example they paid dividends of 40 cps for years in the late 1990's and eps was as high as 63 cps in 1995, page 30 of the 1997 annual report https://steelandtube.co.nz/sites/default/files/report/1997_AR.pdf
I believe the building industry has always been historically cyclical and it will always be that way going forward so going fishing in this sector for reliable dividend payers is fraught with significant risk around the cyclicality of the industry. As a semi-retired income investor I am far less concerned with what their prospective yield might be in FY23. My focus is on what it will average across the economic cycles going forward.
In my view the board made a complete hash of the FBU $1.90 offer several years ago and in the intervening time the NZX50 is up more than 50% so shareholders could have had $1.90 + 50% = $2.85 in value now plus more reliable income since then in other high yield stocks. Adding that difference back in, let's call it $3 just for the sake of simplicity, (it's probably more), in value now shareholders could have had if the board approved the FBU deal but thanks to the "rocket scientists" on the board they now have only $1.30. Why would anyone trust a board that did that to them?
I also note they did a 1:1 bonus issue in 2017.
I was a shareholder for a while in early 2022 and bought into the hype on the other forum at the time. It cost me a few thousand to liquidate that position in May 2022. My losses would have been four times as much if I was still holding now. I only post to put some background and realism into this thread so that others can reflect on a counter point of view.
I believe over the medium to long term I will get a higher and more reliable source of retirement income from the likes of HLG and TRA. Both companies have a 10% prospective yield and a clear plan for growth in the long run that will grow those dividends over time.
If holders believe all STU's past problems are behind them and they're headed back to the former days of glory. good for you and good luck with that.
The recent past is only a good indicator for the future if you have only one (or one major) parameter impacting your trend, and this is moving in a linear fashion.
Sure - these things happen, but reality is not just unbroken trends ... as we all know :) , but a cyclical or chaotic system with an unlimited number of inputs following anything but a linear trend.
Often good to consider as well things which might change the trend chart ... and I am not just talking about the SP.
No question that STU has had some horrendous years and suffered from poor management. These days under Mark Malpass the ship is I believe steering in the right direction.
I still think STU is One of the most undervalued shares on the NZX currently. Where can you buy a distribution business pretty close to NTA. ($1.22 at FY22). I'm expecting this years result to be close to last years which was EPS of 18 cents and a div of 13 cents. Im thinking FY23 we will be looking at 14 cent DPS possibly even 15 cents with recent acquisitions. Low debt with gearing at 19 percent at FY22.
When I was highlighting the potential on that other site we were looking at around $1.00 a share. Since then the share price has stabilised around current price.
I believe there is a lack of understanding on how this company generates income. These days Steel & Tube is a diversified business with limited exposure to any one sector. According to the annual report residential is about 21% of their market sales.
One of the highest dividend payers on the NZX and should be fully imputed going forward. I also believe at current price it will be attractive as a take over.
Not long to wait for the results. I back myself with 18 Years in the industry which is why I'm overweight on STU.
Well said shareguy 100% agree.
This is my second largest holding (v overweight) and for those same reasons you outline.
Roll on the next report 15 Feb
I think we should see a steady eps with inventory and debt down and a fully imputed 1/2 yr dividend around 7 (or maybe even 8c)
Definitely an attractive t/o prospect, not that that would be my preference. I think the recovery has some way to run yet.
Quote from: Basil on Jan 16, 2023, 11:16 AMFor what its worth mate I will always stick with my belief that the best guide to the future is the recent past
Trouble with this belief is that it doesn't allow for CHANGE.....(Lessons learned and all that.)
After a few disappointing company results, a management/Board shake up takes place, changes are made and a turnaround is underway........
In the last 12 months GTK, ATM are classic examples of positive CHANGE........both up over 50% on recent 12 month lows. (Although dividend hounds seem happy to hunt elsewhere).
Always a good feeling to ride a turnaround SP wave when you find one. Can't beat tax free capital gains.
STU maybe a work in progress but all will be revealed soon.
Hi, does STU have a DRIP? I couldn't find it mentioned. Cheers.
Quote from: SuperMario on Jan 16, 2023, 10:51 PMHi, does STU have a DRIP? I couldn't find it mentioned. Cheers.
No DRP active as far as I'm aware.
Cheers
Discl. Holder
Plenty of ready mix concrete being produced
Could say at record levels
Suppose steel and concrete go together - assuming STU do steel for concrete
000readymix.JPG
Back it the Wild West days of STU...the times Basil refer to.
STU used to hide all the dodgy steel in the concrete
..even back then STU was setting records (biggest ever com com fine at the time)
https://comcom.govt.nz/news-and-media/media-releases/2018/steel-and-tube-fined-$1.885-million-for-misleading-representations-about-steel-mesh
but we have a new captain and the boardroom got a refresh. such dodgy practices just ghosts of the past...STU a well respected member of the community now.
You will know how steel and concrete sales mesh on the 15th Feb.
Quote from: winner (n) on Jan 17, 2023, 12:33 PMPlenty of ready mix concrete being produced
Could say at record levels
Suppose steel and concrete go together - assuming STU do steel for concrete
000readymix.JPG
They do - though from a recent site visit I made in Christchurch it did not appear to me that this might be their most significant sales item :) ;
Anyway - if people pour reinforced concrete, than they typically need as well plenty of steel on top of the concrete ... and this is where STU has lots of business: any steel carrier and connector you need for buildings e.g. halls, high rise buildings, industrial buildings ... and obviously as well the stuff they put on the roof (corrugated iron) :);
Thay have a reinforcing division that is very busy. Will be reporting a big profit on Wednesday. I agree that it's one of the best buys on NZ market. Recent acquisitions will add to eps. I'm all in.
Quote from: Davide on Feb 12, 2023, 05:56 PMThay have a reinforcing division that is very busy. Will be reporting a big profit on Wednesday. I agree that it's one of the best buys on NZ market. Recent acquisitions will add to eps. I'm all in.
FBU guidance this morning was soggy (like everything else at the moment)... EBIT down as a "result of adverse weather impacts in New Zealand in January and February." Forward on residential is weak; although they note, "Commercial and infrastructure markets are expected to be more robust." STU are less likely to feel that impact due to greater weighting towards the later areas.
Readymix volumes down 9% in December22 quarter v December21 quarter
Hopefully STU won't tell a sad story like Fletchers
Quote from: winner (n) on Feb 13, 2023, 02:06 PMReadymix volumes down 9% in December22 quarter v December21 quarter
Hopefully STU won't tell a sad story like Fletchers
Stu_and_the_Lads_522522cc9681e.jpg
No doubt, it'll all be dandy.
Vulcan's interim was not flash.
I wonder whether I am wrong to expect a great result from STU tomorrow.?
Quote from: lorraina on Feb 14, 2023, 08:40 AMVulcan's interim was not flash.
I wonder whether I am wrong to expect a great result from STU tomorrow.?
VSL's results in line with expectations and their previous full year guidance.
So no surprises there.
Quote from: Teitei on Feb 14, 2023, 09:25 AMVSL's results in line with expectations and their previous full year guidance.
So no surprises there.
Yes, will be interesting to see whether STU can do better comparatively.
VSL is trading at around 12 times NPAt
STU is trading around 8 times NPAT
Maybe time for a relative reweighting of these two?
We'll know tomorrow
There has been nothing reported since this DECEMBER TRADING UPDATE
The strong demand for steel we have seen over the last two years has continued into the first half of our FY23 financial year, despite challenging macro trends, including higher interest rates, increased labour costs and elevated steel pricing.
This result is going to be excellent I think. Next Six months will be lower, but hay look at the price it's trading at.
I see Vulcan's NTA at $1.21 with share price at$9.56.
Steel and Tubes at $1.22 with share price of $1.42
Quote from: Poet on Feb 14, 2023, 09:39 AMYes, will be interesting to see whether STU can do better comparatively.
VSL is trading at around 12 times NPAt
STU is trading around 8 times NPAT
Maybe time for a relative reweighting of these two?
We'll know tomorrow
A good result from STU will see investors switching from VSL to STU - that's for sure.
The sp action of the two stocks in recent times also show that the swing is towards STU.
Not too late for VSL's shareholders to switch to STU before the results.
1H23 Results out...... BAU?
https://www.nzx.com/announcements/406675$m / 1H23 / 1H22 / Change
Revenue / 315.3 / 282.2 / 11.7%
EBITDA / 30.5 / 31.9 / (4.4%)
Normalised EBITDA* / 31.6 / 31.8 / (0.6%)
EBIT / 20.3 / 22.6 / (10.2%)
Normalised EBIT* / 21.5 / 22.5 / (4.4%)
NPAT / 11.8 / 14.3 / (17.5%)
Net operating cashflow / 41.1 / (9.6) / 528.1%
Total dividends (CPS) / 4.0 Imputed / 5.5 Unimputed
Revenue for the six months was a record $315.3m, up 12% on the prior comparative period (pcp). Volumes were slightly below prior year, with sustained customer demand continuing for a comprehensive range of products.
Earnings were down slightly on pcp as margin improvement was offset by inflation and depreciation. A focus on margin management and fast moving inventory has minimised margin squeeze. Gross margin was 21.7% with gross margin dollars per tonne increasing to $850 per tonne. Pleasingly, normalised operational costs as a percentage of sales continued to decline. EBITDA for the period was $30.5m with EBIT of $20.3m.
Inventory increased in FY22 to support customers through a period of supply chain constraints. This position is now being reduced as supply chain headwinds ease. Inventory turns (unit and tonnes) have remained consistent with prior periods.
Steel & Tube's balance sheet remains strong with reduced net debt, down to $32.5m as at 31 December 2022, from $43m in FY22, with strong cashflows supporting strategic initiatives.
That's a pretty poor result
Teitei will say as expected and good in the prevailing market conditions
But will it support the share price?
Or will share price head back to 110/120
A quick glance.
Not good but not as bad as Vulcans.
Record sales. Div similar when you take 100 percent imputation.
Slightly over Craig's estimates. Second half normally better.
Low debt and reducing. Entering Aluminium market
A mixed result.
Sales Revenue up 11.74% yet cost of sales were up 13.40%.
Borrowings down $11mil.
Pleasing seeing inventory down $17.445mil
EPS down from 8.7cents to 7.1 cents.
Imputed divie of 4cents is positive but is the same as the previous 5.5cents unimputed.
Cash flow from operating activities was outstanding at $41.140 mil.
Also pleasing was seeing the equity ratio improving from 48.42% to 53.48%.
The business is in very good shape.Management are performing well.
The entry into the aluminium market should be another good bolt on serving their existing customers.
Quote from: winner (n) on Jan 16, 2023, 12:20 PMyes basil - there's an old saying 'Believe the past to foresee the future'
Suppose that'sgood advice
There is no way anyone can sugar coat this result. It's bloody awful.
Significant decline in eps and the dividend. This pup is a recidivist offender when it comes to serious disappointments.
Quote from: Basil on Feb 15, 2023, 03:51 PMThere is no way anyone can sugar coat this result. It's bloody awful.
Significant decline in eps and the dividend. This pup is a recidivist offender when it comes to serious disappointments.
That's not how I see it Basil.
Reported just a 0.6% drop in normalised operating profit and saying demand remains solid.
This bad weather has caused plenty of issues. One thing is for sure, will be a lot of roofs that need replacing and infrastructure is going to get a huge boost.
The steel products distributor's normalised earnings before interest, tax, depreciation and amortisation (Ebitda) of $31.6m compared with $31.8m in the previous first half.
Sales were up 11.7% to $315.3m, while sales volumes were down just 2.8% in the latest six months.
On Tuesday, Vulcan Steel reported a 15% drop in steel volumes sold in its first half. Which indicated to me that STU are continuing to grab market share.
Steel & Tube will pay a fully imputed first-half dividend of 4 cents per share (cps), making it equivalent in value for New Zealand shareholders to last year's unimputed payout of 5.5 cps.
So same dividend and EPS was 7.1 cents against 8.7.
Met Craig's forecast. With the low debt no reason why they can't continue to be one of the NZX highest dividend payers.
Acquisitions are doing well. And the move into aluminium seems like a great play considering many of their customers use the product.
No disrespect mate but you have previously stated you were looking for 14 cps in annual dividends and I believe most were expecting full imputation credits with that. I think it's clear they're a long way short of that.
I don't have a lot of respect for "normalised" earnings especially in the construction sector.
Quote from: winner (n) on Feb 15, 2023, 08:55 AMTeitei will say as expected and good in the prevailing market conditions
But will it support the share price?
Or will share price head back to 110/120
No, I would not say that even though it is in line with Craigs.
I was expecting a higher profit to in line with the higher revenues but their margins did not hold up.
Such is life.
Happy to continue to bank the sustainable high dividends and wait for the huge infrastructure spending to kick in.
Not a lot of turnover today suggests to me that the market is ok with the result.
Their presentation reads well.
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/STU/406675/388494.pdf
Quote from: Shareguy on Feb 15, 2023, 05:23 PMNot a lot of turnover today suggests to me that the market is ok with the result.
Quote from: Basil on Feb 15, 2023, 03:51 PMThere is no way anyone can sugar coat this result. It's bloody awful.
Significant decline in eps and the dividend. This pup is a recidivist offender when it comes to serious disappointments.
If they matc
Quote from: Basil on Feb 15, 2023, 03:51 PMThere is no way anyone can sugar coat this result. It's bloody awful.
Significant decline in eps and the dividend. This pup is a recidivist offender when it comes to serious disappointments.
If they match last year's dividend effort its still 11% gross at today's price, $1.32
Still our hopes of 14c this year are dashed.
I will be more than happy with any yield near or over 9% gross.
Maintaining 11% would be outstanding.
Pleased the divie is now imputed.
If they can pay a 4 cent final divvy fully imputed that puts them on a gross yield of 8.4%.
Who knows if they can maintain that in the years ahead?
Quote from: Basil on Feb 15, 2023, 09:58 PMIf they can pay a 4 cent final divvy fully imputed that puts them on a gross yield of 8.4%.
Who knows if they can maintain that in the years ahead?
The previous 2 years the final dividend was higher than the interim. Let's hope.
Fbar say
Steel and Tube (STU) reported a tidy 1H23 result which was in line with our expectations. Challenging macro conditions saw volumes decline over the first half but this was more than offset by pricing gains.
FY23 divi 10c
EPS 15
PE 8.9 at $1.32
Gross yield 10.5 percent
Quote from: lorraina on Feb 15, 2023, 06:24 PMTheir presentation reads well.
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/STU/406675/388494.pdf
2H23 Market Outlook
Challenging macro trends expected to continue; following prolonged 'super cycle',
steel demand is now expected to moderate
Trading conditions:
• Challenging macro trends expected to continue – inflation and higher interest rates,
tight labour market and the ongoing impact from Covid
• Following prolonged 'super cycle', steel demand is now expected to moderate;
easing activity already occurring in residential construction
• Steel pricing stabilising above pre-Covid levels during 1H although in December and
January international prices have firmed in NZ dollars
Reads like the best is over... like a hold at best.
Quote from: Hectorplains on Feb 16, 2023, 10:19 PM2H23 Market Outlook
Challenging macro trends expected to continue; following prolonged 'super cycle',
steel demand is now expected to moderate
Trading conditions:
• Challenging macro trends expected to continue – inflation and higher interest rates,
tight labour market and the ongoing impact from Covid
• Following prolonged 'super cycle', steel demand is now expected to moderate;
easing activity already occurring in residential construction
• Steel pricing stabilising above pre-Covid levels during 1H although in December and
January international prices have firmed in NZ dollars
Reads like the best is over... like a hold at best.
aye I thought the reference to supercycle perhaps unintentionally signaled more of a correction rather than a moderation, the later of which they were aiming for. outlook statements pretty important in this environment.
Steel & Tube is focused on its 'strengthen and grow' strategies – continuing to strengthen the core of the business and growing in high value products, services and sectors to drive gross margin dollar improvement. Business growth will continue through organic expansion and smaller programmatic acquisitions. Further strategic initiatives are expected to be reflected in results from FY24 onwards.
CEO of Steel & Tube, Mark Malpass, commented: "Following the recent 'super cycle', we are well positioned to respond to moderating demand. We have a strong balance sheet and cashflows, and are actively managing costs and margins per tonne. Customer and employee satisfaction remains at high levels and we are a preferred supplier for projects large and small across a diverse range of industries. Our recent growth investments are performing well and we are continuing to assess new opportunities that complement our existing business and provide growth pathways."
Caught up with friend in "the no" who said. Real focus on costs at moment with another round of reduncies just announced.
Quote from: Shareguy on Feb 17, 2023, 11:36 AMCaught up with friend in "the no" who said. Real focus on costs at moment with another round of reduncies just announced.
If your negative friend, Mr No, is correct that really should have been disclosed by Malpass. I've never known redundancies to create an atmosphere where, "employee satisfaction remains at high levels."
I drew some lines with my electronic crayons on the STU chart as below
Google says it is a Symmetrical Triangle and the price has 'broken down' through the triangle .... that's bad
Explanation I read was a bit hard to follow but it seems to say that traders would be looking a new low of 75 cents (price went up from about 100 to 150 or 50 cents and could fall by 50 cents when it broke down at say 125)
But heck what do I know about real TA .... probably need to leave that to the experts eh
Chart doesn't look pretty though
0000stuchart.JPG
Attached Thumbnails Attached Thumbnails
I see NZX shows STU divie yield as 11.567%
But it's hard to see how they will be able to pay out more than 8 cents this financial year
Fully imputed gives gross yield of 9%
Not too bad but I marketscreener shows declining dividends over next few years
Jeez I have to stop googling symmetrical triangles and stock charting
One out draws a parallel line to the down trend and implies the share price could head down to meet that new line which could act as support.
Think I'll give up googling such stuff now
Maybe KW can enlighten me about triangles / wedges on stock charts
0000stuchart1.JPG
@Winner, try the TA bible by Bullkowski https://thepatternsite.com/st.html
Symmetrical triangle:
Percentage meeting price target for up/down breakouts: 58%/36%
Measure Rule: https://thepatternsite.com/measure.html
Triangles, Symmetrical, down breakout B - ((H - L) * 36%)
Screenshot 2023-03-04 at 2.42.15 PM.png
Thanks buzz ....that gives a low around 106
Seems reasonable ...even on fundamentals.
Quote from: winner (n) on Mar 04, 2023, 01:23 PMI see NZX shows STU divie yield as 11.567%
But it's hard to see how they will be able to pay out more than 8 cents this financial year
Fully imputed gives gross yield of 9%
Not too bad but I marketscreener shows declining dividends over next few years
https://www.marketscreener.com/quote/stock/STEEL-TUBE-HOLDINGS-LIM-6491420/financials/
Ouch, eps dropping from 18 cps in FY22 to 15 cps then 12 cps for FY24 and FY25.
Only 2 analysts are covering it though. Maybe they're both wrong?
Quote from: Basil on Mar 05, 2023, 10:17 AMhttps://www.marketscreener.com/quote/stock/STEEL-TUBE-HOLDINGS-LIM-6491420/financials/
Ouch, eps dropping from 18 cps in FY22 to 15 cps then 12 cps for FY24 and FY25.
Only 2 analysts are covering it though. Maybe they're both wrong?
So if they are right, we could get down to a P/E of 10 at the worst point of the cycle - hardly a disaster.
And they are showing a 25 cps net cashflow for each of the next three years
Was thinking the same Poet, FY24 and FY25 probably the bottom of the cycle so probably somewhere about fair value now.
Genuine question about governance though. Mostly still the same board that in their "infinite wisdom" turned down Fletchers bid @ $1.90?
The 2 analyst who make up the forecasts at marketscreener seem to be odds with the company rhetoric about the future
Mark's pretty slides haven't convinced the analysts as much as some punters
307F3867-5F93-461E-886E-5D9BF90513CE.jpeg
Quote from: Poet on Mar 05, 2023, 11:02 AMSo if they are right, we could get down to a P/E of 10 at the worst point of the cycle - hardly a disaster.
And they are showing a 25 cps net cashflow for each of the next three years
Is net cash flow now the preferred performance metric for STU?
Quote from: Hectorplains on Mar 05, 2023, 12:56 PMIs net cash flow now the preferred performance metric for STU?
Could be. There's still a governance credibility gap with STU and punters are right to be wary. NP and dividend payouts don't always show the whole picture. Cash doesn't lie.
Quote from: LoungeLizard on Mar 05, 2023, 01:46 PMCould be. There's still a governance credibility gap with STU and punters are right to be wary. NP and dividend payouts don't always show the whole picture. Cash doesn't lie.
Last couple of cash flow statements have shown STU haven't sold enough steel rods to pay the divie and they've had to have morning tea with the bank manager to borrow some cash to keep the punters happy
Quote from: winner (n) on Mar 05, 2023, 02:11 PMLast couple of cash flow statements have shown STU haven't sold enough steel rods to pay the divie and they've had to have morning tea with the bank manager to borrow some cash to keep the punters happy
Latest hy cashflow from operations 41m
Dividend 7m
Dividend covered six times by cashflow
Debt reduced by 11m
LAST 12 MONTHS CASHFLOWS
From Operations plus lease costs $2.6
Capex $5.8m (doesn't include the $8.9m to buy a business)
Free Cash Flow - outflow of $3.2
Dividends paid $21.6m
Borrowed $38.0m more
Hope things look better in H2
Quote from: winner (n) on Mar 05, 2023, 03:54 PMLAST 12 MONTHS CASHFLOWS
From Operations plus lease costs $2.6
Capex $5.8m (doesn't include the $8.9m to buy a business)
Free Cash Flow - outflow of $3.2
Dividends paid $21.6m
Borrowed $38.0m more
Hope things look better in H2
Bad effort W69 on a negative posting.
Using H2 F22 & H1 F23 as 12 months financials?
That's pathetic!
I like all the negative postings as they are achieving the desirable outcome but using creative accounting is too obvious!
I take little notice of analysts forward earnings figures for STU, as I don't think they understand the company well. I have gone back through Craig's Research and find big differences on actual results and their forecast.
Take FY22 Craig's had forecasts of 13.2 EPS and dividend of 9.2c.
Actual was 18.3 EPS and 13c dividend.
Yes they are forecasting big drops going forward. I don't think so and have invested accordingly.
Wonder if H122+H222 is bad practice ...gives a annual/12 month period eh .......as does an annual/12 month period H222+H123 but more up to date
And both above annual period eliminate this thing called seasonality
The world doesn't stop at financial period end ......the world carries on
I dont see such a practice as pathetic or creative .....just a way to see what's happened over the last 12 months / annual period.
Over many years I've found it an invaluable way of assessing things and I'll continue to do so
Quote from: winner (n) on Mar 05, 2023, 04:57 PMWonder if H122+H222 is bad practice ...gives a annual/12 month period eh .......as does an annual/12 month period H222+H123 but more up to date
And both above annual period eliminate this thing called seasonality
The world doesn't stop at financial period end ......the world carries on
I dont see such a practice as pathetic or creative .....just a way to see what's happened over the last 12 months / annual period.
Over many years I've found it an invaluable way of assessing things and I'll continue to do so
By all means continue to do so as long as it paints a bad picture.
Any chance of doing a H2 F21 + H1 F22 to compare with H2 F22 + H1 F23? Must paint a pretty bleak picture.
Here's a pretty cool STU chart from the database
Annual revenues - MAT being sum of last two report periods
Mark possibly has on the wall with a big mark pointing out when he started as CEO
000stusales.JPG
YOUR A PRO WINNER()....
you need elons prime or AI to do all your work...or run amuk...
Quote from: Waltzing on Mar 06, 2023, 09:17 AMYOUR A PRO WINNER()....
you need elons prime or AI to do all your work...or run amuk...
AI said the chart shows what 'super cycles' can do to sales but reminded me of the consequences when a 'super cycle' ends
We suspected all along you have AI from elon at work...
???
Hope whatever Vulcan caught today isn't contagious
Média market roundup said it had one of its biggest single-day falls ever
2 year chart looks like a series of lower high's and lower low's.
My thoughts
Both Stu and Vulcan are very similar businesses in what they sell. In essence they are both in the distribution and processing of steel and associated products. Both Vulcan and Stu have recently entered the aluminium market.
The main difference I think between the two is that Vulcan is a quality business that has placed a very high regard to customer relationships and importantly attracting and retaining high calibre staff. Vulcan have a great culture that has come from Peter wells down. Stu has unfortunately not put a high price on these values and has paid the price over the years.
What interests me currently is what Stu is trading at. If you go back over the years as I have done you will find that the share price has traded far in excess of NTA as it should in my opinion. Also apart from the last period of change has been consistently one of the higher dividend payers on the NZX.
If we compare both companies today {from NZX) we have
STU VULCAN
SP $1.24. SP. $8.82
NTA $1.17. NTA $1.21
Gross yield 11.75 percent. 8.2 percent
PE. 7.3. 9.2
Yes NTA is one metric, but I just can't get over the huge premium to NTA that Vulcan trades at when you can get STU at close to NTA.
Stu finally have a good leader by all account, who is focusing on margin and people. They seem to finally be putting effort into staff and are looking to do the basics the best.
No question Vulcan is a great company that has done well and deserves to trade where it is. Stu is the "ugly duckling" that is having plastic surgery and will be the pick in the sector in my opinion.
I can't see much more downside to STU and already have a large holding. I'm sure the current board are concerned that they are at risk as a takeover target with share price heading below NTA.
Only time will tell. In the meantime will continue to enjoy one of the highest yields on the NZX.
Shareguy ..your NTA conundrum possibly something to do with the relative returns on equity
VSL shareholder funds slightly less than STUs but VSL make roughly 4 times more profit(NPAT) than STU
Rewarded with higher multiples
Quote from: winner (n) on Mar 07, 2023, 08:32 AMShareguy ..your NTA conundrum possibly something to do with the relative returns on equity
VSL shareholder funds slightly less than STUs but VSL make roughly 4 times more profit(NPAT) than STU
Rewarded with higher multiples
Means VSL's margins can only go down while STU's have huge potential to go higher?
Hope not as we want STU's sp to drop towards $1.00.
Better if lower obviously.
New data from Stats NZ showed the value of sales in construction was up by 14 per cent or $1b on the December 2021 quarter.
Quote from: lorraina on Mar 11, 2023, 11:00 AMNew data from Stats NZ showed the value of sales in construction was up by 14 per cent or $1b on the December 2021 quarter.
The 2021 Quarter was as Auckland came out of lockdown - so it was always going to be up.
New home consents have continued to fall from the May 2022 peak. December was down another 7%. Annualised the consent figure was 16% lower than at the same last year.
https://www.nzherald.co.nz/nz/eyesore-half-finished-auckland-apartment-complex-upsets-neighbours-as-developers-battle-rising-costs/W6AO4HYMMND7BBW7MKKTZ3H7CE/
Conditions are ripe for widespread business failures in the construction industry.
Quote from: Basil on Mar 11, 2023, 10:44 PMhttps://www.nzherald.co.nz/nz/eyesore-half-finished-auckland-apartment-complex-upsets-neighbours-as-developers-battle-rising-costs/W6AO4HYMMND7BBW7MKKTZ3H7CE/
Conditions are ripe for widespread business failures in the construction industry.
Yep and also failures of the developers with the pseudo wholesale 'investors' - Du Val and Williams et al
Hopefully STU aren't making the same mistakes of years ago and if FBU and Vulcan stay with 'sensible' pricing (let's not involve the ComCom about here) then the mistakes become who funded the upcoming failures and are gonna be unsecured creditors.
It's an interesting sector - I left a while ago but I'm definitely monitoring
Hmmmm.....
Quote from: Hectorplains on Mar 11, 2023, 04:52 PMThe 2021 Quarter was as Auckland came out of lockdown - so it was always going to be up.
New home consents have continued to fall from the May 2022 peak. December was down another 7%. Annualised the consent figure was 16% lower than at the same last year.
Total construction consents year to Jan 23 +9.2% on pcp. Not too bad but weakening
Here's some history as to growth in total consents
Seems we are following path of around GFC times and could expect a decent decline in activity
And if Chch quakes anything to go by it takes some time for acttivity to pick up,... up to 2 years. So all future work re recent cyclone damage could be some time off .... and after Chcistchurch quakes the rest of the country suffered a bit of a downturn in activity
So extra work from cyclones could be some time off ....and in meantine STU (and FBU et all) might see a bit of decline in sales
I wouldn't be surprised if STU sales post the 'super cycle' reverted back to steady state level around the $500m mark
0000consents.JPG
Quote from: Basil on Mar 05, 2023, 10:17 AMhttps://www.marketscreener.com/quote/stock/STEEL-TUBE-HOLDINGS-LIM-6491420/financials/
Ouch, eps dropping from 18 cps in FY22 to 15 cps then 12 cps for FY24 and FY25.
Only 2 analysts are covering it though. Maybe they're both wrong?
Analysts (as everybody else) can't look into the future. Had recently (but before the latest weather events) a chat with Mark Malpass - he thinks the analysts are pessimistic (well, this is what he said). But hey, not sure Mark knows more about the future than the analysts (probably not), but I recon he knows more about the company he runs ...
I suspect that climate change together with the recent weather events will increase the demand for building steel. I suspect as well that the underlying reason for 3 waters (no, not racism or politics ...) will increase the need for pipes and tubes.
The cake clearly will grow. Harder to say though, how big STU's share of this growing cake will be.
BP - chat with Malpass eh .... what other intel you g
those pessimistic analysts might be right - if I use their forecast for year through to June 23 the STU sales growth over the years looks like what is in the chart
All falls into place - Malpass sounding bearish at half year ..... the 'super cycle' over .... market activity cooling etc etc.
No sales growth in F23 and EBIT/NPAT not to flash ..... no 10 cent dividend this year
Disasters tend to slow growth badly in the short term .... it takes years to get reconstruction under way so talking of cyclone recovery boosting sales over the next year is flawed thinking .... and wishful thinking that things won't be too bad over the next year or so.
The cake eventually will get bigger (always does) but whether this ends up as a great STU only term will tell. STU probably good buying again when downtrend ends .... maybe around 80 cents
00000stusupercycle.JPG
Interesting.
Shares on issue 166,852,665.
Market cap @ Share price $1.22 is $203.5 mil.
NTA.$1.17.or $195.21 mi.
So at 80 cents the market cap would fall to $133.48 mil a drop of $70.02 mil.
I would guess the NTA would increase, how ever if it remained the same;$1.17 or $195.21 of net tangible assets.Acoording to brokers STU's sales will remain around $600 mil .
Net debt to capital will reduce over the next 3 years to 10%,
Distributable Free Cash flow is expected to increase from $39mil in 2023 to $44.7 mil in 2024.
The distributable $44.7 mil would be rather interesting should STU's market cap fall to$133.48.
33.48% of their market cap. ?
You could be right lorriana - Market cap @ Share price $1.22 is $203.5 mil.
NTA.$1.17.or $195.21 mi. So at 80 cents the market cap would fall to $133.48 mil a drop of $70.02 mil.
But then again nobody ever thought OCA would trade at at nearly 50% of NTA ...the market is a funny animal
Distributable Free Cash flow is expected to increase from $39mil in 2023 to $44.7 mil in 2024.
The distributable $44.7 mil would be rather interesting should STU's market cap fall to$133.48.
33.48% of their market cap. ?
And that W69 is the difference between STU and OCA...Low debt and high distributable free cash flow.
Quote from: winner (n) on Mar 12, 2023, 06:22 PMYou could be right lorriana - Market cap @ Share price $1.22 is $203.5 mil.
NTA.$1.17.or $195.21 mi. So at 80 cents the market cap would fall to $133.48 mil a drop of $70.02 mil.
But then again nobody ever thought OCA would trade at at nearly 50% of NTA ...the market is a funny animal
I'm probably the only one that's called for exactly that for quite some time now and I reckon there's a pretty good chance we will see the full 50% discount to NTA this year but I don't think anyone saw ARV at nearly a 50% discount, so agree the market can be a very tough taskmaster at times.
I suspect the analysts are probably not far off the money with their call for trough year earnings in FY24 and FY25 of 12 cps. Where the market prices STU as the residential building downturn gathers pace will be interesting to see. At this point I am happy to watch from sidelines and keep my powder dry. Ditto for ARV. Thing is, 80 cents (if they can earn 12 cps in the trough years) would be less than 7 times trough year earnings which on the face of it seems too cheap but shares often undershoot fair value by quite a bit in a downturn so you never really know what might be coming and obviously applies to far more than STU!
Residental building makes up just 10% of STU's revenue.
Quote from: lorraina on Mar 12, 2023, 07:40 PMResidental building makes up just 10% of STU's revenue.
Yep residential 11% of revenue
I note Infrastructure is only 5%
So maybe no bonanza windfall from disaster recovery after all
From half year preso good to see STU doing good stuff like -
Expanded investment in Māori Cadetship Programme and All staff at or above the Living Wage from 31 December 2022
Quote from: winner (n) on Mar 13, 2023, 08:07 AMYep residential 11% of revenue
I note Infrastructure is only 5%
So maybe no bonanza windfall from disaster recovery after all
It was 11% in 2022 half,but 10% 2023 half.Company presentation 15th Feb page 6.
And infrastructure is 6% up from 5% last year.
2023 figures are on the left side,2022 on the right side.
It will be interesting seeing where infrastructure % goes over the next few years.
Quote from: winner (n) on Mar 13, 2023, 08:07 AMYep residential 11% of revenue
I note Infrastructure is only 5%
So maybe no bonanza windfall from disaster recovery after all
So - if some wool storage sheds need to be rebuild (and I am sure WoolWorks was not the only company effected by the floods), would this be part of the 11% residential construction or part of the 42% commercial construction?
Maybe the potential is larger than we might think ...
Don't sweat the small stuff ...
Media market close report today ... Steel & Tube gained 2c or 1.94% to $1.05;
That's good news
See our Mark doing a rave at a NZX Virtual Investor event next week.
Last time he did that the shareprice was over $1.50 ........hope he does a real good rave this time .....STU needs all the ramping it can get
Quote from: winner (n) on May 01, 2023, 07:05 PMMedia market close report today ... Steel & Tube gained 2c or 1.94% to $1.05;
That's good news
See our Mark doing a rave at a NZX Virtual Investor event next week.
Last time he did that the shareprice was over $1.50 ........hope he does a real good rave this time .....STU needs all the ramping it can get
Last time I checked it was the responsibility of a CEO to manage and improve the performance of the company, not to ramp up the share price. Lets hope his strategy adding aluminium to the steel business helps to dampen the blow the building industry is currently going though (courtesy to the reserve bank strategy) and his numbers are somewhat better than the numbers of the competition.
Well, this is how I will measure his performance anyway - the raving and ramping up can be done by others. Normally you are pretty good in this role, aren't you?
Anyway - dividend yield currently 9.6%, around half of this beauty imputed ... but sure - I hear already the shouting "dividend trap". I see it as deep value game, unless somebody manages to shut down NZ Inc in the years to come for good ...
Quote from: BlackPeter on May 02, 2023, 09:17 AMLast time I checked it was the responsibility of a CEO to manage and improve the performance of the company, not to ramp up the share price. .............
Then why does our Mark seem to get excited about getting to do a rave at these Investor gigs?
I am looking forward to the investor update which will hopefully be next week.
Analyst coverage has 2024 and 2025 on lower EPS and dividend. I think they are far to conservative and wrong.
Take FY22 Craig's had forecasts of 13.2 EPS and dividend of 9.2cps.
Actual was 18.3 EPS and 13cps dividend.
Stu these days has Low debt, lean with big reduction in overheads, diversified and a focus on basics. Recent acquisitions to add 0.5 to Eps according to ceo. Interested to hear how entrance into the Aluminum market is going. Trading well under nta for a distribution business does not make sense to me. Historically has traded well above nta and carried high debt.
Forecasts for FY23 from analysts. FY22 dividend was $.13 cps partially imputed.
Craig's forecast for FY23 is $.093 cps
Fbar forecast is $.10 cps
Stu current policy is to pay out 60% - 80% of adjusted NPAT to shareholders. I'm picking that the actual dividend will be very similar to last years $.13 when you account for imputation going forward. They have the ability to pay out at 80 percent of adjusted NPAT to match last years. Would also like to see a dividend re investment plan and share buyback.
Have looked at this going down with the rest of the market and think it's a good buy, a steel in fact.
I have more than enough but can't resist at these prices.
Disc. Have been accumulating. Overweight. Hope I'm right.
Quote from: Shareguy on May 04, 2023, 02:23 PMI am looking forward to the investor update which will hopefully be next week.
Analyst coverage has 2024 and 2025 on lower EPS and dividend. I think they are far to conservative and wrong.
Take FY22 Craig's had forecasts of 13.2 EPS and dividend of 9.2cps.
Actual was 18.3 EPS and 13cps dividend.
Stu these days has Low debt, lean with big reduction in overheads, diversified and a focus on basics. Recent acquisitions to add 0.5 to Eps according to ceo. Interested to hear how entrance into the Aluminum market is going. Trading well under nta for a distribution business does not make sense to me. Historically has traded well above nta and carried high debt.
Forecasts for FY23 from analysts. FY22 dividend was $.13 cps partially imputed.
Craig's forecast for FY23 is $.093 cps
Fbar forecast is $.10 cps
Stu current policy is to pay out 60% - 80% of adjusted NPAT to shareholders. I'm picking that the actual dividend will be very similar to last years $.13 when you account for imputation going forward. They have the ability to pay out at 80 percent of adjusted NPAT to match last years. Would also like to see a dividend re investment plan and share buyback.
Have looked at this going down with the rest of the market and think it's a good buy, a steel in fact.
I have more than enough but can't resist at these prices.
Disc. Have been accumulating. Overweight. Hope I'm right.
So you have been the one holding up the sp which I was hoping would drift down to $1.00 or lower!
Fair enough but can you step aside for a few days? :P
Quote from: Teitei on May 04, 2023, 03:20 PMSo you have been the one holding up the sp which I was hoping would drift down to $1.00 or lower!
Fair enough but can you step aside for a few days? :P
Yes Teitei got my last lot this afternoon. Has been hard to get decent volume.
Shareguy ....keen on this eh .....you work in industry and have a decent feel for what's happening
Quote from: winner (n) on May 04, 2023, 03:56 PMShareguy ....keen on this eh .....you work in industry and have a decent feel fot pr what's happening
Yes, Yes and Yes Winner.
Quote from: Shareguy on May 04, 2023, 02:23 PMI am looking forward to the investor update which will hopefully be next week.
Analyst coverage has 2024 and 2025 on lower EPS and dividend. I think they are far to conservative and wrong.
Take FY22 Craig's had forecasts of 13.2 EPS and dividend of 9.2cps.
Actual was 18.3 EPS and 13cps dividend.
Stu these days has Low debt, lean with big reduction in overheads, diversified and a focus on basics. Recent acquisitions to add 0.5 to Eps according to ceo. Interested to hear how entrance into the Aluminum market is going. Trading well under nta for a distribution business does not make sense to me. Historically has traded well above nta and carried high debt.
Forecasts for FY23 from analysts. FY22 dividend was $.13 cps partially imputed.
Craig's forecast for FY23 is $.093 cps
Fbar forecast is $.10 cps
Stu current policy is to pay out 60% - 80% of adjusted NPAT to shareholders. I'm picking that the actual dividend will be very similar to last years $.13 when you account for imputation going forward. They have the ability to pay out at 80 percent of adjusted NPAT to match last years. Would also like to see a dividend re investment plan and share buyback.
Have looked at this going down with the rest of the market and think it's a good buy, a steel in fact.
I have more than enough but can't resist at these prices.
Disc. Have been accumulating. Overweight. Hope I'm right.
Also cashflow should be excellent as they reduce inventory from the high levels built up during covid supply chain disruptions. As a consequence, Debt should be down again and there should plenty of cash left over to pay a decent dividend or start a buyback.
Disc - I've got plenty
For goodness sake - can you guys just stop any positive posts, just for a few days? Please!
Quoteand think it's a good buy, a steel in fact.
Nice play on words ;)
I think they are looking for an excuse to cut the dividend. They want cash to invest in more add-ons and retire high interest debt.
Cash flow is getting squeezed a little at this part of the cycle.
Craig's have added STU to their bakers dozen. (stocks most likely to perform short term).
In days past when I was working in a business whose fortunes to a large degree depended on the building/construction activities we included STU in our 'peer group' to monitor market activities
Morbid fascination with STU has seen me keep keeping on updating my model. Sad eh
Their performance has ever really inspired me. Sales growth has been a bit and up down and profit margins over time have declined....like in 2004 they made $29.5m on $388m of sales and last year made about the same profit but on $599m of sales.
Below is a chart of their annual sales growth this century Except for a couple of good years nothing to get enthused over. And I have a feeling that what previously happened post 2007 is likely to happen over the next few years (building downturn etc etc). And consensud forecasts are 'predicting' that
Is this time different .... what's in their DNA would say no really .... The F22 result might be as good as it gets for a while.
I've held at odd times .... even recently from about a buck but took profits when the share price started weakening. Seems Craigs have put on their outperform list for no other reason than the share price has fallen (as opposed to strong financial performance), They probably re right as current price is tempting (for short/medium term gains).
That's how I see it anyway
0000stugrowth.JPG
I'm still trying to get keen on STU again
Next weeks preso will be interesting. About this time last year at an investor day they produced detailed 10 month financials and performance commentary.
Good stuff ......hope they do the same this year
NPAT at half year was down on pcp and they weren't bullish in what they said about the rest of the year. If they do produce 10 month numbers we'd see how good or bad the last four months have been ...I'd hazard a guess not that good....but at least we'll know.
I'll wait until after that preso to see whether I'm still keen, but...........
........"but the share price downtrend from a high of 170 is still intact (lower lows etc etc) and no sign of it ending ....and next week might be bad news and a trigger for it to go under a buck.
Uk.
And KW keeps reminding me never buy in a downtrend and be an idiot.
I see STU share price down 27% over last 12 months, FBU down 21% and VSL down 19%
In same period NZX50 up slightly
Even though all three do positive raves it seems the market per se doesn't like building/construction companies these days ......could say if market forward looking the future isn't that bright.
Indicators like consents not that good so market could be weak over next year or so and as usual a recovery could take some time.
Should have a better feel after Marks rave next week
Lost a bit of dough on this mangy mutt last year when I bought into the hype on here about it.
Glad I Qatarized the small wound in the low $1.40's and got out.
The old mantra of once bitten, twice shy probably applies here for me.
Quote from: Basil on May 06, 2023, 02:08 PMLost a bit of dough on this mangy mutt last year when I bought into the hype on here about it.
Glad I Qatarized the small wound in the low $1.40's and got out.
Don't see any reason to have another go either from a FA or TA perspective and then of course there's the old mantra of once bitten, twice shy.
Bloody good divie basil .....thought that might have seduced you
Quote from: winner (n) on May 06, 2023, 02:49 PMBloody good divie basil .....thought that might have seduced you
Probably yield will be greater than 13% gross
Better buying 'cheap' than waiting for share price to get back to 130...yield only about 10% then.
Be interesting presentation on Wednesday.
I am looking to see whether the latest high margin bolt ons are delivering,and to by how much they have lowered their stock level.
But perhaps most important will be their outlook.
Current PE of 6.36 is very modest,while current yield of 10.85% is very generous.
Analysts have them earning 12 cps in FY24 and FY25 and dividends per share at 9 cps each year, presume full imputation credits apply = 9 / 0.72 = 12.5 cps gross. On $1.06 that's a forward FY24 PE of 8.8 and gross yield of 11.8%. On the face of it these looks like pretty compelling metrics.
My nose for trouble is telling me they won't do the above numbers and the headwinds in the constructions sector are too strong.
Think we will find the answers we are looking for on Wednesday.
Love to see the analysts proved wrong [again]..lol.
Great seeing the different points of view both positive and negative.
Hopefully we will get some clarity shortly.
Quote from: Shareguy on May 06, 2023, 04:56 PMGreat seeing the different points of view both positive and negative.
Hopefully we will get some clarity shortly.
Mark will do a great rave ....no worries
Sorry guys, I can't see what there is to get excited about with this one. Plenty of excitement on here by many, just before they reported in February 23 and oh my goodness, what a three months its been since then with the share price down a considerable ~ 25%.
Viewed through a long term lens, they're earning and paying dividends at a much lower level that they have been in previous cycles. I think its crystal clear we're headed into what is arguably quite a protracted period of lower economic activity and the outlook statement they gave in mid February 2023 made for pretty sober reading as did eps for the half year to 31 December 2022 relative to the PCP.
Looks like a value trap to me with no obvious catalyst for a rerate and plenty of potential for the share price to continue is well established downtrend. No question this long-established company will have its day in the sun again, when the economy starts to pick up again, but its early winter and for the near term I foresee it getting colder and darker and I am not just talking about the weather. That's how I see it.
Quote from: winner (n) on May 06, 2023, 05:01 PMMark will do a great rave ....no worries
I have been reading STU's announcements and presentations again this morning.
Conclusion.I agree with you..
Disc.Although I hold what I want of STU,an outstanding rave by Mark may move me to buy more...lol
Quote from: winner (n) on May 06, 2023, 01:43 PMI see STU share price down 27% over last 12 months, FBU down 21% and VSL down 19%
In same period NZX50 up slightly
Even though all three do positive raves it seems the market per se doesn't like building/construction companies these days ......could say if market forward looking the future isn't that bright.
Indicators like consents not that good so market could be weak over next year or so and as usual a recovery could take some time.
Should have a better feel after Marks rave next week
I guess there is s a different way to read the highlighted bit: "could say if market forward looking the market isn't that bright"
Obviously - nobody can look into the future, so lets not beat up the market.
Interesting article in the herald (sorry, paywalled):
https://www.nzherald.co.nz/business/liam-dann-with-numbers-this-good-why-does-the-economy-feel-so-bad/G3N6N6R4U5BZHFNUFCQF3D3IH4/
But I recon it makes sense to keep talking the market down ... until we all have filled our boots and trucks :P ;
Family member working at some competitor for STU ... and indicated a couple of months ago that things are going a bit slow. Met him yesterday and it sounds they are busy again, but sure - that's just one data point, not a statistical relevant trend.
Quote from: lorraina on May 07, 2023, 09:56 AMI have been reading STU's announcements and presentations again this morning.
Conclusion.I agree with you..
Disc.Although I hold what I want of STU,an outstanding rave by Mark may move me to buy more...lol
Mark's raves almost on a par of those of Dave's. Dave didn't lose his touch after selling Methven and doing a good job keeping Comvita public profile up there.
Hope Mark doesn't disappoint next week
Investors went mad on the TAB just know ...piled the cash on a horse and backed it in from $15 to $5 ....like saying STU share price is going to double or something like that.
As the price kept falling I just had to join the army of investors ......and said to myself jeez with a horse named JUSTASKPERCY what could go wrong.
And JUSTASKPERCY delivered ......so a few extra bob to spend this week.
When Fletchers offered a good price in a takeover STU told shareholders that
"conservative assumptions value your shares at $1.95- $2.36 per share"
That was in 2018 ....share price might get there one day
Mark has been CEO for 5 years now ...,,.,suppose we need to give him more time
Quote from: winner (n) on May 08, 2023, 09:47 AMWhen Fletchers offered a good price in a takeover STU told shareholders that
"conservative assumptions value your shares at $1.95- $2.36 per share"
That was in 2018 ....share price might get there one day
Mark has been CEO for 5 years now ...,,.,suppose we need to give him more time
Amazing how your tune has changed in just 2 weeks, W69.
You bought some stock?
Quote from: Teitei on May 08, 2023, 11:30 AMAmazing how your tune has changed in just 2 weeks, W69.
You bought some stock?
W69 gone awfully quiet.
Must be hoping that Mark is going to deliver some good news tomorrow now that he has bought the stock?
Quote from: Teitei on May 09, 2023, 09:36 AMW69 gone awfully quiet.
Must be hoping that Mark is going to deliver some good news tomorrow now that he has bought the stock?
First half profit down on last year ....key tomorrow is whether last months has seen sales growth and profits haven't slipped further.
Still trying to get keen on STU
You put me off when you said if preso not too good and a downgrade it'll mean the 'recovery' is over and share price will fall to the 80'sh
Could will happen as STU seem to go through bad times etc etc every 5 or 6 years and Mark has been in charge for 5 years now.
Quote from: winner (n) on May 09, 2023, 09:47 AMStill trying to get keen on STU
You put me off when you said if preso not too good and a downgrade it'll mean the 'recovery' is over and share price will fall to the 80'sh
Could will happen as STU seem to go through bad times etc etc every 5 or 6 years and Mark has been in charge for 5 years now.
Now, W69 - not nice to add an extra line to my post. Post fairly and with integrity.
I fully expect Mark to deliver bad news tomorrow as international steel prices are back to where they were in 2017 and STU's high inventory level will need write-offs?
Duplication
Market is certainly pricing in bad news tomorrow. Rekt
Quote from: Teitei on May 09, 2023, 09:58 AMDuplication
So you admeet you are duplicitous? I knew eet! The high flying inter-continental trader, all the time in the pocket of Lloyd George! Vell, now that your cover eez blown, it eez back to the trenches vor you! But a beet ov vriendly advice vrom the baron. It eez cold and damp in there. Make sure you vear your trenchcoat!
RB
Quote from: Red Baron on May 09, 2023, 01:39 PMSo you admeet you are duplicitous? I knew eet! The high flying inter-continental trader, all the time in the pocket of Lloyd George! Vell, now that your cover eez blown, it eez back to the trenches vor you! But a beet ov vriendly advice vrom the baron. It eez cold and damp in there. Make sure you vear your trenchcoat!
RB
Ihr Deutsch hört sich etwas seltsam an ... Sie sollten entweder ordentliches Deutsch oder ordentliches Englisch (oder beides) lernen!
Not sure what you want to highlight? I am sure Manfred von Richthofen's English was better than that, I guess he went to a proper school. Did you poor sod learn your English in a NZ school? Maybe you should try to write in Te Reo instead?
Quote from: entrep on May 09, 2023, 01:31 PMMarket is certainly pricing in bad news tomorrow. Rekt
Very light volume though
Somebody will see its back to 105/106 at the close
Quote from: winner (n) on May 09, 2023, 04:11 PMVery light volume though
Somebody will see its back to 105/106 at the close
Better get out before the webinar update tomorrow, W69.
Remember that downgrades come in threes and we had the first one in Feb (interim results).
Latest results out....
https://www.nzx.com/announcements/411164
Quick look,
Steel & Tube's unaudited 10-month performance to end-April is summarised below:
$millions / FY23 10 months / FY22 10 months / FY21 10 months
Revenue / 489.0 / 479.3 / 384.6
EBITDA / 40.8 / 53.6 / 29.5
Normalised EBITDA / 41.7 / 54.0 / 28.6
EBIT / 23.6 / 37.9 / 14.8
Normalised EBIT / 24.5 / 38.3 / 13.8
NPAT / 12.4 / 24.1 / 7.4
Operating Cash flow / 77.9 / (38.1) / 20.5
Dividends paid / 19.1 / 14.6 / 2.0
Inventory / 152.2 / 200.9 / 108.3
Net (Debt)/Cash / (9.2) / (43.5) / 19.7
The company continues to perform well against a backdrop of tightening economic conditions and weather events over the past 10 months. Revenues have continued to grow driven by elevated international pricing. Higher input prices and cost pressures have impacted margins. Steel & Tube has built a resilient platform exhibited by significant reductions in debt and inventory positions, and solid underlying cash generation. The company has a strong balance sheet and substantial bank facilities in place to fund growth and to take advantage of opportunities.
Given the recessionary operating environment, 2H23 volumes are expected to be 10% to 15% less than 1H23. As such, Steel & Tube is forecasting FY23 normalised EBIT of between $28m and $32m and normalised EBITDA of between $48m and $52m (*1).
Pretty gloomy eh leftie
Just as will I struggled to like STU
The Bad.
..NPAT well down from $24.1 mil to $12.4 mil
..2nd half volumes expect to be down 10 to15% on 1st half.
The Good.
..Operating Cash Flow an impressive $77.9 mil.
..Inventory well down from $200.9 mil to $152.2 mil
..Net debt heavily reduced from $43.5 mil to a very modest $9.2 mil.
Conculsion.The company's balance sheet is in a very strong position to weather any storm.
I will continue to hold,however I will not be adding to my position.
Back in 2018 the 'reset' and new management was going toachieve great results .....they proclaimed " Steel & Tube expects to achieve normalised EBIT of $35-40m in the next 3 years"
Oh well, come 2023 and they might achieve $30m (barring further downgrades)
Just another chapter in the life of Steel & Tube .......new strategies, acquisitions, resilience blah blah blah .......and never delivering
Seems things haven't changed over the years (decades)
Quote from: lorraina on May 10, 2023, 09:00 AMThe Bad.
..NPAT well down from $24.1 mil to $12.4 mil
..2nd half volumes expect to be down 10 to15% on 1st half.
The Good.
..Operating Cash Flow an impressive $77.9 mil.
..Inventory well down from $200.9 mil to $152.2 mil
..Net debt heavily reduced from $43.5 mil to a very modest $9.2 mil.
Conculsion.The company's balance sheet is in a very strong position to weather any storm.
I will continue to hold,however I will not be adding to my position.
Impressive cashflow generation - must admit STU has done a great job managing working capital over the last 2 years. Pity about the volatile steel prices - proving too difficult for Mark to manage.
Quote from: Basil on May 06, 2023, 03:31 PMAnalysts have them earning 12 cps in FY24 and FY25 and dividends per share at 9 cps each year, presume full imputation credits apply = 9 / 0.72 = 12.5 cps gross. On $1.06 that's a forward FY24 PE of 8.8 and gross yield of 11.8%. On the face of it these looks like pretty compelling metrics.
My nose for trouble is telling me they won't do the above numbers and the headwinds in the constructions sector are too strong.
Good to see that Beagle nose of mine is still working well when it comes to sniffing out food and trouble.
Extrapolating $12.4m net profit for the 10 month period out to 12 months gives $14.9m, let's be generous and call it $15m which is 8.99 cps. With the recession in full effect in FY24, probably for the whole year, I would think they will struggle even more and be lucky if they can make 7-8 cps, well down on analysts' estimates.
There's no way to sugar coat earnings basically halving compared to the previous ten months. Add in the gloomy outlook and ouch, it's not a pretty picture.
Quote from: Basil on May 10, 2023, 09:39 AMGood to see that Beagle nose of mine is still working well when it comes to sniffing out food and trouble.
Extrapolating $12.4m net profit for the 10 month period out to 12 months gives $14.9m, let's be generous and call it $15m which is 8.99 cps. With the recession in full effect in FY24, probably for the whole year, I would think they will struggle even more and be lucky if they can make 7-8 cps, well down on analysts' estimates.
There's no way to sugar coat earnings basically halving compared to the previous ten months. Add in the gloomy outlook and ouch, it's not a pretty picture.
Last 4 months NPAT has been $0.6m so your generous $15.0 might be a bit generous
Even if $15.0m only their 'strong' balance sheet and so called 'reilience' would enable a full year divie of 7 cents....already paid 4 cents
Can't see next year geting better either
Quote from: winner (n) on May 10, 2023, 10:00 AMLast 4 months NPAT has been $0.6m so your generous $15.0 might be a bit generous
Even if $15.0m only their 'strong' balance sheet and so called 'reilience' would enable a full year divie of 7 cents....already paid 4 cents
Can't see next year geting better either
They are forecasting an additional $4m to $8m EBIT for remainder of FY - most of this should translate to NPAT given the low debt level
As such, Steel & Tube is forecasting FY23 normalised EBIT of between $28m and $32m and normalised EBITDA of between $48m and $52m
I still reckon ~ $15m is a good number for FY23. Maybe $12m for FY24 7.2 cps. I'm ignoring lower debt costs, all the resiliency and cost out talk and just focusing on the full winter chill effects of 12 months of recessionary trading conditions in the construction industry in FY24.
Put a bottom of the cycle PE of 12 on this, (what I consider to be a no growth cyclical company), and maybe it's worth a punt at 12 x 7.2 = 86 cents. Say 75 cents so there's some margin of safety. Watch the TA though because a confirmed few months of share price data is really needed to make the case the bottom may be in.
I think a cost out program of more like $15-20m per annum is what's really required here. $5m is merely fiddling around the edges.
Might take a small stake again in due course when it eventually breaks up through its 100 day MA. Doubt that will be anytime soon.
Quote from: Basil on May 10, 2023, 10:33 AMI still reckon ~ $15m is a good number for FY23. Maybe $12m for FY24 7.2 cps. I'm ignoring lower debt costs, all the resiliency and cost out talk and just focusing on the full winter chill effects of 12 months of recessionary trading conditions in the construction industry in FY24.
Put a bottom of the cycle PE of 12 on this, (what I consider to be a no growth cyclical company), and maybe it's worth a punt at 12 x 7.2 = 86 cents. Say 75 cents so there's some margin of safety. Watch the TA though because a confirmed few months of share price data is really needed to make the case the bottom may be in.
I think a cost out program of more like $15-20m per annum is what's really required here. $5m is merely fiddling around the edges.
Might take a small stake again in due course when it eventually breaks up through its 100 day MA. Doubt that will be anytime soon.
It's a great business except for one thing the profits are all over the place, Mark.
I guess you got to expect that with a small cyclical business.
1st half volumes down 2.8% (high selling prices saw sales up 11.8%)
2nd half volumes expected to down about 15%
That's some turnaround and the question is how long will any decline last
So bugger all debt. Great cashflow. Trading well below NTA.
Mark says shares undervalued. I agree and added to my position
Quote from: Shareguy on May 10, 2023, 02:59 PMSo bugger all debt. Great cashflow. Trading well below NTA.
Mark says shares undervalued. I agree and added to my position
If he believes that, must be time for a share buyback when debt situation turns to cash position.
Will Mark deliver?
Quote from: Teitei on May 10, 2023, 03:32 PMIf he believes that, must be time for a share buyback when debt situation turns to cash position.
Will Mark deliver?
Wouldn't this be the job of the board? I would not want to see CEO's worrying abut managing the share price - their job is to manage the performance of the company!
Has anybody done any sums as to whether STU has been a profitable hold over say 3 or 5 year periods (or even longer) ......inc dividends
Probably be a bit like an analysis I did on WHS total returns .........in last 20 years only a few times holding for 5 years given decent returns over extended periods.
Need to pick the times when share price is really cheap .......maybe now is one of this times for STU .....even Mark says it cheap
Got to love when CEO says shares are undervalued........deflects attention away from less than good company performance.
Best rave about undervalued share prices were the Turners guys a few years ago who kept on about the low share price and said it's worth $3.30 something and we are buying up ......
Turners guys have been proven correct though over time.
I'm with you that whenever a company says its shares are cheap, be very cautious.
Brave move Shareguy, much braver than I am prepared to be leading into a protracted recession that's absolutely hammering that sector. Hope it works out for you mate.
Quote from: Basil on May 10, 2023, 05:44 PMTurners guys have been proven correct though over time.
I'm with you that whenever a company says its shares are cheap, be very cautious.
Brave move Shareguy, much braver than I am prepared to be leading into a protracted recession that's absolutely hammering that sector. Hope it works out for you mate.
Yes me to Basil. Will be a good dividend while I wait for either a take over or improved performance. Can't see much risk to the downside from here.
Quote from: winner (n) on May 10, 2023, 05:01 PMHas anybody done any sums as to whether STU has been a profitable hold over say 3 or 5 year periods (or even longer) ......inc dividends
Probably be a bit like an analysis I did on WHS total returns .........in last 20 years only a few times holding for 5 years given decent returns over extended periods.
Need to pick the times when share price is really cheap .......maybe now is one of this times for STU .....even Mark says it cheap
Got to love when CEO says shares are undervalued........deflects attention away from less than good company performance.
Best rave about undervalued share prices were the Turners guys a few years ago who kept on about the low share price and said it's worth $3.30 something and we are buying up ......
I think I could take money off Mark Malpass in poker - probabl not against Grant Baker
Craig' says its a sell, in latest note.
FY23 guidance below market expectations, down to underweight
STU has issued its FY23 earnings guidance for the first time, based on
10-months of operations, signalling a full year performance below market
expectations. Management is forecasting normalised EBIT of between $28m
and $32m (-23% below pre-announcement CIPe $39m/-26% below consensus
$40m, at the mid-point) and normalised EBITDA of between $48m and $52m
(-15% below CIPe $59m/-16% below consensus $60m). The company has
pointed to higher input prices and cost pressures impacting margins with it
now focusing on a cost out programme in FY24 (-$5m), whilst 2H23 sales
volumes are expected to be 10-15% down on 1H23, as the recessionary
economic cycle kicks in. We update our forecasts to determine a revised
Target Price of $0.90 (avg of DCF-based TP of $1.14 and PER-based TP of
$0.65), previously $1.33. Given the potential 15% downside to STU's current
share price (last close $1.05), we downgrade our recommendation from
Neutral to Underweight
From above ' We update our forecasts to determine a revised Target Price of $0.90 (avg of DCF-based TP of $1.14 andPER-based TP of$0.65), previously $1.33'
Jeez ....most punters like PE ratios and Craig's say it's worth 65 cents on that basis. Even Basil not that gloomy
Just as well use a blended basis to come up with their target price .......even so going from $1.33 to 90 cents is pretty dramatic
Quote from: winner (n) on May 11, 2023, 11:50 AMFrom above ' We update our forecasts to determine a revised Target Price of $0.90 (avg of DCF-based TP of $1.14 andPER-based TP of$0.65), previously $1.33'
Jeez ....most punters like PE ratios and Craig's say it's worth 65 cents on that basis. Even Basil not that gloomy
Just as well use a blended basis to come up with their target price .......even so going from $1.33 to 90 cents is pretty dramatic
Remind me but were Craigs not wildly out with their forecasts and sp target in the last 3 years with STU?
Quote from: Shareguy on May 05, 2023, 11:37 AMCraig's have added STU to their bakers dozen. (stocks most likely to perform short term).
For teitei ........From the other day shareguy posted this
Apparently they were way too conservative with their F22 forecasts (actual was lot higher than fast) and obviously a bit too optimistic this time around.
Quote from: Shareguy on May 11, 2023, 11:32 AMCraig' says its a sell, in latest note.
FY23 guidance below market expectations, down to underweight
STU has issued its FY23 earnings guidance for the first time, based on
10-months of operations, signalling a full year performance below market
expectations. Management is forecasting normalised EBIT of between $28m
and $32m (-23% below pre-announcement CIPe $39m/-26% below consensus
$40m, at the mid-point) and normalised EBITDA of between $48m and $52m
(-15% below CIPe $59m/-16% below consensus $60m). The company has
pointed to higher input prices and cost pressures impacting margins with it
now focusing on a cost out programme in FY24 (-$5m), whilst 2H23 sales
volumes are expected to be 10-15% down on 1H23, as the recessionary
economic cycle kicks in. We update our forecasts to determine a revised
Target Price of $0.90 (avg of DCF-based TP of $1.14 and PER-based TP of
$0.65), previously $1.33. Given the potential 15% downside to STU's current
share price (last close $1.05), we downgrade our recommendation from
Neutral to Underweight
Thanks for sharing. So target price 90 cents 12 months hence, and I suggested 86 cents yesterday as fair value now, pretty much the same. I think the risks in this economy in the construction sector are to the downside which is why I'd personally want a margin of safety below fair value, say 75 cents to get me interested
as well as TA support. I know I don't want "much" to get back on board lol, but that's what getting bitten does to you, once bitten, twice shy.
Interesting Craigs target price is 90 cents,while Jarden's is $1.27.
Disc.I have sold.
Quote from: Teitei on May 11, 2023, 11:55 AMRemind me but were Craigs not wildly out with their forecasts and sp target in the last 3 years with STU?
Good point, but remember the golden rule: Only use analyst forecasts if they suit your tale. Otherwise - just disregard.
After the downgrade we have
Craig's at $.90 and PER based TP of $.65
Jarden at $1.27
F bar at $1.16
So my take is that the analysts got this so wrong in FY22. Craig's had forecasts of 13.2 EPS and dividend of 9.2cps. Actual was 18.3 EPS and 13cps dividend.
Now Craig's have gone the other way. Forecast before downgrade for FY 23 was EPS 13 and DPS 9.3. Updated today to EPS 10.52 and DPS 7.25. NOTE Fbar latest has EPS of 9.7 and 7.0 DPS.
What's clear is STU is not the stock for the faint hearted. I have a large holding which is still in the green....Just. As Warren Buffet said don't use emotion when buying stocks. I just hope my years in the industry has not jaded my judgement on this one. The result was a lot worse than I was expecting.
I am a long term holder and think that the worse is behind us. Share markets and my portfolio have been on the up since last year. The share price is holding up which suggests to me that the result is not unexpected when you consider the decline in the share price over the last year.
In a separate presentation issued to market, STU has noted significant medium to long-term
opportunities it expects to chase from rebuild activity, climate change, seismic strengthening
and water services reform, including:
$62b budgeted Government spend on infrastructure 2022 to 2026, excluding cyclone
and flooding rebuild cost.
Cyclone/flood rebuild estimates are currently at $9-14.5b from 2023 to 2026.
STU states that it continues to maintain a healthy pipeline of infrastructure and commercial
projects (although we note the announced declines has surprised), and will continue to
pursue business growth opportunities through both organic expansion and smaller M&A
activities.
In the online update Mark says the shares are undervalued. If the shares are undervalued a buy back seems sensible given the low debt in my opinion.
At the current price of $1.00 we have a FY23F PE of 9.5 with a very attractive yield. I also note that Craig's have huge declines in EPS after FY23 halving to 5cps for FY24 and FY25. So if Craig's are right shareholders should be selling as the shares are way overvalued as its going even further downhill from here.
The industry is due for rationalization in my opinion. Bluescope through its ownership in NZ have a blocking stake of 15.8 percent. Lenon holdings also have 5.3 percent. Bluescope in Australia has a distribution business that supply's both Steel and Aluminium products directly to customers. In NZ Bluescope rely on distributors, STU being one of several who supply to end users.
STU roofing is one of the most profitable parts of the business and Fletchers were not happy at the time when it was sold by NZ Steel to STU. If we look at the current players in the market Vulcan and Asmuss don't supply roofing currently.
I think there is going to be change and the longer that S&T underperforms with a dismal share price the higher the chance of change. In the meantime I'm happy to continue to hold and take the attractive dividends. I also think Craig's forecast for YE24 and YE25 are rubbish.
Disc. Do your own research and I might be very wrong.
Quote from: Shareguy on May 11, 2023, 02:37 PMAfter the downgrade we have
Craig's at $.90 and PER based TP of $.65
Jarden at $1.27
F bar at $1.16
So my take is that the analysts got this so wrong in FY22. Craig's had forecasts of 13.2 EPS and dividend of 9.2cps. Actual was 18.3 EPS and 13cps dividend.
Now Craig's have gone the other way. Forecast before downgrade for FY 23 was EPS 13 and DPS 9.3. Updated today to EPS 10.52 and DPS 7.25. NOTE Fbar latest has EPS of 9.7 and 7.0 DPS.
What's clear is STU is not the stock for the faint hearted. I have a large holding which is still in the green....Just. As Warren Buffet said don't use emotion when buying stocks. I just hope my years in the industry has not jaded my judgement on this one. The result was a lot worse than I was expecting.
I am a long term holder and think that the worse is behind us. Share markets and my portfolio have been on the up since last year. The share price is holding up which suggests to me that the result is not unexpected when you consider the decline in the share price over the last year.
In a separate presentation issued to market, STU has noted significant medium to long-term
opportunities it expects to chase from rebuild activity, climate change, seismic strengthening
and water services reform, including:
$62b budgeted Government spend on infrastructure 2022 to 2026, excluding cyclone
and flooding rebuild cost.
Cyclone/flood rebuild estimates are currently at $9-14.5b from 2023 to 2026.
STU states that it continues to maintain a healthy pipeline of infrastructure and commercial
projects (although we note the announced declines has surprised), and will continue to
pursue business growth opportunities through both organic expansion and smaller M&A
activities.
In the online update Mark says the shares are undervalued. If the shares are undervalued a buy back seems sensible given the low debt in my opinion.
At the current price of $1.00 we have a FY23F PE of 9.5 with a very attractive yield. I also note that Craig's have huge declines in EPS after FY23 halving to 5cps for FY24 and FY25. So if Craig's are right shareholders should be selling as the shares are way overvalued as its going even further downhill from here.
The industry is due for rationalization in my opinion. Bluescope through its ownership in NZ have a blocking stake of 15.8 percent. Lenon holdings also have 5.3 percent. Bluescope in Australia has a distribution business that supply's both Steel and Aluminium products directly to customers. In NZ Bluescope rely on distributors, STU being one of several who supply to end users.
STU roofing is one of the most profitable parts of the business and Fletchers were not happy at the time when it was sold by NZ Steel to STU. If we look at the current players in the market Vulcan and Asmuss don't supply roofing currently.
I think there is going to be change and the longer that S&T underperforms with a dismal share price the higher the chance of change. In the meantime I'm happy to continue to hold and take the attractive dividends. I also think Craig's forecast for YE24 and YE25 are rubbish.
Disc. Do your own research and I might be very wrong.
Good post shareguy. Pretty much exactly the way I see it as well.
Shareguy, Is that Lennon Holdings one Phil Lennon of Apex Rentals fame and renowned Christchurch property owner.
Must like STU a lot to invest best part of $10m at much higher prices than today's price.
For a while thought it was you.
Quote from: winner (n) on May 11, 2023, 03:42 PMShareguy, Is that Lennon Holdings one Phil Lennon of Apex Rentals fame and renowned Christchurch property owner.
Must like STU a lot to invest best part of $10m at much higher prices than today's price.
For a while thought it was you.
Yes Winner. Last disclosure he purchased 5m shares for ave cost of $1.44
I agree with you that Craigs analysis pieces are garbage in general.
STU is my largest holding and I just noticed I am in the red every so slightly.
(https://media.tenor.com/Y5bi49QalBgAAAAC/chainlink-crypto.gif)
Mark said things were getting tough and the numbers said last 4 months sales down 12% on pcp
Stats NZ reported today .....In the March 2023 quarter, the actual volume of ready-mixed concrete produced was 983,106 cubic metres, down 13 percent compared with the March 2022 quarter.
Hey some some correlation between concrete and steel
Quote from: winner (n) on May 11, 2023, 05:07 PMMark said things were getting tough and the numbers said last 4 months sales down 12% on pcp
Stats NZ reported today .....In the March 2023 quarter, the actual volume of ready-mixed concrete produced was 983,106 cubic metres, down 13 percent compared with the March 2022 quarter.
Hey some correlation between concrete and steel
I feel one of Winners fabulous charts coming on...... :P
Quote from: winner (n) on May 11, 2023, 05:07 PMMark said things were getting tough and the numbers said last 4 months sales down 12% on pcp
Stats NZ reported today .....In the March 2023 quarter, the actual volume of ready-mixed concrete produced was 983,106 cubic metres, down 13 percent compared with the March 2022 quarter.
Hey some some correlation between concrete and steel
Gosh thats a great coincidence alright. The majority of products not directly related to concrete usage.
Quote from: lorraina on May 11, 2023, 12:55 PMInteresting Craigs target price is 90 cents,while Jarden's is $1.27.
Disc.I have sold.
Good call in my opinion.
Yesterday I postulated eps for FY24 might be only 7-8 cps. Gosh if Craigs are right and its only about 5 cps for FY24
and FY25....that's really, really ugly and this might get down to retest the Covid lows of 50 something cents where it resided for much of 2020.
Share prices usually follow earnings eh. ;)
Must admit I am surprised after earnings halving people are still wanting to front with more than a back a pop for these. Maybe they are "buying" the undervalued talk and ignoring the earnings collapse?
Look at Craigs' track record, that's all you need to know
Quote from: entrep on May 11, 2023, 06:00 PMLook at Craigs' track record, that's all you need to know
On STU, they have been all over the place except the right place!
Quote from: winner (n) on May 11, 2023, 05:07 PMMark said things were getting tough and the numbers said last 4 months sales down 12% on pcp
Stats NZ reported today .....In the March 2023 quarter, the actual volume of ready-mixed concrete produced was 983,106 cubic metres, down 13 percent compared with the March 2022 quarter.
Hey some some correlation between concrete and steel
Sure, there is some correlation, though I don't think that reinforcement steel is STU's biggest seller. STU make money with selling roof steel, steel beams (for large halls and buildings), various steel nuts and fittings, pipes (not just made of steel), lots of aluminium bits and pieces, and yes - a bit of reinforcement steel.
And yes, while much of this stuff might require a newly poured concrete base ... you won't need it for renovations and for lots of the pipe applications.
Nick from WHS all excited with his new store up north ...... energy efficient and all that as well as "the use of engineered wood instead of steel for the structure, which produces 90% less carbon than conventional steel framing,"
Wood the way of the future?
Quote from: winner (n) on May 12, 2023, 12:59 PMNick from WHS all excited with his new store up north ...... energy efficient and all that as well as "the use of engineered wood instead of steel for the structure, which produces 90% less carbon than conventional steel framing,"
Wood the way of the future?
The problem with wood is - you can use it only once for construction, and than you have to throw it away (and give all this carbon back into the atmosphere, no matter whether you burn it or let it rot).
Steel on the other hand can be reused and recycled over centuries ... what am I saying - millenia!.
Quote from: BlackPeter on May 12, 2023, 12:39 PMSure, there is some correlation, though I don't think that reinforcement steel is STU's biggest seller. STU make money with selling roof steel, steel beams (for large halls and buildings), various steel nuts and fittings, pipes (not just made of steel), lots of aluminium bits and pieces, and yes - a bit of reinforcement steel.
And yes, while much of this stuff might require a newly poured concrete base ... you won't need it for renovations and for lots of the pipe applications.
Was just a casual observation yesterday.
For what's it worth this century there has been a strong correlation between annual readymix production and annual STU sales.........also for what it's worth statistically readymix production numbers 'explain' about 77% of STU sales
That's a lagging number so I looked at consents data for this century as a leading indicator. That showed a pretty good correlation between consents and STU sales with a year lag.
STU must have some method of predicting future sales volumes. That's stupid isn't it as even they can't predict the future so let's call it a forecast. In their forecasting models they obviously use things like consents data as most of their presentations have a rave about industry indicators.
Again for what it's worth consents are predicting quite a fall in steel volumes over the next 18 months.
Director Reindler been buying shares
Mark must have told him they undervalued .....and cheap as
Always good sign when Directors are buying
Expect to see some more disclosures next week
Quote from: winner (n) on May 12, 2023, 01:12 PMWas just a casual observation yesterday.
For what's it worth this century there has been a strong correlation between annual readymix production and annual STU sales.........also for what it's worth statistically readymix production numbers 'explain' about 77% of STU sales
That's a lagging number so I looked at consents data for this century as a leading indicator. That showed a pretty good correlation between consents and STU sales with a year lag.
STU must have some method of predicting future sales volumes. That's stupid isn't it as even they can't predict the future so let's call it a forecast. In their forecasting models they obviously use things like consents data as most of their presentations have a rave about industry indicators.
Again for what it's worth consents are predicting quite a fall in steel volumes over the next 18 months.
Nothing wrong with forecasting and seeking leading correlations/indicators. It's what analysts (should) do. Nice work on the consents correlation by the way. Both macro and micro factors come into play when forecasting volumes and sales etc. Macro as in economic & industry specific indicators and forecasts, plus futures pricing on key raw materials provide valuable insights into future input cost prices and potentially demand. Micro factors or indicators also provide valuable insights; such as activity within key clients, branch or competitor activity, data trends etc. Some data will be available to external analysts, but a lot will not so we have to work with what is available. 77% explained sounds like a strong enough indicator to me; is that a +0.88 correlation?
Quote from: winner (n) on May 12, 2023, 04:19 PMDirector Reindler been buying shares
Mark must have told him they undervalued .....and cheap as
Always good sign when Directors are buying
Expect to see some more disclosures next week
Thanks to your fine ramping down efforts (along with nztx), I managed to get reset at $1.01 this week. Happy to hold and add more of the sp should fall below $1.00 again.
I did think that the sp would fall below 90c but I think unlikely to now with directors and management buying.
Don't think that there will ever be a takeover with this outfit as it's stalemate territory with its shareholding but stranger things have happened.
Cheers!
I see at Deloittes Top 200 Awards late last year Vulcan Steel won Company of the Year Award
Steel and Tube were a finalist in the Most Improved Performance category which Fonterra won.
Quote from: Teitei on May 13, 2023, 09:11 AMThanks to your fine ramping down efforts (along with nztx), I managed to get reset at $1.01 this week. Happy to hold and add more of the sp should fall below $1.00 again.
I did think that the sp would fall below 90c but I think unlikely to now with directors and management buying.
Don't think that there will ever be a takeover with this outfit as it's stalemate territory with its shareholding but stranger things have happened.
Cheers!
Good on you mate .......always good buying around a buck
Probably Susan sent a note round the team 'suggesting' they buy a few of the undervalued cheap shares .......always looks good and gives a bit of warm fuzzies to the market.
Quote from: winner (n) on May 13, 2023, 09:25 AMGood on you mate .......always good buying around a buck
Probably Susan sent a note round the team 'suggesting' they buy a few of the undervalued cheap shares .......always looks good and gives a bit of warm fuzzies to the market.
And Mark being good fellow and following instructions .....wonder when Susan makes a disclosure
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/STU/411420/394367.pdf
Quote from: winner (n) on May 15, 2023, 05:15 PMAnd Mark being good fellow and following instructions .....wonder when Susan makes a disclosure
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/STU/411420/394367.pdf
Excellent downramping effort, W69.
I think you ended up scaring yourself at the downgrade result and bailed out to mark? ;D
I was happy to partake at $1.01. Fine effort again, W69!
Budget spending $6 Billion for infrastructure resilience a helpful tailwind for STU.
SP up about 9% from recent lows.
Dwelling consents collapsing. Stats NZ say re April numbers '"April 2023 marks the third consecutive month that the number of homes consented has been down by more than 25 percent when compared with the same month of the previous year,"
Jeez down 25% and the non-residential data doesn't look too flash
These numbers must mean something to STU as they put charts of such stuff in their presos
STU share price going gangbusters off late
Maybe getting into Overbought territory
Might drop back to 105 again
Revenues have continued to grow driven by elevated international pricing, with higher input prices and cost pressures impacting margins.
While we are expecting volumes to be 10% to 15% lower in the second half of the financial year compared to the first half year, we have a resilient platform exhibited by significant reductions in debt and inventory positions, and solid underlying cash generation.
STU shareholder newsletter released to NZX today 🤔
Quote from: Crackity on Jun 12, 2023, 10:03 AMRevenues have continued to grow driven by elevated international pricing, with higher input prices and cost pressures impacting margins.
While we are expecting volumes to be 10% to 15% lower in the second half of the financial year compared to the first half year, we have a resilient platform exhibited by significant reductions in debt and inventory positions, and solid underlying cash generation.
STU shareholder newsletter released to NZX today 🤔
Future looks good though ...plenty of opportunities coming up
Update all seems very positive. Good to see that Aluminium entry has worked out.
Hope STU don't come out with a tale of woe and misery similar to Vulcan Steel's little announcement this morning
Quote from: winner (n) on Jul 17, 2023, 09:30 AMHope STU don't come out with a tale of woe and misery similar to Vulcan Steel's little announcement this morning
No woe and misery. ....all going well in STUland
Full year profit about what they said ....but still not a very good year
Market happy these days so May see 120/130 soon
Shareguy and others will be happy as
Yes Winner. Good news. I even ordered a pound of king crab for dinner.
Still undervalued in my opinion. Trading under nta for a low/no debt distribution business does not make sense to me.
While I have been away the markets have done well. So thinking I need to go on holiday again soon.
Heading home tomorrow.
Last week both STU and VSL issued profit guidances.
STU share price went up but VSL share price collapsed
Both were saying F23 profits (STU's EBIT and VSL's NPAT) were going TO BE DOWN ABOUT 33% on F22
All comes down to managing expectations
Shoeshine in NBR said he's heard that Mark Malpass works like a demon to try and lift the company's performance and the esteem of the company in the eyes of shareholders. That's why I mention Mark's regular Raves .....always good stuff.
This compared to the 'culture at Vulcan being more brash.'
Long may Mark keep on Raving
Shows up in share price .....both seeing profits down 33% but STU share price down 12% from 52 weeks ago while VSL down 18% ...and of course STU's is on the rise at the moment
Mind you both STU and VSL share prices are down about 22% from highs just over a year ago
With profits down 33% suppose 22% isn't too bad
Mark needs to do more to improve shareholders and analysts opinions. Analysts and the market are picking a small final dividend in my opinion. Mark could surprise the market with a nice juicy dividend and a share buy back given their debt position. Stu have released that they will have net cash of NZ$6.5m at FY23.
Remember also how STU's management were criticized by some for investing and building up inventories in F22 to buffer against market supply disruptions and to meet demand?
Well, a very pertinent positive to STU's profit update announcement is this :
"Steel & Tube has ended the financial year with no bank debt and a positive cash balance of $6.5m, representing a ~$50m improvement on FY22 after paying increased dividends and tax. The company has also achieved a significant reduction in its inventory balance."
STU paid an interim dividend of 4cps ($6.67m or 57% of NPAT) and based upon its net debt position of $32.5m as at 31 Dec 2022, the company generated net positive cashflow of $45.67m in H2 2023.
And that's after paying $12.5m of final F22 dividend during the period - so STU generated $68m of positive net cashflow in F23.
Looking forward to a 5c fully imputed final dividend and if the sp stays where it currently, be surprising if a share buyback is not being contemplated.
The Kingfish guy did a real rave about Vulcan Steel at the Kingfish ASM yesterday
Said their key competitive advantage was their outstanding DIFOT performance ....said it was 98% and that number is far superior than competitors ....leads to loyal customers and better margins
Wonder what STU's DIFOT is?
Quote from: winner (n) on Aug 05, 2023, 01:50 PMThe Kingfish guy did a real rave about Vulcan Steel at the Kingfish ASM yesterday
Said their key competitive advantage was their outstanding DIFOT performance ....said it was 98% and that number is far superior than competitors ....leads to loyal customers and better margins
Wonder what STU's DIFOT is?
Not all zuppliers know their trade vell. Ze ones that zurvive are those that
avoid zhooting themslves een 'Di FOoT' too often? Vhich Vulcan does 98% of ze time!
RB
FWIW from Stats Nz today
In the June 2023 quarter, the actual volume of ready-mixed concrete produced was 1.07 million cubic metres, down 11 percent compared with the June 2022 quarter.
There is quite a strong correlation between STU sales with ready-mix volumes
Great investor feedback was received after presenting at the NZ Shareholders Association's Tauranga Branch Meet. CEO Mark Malpass and CFO Richard Smyth had the pleasure of sharing performance and strategy insights.
In case you missed the update, we are also very pleased to announce the official date for our FY23 Financial Results. The full report will be released on Monday 21 August 2023. Details on the FY23 announcement and the NZSA presentation can be found here: https://hubs.la/Q01-Fn7g0
#SteelandTube #Investor #News #FinancialYear
Results look solid to me..... strong balance sheet, increased EPS and divvies should make holders happy.
https://www.nzx.com/announcements/416642
• No bank debt and a positive cash balance, representing a ~$50m year on year improvement
• The company has also achieved a significant reduction in its inventory balance
• Robust pipeline, significant opportunities ahead and well positioned to take advantage of these
$m / FY23 / FY22 / Change
Revenue / 589.1 / 599.1 / (1.7%)
Volumes (Ktonnes) / 146.4 / 167.2 / (12.4%)
EBITDA / 51.9 / 66.6 / (22.1%)
Normalised EBITDA* / 52.9 / 66.9 / (20.9%)
EBIT / 31.0 / 47.6 / (34.9%)
Normalised EBIT* / 32.1 / 47.9 / (33.0%)
NPAT / 17.0 / 30.2 / (43.7%)
Inventory / 139.2 / 192.5 / (27.7%)
Net operating cashflow / 98.3 / (34.1) / +388.3%
Net cash/(debt) / 6.5 / (43.0) / 115.1%
EPS / 10.3cps / 18.3cps / (43.7%)
Gross Dividend (incl. imputation credits) / 11.1cps / 14.5cps / (23.4%)
ROFE / 10% / 15% / (35.7%)
Had a quick look with thoughts as follows
Zero debt and cash in bank of $6.5m. Very unusual for distribution business.
Great cashflow at $98m against last year ($34)
Inventory reduced
EPS of 10.3 cps
Divi 11.1 cps gross incl imputation credits
Positive commentary going forward. But no share buy back
Are cautiously optimistic that 2023 represents the bottom of the cycle and although we don't expect a fast recovery, we anticipate there will be some improvement from early 2024 (the second half our FY24 financial year). Steel & Tube has significant operating leverage and we expect any uplift in activity and demand to be reflected in our results. There are plenty of green lights ahead across our multi sector exposures. Commercial construction is expected to improve, there is still a strong pipeline in residential construction from consents granted previously, and large scale infrastructure projects are progressing.
A lot to like...
"Steel & Tube's volumes are down 12 per cent and unlikely to recover this year. Its CEO explains why it's cleaning up its balance sheet and selling down stock."
Steel supercycle officially over: How distributors are responding | nzherald.co.nz
https://www.youtube.com/watch?v=t2RYnf58Quo
Thought that after that pretty solid results announcement and Marks usual good rave the STU share price would have kicked up to 130 and back on its way to 150.
However response has been rather muted and it seems to be heading back to sub 120
A few years ago when STU told Fletchers to bugger off with their $1.90 offer STU said they were valued at $2.36
What's STUs share price today
STU will either follow the red curve or down to the bottom trend line, I can't guess which one it will be but if I had money in it, I would say the red curve is favorite.
STU_2023-09-19_10-42-09.png
STU said at ASM the other day '....that the recessionary environment would continue into the first half of its 2024 financial period but expected it to ease in the second half."
Seems to be at odds with what Westpac say in commentary on building consents ' The ongoing downturn in consent issuance reinforces our expectations for a stark fall in building activity over the coming year."
Who knows but I suppose Mark knows more than a bank economist / commentator so no worries for a company showing much resilience
Quote from: winner (n) on Oct 02, 2023, 11:58 AMSTU said at ASM the other day '....that the recessionary environment would continue into the first half of its 2024 financial period but expected it to ease in the second half."
Seems to be at odds with what Westpac say in commentary on building consents ' The ongoing downturn in consent issuance reinforces our expectations for a stark fall in building activity over the coming year."
Who knows but I suppose Mark knows more than a bank economist / commentator so no worries for a company showing much resilience
Had over the weekend a chat with somebody working in one of the steel companies in Christchurch (not STU, but one of their competitors): staff expanding, consistent need for overtime and their branch is cutting at the moment more steel than they ever did ... and their order books are full for another year or so.
If this is crisis - then I really would want to know how good business conditions look like :) ;
Quote from: BlackPeter on Oct 02, 2023, 12:08 PMHad over the weekend a chat with somebody working in one of the steel companies in Christchurch (not STU, but one of their competitors): staff expanding, consistent need for overtime and their branch is cutting at the moment more steel than they ever did ... and their order books are full for another year or so.
If this is crisis - then I really would want to know how good business conditions look like :) ;
Good feed back Peter
So hopefully we'll see a much better performance from STU in F24 after their woeful F23
Here's hoping
Quote from: BlackPeter on Oct 02, 2023, 12:08 PMHad over the weekend a chat with somebody working in one of the steel companies in Christchurch (not STU, but one of their competitors): staff expanding, consistent need for overtime and their branch is cutting at the moment more steel than they ever did ... and their order books are full for another year or so.
If this is crisis - then I really would want to know how good business conditions look like :) ;
And interesting enough, a family friend we were having a birthday dinner with last week said that the aluminum joinery & installation company he works for is booked out until June next year. Never been busier.
Something is happening out there.
Our Mark doing a rave in a Govt funded report on NZ manufacturing
Betcha he loved doing this
https://tin100.com/wp-content/uploads/2023/10/New-Zealand-Advanced-Manufacturing-Report-2023-Distribution-Ready.pdf?2023+New+Zealand+Advanced+Manufacturing+Report
IMG_5526.jpeg
Quote from: Teitei on Oct 02, 2023, 06:00 PMAnd interesting enough, a family friend we were having a birthday dinner with last week said that the aluminum joinery & installation company he works for is booked out until June next year. Never been busier.
Something is happening out there.
I'm hearing everyone from developers down are holding off massively. I assume STU's customers are the MASSIVE dev companies though, who probably keep going?
Only one way since August.
(https://s3.tradingview.com/snapshots/f/FTBuciTD.png)
Quote from: entrep on Oct 20, 2023, 05:34 PMI assume STU's customers are the MASSIVE dev companies though, who probably keep going?
STU are also a supplier for relatively smaller local manufacturers and a supplier of last resort when demand has exceeded supply chain delivery times ex Asia for larger manufacturers. IMO their requirements to be a customer are overly onerous and belong in the previous millennium, particularly for specialty products. But hey if it de-risks their business then good for them.
Vulcan say ebitda for last 4 months down 29% on last year
Lower volume, lower selling prices and higher costs they say
Hope STU not doing as bad
Quote from: winner (n) on Nov 08, 2023, 10:06 AMVulcan say ebitda for last 4 months down 29% on last year
Lower volume, lower selling prices and higher costs they say
Hope STU not doing as bad
SNAP! That was immediate thought too on reading Vulcan's announcement. It was only five weeks ago at STU's AGM they were talking about the year ahead with "significant" work for them in climate resilience, infrastructure and essential water services. This confidence coming while presenting earnings down 33% and a near halving of net profit...
I sold out awhile back (as announced on here) and I've my eye on a re-entry at some point... but not yet. I think it's more likely that their 12 month low will be retested.
From Stats NZ ....
In the September 2023 quarter, the actual volume of ready-mixed concrete produced was 1.05 million cubic metres, down 10 percent compared with the September 2022 quarter.
STU thinks this measure put is relevant in measuring their business activity
Must have been worried about the sinking share price so have come out with a reassuringannouncement
Saying H124 ebit (normalised of course) will be about the same as H223 seems pretty good (and reassuring) but jeez that's about half of what they achieved last year ...yes H124 ebit down about 50%
Never mind ....still have cash in the bank and sticking to the long term plan
So no worries
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/STU/423213/409249.pdf
Wonder if they can maintain last years 8c dividend - that's a gross return on current price of 7.8%.
The new Government seems to be committed to correcting the chronic underinvestment in NZ's infrastructure, so STU have a long, long pipeline of big projects. If they can maintain margins I see a pretty solid future for them.
Quote from: LoungeLizard on Dec 11, 2023, 09:40 AMWonder if they can maintain last years 8c dividend - that's a gross return on current price of 7.8%.
The new Government seems to be committed to correcting the chronic underinvestment in NZ's infrastructure, so STU have a long, long pipeline of big projects. If they can maintain margins I see a pretty solid future for them.
Full year eps might be about 9 cents so divie of 8 cents in danger so will likely use cash reserve to maintain it
Punters need to keep the faith ...just a cyclical issue eh
EBIT was $48m in FY22 ...H223 plus H124 going to be $21m/$22m highlights now big the cyclical downturn has been
Quote from: winner (n) on Dec 11, 2023, 08:54 AMMust have been worried about the sinking share price so have come out with a reassuringannouncement
Saying H124 ebit (normalised of course) will be about the same as H223 seems pretty good (and reassuring) but jeez that's about half of what they achieved last year ...yes H124 ebit down about 50%
Never mind ....still have cash in the bank and sticking to the long term plan
So no worries
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/STU/423213/409249.pdf
Fair enough - however, if considering that H124 was coinciding with the real estate bottom as well as with all the uncertainty about who will form the next government I think that they did not too bad. Cash up, inventories down and sticking to their EBIT guidance is good.
Adding to that that the new government can now use all the money the old government earmarked for cogovernance bureaucracy and invest it into new shiny (and much more useful) steel pipes to update our crumbling water infrastructure - I think the SP bottom for STU might be in as well. All up from here to go for and exceed FBU's ancient (and from STU board declined) $1.80 offer per share :);
$2 per share around Christmas 2025, how would this sound?
Note: not a forecast ... just a question :), However - just to put the number in context:
forward PE (based on analyst consensus for the next 3 years and SP $1.04) is 8.7
forward earnings CAGR (dto, as above) is 8.8
this gives us a PEG (Zulu) of 0.99.
For anybody using this methodology - PEG below 1 is great :);
On top of that ... long term guidance sounds pretty upbeat, and there are plenty of good reasons for that.
If I put above values into grahams formula I get $3.13 per share,and if I use beagles modified formula, its still $2.25.
Some DCF values which float around for STU are as well around the $2 mark - e.g. alphaspread came up recently with $1.86;
So - what about with $2 in Dezember 2025? Am I too pessimistic?
Discl: holding, and nibbled a bit more this morning.
Quote from: BlackPeter on Dec 11, 2023, 10:01 AM$2 per share around Christmas 2025, how would this sound?
Works for me!
Steel and Tube forecasts steep fall in year-on-year earnings
https://www.rnz.co.nz/news/business/504458/steel-and-tube-forecasts-steep-fall-in-year-on-year-earnings
No worries as long as Customer Satisfaction and Employee Survey score keep improving
Quote from: winner (n) on Dec 12, 2023, 08:10 AM Steel and Tube forecasts steep fall in year-on-year earnings
https://www.rnz.co.nz/news/business/504458/steel-and-tube-forecasts-steep-fall-in-year-on-year-earnings
No worries as long as Customer Satisfaction and Employee Survey score keep improving
You mean RNZ is just regurgitating last weeks news without even putting it properly into context (like property bottom and uncertainty due to elections)? Pity, there was a time when I thought that they are the only radio station still worthwhile listening to in NZ. Maybe I was a bit too optimistic ;) .
STU share price holding up in spite of that dismal update a month ago
No doubt all the talk of billions of upcoming infrastructure spend and a resurgence in building activity is giving punters hope
However my industry experience is that talk like that is just that .....it often doesn't lead to boom times. NZ notorious for being useless at actually doing things (construction wise) over and above the norm. Post Chch quakes took years for work to be done and then it took resources from other areas/regions so nationally no big boom. Same post Kaikoura quakes and what happen with all those shovel ready things of a few years ago.
At best over the next few years the likes of STU, FBU can look to steady/flat market activity
But then Peter says STU share price $2 sometime ....maybe he knows more than me
Quote from: winner (n) on Jan 04, 2024, 03:18 PMSTU share price holding up in spite of that dismal update a month ago
No doubt all the talk of billions of upcoming infrastructure spend and a resurgence in building activity is giving punters hope
However my industry experience is that talk like that is just that .....it often doesn't lead to boom times. NZ notorious for being useless at actually doing things (construction wise) over and above the norm. Post Chch quakes took years for work to be done and then it took resources from other areas/regions so nationally no big boom. Same post Kaikoura quakes and what happen with all those shovel ready things of a few years ago.
At best over the next few years the likes of STU, FBU can look to steady/flat market activity
But then Peter says STU share price $2 sometime ....maybe he knows more than me
One way or another - planned or unplanned - $billions will be spent on infrastructure. One bridge built on SH25 in the Coromandel cost $40m but replaced a large stretch of demolished roading which cut off entire communities for ages. The cost to the country in lost productivity, compensation claims and insurance would have been far more than $40m. And that was just one climate event impacting one road. So the money WILL be spent whether we like it or not.
The macro environment is turning in STU's favour again - it is, after all a cyclical stock - and I see sustained growth ahead. (NZ Govt has budgeted infrastructure spend of $71b over the next 5 years). Management seem to have got their act together and they have a very solid balance sheet to work with. And the yield is conservatively still going to be 7-8% at the current SP.
A lot to like, I feel.
Roads around the wider Titirangi Auckland area are still a mess a year on from the massive deluges of last summer. Might be fixed sometime this decade. Best chance of $2 is if FBU improve their takeover offer of $1.90 from many years ago but then I am sure the directors in their infinite wisdom would say that undervalues the company again lol
Came across this the other day......had seen similar wisdom in the past but it was a good reminder of how I feel about a few companies and STU is one of those.
"In the absence of a track record of accomplishment, you should take a CEO's plans as hopeful intent. That doesn't mean they are lying, just that we really don't necessarily know what they can or cannot do. There is a particular danger if they use language that resonates with you. More than once in my investment career did I fall for someone who said all the right things, except that they hadn't done them — in the past, or as it turned out, in the future."
Used to live next to Glen Eden primary school in west Auckland as a young man. Their school motto was "Facta non verba" "Deeds not words"
Quote from: Basil on Jan 04, 2024, 09:00 PMUsed to live next to Glen Eden primary school in west Auckland as a young man. Their school motto was "Facta non verba" "Deeds not words"
Nice one. We call it "less hui, more do-ey"
No question things are tuff out there with volumes well down across the industry. Spoke to a large truck body manufacturer/engineer who has after several years of massive workloads started to run out of work.
However share price holding up over the dollar mark which is good.
Fbar say further inventory reductions (-NZ$3.7m to NZ$135.5m as at November 2023) and solid cash conversion (NZ$6.9m of operating cash generation over five months of 2023) lifted STU's cash balance to NZ$17.1m or 10cps.
While the 1H24 DPS (FBAR estimate 3.5cps) will consume some of this cash, STU's balance sheet remains well positioned given the softer demand backdrop. Along with STU's NZ$100m undrawn banking facility, this provides headroom to pursue bolt-on acquisitions and/or other capital management initiatives.
STU has an exceptional balance sheet with a bright future in my opinion.
A steel for some company...... only question in my mind is when..
Quote from: Shareguy on Jan 05, 2024, 03:45 PMNo question things are tuff out there with volumes well down across the industry. Spoke to a large truck body manufacturer/engineer who has after several years of massive workloads started to run out of work.
However share price holding up over the dollar mark which is good.
Fbar say further inventory reductions (-NZ$3.7m to NZ$135.5m as at November 2023) and solid cash conversion (NZ$6.9m of operating cash generation over five months of 2023) lifted STU's cash balance to NZ$17.1m or 10cps.
While the 1H24 DPS (FBAR estimate 3.5cps) will consume some of this cash, STU's balance sheet remains well positioned given the softer demand backdrop. Along with STU's NZ$100m undrawn banking facility, this provides headroom to pursue bolt-on acquisitions and/or other capital management initiatives.
STU has an exceptional balance sheet with a bright future in my opinion.
A steel for some company...... only question in my mind is when..
Yes exactly - a steel for a competitor to buy. Current Shareprice is only slightly above cash plus inventory
One thing that STU aren't very clear about is what revenues/profits acquisitions are actually bringing in .....many positive loose read between the lines statements
Why I'd like to know is so I assess growth of underlying business ....ie total revenue = underlying business plus acquisitions.
Like if you backed Fasteners NZ, Kiwi Pipes ans aluminium contributions what would business be like.
At a total level can't really say STU is growing that fast.
Back of mind is that their history around acquisitions is a bit chequered ...have things changed?
Fbar forecast note says it's all good from here.
2025F divi of 8.5cps fully imputed. I'm picking share buy back coming.
Mark will be very concerned for his job with this low share price, especially when the vultures start circling.
Both Craigs and Fbar are picking an increase in M&A this year with interest rates on the decline and our low NZ dollar.
Quote from: Shareguy on Jan 05, 2024, 04:52 PMFbar forecast note says it's all good from here.
2025F divi of 8.5cps fully imputed. I'm picking share buy back coming.
Mark will be very concerned for his job with this low share price, especially when the vultures start circling.
Both Craigs and Fbar are picking an increase in M&A this year with interest rates on the decline and our low NZ dollar.
Suppose Forbar one of brokers whose guru analysts have a target range of 120 to 132
Probably same analysts who not along had targets of 170 plus minus a bit
Might get it right one day
Quote from: winner (n) on Jan 06, 2024, 04:10 PMSuppose Forbar one of brokers whose guru analysts have a target range of 120 to 132
Probably same analysts who not along had targets of 170 plus minus a bit
Might get it right one day
Fbar have a target price of $1.20 currently. Yes they change all the time as conditions change. They may be right or wrong. The market of course will have its own opinion on what a share is worth.
OMG ...the STU share price on fire ...up to 112 heading to 115 and 120 tomorrow
All I can say I reckon market has got it all wrong ....was trying hard to like STU but not at these ridiculous prices
Quote from: winner (n) on Jan 09, 2024, 02:39 PMOMG ...the STU share price on fire ...up to 112 heading to 115 and 120 tomorrow
All I can say I reckon market has got it all wrong ....was trying hard to like STU but not at these ridiculous prices
Ok what do you think it's worth Winner and why?
Quote from: Shareguy on Jan 09, 2024, 02:54 PMOk what do you think it's worth Winner and why?
On current performance which isn't going to come right this year and future industry activity prospects about 100/105 now and maybe 120 in 2026 when things look a bit brighter
Quote from: winner (n) on Jan 09, 2024, 03:30 PMOn current performance which isn't going to come right this year and future industry activity prospects about 100/105 now and maybe 120 in 2026 when things look a bit brighter
Sorry Winner - that train has left the station. With 1H24 guidance being much the same as last year, IMO I don't think you'll see 1.00/1.05 again anytime soon. $1.20-$1.25 is more likely. Those already on board are looking at a 10% uplift in SP plus a 7-8% yield. That'll do me.
Good on you loungelizard
Jeez after everyone's favourite brokers update their targets the share price will be over 130, even though company performance will still be pretty dismal
Might have missed the express train but I'll continue to monitor its progress as it roars through the stations
Quote from: winner (n) on Jan 09, 2024, 03:30 PMOn current performance which isn't going to come right this year and future industry activity prospects about 100/105 now and maybe 120 in 2026 when things look a bit brighter
FWIW - I see their underlying value (based on earnings, growth & analyst opinions) around $2 per share.
Doubt however they will reach this mark in the next 12 months ... but probably around the end of the next up cycle. Anyway - each to their own. Just don't intend to sell them before they reach this mark.
Quote from: BlackPeter on Jan 09, 2024, 05:33 PMFWIW - I see their underlying value (based on earnings, growth & analyst opinions) around $2 per share.
Doubt however they will reach this mark in the next 12 months ... but probably around the end of the next up cycle. Anyway - each to their own. Just don't intend to sell them before they reach this mark.
I'm with you on that BP, and I have a few.
I have some STU. I'm waiting for VSL to get a bit cheaper then I plan to sell STU and buy VSL. I think StU is worth $1.20 -$1.30 now.
Better management team, margins and Australian focus make me think VSL will outperform STU.
Stu is like the train Te Huia...VSL will be like a bullet train...one day
Quote from: Perky on Jan 09, 2024, 05:59 PMI have some STU. I'm waiting for VSL to get a bit cheaper then I plan to sell STU and buy VSL. I think StU is worth $1.20 -$1.30 now.
Better management team, margins and Australian focus make me think VSL will outperform STU.
Stu is like the train Te Huia...VSL will be like a bullet train...one day
FWIW agree with you re Vulcan ...... prospects in Oz lot brighter than NZ I reckon
STU has been good for me...bought 0.87 plus good divies. I don't mind holding.
I think next report for both Stu and Vsl be pretty average...just cyclical building/infrastructure market...pretty flat.
I'm not sure what is a good entry price for VSL...maybe $7 to $7.50?
What do you think it might drop to Winner?
KFL happy to buy in quite a bit higher than todays prices but they just spending other peoples money...I'm just a poor student...need a bargain.
Quote from: winner (n) on Jan 09, 2024, 03:30 PMOn current performance which isn't going to come right this year and future industry activity prospects about 100/105 now and maybe 120 in 2026 when things look a bit brighter
Ok thanks for that Winner. Based on that, your valuation is not far from current share price anyway. Closed at $1.13 yesterday. The way I look at it from a value point of view is
(1) What other distribution business is trading at less than its NTA. Current from 2023 annual report is NTA of $1.17. Vulcan Steel have a $1.21 NTA with a share price of $8.23.
It just does not make sense to me.
(2) Cash in the bank of $17m ($.10 per share) and no debt. Vulcan have net debt of $340m (from FB)
(3) Balance sheet is very strong with bugger all "fluff" like over inflated goodwill.
(4) Attractive dividend which is one of the highest on the NZX and both Craig's and FB forecasting big improvements to eps and the divi. It's also fully imputed going forward.
(5) With interest rates forecast to decline both Craig's and FB suggest that M&A is going to be increasing. I agree and think STU stands out.
While I would not like to see another loss to NZ or the NZX I can't see STU being around much longer if the share price does not reflect its true value which I believe is around $2.
Well that's how I see it anyway and I'm off to chase some Marlin.
Looks like the curve is in, what happens next?
STU_2024-01-10_08-58-23.png
Love your charts Cod ..... very interesting .....and often telling
STU at 80 cents would be good
Quote from: Perky on Jan 09, 2024, 07:13 PMSTU has been good for me...bought 0.87 plus good divies. I don't mind holding.
I think next report for both Stu and Vsl be pretty average...just cyclical building/infrastructure market...pretty flat.
I'm not sure what is a good entry price for VSL...maybe $7 to $7.50?
What do you think it might drop to Winner?
KFL happy to buy in quite a bit higher than todays prices but they just spending other peoples money...I'm just a poor student...need a bargain.
I don't think VSL will go much lower than 8 bucks..... it's bigger and has that OZ exposure, listed on ASX and has interest from fundies. Think it will outperform STU over time
STU share price tends to closely follow FBU's and that's not always a good sign
Quote from: Perky on Jan 09, 2024, 05:59 PMI have some STU. I'm waiting for VSL to get a bit cheaper then I plan to sell STU and buy VSL. I think StU is worth $1.20 -$1.30 now.
Better management team, margins and Australian focus make me think VSL will outperform STU.
Stu is like the train Te Huia...VSL will be like a bullet train...one day
Might be worthwhile to analyse VSL's balancesheet before buying. My system flags them with a sh*tload of liabilities, which makes them look more like a bank, while STU looks quite healthy. Not enough motivation to cross check, but just saying ...
Yes agree BP..more debt. Something to be of aware of for sure.
Headwinds for both VSL and STu in short term but VSL much more efficient at turning $1 into $1.50 than STU.
STU always put a chart of building consents in their presos ...an indicator of macro factors affecting their business. So consents must mean something to them.
NOVEMBER consents data out today and the numbers were very sobering
Residential consents (number) for November month down 38% on pcp taking annual fall to 24%
Non-residential ($) for month up 2% on pcp and annual down 8%
For me just confirms STU and most punters are too optimistic about when things might get better. I see tough times for STU through to end of 2025 at earliest
Quote from: winner (n) on Jan 11, 2024, 06:49 PMSTU always put a chart of building consents in their presos ...an indicator of macro factors affecting their business. So consents must mean something to them.
NOVEMBER consents data out today and the numbers were very sobering
Residential consents (number) for November month down 38% on pcp taking annual fall to 24%
Non-residential ($) for month up 2% on pcp and annual down 8%
For me just confirms STU and most punters are too optimistic about when things might get better. I see tough times for STU through to end of 2025 at earliest
No doubt, a backwards looking market might notice that the number of new residential building permits dropped. Does not mean though that the number of future new buildings will drop as well, but hey, there likely is some short term correlation.
Just wondering, though how the number of building permits in 2023 will impact on the pressure on (not just) Wellington city council to replace their ancient pipe infrastructure? I hear the sale of water storage tanks (not sure, though whether they are made form steel) in Wellington is going already through the roof ...
Just wondering as well, whether the number of past permits gives us an idea of how many of these houses are build with a pina radiata skelton and how many with a steel framework? Plenty of new builds in our district (I hear its the fastest growing in NZ), and I notice more often houses with steel framework.
No doubt the number of building consents tells us that people last year have been pessimistic about the residential building sector. Not sure, a linear extrapolation of these data gives us a useful indication of all of STU's business segments in 2024 and 2025, but hey - we will see.
Quote from: BlackPeter on Jan 12, 2024, 10:38 AMNo doubt, a backwards looking market might notice that the number of new residential building permits dropped. Does not mean though that the number of future new buildings will drop as well, but hey, there likely is some short term correlation.
Just wondering, though how the number of building permits in 2023 will impact on the pressure on (not just) Wellington city council to replace their ancient pipe infrastructure? I hear the sale of water storage tanks (not sure, though whether they are made form steel) in Wellington is going already through the roof ...
Just wondering as well, whether the number of past permits gives us an idea of how many of these houses are build with a pina radiata skelton and how many with a steel framework? Plenty of new builds in our district (I hear its the fastest growing in NZ), and I notice more often houses with steel framework.
No doubt the number of building consents tells us that people last year have been pessimistic about the residential building sector. Not sure, a linear extrapolation of these data gives us a useful indication of all of STU's business segments in 2024 and 2025, but hey - we will see.
Just my view of the macro environment (their lingo) STU operate in.
Also strong correlation between readymix production and STU sales. Industry outlook is pretty gloomy there as well.
I stand by my view that things are going to be tough next two years for STU and punters will be disappointed
C,mon winner...stop trying to spook the horses...anyone would think you trying to buy some STU as you always telling us it's going to $1 or below
Stu themselves...say that only 12% of their revenue comes from residential...source last yr financial report.
Still imho...headwinds for both STu and Vsl..but I don't think things be as dire as you predict. As soon as interest rates start dropping these shares will be off to the races.
Let's see how it all pans out. I'm Still holding my modest STU holding and waiting for VSL next poor report and then I might look at jumping ship
Just checked..Stu on the leaders board today...UP nearly 3%... and that's just today...Buy, Buy, Buy
Quote from: winner (n) on Jan 12, 2024, 01:33 PMJust my view of the macro environment (their lingo) STU operate in.
Also strong correlation between readymix production and STU sales. Industry outlook is pretty gloomy there as well.
I stand by my view that things are going to be tough next two years for STU and punters will be disappointed
Obviously - nobody can predict the future, this includes me as well as you, so we can only look at the indictors currently available.
What I see is a huge need of replacing ancient and long neglected infrastructure throughout NZ. Councils as well as governments kicked the can for ages down the road, and it sounds we reached in many areas the end of this strategy being sustainable. I heard Wellington is losing nearly half of its water through leaking pipes. Not sure when ratepayers will start to rebel if the water supply stops - what do yo think? Just stop using water (and the toilets) in our capital, how hard can it be? - though I hear, Auckland has its problems as well. Plenty of money around ... assuming Labours predictions of future water bills (predicting they will more than quadruple in the next 10 years) did have any basis. I suppose they foresaw the need to replace some of the infrastructure and consumers having to pay for it ...
What I see is an unbroken demand for living spaces. Plenty of people currently living in cars and carvans ... and even if the government reduces the immigration flow again - we do need more doctors, nurses, carers, builders and teachers - and they need to live somewhere. More and more people living alone, and they want separate homes. Sure - maybe more of these new homes will be flats and units instead of standalone houses, but they all will need steel for the mesh, more and more will need steel for the frame and most of them will need steel for the roof.
What I see is an increasing number of extreme weather events destroying existing infrastructure. Plenty of bridges and roads destroyed last year through extreme weather events, and it will be more this year and in the years to come. They all need steel (and concrete) for fixing.
I don't know more about STU than the public, but I know people working at one of their competitors. They are pretty busy ... and overtime is more the rule for them than the exception.
Ah yes - and for what it is worth ... I see that the analyst EPS consensus for STU is 10 cents in 2024 (same as 2023), rising to 13 cents in 2026. Again - nobody can predict the future, but it shows, that not everybody is that gloomy for the industry.
Quote from: Perky on Jan 12, 2024, 02:33 PMJust checked..Stu on the leaders board today...UP nearly 3%... and that's just today...Buy, Buy, Buy
Even further up ..don't count SVR so it's top of leader ..up 5% to 115
Punters happy ..big boys back next week ...probably go to 125
Well done you who have had faith
Quote from: BlackPeter on Jan 12, 2024, 03:08 PMObviously - nobody can predict the future, this includes me as well as you, so we can only look at the indictors currently available.
What I see is a huge need of replacing ancient and long neglected infrastructure throughout NZ. Councils as well as governments kicked the can for ages down the road, and it sounds we reached in many areas the end of this strategy being sustainable. I heard Wellington is losing nearly half of its water through leaking pipes. Not sure when ratepayers will start to rebel if the water supply stops - what do yo think? Just stop using water (and the toilets) in our capital, how hard can it be? - though I hear, Auckland has its problems as well. Plenty of money around ... assuming Labours predictions of future water bills (predicting they will more than quadruple in the next 10 years) did have any basis. I suppose they foresaw the need to replace some of the infrastructure and consumers having to pay for it ...
What I see is an unbroken demand for living spaces. Plenty of people currently living in cars and carvans ... and even if the government reduces the immigration flow again - we do need more doctors, nurses, carers, builders and teachers - and they need to live somewhere. More and more people living alone, and they want separate homes. Sure - maybe more of these new homes will be flats and units instead of standalone houses, but they all will need steel for the mesh, more and more will need steel for the frame and most of them will need steel for the roof.
What I see is an increasing number of extreme weather events destroying existing infrastructure. Plenty of bridges and roads destroyed last year through extreme weather events, and it will be more this year and in the years to come. They all need steel (and concrete) for fixing.
I don't know more about STU than the public, but I know people working at one of their competitors. They are pretty busy ... and overtime is more the rule for them than the exception.
Ah yes - and for what it is worth ... I see that the analyst EPS consensus for STU is 10 cents in 2024 (same as 2023), rising to 13 cents in 2026. Again - nobody can predict the future, but it shows, that not everybody is that gloomy for the industry.
Peter, With an outlook like that FBU would have to be a great BUY as well
I need to remember that it's the story that matters when assessing STU's value .....I need to look beyond the numbers.
STU are telling much the same story as Peter et al .....and it's a good story
But STU 'stories'dont always come true
Quote from: winner (n) on Jan 14, 2024, 08:58 AMI need to remember that it's the story that matters when assessing STU's value .....I need to look beyond the numbers.
STU are telling much the same story as Peter et al .....and it's a good story
But STU 'stories'dont always come true
Sigh - I guess we all know that stories don't always come true, no matter who told them, unless the narrator can predict the future. I don't know about you, but I haven't yet met anybody who is able to do that.
That's true for your numbers describing the past as well ... the future predicted by them only comes true, if the past trend continues.
Here are some basic facts:
- linear extrapolation is the easiest extrapolation to do (that's the reason so many people are doing it).
- linear extrapolation makes sense as long as you are describing a linear movement
- no naturally occurring movement is long term linear (stretch a spiral and you find out what I mean)
- however ... all movements can be described by an overlay of cyclical movements (Joseph Fourier).
Maybe its time to start thinking about this turning point you've got in any cyclical movement ...
Quote from: winner (n) on Jan 13, 2024, 10:05 AMPeter, With an outlook like that FBU would have to be a great BUY as well
And yes, you are right ... if the industry turns upwards, FBU should benefit as well ... though, not sure, how much horizontal infrastructure they do these days. I think they moved out of this segment after they found out after their last big clusterf*ck that letting project managers go is not helpful for completing projects in time and under budget).
It's not always the story about macro market conditions that don't come true ......quite a few stories about what STU themselves are going to don't come true either
For many years STU have been raving about increasing margins. They put this chart in the F23 review which doesn't really say they've achieved much .....
IMG_5617.jpeg
.....but rather cleverly they left F19 off when GM% was 22.3% ...start the line back then and it paints a different story .....one that says increasing gross margins was just a nice story
Useful debate about STU's prospects going forward.
There are those here that are much better than me at crunching the numbers and whilst that is essential in making an informed decision - Winners graphs are excellent in that regard - I tend to look at what is going on in the sector, what are the macro-economic factors at play. That's not to say that company management and history isn't important as well - it is - and that's why I haven't invested in FBU even though they operate in the same sector. STU management have raised their game in recent years and have streamlined operations and seem, unlike FBU, free of any legacy issues.
2022 was an extraordinary year when COVID was hitting it's straps and supply issues were at their most critical - STU could almost charge what they wanted and NP was double the previous year. Margins in 2023 were down in comparison to that year but are better than the years previous to that. If they can hold 2023 margins into 2024 and beyond I think they will do alright.
BP is right - no-one but no-one has a crystal ball. We all play the odds to some degree. But sometimes the macroeconomic stars align and PROVIDED the company is run well enough to take advantage of that (hang your head in shame FBU) then the odds start to fall in your favour. The other thing is that STU's yield is still decent enough to warrant attention in itself.
Finally, the market is a fickle beast. You can do all the right things in making a decision and still the market will prove you wrong. I'm not a TA expert either but I have seen high volumes and support levels developing. Those who got in before xmas at around $1.05 level have already seen a 10% uplift in SP and I think - just my opinion, it goes without saying - that there's more to come yet. In the current market there's not a lot of good news stories, but I have a hunch that STU in the next 12-24 months might be one of them.
Suppose this is a profit upgrade ...or things were not quite as bad as we thought with Normalised EBIT (whatever that is) only down 48% on last year rather than more than 50%
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/STU/425573/411891.pdf
Probably punters are relieved and we'll see a relief rally with share price heading back over $1.20
Quote from: winner (n) on Feb 01, 2024, 09:12 AMProbably punters are relieved and we'll see a relief rally with share price heading back over $1.20
Curb your enthusiasm, Winner ;D
$1.20-$1.25 is certainly achievable in the short term, above that we'll need to see the infrastructure-spend tailwind kick in.
Nice, great to see some enthusiasm for a change. Gosh now $26m in cash and a nice divi to come. FB say this morning bottom of the cycle this half. Upwards and onwards untill..................
Consents data out for December month
Residential down 28% on last year ...non-residential down 24%
No worries though as STU says bottom of downturn has been reached and it's all good for the future
Quote from: winner (n) on Feb 02, 2024, 12:20 PMConsents data out for December month
Residential down 28% on last year ...non-residential down 24%
No worries though as STU says bottom of downturn has been reached and it's all good for the future
Consent data imo actually does not tell the full story.
What is more critical is actual housing starts - ie.consented developments proceeding into actual builds.
My town planner contact has always monitored housing starts rather than consent numbers as a true indication of what's happening out there.
Quote from: Teitei on Feb 02, 2024, 01:00 PMConsent data imo actually does not tell the full story.
What is more critical is actual housing starts - ie.consented developments proceeding into actual builds.
My town planner contact has always monitored housing starts rather than consent numbers as a true indication of what's happening out there.
I hear starts are down quite a lot as well ......but no hard evidence
What does your town planner say?
Quote from: winner (n) on Feb 02, 2024, 02:04 PMI hear starts are down quite a lot as well ......but no hard evidence
What does your town planner say?
I hear they will need to spend $2.5b to fix the Wellington water supply, starting ideally yesterday. Wondering how much of that will go to STU?
How much to fix the Auckland water supply? What about the rest of the country? Changing the government did not improve our crumbling infrastructure, but hey - let's do it ...
Quote from: BlackPeter on Feb 02, 2024, 02:11 PMI hear they will need to spend $2.5b to fix the Wellington water supply, starting ideally yesterday. Wondering how much of that will go to STU?
How much to fix the Auckland water supply? What about the rest of the country? Changing the government did not improve our crumbling infrastructure, but hey - let's do it ...
Oops - correct that ... the number I remembered was somewhat light. Apparently it is $10 billion to fix Wellingtons water supply. Due to capacity constraints they can however only spend $1 billion per year (for 10 years).
Sounds like good business, even if they need to share with the competition :) ;
https://www.rnz.co.nz/news/national/501800/wellington-s-water-woes-could-cost-1-billion-a-year-to-fix
Doesn't STU stand for Steal and Tube?
Quote from: BlackPeter on Feb 02, 2024, 02:21 PMOops - correct that ... the number I remembered was somewhat light. Apparently it is $10 billion to fix Wellingtons water supply. Due to capacity constraints they can however only spend $1 billion per year (for 10 years).
Sounds like good business, even if they need to share with the competition :) ;
https://www.rnz.co.nz/news/national/501800/wellington-s-water-woes-could-cost-1-billion-a-year-to-fix
Doesn't STU stand for Steal and Tube?
And they have a Pipes division ...what else is needed
Quote from: winner (n) on Feb 02, 2024, 02:04 PMI hear starts are down quite a lot as well ......but no hard evidence
What does your town planner say?
I have not asked him in recent times. Last I met him was at Christmas function and he said things had slowed right down in the apartment & terrace housing markets.
I would tend to believe that developers applying for consents in recent times would follow through to start the development given the costs involved in the approval process.
Not so much the consented developments in 2022 & 2023 where rampant speculation meant there was good profits to be made simply by selling consented sites.
Unfortunately as you probably are aware, stats does not compile housing starts & completions unlike consents. Something to do with some councils not keeping such data.
MBIE, BRANZ and Pacificon put out latest construction activity report. Headline is 'New Zealand's construction sector's activity increased to a forecast $61 billion by project value last year, but it's expected to ease to under $55.7b within the next five years.'
One chart from it attached
STU quote this forecast but must mean something. Outlook not as bright as most on here saying. But then a guy in BusinessDesk is rubbishing these reports because they are usually way out ...crappy in other words
https://www.mbie.govt.nz/dmsdocument/27910-national-construction-pipeline-report-2023
IMG_5640.jpeg
Quote from: winner (n) on Feb 12, 2024, 03:50 PMMBIE, BRANZ and Pacificon put out latest construction activity report. Headline is 'New Zealand's construction sector's activity increased to a forecast $61 billion by project value last year, but it's expected to ease to under $55.7b within the next five years.'
One chart from it attached
STU quote this forecast but must mean something. Outlook not as bright as most on here saying. But then a guy in BusinessDesk is rubbishing these reports because they are usually way out ...crappy in other words
https://www.mbie.govt.nz/dmsdocument/27910-national-construction-pipeline-report-2023
IMG_5640.jpeg
I wish I would be clever enough to reliably predict the activity for the construction sector five years ahead. I guess - surely, these people must be able to forecast not just the required maintenance work for our delapidated infrastructure with high acuracy, but for sure they know as well the severity of the next 15 (given the current frequency) 200 to 500 year extreme weather events which are going to hit us. Add to that, they must know exactly demand and supply situation in the residential construction sector - I assume they have a hotline to NZ Immigration and clearly can predit the direction of this government, the outcome of the coming election and the impact of all important global events in the next 5 years. Wow!
Just wondering how accurate their previous forecasts have been?
Quote from: BlackPeter on Feb 12, 2024, 05:09 PMI wish I would be clever enough to reliably predict the activity for the construction sector five years ahead. I guess - surely, these people must be able to forecast not just the required maintenance work for our delapidated infrastructure with high acuracy, but for sure they know as well the severity of the next 15 (given the current frequency) 200 to 500 year extreme weather events which are going to hit us. Add to that, they must know exactly demand and supply situation in the residential construction sector - I assume they have a hotline to NZ Immigration and clearly can predit the direction of this government, the outcome of the coming election and the impact of all important global events in the next 5 years. Wow!
Just wondering how accurate their previous forecasts have been?
Suppose we"ll never know what STUs forecast (activity wise) of the future. No doubt internally the have a forecast for the next few years.
If not achieved probably say capability/capacity constraints in the industry held up work more than we thought ...or something like that
Fletchers outlook for rest of year pretty gloomy
Must be a guide as to STU 2ill
Punters still optimistic ...share price holding up well
Quote from: winner (n) on Feb 14, 2024, 01:15 PMFletchers outlook for rest of year pretty gloomy
Must be a guide as to STU 2ill
Punters still optimistic ...share price holding up well
STU's SP will probably get caught in the cross-fire of Fletchers and Vulcan's poor performance. I see them as different beasts though- no debt, strong cashflow and their general profitability and dividends held up through the bottom of the cycle. They appear to be much better positioned to catch the predicted upswing in residential building and infrastructure spending than either FBU or Vulcan.
Quote from: winner (n) on Feb 14, 2024, 01:15 PMFletchers outlook for rest of year pretty gloomy
Must be a guide as to STU 2ill
Punters still optimistic ...share price holding up well
Actually - Fletchers residential / development branch didn't look to bad, didn't it?
Not quite sure, what Fletchers (potential) problems with plastic pipes in Australia and problems with Tradelink and their legacy construction issues would have to do with STU.
At loss how to draw parallels from any of Fletchers known problems to STU. Care to enlarge?
Quote from: BlackPeter on Feb 14, 2024, 03:36 PMActually - Fletchers residential / development branch didn't look to bad, didn't it?
Not quite sure, what Fletchers (potential) problems with plastic pipes in Australia and problems with Tradelink and their legacy construction issues would have to do with STU.
At loss how to draw parallels from any of Fletchers known problems to STU. Care to enlarge?
They said last couple of months in NZ markets were down more than thought and the rest of the year probably not that good
And full year guidance shows H2 earnings decline will be greater than H1.
But no doubt like Vulcan Mark will say the bottom has passed and it's all looking good...just I beg to differ
Quote from: winner (n) on Feb 14, 2024, 06:39 PMThey said last couple of months in NZ markets were down more than thought and the rest of the year probably not that good
And full year guidance shows H2 earnings decline will be greater than H1.
But no doubt like Vulcan Mark will say the bottom has passed and it's all looking good...just I beg to differ
Fair enough.
You want to share with us why you think that things will further deteriorate - and when (and why) you expect the bottom to come in?
Half year out Tuesday
Mark said EBIT ~$11m
Wonder if he'll come out with his first guess of full year number ......bearing mind FY23 EBIT was $31.1m
Wonder if they made an acquisition they can tell us about .....need something to keep top line growing.
Whose charged with making sure the STU share price closes at a respectable number doesn't need much cash
Today it only took about 3k to get share price back to 115 after it had languished at 111 most of the day (where it opened after closing 115 Friday)
VWAP was 111.51
Doing a good job that person.
Looks good to me. One of the highest divi returns on NZX and should only improve from here.
Investor returns
• Interim dividend of 4.0 cents per share maintained at FY23 level – above 60%-80% target range reflecting confidence in the company's future
• Attractive gross dividend yield of 10.3%
• Earnings per share: 3.2 cents per share
• Net Tangible Assets per share: $1.16
• Price earnings ratio: 17.22
Quote from: Shareguy on Feb 20, 2024, 08:50 AMLooks good to me. One of the highest divi returns on NZX and should only improve from here.
Investor returns
• Interim dividend of 4.0 cents per share maintained at FY23 level – above 60%-80% target range reflecting confidence in the company's future
• Attractive gross dividend yield of 10.3%
• Earnings per share: 3.2 cents per share
• Net Tangible Assets per share: $1.16
• Price earnings ratio: 17.22
All fine and dandy on the western front
Earnings 3.2 cents ....divie 4.0 cents ($5.3m earnings / $6.7m divie)
Hope that 'confidence in company's future' is not misplaced and comes back to bite them.
Whatever market been seduced by a good rave and share price $1.25/$1.30 soon .....maybe by Friday
Excellent result, particularly after Vulcans poor one. I like the fact that with no debt, a pile of cash and on-going improvements in costs and inventory, they have emerged from the bottom of the cycle in a good position to take advantage of a few tailwinds coming their way, particularly in infrastructure spend. And an extremely high dividend return in the meantime. Onwards and upwards.
Quote from: LoungeLizard on Feb 20, 2024, 09:31 AMExcellent result, particularly after Vulcans poor one. I like the fact that with no debt, a pile of cash and on-going improvements in costs and inventory, they have emerged from the bottom of the cycle in a good position to take advantage of a few tailwinds coming their way, particularly in infrastructure spend. And an extremely high dividend return in the meantime. Onwards and upwards.
Well said. Agree 100 percent.
Quote from: LoungeLizard on Feb 20, 2024, 09:31 AMExcellent result, particularly after Vulcans poor one. I like the fact that with no debt, a pile of cash and on-going improvements in costs and inventory, they have emerged from the bottom of the cycle in a good position to take advantage of a few tailwinds coming their way, particularly in infrastructure spend. And an extremely high dividend return in the meantime. Onwards and upwards.
'Excellent result' v 'poor one' ...c'mon mate
V pcp-
STU sales down 17% v Vulcan down 12%
STU ebitda down 31% v Vulcan down 30%
STU npat down 55% v Vulcan down 52%
If Vulcan had 'poor result' than STU had a 'poor result' as well I reckon
But Mark does a good rave eh so all hunky dory
Muted market response so far ......but that person waiting in the wings will see share price close at 115 or higher
Quote from: winner (n) on Feb 20, 2024, 10:26 AM'Excellent result' v 'poor one' ...c'mon mate
V pcp-
STU sales down 17% v Vulcan down 12%
STU ebitda down 31% v Vulcan down 30%
STU npat down 55% v Vulcan down 52%
If Vulcan had 'poor result' than STU had a 'poor result' as well I reckon
But Mark does a good rave eh so all hunky dory
Muted market response so far ......but that person waiting in the wings will see share price close at 115 or higher
Your market perception skills are slipping, W69?
It's all about market expectations and VSL has not performed well there.
Quote from: Teitei on Feb 20, 2024, 10:34 AMYour market perception skills are slipping, W69?
It's all about market expectations and VSL has not performed well there.
Yes Rhys has to pull his socks up ......and improve his raving skills .......and get his people to produce charts that show things in good light. Mark leaves him for dead
Disappointed Mark didn't mention a 'Super Cycle' again .....don't know if that's in the past or whether there's one on the way
Quote from: winner (n) on Feb 20, 2024, 10:48 AMYes Rhys has to pull his socks up ......and improve his raving skills .......and get his people to produce charts that show things in good light. Mark leaves him for dead
Disappointed Mark didn't mention a 'Super Cycle' again .....don't know if that's in the past or whether there's one on the way
Super cycle .... Interesting you mention this ...
https://corporatefinanceinstitute.com/resources/economics/supercycle/
and even Motley Fool did talk about it:
https://www.fool.com.au/definitions/supercycle/
I think it makes sense to expect in the coming decade or so world wide a significant uptick in infrastructure investments - The last Infrastructure boom in the Western world (the decades after WW II) is so long ago that lots of stuff is just crumbling ... and NZ is no exception to that. Water Infrastructure is crumbling, our schools, hospitals and police stations are leaking and our roads - well, have a look for yourself.
While the whinging of populists is louder than ever - we clearly need to do something about the problems. Question is only - how long do we keep kicking the can down the road before we do something about the problem?
Just out from Craig's
STU – STOP PRESS – STU has delivered 1H24 normalised EBIT of $11.3m (in line with guidance of $11m+ provided 1st Feb), down 47% from $21.5m in the pcp. The sharp decline in earnings was primarily driven by a -17% YoY reduction in revenue, as volume continued to drop in a weak macroeconomic environment (down -22% on pcp), particularly for STU's distribution business. Whilst the result itself is largely pre-guided, there are a few additional updates we like in the result including 1) a 9% improvement in gross margin per tonne, supported by a significant uplift in gross margin % for the Infrastructure division (+410bps) 2) operating costs were flat on pcp despite inflationary pressures as we have seen for other NZ companies 3) net cash increased to $26m from $7m at the end of FY23, with no bank debt 4) an interim dividend of 4.0cps (flat on pcp; despite NPAT down 55% on pcp), with payout ratio above STU's 60%-80% target range reflecting STU's strong balance sheet position. Whilst no guidance has been provided for FY24, we think the above points will be taken positively by the market. STU to trade up slightly today ...
Quote from: BlackPeter on Feb 20, 2024, 11:04 AMSuper cycle .... Interesting you mention this ...
https://corporatefinanceinstitute.com/resources/economics/supercycle/
and even Motley Fool did talk about it:
https://www.fool.com.au/definitions/supercycle/
I think it makes sense to expect in the coming decade or so world wide a significant uptick in infrastructure investments - The last Infrastructure boom in the Western world (the decades after WW II) is so long ago that lots of stuff is just crumbling ... and NZ is no exception to that. Water Infrastructure is crumbling, our schools, hospitals and police stations are leaking and our roads - well, have a look for yourself.
While the whinging of populists is louder than ever - we clearly need to do something about the problems. Question is only - how long do we keep kicking the can down the road before we do something about the problem?
Hey BP with passion like that you need to get into politics and become Minister of Super Cycle or similar title ....... Current lot won't do it
Age no problem these days
I'd vote for you
Quote from: winner (n) on Feb 20, 2024, 11:18 AMHey BP with passion like that you need to get into politics and become Minister of Super Cycle or similar title ....... Current lot won't do it
Age no problem these days
I'd vote for you
cheers for the flowers - I'll think about it. I certainly would have still a lot of miles to go before I reach the age of the past and likely next US president candidates, so - age is clearly not an issue.
And I guess with the proposed portfolio one could only win. If you look into history - there was one supercycle in the 1930íes when everybody did build up their weapons arsenals and armies they needed to destroy each other in the 1940'ies (I reccon this is where we are now - building up, the real destruction still to follow). The third supercylce was in the 1960'íes when everybody did build bridges and other infrastructure (I reccon we soon will be there).
We might even have a super-super cycle where the build up of the armies world wide and the build up of the crumbling infrastructure coincides with building new infrastructure we need to protect us from the symptoms of climate change - followed by a further supercycle to rebuild all the stuff we destroyed with the armies we are currently building up. Look at Ukraine and Gaza to see what I mean.
Opportunities everywhere ... lets do it!
Quote from: winner (n) on Feb 20, 2024, 10:26 AM'Excellent result' v 'poor one' ...c'mon mate
V pcp-
STU sales down 17% v Vulcan down 12%
STU ebitda down 31% v Vulcan down 30%
STU npat down 55% v Vulcan down 52%
If Vulcan had 'poor result' than STU had a 'poor result' as well I reckon
But Mark does a good rave eh so all hunky dory
Muted market response so far ......but that person waiting in the wings will see share price close at 115 or higher
Fair enough. But as an investor - assuming you are actually at the races - which horse would you rather back at this point? A company with no debt and maintaining dividends or a company with a mountain of debt and cut its dividend by 50% from last year? My instinct tells me that STU will out-perform Vulcan over the next period. Time will tell.
Good news Peter .....it seems that the forthcoming Super Cycle is going to be even bigger than we envisaged ...billions more
https://www.nzherald.co.nz/business/transport-projects-could-cost-twice-as-much-as-national-estimated-nzta/DOYAPIZECNFYPBWYP6Z6J66XEM/?lid=11adb78pqwe1
Quote from: winner (n) on Feb 21, 2024, 08:14 AMGood news Peter .....it seems that the forthcoming Super Cycle is going to be even bigger than we envisaged ...billions more
https://www.nzherald.co.nz/business/transport-projects-could-cost-twice-as-much-as-national-estimated-nzta/DOYAPIZECNFYPBWYP6Z6J66XEM/?lid=11adb78pqwe1
Hmm - the art of understating project costs does not seem to be restricted to one particular political colour - no matter whether left or right, they all seem to master the art of overspending and underdelivering.
So difficult to choose :) ;
But yes, this political mastergame will be good for suppliers (though less for the taxpayers - ouch, this is us) with the exception of FBU (but this is a different thread). FBU tends to do bad in bad times and particularly bad in good times, but yes - STU (and others) might thrive.
Over the last few years Mark has raved about how good their Gross Margin is and how it's improving (in rave language sky rocketing)
I have a lot of trouble reconciling Mark's raves with the financials ...and gross margin % is one if them
I wouldn't call this trend great
IMG_5652.png
Quote from: winner (n) on Feb 21, 2024, 04:31 PMOver the last few years Mark has raved about how good their Gross Margin is and how it's improving (in rave language sky rocketing)
I have a lot of trouble reconciling Mark's raves with the financials ...and gross margin % is one if them
I wouldn't call this trend great
IMG_5652.png
You clearly choose the wrong time window :) ; - If you start in June 20 and do a linear extrapolation you get a nice and solid improvement trend. Sure - not sky rocketing (unless the sky is falling), but no doubt getting better.
Admittedly - if you take the Covid years out, than it looks pretty much like a flatline. Not sure whether this is good or bad.
Quote from: BlackPeter on Feb 21, 2024, 05:22 PMYou clearly choose the wrong time window :) ; - If you start in June 20 and do a linear extrapolation you get a nice and solid improvement trend. Sure - not sky rocketing (unless the sky is falling), but no doubt getting better.
Admittedly - if you take the Covid years out, than it looks pretty much like a flatline. Not sure whether this is good or bad.
Real point is that Mark's raves aren't really supported by financials.
I see there's a similar chart in the STU preso ...trouble is their chart is wrong .....maybe aimed at supporting his rave
Quite a few other things over the years don't 'add up' ......to the point I take Mark's rave with a grain of salt........even his and Susan's optimism about the future.
Never mind, this is only how I see it now .....as long as you and others see things differently hopefully you'll be OK
Marks always raving on about how M&A is driving growth but is always vague about the numbers
I like this graphic from full year preso
IMG_5656.jpeg
Pretty amazing growth eh ...but come half year little comment about Kiwi Pipes
All one can conclude is that 'real' / 'base' sales have declined by a lot more than the reported 17% ......... 'base' could say down 25% softened by M&A growth
Mark's raving does go over board at time ....like a true salesman only the good stuff and then embellish that ......quite amusing seeing punters fall for it
Quote from: winner (n) on Feb 21, 2024, 04:31 PMOver the last few years Mark has raved about how good their Gross Margin is and how it's improving (in rave language sky rocketing)
I have a lot of trouble reconciling Mark's raves with the financials ...and gross margin % is one if them
I wouldn't call this trend great
IMG_5652.png
Thanks for that. Is 20-22% GM really that good? {rhetorical} It doesn't leave much room for CODB.
A client I work with has a GM of 35-40% on products where steel makes up 70% of the cost of materials. GM is after deducting material costs, labour, freight, rebates, duties, packaging & other production costs etc. So it's a real figure. The point being low 20's is hardly something to brag about.
At 20% GM, extra overhead costs of $100k requires an additional $500k in sales to break even. Whereas at 40% GM, extra overheads costs of $100k requires an additional $250k in sales to break even. Looking at this another way, every 2% in discounts requires an additional 10% in volumes at no discount to make up the lost GM dollars, when GM is 20%. For the 40% business this is 5%.
At the risk of stating the obvious, business is so much easier with large margins. Whilst 20% is better than 10%, IMO 20% is relatively tight and Management really need to be onto cost control.
Good analysis there Ferg.
I have a small holding of Stu...hold more for dividend yield rather than growth.
At some stage I want to pick up some VUlcan steel...I think their gross margin 35-40% so similar to your client
Much more efficient business and dual aus/nz market for better growth when market picks up.
I thought the vul price might drop a bit after last report but didn't really so I just wait my time holding Stu but VUl is on my watching list. Was hoping might get down to low $7 or late $6 for a buyzone.
Maybe I'm dreaming but it still seems a little expensive for me
Quote from: Ferg on Feb 23, 2024, 03:57 PMThanks for that. Is 20-22% GM really that good? {rhetorical} It doesn't leave much room for CODB.
A client I work with has a GM of 35-40% on products where steel makes up 70% of the cost of materials. GM is after deducting material costs, labour, freight, rebates, duties, packaging & other production costs etc. So it's a real figure. The point being low 20's is hardly something to brag about.
At 20% GM, extra overhead costs of $100k requires an additional $500k in sales to break even. Whereas at 40% GM, extra overheads costs of $100k requires an additional $250k in sales to break even. Looking at this another way, every 2% in discounts requires an additional 10% in volumes at no discount to make up the lost GM dollars, when GM is 20%. For the 40% business this is 5%.
At the risk of stating the obvious, business is so much easier with large margins. Whilst 20% is better than 10%, IMO 20% is relatively tight and Management really need to be onto cost control.
Good insights Ferg
STU point out they calculate GM different from others but the loose definitions they give seem much the same as you outline.
While STU margins are in low 20's Vulcan Steel are in the high 30's.
Whether it's a different methodology maybe a better performance indicator to look at is EBIT margin. I spent decades working in manufacturing and distribution companies servicing the construction / building / DIY markets. The benchmark most in the sector strived for was an EBIT margin of 15%
I pulled out these numbers comparing STU and Vulcan ....quite interesting and your comments are very pertinent
You can see STU margin low at the GM line but pretty thin at the EBIT line ...and significantly less than Vulcans. Note EBIT adjusted to incluse lease costs
I look forward to seeing how they pan out but STU doesn't seem too have much to play with if the top line shrinks much more.
IMG_5657.png
Quote from: winner (n) on Feb 24, 2024, 12:27 PMGood insights Ferg
STU point out they calculate GM different from others but the loose definitions they give seem much the same as you outline.
While STU margins are in low 20's Vulcan Steel are in the high 30's.
Whether it's a different methodology maybe a better performance indicator to look at is EBIT margin. I spent decades working in manufacturing and distribution companies servicing the construction / building / DIY markets. The benchmark most in the sector strived for was an EBIT margin of 15%
I pulled out these numbers comparing STU and Vulcan ....quite interesting and your comments are very pertinent
You can see STU margin low at the GM line but pretty thin at the EBIT line ...and significantly less than Vulcans. Note EBIT adjusted to incluse lease costs
I look forward to seeing how they pan out but STU doesn't seem too have much to play with if the top line shrinks much more.
IMG_5657.png
I am sure you considered for your comparison that STU is practically without bank debts (liabilities to assets 42,8%), while VSL is fully loaded, so to speak (liabilities to assets 81.5% - maybe they have aspirations to turn into a bank and have already the necessary debts :p ;
VSL better have a higher EBIT margin to pay for all these nasty interests STU does not need to worry about.
Quote from: BlackPeter on Feb 24, 2024, 12:44 PMI am sure you considered for your comparison that STU is practically without bank debts (liabilities to assets 42,8%), while VSL is fully loaded, so to speak (liabilities to assets 81.5% - maybe they have aspirations to turn into a bank and have already the necessary debts :p ;
VSL better have a higher EBIT margin to pay for all these nasty interests STU does not need to worry about.
Quote from: BlackPeter on Feb 24, 2024, 12:44 PMI am sure you considered for your comparison that STU is practically without bank debts (liabilities to assets 42,8%), while VSL is fully loaded, so to speak (liabilities to assets 81.5% - maybe they have aspirations to turn into a bank and have already the necessary debts :p ;
VSL better have a higher EBIT margin to pay for all these nasty interests STU does not need to worry about.
It is pleasing to see that they still have some of that $80m they begged for a few years ago. Some punters fronted up with $1.23 a share lol
At the time they seduced punters with a veiled promise of Normalised EBIT of $40m in a few years (say 2021) ..........what was last years EBIT .... $32m I believe and heading for less this year even though they have done so many fantastic things
Quote from: winner (n) on Feb 24, 2024, 01:48 PMIt is pleasing to see that they still have some of that $80m they begged for a few years ago. Some punters fronted up with $1.23 a share lol
At the time they seduced punters with a veiled promise of Normalised EBIT of $40m in a few years (say 2021) ..........what was last years EBIT .... $32m I believe and heading for less this year even though they have done so many fantastic things
Hmm - I guess nobody had to hold STU during the capital raise - I bought in much later and cheaper, and they nontheless pay me good dividends plus offer capital appreciation.
But just wondering - are you trying to say with the CR reference that VSL still needs to raise capital in order to get rid of their strangling debt load?
I guess - would make sense, wouldn't it?
Interesting stuff, anyway ...
I asked this on investor call some time ago regarding the margin comparison.
Mark said
The margin comparison is a little misleading. Stu includes freight and labour costs in there gm. Vulcan does not. Mark said that as a comparison stu would be in the high 30"s excluding the freight. So still a difference but a lot closer. A lot of the difference is down to Vulcans downstream plate and coil processing which is at high margin. Stu are planning on addressing that with some investment in this area.
STU's 1H24 result had gross margin per tonne growth offsetting the lower-than- expected sales volume: Volume declined 22% vs pcp while GP$/tonne grew 9% to NZ$926/tonne vs 1H/2H23, which is a positive takeaway from this result. 1H dividend NZ4.0cps, fully imputed, at 125% payout and above the 60-80% EPS payout policy range, signalling management confidence in the business already passed the bottom of the cycle, and its current net cash position.
So my take is we at bottom of cycle and management have confidence in that with divi higher than payout policy. Its net cash position gives stu the ability to take advantage of opportunities. Also I'm convinced that stu like a number of beaten down NZX companies will look attractive to others, especially when we have confirmation of interest rate cuts. There is a lot to like here even at current price levels.
Quote from: Shareguy on Feb 25, 2024, 10:42 AMI asked this on investor call some time ago regarding the margin comparison.
Mark said
The margin comparison is a little misleading. Stu includes freight and labour costs in there gm. Vulcan does not. Mark said that as a comparison stu would be in the high 30"s excluding the freight. So still a difference but a lot closer. A lot of the difference is down to Vulcans downstream plate and coil processing which is at high margin. Stu are planning on addressing that with some investment in this area.
Even so I still reckon GM% in low 20s isn't very good ....... Jeez even Metro Glass manages 40% odd (and I'm sure they include labour etc)
Slide on Page 5 from their latest preso ...says all looking good for the future
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/STU/426451/412902.pdf
Can't post image as screen dump too big ha ha ...but found a way around the restriction and now you have it twice
They must see the indicators shown on Page 5 as being meaningful ......probably use the data as inputs into a model forecasting future market demand.
They say macro trends are positive .......suppose they couldn't really say 'when we input the indicators into our market size forecast model it indicates declining volumes through calendar 2024 and well into 2025'
Anyway nobody can predict the future eh ....not even Yogi Berra .......so Mark saying soothing optimistic things using words like macro is just as good a guess as Yogi would come up ......and one punters want to believe.
IMG_5661.jpegIMG_5661.jpeg
Chris Bishop says he is going to fix housing supply in NZ ...... and really going to push infrastructure ahead
All good for STU if you believe government rhetoric
Good to see Jardens latest note is outperform.
Looking at 6-12 M and A opportunities
Balance sheet strengthened: Net cash increased from NZ$6.5m at the FY23 results to NZ$26.3m as at 1H24, driven by working capital improvement by c. NZ$21m and in particular a continued reduction in inventory levels. No M&A was announced with this update except a loan commitment to a small steel and road barrier supplier (ROBOS), with an option for STU to take equity in the business. STU is still looking at c. 6-12 M&A opportunities at any one time on both horizontal and vertical adjacencies.
Quote from: Shareguy on Feb 29, 2024, 02:10 PMGood to see Jardens latest note is outperform.
Looking at 6-12 M and A opportunities
Balance sheet strengthened: Net cash increased from NZ$6.5m at the FY23 results to NZ$26.3m as at 1H24, driven by working capital improvement by c. NZ$21m and in particular a continued reduction in inventory levels. No M&A was announced with this update except a loan commitment to a small steel and road barrier supplier (ROBOS), with an option for STU to take equity in the business. STU is still looking at c. 6-12 M&A opportunities at any one time on both horizontal and vertical adjacencies.
is OUTPERFORM outperforming peers or outperforming market ...or is it code for BUY without the conviction of screaming out BUY
Always good for brokersvto be +ve
Quote from: winner (n) on Feb 29, 2024, 02:16 PMis OUTPERFORM outperforming peers or outperforming market ...or is it code for BUY without the conviction of screaming out BUY
Always good for brokersvto be +ve
I take it as outperform where the market assesses it to be ie. a buy at this level. I'd have to agree in this case.
Tony Alexander views differ from brokers I think
Tony says -
Business investment prospects for 2024 look munted. That is bad for productivity growth and will limit the extent of interest rate declines through this year
And
House building is also - guess what - munted for 2024 with developers becoming increasingly desperate to offload stock.
Quote from: winner (n) on Mar 01, 2024, 09:51 AMTony Alexander views differ from brokers I think
Tony says -
Business investment prospects for 2024 look munted. That is bad for productivity growth and will limit the extent of interest rate declines through this year
And
House building is also - guess what - munted for 2024 with developers becoming increasingly desperate to offload stock.
Is this the same Tony Alexander who said that house prices were going to decline big time at the start of covid when in fact they went up plenty.............
Quote from: Shareguy on Mar 01, 2024, 10:06 AMIs this the same Tony Alexander who said that house prices were going to decline big time at the start of covid when in fact they went up plenty.............
If you say so.
If you saw my comment re Mark Malpas I'm very sorry
But ignore Tony at your peril
Stats NZ building consents January
Westpac notes -
Consent issuance fell sharply in January. Weakness has been widespread with tight financial conditions putting the brakes on new development.
and
The downturn in residential construction is deepening.
and
Non-residential consent numbers did rise in January, but the longer-term trend remains down. The amount of non-residential floor space being consented fell 10% over the past year. Developers have highlighted higher financing costs and concerns about slowing economic growth as key factors that are putting the brakes on new projects.
Quote from: winner (n) on Mar 01, 2024, 10:08 AMIf you say so.
If you saw my comment re Mark Malpas I'm very sorry
But ignore Tony at your peril
No am on a plane using free wifi travelling back to Auck. You and Tony may well be right. I just read that John Key thinks property will double in next ten years.....
Metro Glass outlook copied from a Mark rave?
Metroglass expects demand for glass to be flat for at least the next 12 months in New Zealand. The business has resized to meet expected demand whilst ensuring customer service and quality is not compromised.
I'd stay both are optimistic about the flat bit
Quote from: winner (n) on Mar 07, 2024, 09:04 AMMetro Glass outlook copied from a Mark rave?
Metroglass expects demand for glass to be flat for at least the next 12 months in New Zealand. The business has resized to meet expected demand whilst ensuring customer service and quality is not compromised.
I'd stay both are optimistic about the flat bit
Actually - I remember that Mark used to hold MPG shares (well, that is what he told me anyway), and he was at that stage (some years ago) not that stoked about their performance. Can't really imagine that he is now more enthusiastic about them.
But anyway - it sounds like you see the future of housing and infrastructure in a quite dim light.
Would be interesting to learn where you see the bottom - later this year, next year, 2026 - or still later (like after the next elections - surely there must be some government able to run the country and the economy)?
How do you see housing and infrastructure to play out and what would you expect to trigger the trend change?
Quote from: BlackPeter on Mar 07, 2024, 09:51 AMActually - I remember that Mark used to hold MPG shares (well, that is what he told me anyway), and he was at that stage (some years ago) not that stoked about their performance. Can't really imagine that he is now more enthusiastic about them.
But anyway - it sounds like you see the future of housing and infrastructure in a quite dim light.
Would be interesting to learn where you see the bottom - later this year, next year, 2026 - or still later (like after the next elections - surely there must be some government able to run the country and the economy)?
How do you see housing and infrastructure to play out and what would you expect to trigger the trend change?
BlackPeter ...here's how I see it playing out. Just my view ...laugh if you want, I won't be offended.
Most of optimism about forthcoming growth in construction activity is based on the billions to be spent on infrastructure over the next few years.
Probably just rhetoric.....full of good intentions ...saying what they think some punters want to hear.
This infrastructure growth and other construction growth won't happen because -
1 No cash- fiscally government buggered for many years and private sector not inclined to do much capex spend at moment
2 Talk doesn't always lead to action in this country.
3 Capability and resource issues ....the country has got no big tap to turn on to do heaps more ......industry stretched now ....if new things are started other work put on hold etc.....about the same amount of work is done
So my reading of things is that construction activity will chug along at current rates ....but a danger of declining further through 2025/2026
My forecast total activity in 2027/2028 will still be less than what it was last year.
Quote from: winner (n) on Mar 12, 2024, 09:22 AMBlackPeter ...here's how I see it playing out. Just my view ...laugh if you want, I won't be offended.
Most of optimism about forthcoming growth in construction activity is based on the billions to be spent on infrastructure over the next few years.
Probably just rhetoric.....full of good intentions ...saying what they think some punters want to hear.
This infrastructure growth and other construction growth won't happen because -
1 No cash- fiscally government buggered for many years and private sector not inclined to do much capex spend at moment
2 Talk doesn't always lead to action in this country.
3 Capability and resource issues ....the country has got no big tap to turn on to do heaps more ......industry stretched now ....if new things are started other work put on hold etc.....about the same amount of work is done
So my reading of things is that construction activity will chug along at current rates ....but a danger of declining further through 2025/2026
My forecast total activity in 2027/2028 will still be less than what it was last year.
Cheers for responding, and no reason to laugh about ... while I don't share this viewpoint, it is certainly a valid view and could (with a certain likelihood) happen.
Personally I am a bit more optimistic.
Debts: While NZ carries currently historically seen a very high debt load, compared on a per capita basis has NZ compared to all (or nearly all?) other OECD countries a very low debt load. Just have a look at the attached stats - our per capita government debt is minimal compared to most other countries. Admittedly - Japan, Europe and the US do show us what might happen when you have a (too) high debt burden, but somehow they still seem to do economically better than we do (and this is not a political statement :) ;
Goivenment debt OECD countries.JPG
So - if there is a political will we can afford to fix our infrastructure, and I think it would not be too hard to even make a solid business case for that. The spoiler might be - our previous government was happy to spend, but they didn't invest, they just wasted (most of) the money. Our current government seems to have an austerity tendency - i.e. there is a risk that they prefer to starve the cash cow instead of feeding it. So difficult to get politicians who know what they are doing (no matter which colour), and as larger countries like the US demonstrate, this problem has nothing to do with the size of the talent pool, it just appears that politics tends to float everywhere mediocracy, populism and ineptness ... so - yes, this is a risk for our economic development which might support your view of the future.
On the other hand - we (and this is basically humanity and specifically todays western world) came so far a long way with quite mediocre leadership, interrupted by a very small number (and far apart) of talented leaders. If you look at the economic waves over the last 150 years (including already two world wars) - the midterm tendency was always upwards.
I believe that the current bunch of political inepts will just float on the economic wave which is currently shaping up in the leading markets (as they always did ...). If the Fed reduces interest rates (as no doubt it will), the US economy will flourish and with that our little market. If Xi tries to keep China growing (hey, he might be a tyrant, but he still wants to survive) we will keep selling our agricultural products and school Chinese children - and maybe still more important Australia (thanks to all the mining) will do well, which means, Australia can buy more from us.
As long as the world lives in uncertain times (and I am sure, political conflicts as well as climate change will make sure that it stays this way for longer than any of us will hang around) people will want to come to our safe haven. While the climate will deteriorate here as well, we feature no climate extremes, we have enough water and can produce enough food for anybody here (unless we behave really dumb, which is a possibility) and an environment which, while deteriorating, is compared to the rest of the world still cleaner and in some parts even still nearly pristine. And yes, these people will bring money and need houses and infrastructure.
I am optimistic unless the populists take over - and in that case we might have still more urgent problems than just worrying about the economy :) ;
The future will be great :) 8) ;
There's a good article in NBR today ...how retiring CEO of Naylor Love sees the construction sector. Worth a read if you have access
https://www.nbr.co.nz/business/builder-by-heart-gives-minister-words-of-construction-wisdom/
Third Fractal in progress will not linger at the bottom.
STU_2024-03-15_21-04-39~2.png
Quote from: Cod on Mar 15, 2024, 09:12 PMThird Fractal in progress will not linger at the bottom.
STU_2024-03-15_21-04-39~2.png
Interesting chart. They do say something about falling wedges, don't they? And from memory it is good.
Quote from: BlackPeter on Mar 16, 2024, 11:12 AMInteresting chart. They do say something about falling wedges, don't they? And from memory it is good.
Hey BP ...last time you talked about STU falling wedges it precipitated a collapse from mid 120's to 100
Wouldn't want to see 80 cents this time would we
Rhetoric about growth still strong out there
But MOF told business people yesterday "Treasury is now warning me that growth over the next few years is likely to be significantly slower than it had previously thought," she said, recognising productivity in New Zealand has slowed. "
I'm sticking to my forecast that things won't be getting much better for the likes of STU before 2027/2028
Quote from: winner (n) on Mar 16, 2024, 11:25 AMHey BP ...last time you talked about STU falling wedges it precipitated a collapse from mid 120's to 100
Wouldn't want to see 80 cents this time would we
That's the thing with TA patterns - they only describe likelihoods and they don't tell you either when the breakout will happen.
I would not see any reason to rule out 80 cents or any other amount ... and frankly, not sure I'd care too much where the bottom lies. Do you?
I guess the more interesting question would be - will they stay profitable (as they have been - with only one exception in the last 10 years)? ... and will they turn the long term EPS shrinkage around (analysts seem to think so, but analysts are not more often right, than you or me are :);
So far I see at $1.05 (ex-dividend - i.e. minus 4 cents divie) a forward PE of 9.3. At 80 cents it would be 7. Pretty sure the market would fix such an anomaly, unless the NZ construction sector falls into a deep depression, which you seem to expect and I don't.
Quote from: BlackPeter on Mar 16, 2024, 11:44 AMThat's the thing with TA patterns - they only describe likelihoods and they don't tell you either when the breakout will happen.
I would not see any reason to rule out 80 cents or any other amount ... and frankly, not sure I'd care too much where the bottom lies. Do you?
I guess the more interesting question would be - will they stay profitable (as they have been - with only one exception in the last 10 years)? ... and will they turn the long term EPS shrinkage around (analysts seem to think so, but analysts are not more often right, than you or me are :);
So far I see at $1.05 (ex-dividend - i.e. minus 4 cents divie) a forward PE of 9.3. At 80 cents it would be 7. Pretty sure the market would fix such an anomaly, unless the NZ construction sector falls into a deep depression, which you seem to expect and I don't.
Yes, can't be too bad a deal if we continue to get 10% plus gross yield while we wait for better times to arrive
Quote from: Poet on Mar 16, 2024, 12:06 PMYes, can't be too bad a deal if we continue to get 10% plus gross yield while we wait for better times to arrive
Last divie greater than profit ......sustainable?
Got surplus cash but isn't that earmarked to acquire things .....or being resilient tide them over in bad times
That could stuff up your yield expectations eh
Quote from: winner (n) on Mar 16, 2024, 12:19 PMLast divie greater than profit ......sustainable?
Got surplus cash but isn't that earmarked to acquire things .....or being resilient tide them over in bad times
That could stuff up your yield expectations eh
Last divie greater than profit ......sustainable?
Sounds bad, but is it?
OK - Dividend 4 cents, EPS 3.2 cents. Obviously not sustainable if this is not a one off, but a consistent trend.
On the other hand - Last year was H2 better than H1 - and it doesn't need to be much better to make this sustainable, doesn't it?
I guess, again - it depends on how bleak you see the future. Given that bull runs are historically happening in 78% of the time, while bears occupy only the remaining 22% - well, that's what Russell Investments are saying anyway (https://russellinvestments.com/us/blog/bulls-vs-bears) I guess the odds are against a prolonged recession in the building sector.
But if it makes you feel better ... it could happen - its just not very likely.
Just remember one thing - optimists tend to live longer than pessimists ... ;) :
Caught up with a mate who owns a business competing with STU in Auckland. He said that the level of enquires and sales has noticeably dropped off last few months. What is also a concern is doubtful debts are increasing and some customers mostly related directly to constuction are struggling to pay the bills. He is concerned and is trying to cut costs.
Stu has a history of destroying businesses they have acquired. Mostly through being unable to hold on to key staff. Knowledge and skills are something that STU in the past has not valued enough and as such competitors are full of ex STU employees.
However with that all aside Mark seems to be doing a good job. It's a much leaner business and STU have a pile of cash to hopefully make some sound Acquisitions.
Quote from: Shareguy on Mar 16, 2024, 01:15 PMCaught up with a mate who owns a business competing with STU in Auckland. He said that the level of enquires and sales has noticeably dropped off last few months. What is also a concern is doubtful debts are increasing and some customers mostly related directly to constuction are struggling to pay the bills. He is concerned and is trying to cut costs.
Stu has a history of destroying businesses they have acquired. Mostly through being unable to hold on to key staff. Knowledge and skills are something that STU in the past has not valued enough and as such competitors are full of ex STU employees.
However with that all aside Mark seems to be doing a good job. It's a much leaner buisiness and STU have a pile of cash to hopefully make some sound Acquisitions.
Jeez mate, for you that's one bearish post.
Have a retaining wall built ......contractor ordered steel the other day and they said do you want it yesterday as things are so slack these days
Got to post the good and the bad Winner. I still think at current price is good buying just on the divi and potential for takeover. We are at bottom of cycle or close to it some experts say.
Disc
Still have a good holding but no longer one of my largest positions.
Just as an aside...love the word "munted"...hardly ever see it in use these days, especially by economists.
Its so prescriptive, doesn't leave much room for interpretation but for what its worth
munt·ed from an online dictionary
Quote[ˈmʌntɪd]
adjective
munted (adjective)
BRITISH
AUSTRALIAN
NEW ZEALAND
informal
under the influence or alcohol or drugs:
"they have constant issues with drivers turning up munted"
NEW ZEALAND
informal
badly damaged; ruined:
"work to remove the munted footbridge—an icon of the Canterbury earthquakes—is to begin this week" · "no wonder our education system is totally munted"
Origin
1990s: of unknown origin.
Translate munted to
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Similar and Opposite Words
adjective
under the influence or alcohol or drugs:
intoxicated
inebriated
drunken
befuddled
incapable
tipsy
the worse for drink
Opposite:
sober
Maybe shareholders will get really lucky and FBU will renew their takeover offer at $1.90...but of course the directors would reject it as its below intrinsic value yet again just like ARV directors did with their $1.70 offer. Really, some of these directors need to be taken out the back of the cow shed and @#%&.
I wouldn't trust STU directors as far as I could throw them. I'm with Winner and Tony Alexander, the outlook for the next few years for this sector is pretty munted.
Susan would never allow STU to be taken over
Munted ..good word. Used a lot to describe christchurch post quakes. I did a preso to the Board of an ASX company about impact of quakes on business ...they took the word munted out of the actual preso slides as it was improper to use such words ..... but I said it anyway ...I think they got the message Chch was munted
From Interest.co.nz Friday report.
HARD MINERAL RETREAT
Global steel and iron ore prices are falling rather quickly now. Steel (https://tradingeconomics.com/commodity/steel) (rebar) is down -2.7% over the past week, and iron ore (https://tradingeconomics.com/commodity/iron-ore) is down -9.5% over the same timeframe. Since the start of the year the reductions at -11% and -24% respectively. The steel price is back to 2009 levels. These pullbacks directly relate to soft Chinese demand.
Quote from: Cod on Mar 16, 2024, 05:37 PMFrom Interest.co.nz Friday report.
HARD MINERAL RETREAT
Global steel and iron ore prices are falling rather quickly now. Steel (https://tradingeconomics.com/commodity/steel) (rebar) is down -2.7% over the past week, and iron ore (https://tradingeconomics.com/commodity/iron-ore) is down -9.5% over the same timeframe. Since the start of the year the reductions at -11% and -24% respectively. The steel price is back to 2009 levels. These pullbacks directly relate to soft Chinese demand.
You mean the steel price is "munted"?
Not sure whether the price trend (below) is showing this ... I'd say, there still is hope :) ;
Steelprice.JPG
But apart from that - even if the Chinese spend these days less money on steel, would this really mean there is a problem for STU selling its stuff in NZ?
Graphic below from STU half year results preso showing dividend history
Rolling 12 months EPS to December is 6.3 cents .....yet they have paid out 8 cents a share divie
Interesting they use the term 'Super Cycle' above F22......probably code for divies will never be this high again ...or at least for many years
I reckon dividends over the next couple of years (maybe longer) will be at best 6 cents/7 cents .....gives a reasonable yield at current share price but a bit short of the 10% they are proud of.
IMG_5697.jpeg
The wind has definitely gone out of the sails hasn't it? Guess the market is unconvinced that the Nats will make good on their infrastructure spend pledge. Still, if divys can be maintained at current levels - which I think they will - the yield is still around 7-8%, Good enough to keep holding - for now.
Jenny Ruth gave STU a good rave in her Just the Business today ....that's good
It seems no matter how good or bad the second half all guru analysts are saying they'll be keeping full year divie at 8 cents .....a lot more than the consensus profit forecasts.
You have to pay to read it
https://justthebusinessjennyruth.substack.com/p/steel-and-tube-ready-for-continuing?publication_id=1827355&utm_campaign=email-post-title&r=1rwf26&utm_medium=email
Ó
Quote from: Perky on Feb 23, 2024, 04:32 PMGood analysis there Ferg.
I have a small holding of Stu...hold more for dividend yield rather than growth.
At some stage I want to pick up some VUlcan steel...I think their gross margin 35-40% so similar to your client
Much more efficient business and dual aus/nz market for better growth when market picks up.
I thought the vul price might drop a bit after last report but didn't really so I just wait my time holding Stu but VUl is on my watching list. Was hoping might get down to low $7 or late $6 for a buyzone.
Maybe I'm dreaming but it still seems a little expensive for me
Just over a month ago that was perky
Since then VSL share price UP 13% while STU share price DOWN 8%
Suppose that means STU is a BUY at the moment ....lot of catching up to do eh
But then it just may reflect the relative perception of the future prospects of each
I drove past the big shiny Vulcan factory in te rapa Hamilton today Winner...the siren mermaid was singing to me...buy Vulcan perky, buy Vulcan Perky....come to me my friend.
It's a trap...too expensive for me...meanwhile the Stu divie is in the bank today.
I bought STU at 0.80...sold a few at 1.17 after you scared the horses it's was going under $1
So life is all good ...still green capital gain plus good divies...waiting for that mermaid to piss off before I join the Vulcan ship.
Good or bad for STU
I'm told cost of steel and construction steel fixing in NZ is exorbitant compared to Australia ...is this on govt radar?
https://www.nzherald.co.nz/nz/politics/live-prime-minister-christopher-luxon-speaks-from-upper-hutt/KKCXBLEOORBKRE5W7QFFA5LZFE/
Quote from: winner (n) on Apr 04, 2024, 10:33 AMGood or bad for STU
I'm told cost of steel and construction steel fixing in NZ is exorbitant compared to Australia ...is this on govt radar?
https://www.nzherald.co.nz/nz/politics/live-prime-minister-christopher-luxon-speaks-from-upper-hutt/KKCXBLEOORBKRE5W7QFFA5LZFE/
Wow, one of the most sensible proposals I heard so far from the new government. Maybe they are after all still able to do better than just supporting the tobacco and the gun industry?
This proposal is clearly a big win for all consumers - prices for building products in NZ are just outrageous! If they get them down (and I think there is a good chance), this would be good for everybody.
Is it good as well for STU? I suppose it will increase volume (more building activity), but might reduce individual margins. But hey, they say competition is good for business, so lets bring it on!
Coventry on ASX announce acquisition of Steelmasters Group. Turnover $40m and costing Coventry $40m
Were they on STU's radar and one that got away?
Or Aussie exposure put them off to start with.
That Steelmasters has an EBITDA margin ~18%
STU's is ~8%/9%
Probably different type of business but hmmmm
BusinesDesk headline - Fletcher subsidiary Easysteel looks to cut jobs ...half unionised members to go plus admin etc staff
Things tough in steel industry ...and outlook a bit uncertain
STU pretty clever ...already cut the jobs
TV news says contractors and tradies are leaving NZ in droves as uncertainty and delays due to the government cancelling and putting major infrastructure projects on hold.
Jeez ...maybe the billions of work won't eventuate for many years
I'm sticking to my forecast that building/construction activity won't be picking up until at least 2027 ..at beast same amount of activity as the last 12 months.
Quote from: winner (n) on Apr 29, 2024, 07:18 PMTV news says contractors and tradies are leaving NZ in droves as uncertainty and delays due to the government cancelling and putting major infrastructure projects on hold.
Jeez ...maybe the billions of work won't eventuate for many years
I'm sticking to my forecast that building/construction activity won't be picking up until at least 2027 ..at beast same amount of activity as the last 12 months.
Jeez - 2027? So you are saying, we need to wait until the current hepless lot is thrown out of government?
Acquired a fleet of trucks and trailers and taken on the drivers
Earnings accretive they say ...that's good
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/STU/430311/417594.pdf
Quote from: BlackPeter on Apr 30, 2024, 11:00 AMJeez - 2027? So you are saying, we need to wait until the current hepless lot is thrown out of government?
Heavens forbid ......they even more hepless ......would need to extend my forecast for any recovery out to 2032 or beyond if that happened .
Quote from: winner (n) on May 01, 2024, 08:45 AMHeavens forbid ......they even more hepless ......would need to extend my forecast for any recovery out to 2032 or beyond if that happened .
Hepless - I like that new word - sorta a cross between hapless and helpless 👍
Quote from: Crackity on May 01, 2024, 09:03 AMHepless - I like that new word - sorta a cross between hapless and helpless 👍
Picked that up from BlackPeter ..he's a genius with words
From Stats Nz - In the March 2024 quarter, the actual volume of ready-mixed concrete produced was down 12 percent compared with the March 2023 quarter.......been double decline for 4 quarters in a row now
Market remains subdued and challenging in STUspeak
Mark said last update there will be some easing of macro trends supporting increased activity from Q4 FY24....(that being this June Qtr )
Doubt whether that's going to happen
Note: OK steel often goes where concrete doesn't but there's a strong correlation between ST sales and concrete production ....and STU often quote quote such economic indicators
Way things are looking FY24 sales could be less than $500m ...a bit lower than last years $587m
If sales are about $500m that's about the same as they were achieving pre-covid
Marketscreener as F24 forecast sales at $523m ...think they dreaming.
Quote from: winner (n) on May 09, 2024, 01:09 PMWay things are looking FY24 sales could be less than $500m ...a bit lower than last years $587m
If sales are about $500m that's about the same as they were achieving pre-covid
Marketscreener as F24 forecast sales at $523m ...think they dreaming.
Analysts are always optimistic :) - but anyway, while I have no knowledge how STU is doing, I do know that at least one of their competitors is currently pretty busy (I have family working there - they still do overtime), which might be bad for STU if the overall market is really that much down.
Quote from: BlackPeter on May 09, 2024, 02:03 PMAnalysts are always optimistic :) - but anyway, while I have no knowledge how STU is doing, I do know that at least one of their competitors is currently pretty busy (I have family working there - they still do overtime), which might be bad for STU if the overall market is really that much down.
A contractor I know is 2 staff down (not replacing them until biz picks up) and the others have to a bit of overtime at times to keep tons schedule
Fletcher profit downgrade this morning noted -
A combination of weaker revenues and gross margin pressure in certain Building Products businesses, notably Iplex NZ and Steel, where end markets have been particularly soft.
Outlook still pretty gloomy according to this item about a report from BDO
Construction and Real Estate Sector leader says -
So there's concern in terms of that forward work space with higher interest rates and many projects not being really financially viable. So there seems to be a real concern amongst the construction leaders in the report about what happens either the end of this year, or certainly going into 2025, and I think 2025 is going to be the tricky year more so than 2024."
https://newsroom.co.nz/2024/05/16/building-firms-uncertain-about-work-pipeline-after-post-covid-highs/?utm_source=Newsroom&utm_campaign=127b146b32-Daily_Briefing+17.05.2024&utm_medium=email&utm_term=0_71de5c4b35-127b146b32-97970805&mc_cid=127b146b32&mc_eid=f260d735f1
STU must be due to come out with some guidance. Financial nearly over so must have a good feel for how much they going to make.
No guidance and Mark won't be able to come out and say 'upper end of guidance' when the result is printed.
Last indication was that they were looking forward to "increased activity from Q4 FY24"
So here's hoping
"Steel & Tube Holdings Limited (NZX: STU) has today provided earnings guidance for the financial year ending 30 June 2024 (FY24) and an update on trading for the eleven months of the year to date.
The company is performing well relative to a challenging market, which has seen demand for steel at even lower levels than during the Global Financial Crisis. Despite this, Steel & Tube has continued to grow margins and maintain market share, strengthen customer relationships and significantly improve operating leverage to position itself for New Zealand's economic recovery.
Steel & Tube is forecasting FY24 Normalised EBIT(*1) of $14m to $15m and Normalised EBITDA of $35m to $36m. Net cash on hand is expected to be between $7m and $10m at year end. The Board remains committed to delivering value for shareholders and expects to declare a final dividend for FY24.
Controlling the controllables, positioned well when growth returns
Steel & Tube CEO, Mark Malpass, said: "Whilst the trading environment is challenging, we have controlled the controllables and we are positioned for demand growth once the New Zealand economy improves. Steel & Tube continues to deliver margin growth, cost reductions which have offset inflation and resilient operating profit. Our investment strategy into high value products and services is delivering results and we have built a robust balance sheet which is capable of enabling further growth, both organically and through acquisition.
"While the timing and pace of an economic recovery remains unclear, our expectation from our customer mix is that we are near the bottom of the cycle and should start to see demand improve in the 2025 calendar year. Steel & Tube is positioned for demand growth, when it returns, with quality inventory on hand, strong customer relationships and significant operating leverage."
For the eleven months to 31 May 2024
• Average selling prices have remained elevated due to international product costs and a weaker New Zealand dollar, despite market contraction and increased competition
• Gross margin dollars/tonne has improved as a result of pricing disciplines, cost control, improved product mix and customer value add
• The $5m cost out programme has been successfully completed with FY24 operating costs well below prior year. A new cost out programme has commenced targeting a further $5m in savings
• Steel & Tube's net cash balance remains positive, with a relentless focus on working capital discipline
[For additional historical trend information - see the graphs in the attached document]
(*1) Normalised EBITDA and Normalised EBIT have been adjusted to exclude non-trading adjustments of c.$3.5m relating to Software as a Service costs and Project Strong.
ENDS
Positive update, considering where the industry is at the moment and relative to FBU's struggles. Wonder if they will be able to maintain the 4c final divy? Probably not would be my guess - 3c perhaps?
Full year earnings about 4 cents per share ...lucky might get to 5 cents
Interim divie 4 cents ..... full year?
STU put this chart in their announcement today
Presumably to reinforce that things are actually as bad as they were in the GFC
But to me reminded me how STU have performed over the years. The red line is revenues ...not that good and reinforces what I've posted before in that STU are only any good in what they themselves describe as 'super cycles' times ...take 22 and 23 out and hmmmm. And the profit line is just as unimpressive
Never mind ...the future is bright so no worries
IMG_5819.jpeg
Chart Agrees.
STU_2024-06-14_11-57-12.png
EBIT guidance about 15m is bit short of Forbars forecast of 24m
But that was only Forbars view so shouldn't matter
Not good at all, but not surprising given the state of the economy. Surprised at the share price given the level forecast from STU against consensus.
May result in a 2H loss. Craig's fcast was $22m ebit. Fbar $20.3m
Cash at year end about the same as it was last year end
So Free Cash Flow not that much ...but just enough to give a hand out to shareholders
Future Infrastructure spend saviour of STU as Susan said a few months ago "There has been underinvestment in New Zealand's infrastructure for many years and we look forward to the new coalition Government confirming its long term investment plan"
Chart below from Budget numbers
Will Susan be pleased (Esp from a growth perspective)
IMG_5833.png
STU will be creaming it...should get an order at least for some bolts for the power pylon that fell over ...maybe the whole structure a write off...and some sheet steel for the ferry repair and that's just the last week..lol
As long as some clever clogs doesn't come up with a timber solution like cross laminated timber for all those windmilly things and solar panel structures we going to be building as steel helps us turn green...they will be ok.
You called it early eh winner...told us it was going under $1... took a while to come true but it did.
Sold my small Stu holding progressively over last few months at$1.20, $1.09 and $1.05...but I think if it goes below much below 0.80c might buy some back for the ride back up. Still keen on VSL longer term but it keeps getting cheaper so happy to wait for the whole sector to show some turnaround.
No hurry to buy in to either Stu or Vsl at moment me thinks...maybe capital loss and reduced divvies until earning turn up.
Perky mentions dividend....here's how I see it
They say cash on hand at end of yesr is about $7m which is much the same as it was a year prior .....which implies FCF generated has already gone out as dividends ($13.4m in financial year)
Pay another 4 cents and that $7m has gone so would have to do we have confidence in the future trick.
I think it unwise to pay more than earnings out as a dividend ....you've done your dash for the year with the 8nterim.
But no worries, Susan says there's one coming
Good news must be coming next month ,,,STU share price up more than 10% over last few days ....and over $1 .and way up from mid 80's it was not that long ago.
Mark no doubt polishing up his rave for full year results and telling us the market is becoming quite buoyant and F25 will be bloody good
Good gracious me ...Stats NZ says - In June 2024, the seasonally adjusted number of new dwellings consented fell 14 percent, after falling 1.9 percent in May 2024.
Doesn't bode well for a great recovery .....and govt not doing much infrastructure stuff either
Total consents residential and non-residential 28% less than June last year (and that's value)
Quote from: winner (n) on Jul 31, 2024, 11:27 AMGood gracious me ...Stats NZ says - In June 2024, the seasonally adjusted number of new dwellings consented fell 14 percent, after falling 1.9 percent in May 2024.
Doesn't bode well for a great recovery .....and govt not doing much infrastructure stuff either
Total consents residential and non-residential 28% less than June last year (and that's value)
Actually, my town planner contact tells me that housing starts are more critical than housing consents.
Many of the consented developments in 2021 to 2023 have not gone ahead and there are any number of sites around NZ sitting idle.
Quote from: winner (n) on Jul 31, 2024, 11:27 AMGood gracious me ...Stats NZ says - In June 2024, the seasonally adjusted number of new dwellings consented fell 14 percent, after falling 1.9 percent in May 2024.
Doesn't bode well for a great recovery .....and govt not doing much infrastructure stuff either
Total consents residential and non-residential 28% less than June last year (and that's value)
On the other hand: Business Confidence in July took a huge leap upwards:
https://publications.anz.com/SingletrackCMS__DownloadDocument?uid=033428e6-47a9-4d0e-880f-cccea2640d6d&docRef=3c0e4465-5d5f-4d10-a0f9-dc460c79263a&jobRef=2998cfc6-ac5a-4bb9-8274-085c1a95f743
... and the good thing is that stock prices are not backwards but forwards looking!
Anyway a better way too drive :) ;
Quote from: BlackPeter on Jul 31, 2024, 03:29 PMOn the other hand: Business Confidence in July took a huge leap upwards:
https://publications.anz.com/SingletrackCMS__DownloadDocument?uid=033428e6-47a9-4d0e-880f-cccea2640d6d&docRef=3c0e4465-5d5f-4d10-a0f9-dc460c79263a&jobRef=2998cfc6-ac5a-4bb9-8274-085c1a95f743
... and the good thing is that stock prices are not backwards but forwards looking!
Anyway a better way too drive :) ;
STU share price been improving lately
Punters obviously think construction going to improve from here on in
Different view from what Fletchers indicated today .... Activity down and doubt if bottom of cycle been reached
No doubt Mark will tell us what's really going on next Monday
Quote from: winner (n) on Aug 21, 2024, 07:30 PMSTU share price been improving lately
Punters obviously think construction going to improve from here on in
Different view from what Fletchers indicated today .... Activity down and doubt if bottom of cycle been reached
No doubt Mark will tell us what's really going on next Monday
Worldwide wholesale price of steel has been hammered recently so STU could be seeing some decent margin improvements
Crikey.....they say a solid result!
https://www.nzx.com/announcements/436783
FY24 Performance and Results
$m / FY24 / FY23 / Change
Revenue / 479.1/ 589.1/ -18.7%
Volume (Ktonnes) / 115.5 /146.4 / -21.1%
GM$/tonne / 901 / 850 / 6.0%
EBITDA / 31.4 / 51.9 / -39.5%
Normalised EBITDA* / 35.8 / 52.9 / -32.3%
EBIT / 9.6 / 31 / -69.0%
Normalised EBIT* / 14.5 / 32.1 / -54.8%
NPAT / 2.6 / 17 / -84.7%
Net cash / 8.7 / 6.5 / 33.8%
Net operating cashflow / 42.2 / 98.3 / -57.1%
Full Year gross dividend (cents per share) / 8.3 / 11.1 / -25.2%
Full Year gross dividend yield** (%) / 9.7% / 9.9% / -2.0%
Mark says not to worry ....all hunky dory
It's all about this graphic .....what a masterpiece
IMG_5898.jpeg
Quote from: Left Field on Aug 26, 2024, 08:41 AMCrikey.....they say a solid result!
https://www.nzx.com/announcements/436783
FY24 Performance and Results
$m / FY24 / FY23 / Change
Revenue / 479.1/ 589.1/ -18.7%
Volume (Ktonnes) / 115.5 /146.4 / -21.1%
GM$/tonne / 901 / 850 / 6.0%
EBITDA / 31.4 / 51.9 / -39.5%
Normalised EBITDA* / 35.8 / 52.9 / -32.3%
EBIT / 9.6 / 31 / -69.0%
Normalised EBIT* / 14.5 / 32.1 / -54.8%
NPAT / 2.6 / 17 / -84.7%
Net cash / 8.7 / 6.5 / 33.8%
Net operating cashflow / 42.2 / 98.3 / -57.1%
Full Year gross dividend (cents per share) / 8.3 / 11.1 / -25.2%
Full Year gross dividend yield** (%) / 9.7% / 9.9% / -2.0%
Depends on how you look at it - bottom of the cycle in a prolonged recessionary environment, construction industry in the doldrums (FBU loss of $227m). So yes, to make a profit, keep cash in hand, no debt and pay a 9.7% FY gross dividend maybe not so bad?
Quote from: LoungeLizard on Aug 26, 2024, 09:29 AMDepends on how you look at it - bottom of the cycle in a prolonged recessionary environment, construction industry in the doldrums (FBU loss of $227m). So yes, to make a profit, keep cash in hand, no debt and pay a 9.7% FY gross dividend maybe not so bad?
FBU loss was due to more write offs/downs. I wouldn't compare FBU result to STU
Quote from: Greekwatchdog on Aug 26, 2024, 09:31 AMFBU loss was due to more write offs/downs. I wouldn't compare FBU result to STU
They're both in the same industry, and not all FBU's loss is attributable to write-offs. The going is tough out there, and relative to the rest STU seem to have their house more in order.
Quote from: Left Field on Aug 26, 2024, 08:41 AMCrikey.....they say a solid result!
https://www.nzx.com/announcements/436783
FY24 Performance and Results
$m / FY24 / FY23 / Change
Revenue / 479.1/ 589.1/ -18.7%
Volume (Ktonnes) / 115.5 /146.4 / -21.1%
GM$/tonne / 901 / 850 / 6.0%
EBITDA / 31.4 / 51.9 / -39.5%
Normalised EBITDA* / 35.8 / 52.9 / -32.3%
EBIT / 9.6 / 31 / -69.0%
Normalised EBIT* / 14.5 / 32.1 / -54.8%
NPAT / 2.6 / 17 / -84.7%
Net cash / 8.7 / 6.5 / 33.8%
Net operating cashflow / 42.2 / 98.3 / -57.1%
Full Year gross dividend (cents per share) / 8.3 / 11.1 / -25.2%
Full Year gross dividend yield** (%) / 9.7% / 9.9% / -2.0%
Weird things happen - I find myself agreeing with the Lizard ...
Lets face it - it is a cyclical company, and not just the usual analysts seem to assume that we reached the bottom of said cycle.
If that's correct, than this is a solid result (hey, they did make money - though admittedly not a lot, NTA is above SP, balance sheet looks quite good, cashflow is under control and the future should look bright.
Obviously - anybody assuming that our current government is running our economy from here still deeper into the mud instead of supporting it should invest instead into one in their view better run economy.
Quote from: winner (n) on Aug 26, 2024, 09:17 AMMark says not to worry ....all hunky dory
It's all about this graphic .....what a masterpiece
IMG_5898.jpeg
We better set a reminder for the next high! Always good to buy when the SP is depressed (as it still is now), but so hard not to forget the selling during the inevitable high in a few years :) ;
They also out this chart in the preso. Not so dramatic but gives some idea of the future market conditions. Dashes are my doing ...like marking present
Suppose things are going to be better but no 'super cycle'
I still say things not going much better to 2027/2028
IMG_5899.jpeg
Strange no insider buying if they really think it's the bottom of the cycle ;)
Liked the chart which showed EBIT should be up $20m even on the same FY22 volume due to all the work behind the scenes. Hope it ages well.
They seem to be getting quite keen on m&a which is questionable given cost of capital differential vs competition such as Vulcan. Hope they show discipline.
Quote from: LoungeLizard on Aug 26, 2024, 09:36 AMThey're both in the same industry, and not all FBU's loss is attributable to write-offs. The going is tough out there, and relative to the rest STU seem to have their house more in order.
STU v FBU FY24 V FY23
STU revenue down 19% ...EBIT down 55%
FBU revenues +0% ...EBIT down 36%
Normalized ebit for both
FBU seem to have done better ..or less bad
But agree STU house more in order
Updated my spreadsheets with this year's numbers
One thing that stood out was that the 2nd half of of year was pretty dire
Revenues were only $217m (~20% down on pcp and first half of year( and Normalized EBIT was a miserly $3.2m
Can't really see how half year we are in can be any better
Mark's rave and positive media and analyst comments have held the share price up today ... might even close UP
I think come six months time punters might be feeling a bit different
Quote from: winner (n) on Jun 23, 2024, 12:10 PMFuture Infrastructure spend saviour of STU as Susan said a few months ago "There has been underinvestment in New Zealand's infrastructure for many years and we look forward to the new coalition Government confirming its long term investment plan"
Chart below from Budget numbers
Will Susan be pleased (Esp from a growth perspective)
IMG_5833.png
Mark really excited about the future growth....esp with infrastructure soend.
Marks words - "In May 2024, the Government budget allocated $68b to infrastructure work over the next five years and is in the process of approving fast track consent legislation, which will improve Infrastructure "
The chart is from Budget numbers ....hmmmm
Quote from: winner (n) on Aug 26, 2024, 03:23 PMMark really excited about the future growth....esp with infrastructure soend.
Marks words - "In May 2024, the Government budget allocated $68b to infrastructure work over the next five years and is in the process of approving fast track consent legislation, which will improve Infrastructure "
The chart is from Budget numbers ....hmmmm
Clearly - the budget did not plan for increasing climate change damages nor did it plan for fixing our crumbling water infrastructure. Ah yes, and we will need coastal shipping back very soon (which requires in many harbours additional docking terminals) - just get some more inland routes destroyed by landslides ...
what is the current rate? 2 to 3 per year unusable for weeks or months ...
Trust Mark, climate change and our quickly deteriorating water infrastructure ... Infrastructure spending will go up!
Terrible result.
Craig's say
Our approach to STU's valuation remains unchanged and incorporates a 50/50 DCF and P/E multiple based Target Price (TP) to reflect the cyclical nature of STU's earnings and current market sentiment toward the construction sector, combined with our long-term view of the company.
STU is currently trading on a 12-month forward PE of 30x (based on CIPe blended forward 12-month EPS of 3.5cps, prev 4.7cps), compared to a historical average of 10.5x. Applying this average PE to our forward EPS forecast of 3.5cps we arrive at a TP of $0.36 (prev. $0.49).
Our DCF derived target price increases 9% to $1.27 (prev. $1.16), driven by earnings revisions and a review of our long-run gross margin forecast. Key DCF inputs include WACC of 10.6%, TGR of 2.0%, and long-run RFR of 4.3%.
With the current share price trading c.23% above our Target Price ($0.82), we retain our Underweight recommendation.
Glad I sold.
Craig's say in above from shareguy - Our DCF derived target price increases 9% to $1.27 (prev. $1.16), driven by earnings revisions and a review of our long-run gross margin forecast. Key DCF inputs include WACC of 10.6%, TGR of 2.0%, and long-run RFR of 4.3%.
With all due respect to the gurus at Craig's I remind myself of the old saying 'price is what you pay, value is what you want the spreadsheet to come up with'
PS .... Their F25 forecast eps 3.5 cents is NPAT of $5.8m ....stuff all eh but probably be less
From the interest.co web site today
INFRASTRUCTURE RUSH, RISING +$1.5 BLN PER WEEK
Projects are being added to the national infrastructure pipeline fast now. The latest report from the Infrastructure Commission shows that the value of infrastructure projects in the pipeline totaled $148 mln as at June, an increase of more than +20% since March. That is $24 bln more added in just 90 days. Almost 60% of them comes from projects that are funded, part-funded or have a funding source
https://media.umbraco.io/te-waihanga-30-year-strategy/fk4k5ivh/pipeline-snapshot-june-2024-final.pdf
Might stiffen up the order Book for STU
Quote from: Shareguy on Aug 27, 2024, 03:47 PMTerrible result.
Craig's say
Our approach to STU's valuation remains unchanged and incorporates a 50/50 DCF and P/E multiple based Target Price (TP) to reflect the cyclical nature of STU's earnings and current market sentiment toward the construction sector, combined with our long-term view of the company.
STU is currently trading on a 12-month forward PE of 30x (based on CIPe blended forward 12-month EPS of 3.5cps, prev 4.7cps), compared to a historical average of 10.5x. Applying this average PE to our forward EPS forecast of 3.5cps we arrive at a TP of $0.36 (prev. $0.49).
Our DCF derived target price increases 9% to $1.27 (prev. $1.16), driven by earnings revisions and a review of our long-run gross margin forecast. Key DCF inputs include WACC of 10.6%, TGR of 2.0%, and long-run RFR of 4.3%.
With the current share price trading c.23% above our Target Price ($0.82), we retain our Underweight recommendation.
Glad I sold.
Its a funny thing with analyst recommendations. We all know that they are professionally created white noise, given that analysts don't know more about the future than anybody else.
Actually - I did over some years a comparison of analyst recommendations (one year back) with the share price of various companies in my portfolio and on my watchlists - and there was clearly no statistically relevant correlation between recommendation and what the SP did.
Should be still a thread in the other forum (which for some reason I can't access anymore), where I documented some of my results.
But still - if we like what the analysts say, we take their recommendation as evidence that we are right.
Of course, if we disagree, than we know that they aren't right anyway.
In this particular case you seem to belong to the first group and I to the second ... but even if I agree with them (in some other cases) I know that this doesn't mean that they (or I) are right.
And yes, STU's P/E looks currently somewhat stretched, however - this is what any cyclical does at the bottom of the cycle. Only question is - will our economy go belly up from here? I don't think so, and if it recovers from here, so will STU, unless they do a FBU on us, which I don't believe.
Obviously - if the economy goes bust, than the Craig's will end up being on the laughing end, but on the other hand, I don't think this would be good for them (or anybody else) either.
Discl: holding and not too worried.
Following Craigs reports has cost me money many more times than it made me money.
Mark getscall excited about the tens of billions of infrastructure spend that's going to wonders for STU's profits
Had to laugh when I saw this NBR headline You can't fix infrastructure with accounting
Didn't read properly but reminded me you need more than talk blah blah to get things done. Sadly we don't have resources and the wherewithal to get what's needed to be done actually done and what's worse lack of drive / desire to do it
Hope Mark isn't pinning his hopes on a huge increase in activity over the next few years
Always good to see Directors buying
Chris Ellis bought another 10,000 shares ...at $1.03
His only previous purchase was 10,000 shares at $1.25 six years ago
Chris is a Fletchers veteran and been Director of STU since 2017. From all accountec real good guy
Positive sign this purchase
Ouch, someone been selling non-stop last few days.
Oh dear, back to 90c. Really thought things might be picking up by now, but STU is clearly going to stay out of favour until the projected infrastructure spend starts to materialise. Until then, nothing is going to get the big boys back in the game.
Quote from: LoungeLizard on Sep 11, 2024, 06:15 PMOh dear, back to 90c. Really thought things might be picking up by now, but STU is clearly going to stay out of favour until the projected infrastructure spend starts to materialise. Until then, nothing is going to get the big boys back in the game.
Might start materialise in 2027
Quote from: winner (n) on Sep 11, 2024, 06:41 PMMight start materialise in 2027
Well the Infrastructure commission projects $12b spend this year and $11.6b next year. And $44b of projects with funding confirmed or currently under construction. One would like to think that a chunk of that would flow STU's way, but so far neither it's accounts or the market show it.
disc. still holding. still waiting.
Quote from: LoungeLizard on Sep 11, 2024, 07:31 PMWell the Infrastructure commission projects $12b spend this year and $11.6b next year. And $44b of projects with funding confirmed or currently under construction. One would like to think that a chunk of that would flow STU's way, but so far neither it's accounts or the market show it.
disc. still holding. still waiting.
Big numbers but still lower than we've seen in the recent past ....... So no real growth likely for STU (until 2027 at earliest)
Quote from: winner (n) on Sep 12, 2024, 07:57 AMBig numbers but still lower than we've seen in the recent past ....... So no real growth likely for STU (until 2027 at earliest)
I think - or perhaps, because we have to put faith in politicians, it's more like hope - that we'll see spending jump before then. Maybe the fast track systems that the Nats are putting in place will accelerate things?
Things not going that well at Vulcan last 3 months
Don't be surprised if STU follows suit with a similar dismal story
Quote from: winner (n) on Oct 21, 2024, 01:48 PMThings not going that well at Vulcan last 3 months
Don't be surprised if STU follows suit with a similar dismal story
I'm afraid you may be right. STU are good litmus test of the state of the real economy - are we building, growing, modernising infrastructure? The answer unfortunately appears to be no.But hey, houses prices might be going up again, so no need to worry...
Quote from: winner (n) on Oct 21, 2024, 01:48 PMThings not going that well at Vulcan last 3 months
Don't be surprised if STU follows suit with a similar dismal story
No sure about STU, however - my connection into one of the other steel suppliers / retailers tells me that they are after a somewhat slow winter back again with all hands (and overtime) on the deck ...
Anyway - probably not the best time to make stock decisions firmly with the view into the rear mirror, but - is there anytime when this is a good guide?
Interest rates dropping, spring has arrived, the councils have thanks to rate increases more money to repair their rotten water pipes, and Team NZ happened to keep the Americas Cup ... what could possibly go wrong?
Readymix volumes down again Sept Qtr says Stats NZ
Heard nothing from Mr Malpsss for a while ...suppose at AGM in a week or so he wil tell us his prediction is the market recovery will happen in 2025 still expected in 2025
As expected STU losing money at the moment
Tough times continue but it'll all be OK one day ..... like they said '. This trend is expected to start to reverse in the new financial year as the cycle turns.
Does that mean F26 ...ie late next year for things to get better
https://announcements.nzx.com/attachment/432014.pdf
STU revenues down 42% July/Oct
Vulcan revenues down 13% July/Sep
Hmmm
Quote from: winner (n) on Nov 15, 2024, 09:18 AMSTU revenues down 42% July/Oct
Vulcan revenues down 13% July/Sep
Hmmm
Revenues down $42m not 42% (actually 24%)
Quote from: Poet on Nov 15, 2024, 09:48 AMRevenues down $42m not 42% (actually 24%)
Yes you are correct
So 22% down
Whenever I look at my STU stuff I can't help asking myself "in spite of all the restructures/transformations and Mark and Susan's raves over the last few years what really has changed with STU"
NPAT over the years and being generous in assuming F25 is a $10m loss.
IMG_5979.png
Quote from: Basil on Mar 16, 2024, 05:04 PMJust as an aside...love the word "munted"...hardly ever see it in use these days, especially by economists.
Its so prescriptive, doesn't leave much room for interpretation but for what its worth
munt·ed from an online dictionary
Maybe shareholders will get really lucky and FBU will renew their takeover offer at $1.90...but of course the directors would reject it as its below intrinsic value yet again just like ARV directors did with their $1.70 offer. Really, some of these directors need to be taken out the back of the cow shed and @#%&.
I wouldn't trust STU directors as far as I could throw them. I'm with Winner and Tony Alexander, the outlook for the next few years for this sector is pretty munted.
Sales were munted as expected.
Not surprised at all.
In my opinion Vulcan and others are unfortunately doing it much better, as far as customer relationships and stock holdings go. STU has lost the specialist niche they once had. I have had conversations with customers who have said even "bread and butter" items STU often can not supply forcing you to deal with others. Often basic items will come from far away branches either damaged or with ridiculous freight costs.
I imagine recent aquasitions will go the same way as a lot of their historical buys. Key staff will go to competitors or leave the industry and competitors will take the good customers.
Glad I sold out some time ago. Best of luck to any holders.
The question is what happens when price runs out of room on the decending wedge.
stu.png
Quote from: Shareguy on Nov 15, 2024, 12:10 PMNot surprised at all.
In my opinion Vulcan and others are unfortunately doing it much better, as far as customer relationships and stock holdings go. STU has lost the specialist niche they once had. I have had conversations with customers who have said even "bread and butter" items STU often can not supply forcing you to deal with others. Often basic items will come from far away branches either damaged or with ridiculous freight costs.
I imagine recent aquasitions will go the same way as a lot of their historical buys. Key staff will go to competitors or leave the industry and competitors will take the good customers.
Glad I sold out some time ago. Best of luck to any holders.
R
Good insights shareguy ....I'd heard much the same so must be some truth to it.
Love how Mark raves with bits like this ' "The work we have done over the past two years has created a stronger, streamlined company. Importantly,
we have retained sufficient 'muscle' in the business to ensure we can move quickly to capture profit expansion opportunities as demand returns. Hope it's not the key staff who are 'muscle' looking to move elsewhere
And Susan still raving on about this $68 billion of work coming up lol
Craig's say
Steel & Tube has issued a very weak trading update covering the first 4 months of FY25. Sales volumes have fallen -18%, total revenue is down -23%, with its Normalised EBIT now in negative territory (-$14.5m, CIPe c$12m) over the period to a loss of -$5m. This performance is much worse than Cam Parker had anticipated
Can't see them paying divie this year
Even more unlikely if they buy something
Worse result than predicted. Companies like STU are the canary in the coal mine and it's clear that although NZ may not be in a technical recession, there's a recessionary mood out there. The NATS need to start putting their money where their mouths are, and fast, as all this Government austerity is starting to bite in just about every industry. Looks like the long haul has got even longer for investors. :'(
I note 12% voted NO for re-election of Susan Paterson
Quote from: winner (n) on Nov 28, 2024, 03:56 PMI note 12% voted NO for re-election of Susan Paterson
Why do you think that is Winner?
Looking forward to Winners reply to your question.
I'm guessing there are some shareholders looking at a share value of circa 0.80c today vs a takeover offer in 2018 of $1.70...and wondering where the accountable is for saying shit like this...
Chair of Steel & Tube, Susan Paterson, said: "The fact that Fletchers has made this indicative offer
speaks to our reputation and the strength of our business. Obviously Fletchers sees a lot of value in
our business and its future potential as the benefits of our turn-around strategy start to become
clear... as do we."
https://steelandtube.co.nz/investor/media/2018/no-support-non-binding-indicative-offer-acquire-stu
I Sold my STU holding between 1.20 and 1.05 a few months back as winner told us they were going under 1.00
Cheers Winner...should have acted on your hunch earlier..would have made a few more pennies
Will be a share to buy again at some time....maybe after Susan leaves...but more likely when construction bottoms.
Quote from: Turkey on Nov 29, 2024, 08:23 AM...
Will be a share to buy again at some time....maybe after Susan leaves...but more likely when construction bottoms.
I guess this will be the $150m question (which would be current market cap) - when is construction going to bottom? Is it now? Is it next year? Is it after this government gets flushed down the drain? Is it after the US is losing the next idiot going to reign, or is it after the mother of all world wars ending sometimes in the decade to come? Problem is replacing inepts with inepts does not really seem to make a difference, no matter whether you pick the right-wing or the left-wing bunch.
I have no idea when construction industry bottoms BP...I wouldn't even try to predict...but I think forecasts are saying no quick turnaround here in NZ. We probably closer to the bottom than I think.
there is no rush to buy STU...plenty of other shares with less headwinds or offshore markets going to perform better than NZ in next few years..where you can get a better return
It's good they have no debt, but will they keep paying a high or any div in short term with sales revenue down so much?
I was happy holder of STU for several years ...bought at 0.80...rode the escalator to 1.30...
Then Winner started beating the doom drums...concrete production down etc...I watched the escalator change direction and slowly exited my holding to lock in the gain plus had pretty good divies 8%+ too.
Very good move in hindsight as todays price is 20-25 odd % below my exit price.
I don't know exactly but if share prices goes in 0.70s and no deterioration in mkt or company I probably start buying again.... I sought of see STU as a bit of a trading share for me anyway and never a big holding.
Just a guesstimate how I might play it.
Quote from: Stockgathering on Nov 29, 2024, 08:01 AMWhy do you think that is Winner?
Turkey mentioned telling Fletchers to piss off but maybe we could forgive her that
Been around for nearly 8 years ....STU in mo better shape performance wise than when she started so time for her to move on.
Now she's lost her job at Arvida she prob not keen on that idea .....more time to spend here and with ERoad and trying to keep Orr under control
STU share price still on decline
Take out a few months during early stage of pandemic share price hasn't been this low this century
Mark must be in raptures today hailing the appointment of an Economic GROWTH Minister
Nicola going to do stuff instead of it just being talk
The 'plan to turn it around' no doubt includes getting big infrastructure projects started ....music to Mark's ears
Bad report for STU - looks like it will go for a fourth fractal move. Price bottom looks to be around 0.67c on TA.
STU_2025-02-24_10-28-18~2.png
Nothing to cheer about with these results, with the exception of the acquisition, which may yield long term synergies and value. But until our economy gets going again I don't see STU's fortunes changing, no matter how efficient or well managed they may be.
Trouble is it seems like the NATs want everyone but themselves to invest in NZ. They won't take the lead - won't spend to stimulate growth - and hence everyone else tightens their belt as well. Instant recession.
Quote from: LoungeLizard on Feb 24, 2025, 10:44 AMNothing to cheer about with these results, with the exception of the acquisition, which may yield long term synergies and value. But until our economy gets going again I don't see STU's fortunes changing, no matter how efficient or well managed they may be.
Trouble is it seems like the NATs want everyone but themselves to invest in NZ. They won't take the lead - won't spend to stimulate growth - and hence everyone else tightens their belt as well. Instant recession.
Spot on lizard
Maybe 2028 will see an improvement in fortunes for the sector
Half year out and $10m LOSS. No comment on here
But a thought
Another acquisition
Love the way how they always headline Proven M&A track record
So they acquired Fasteners NZ in 2021 and Kiwi Pipe & Fittings in 2022 and Transport Strategy in 2024
A chart in todays preso shows EBITDA from these for H125 is about $3m (maybe more). So pretty good.
But the whole business reported EBITDA of $2.0m
Jeez doesn't say much the core Steel & Tube business does it
The rhetoric coming from STU is beyond belief now ... Malpass and Patterson live in another universe and are just taking the mickey out of shareholders
Quote from: winner (n) on Feb 24, 2025, 01:53 PMHalf year out and $10m LOSS. No comment on here
But a thought
Another acquisition
Love the way how they always headline Proven M&A track record
So they acquired Fasteners NZ in 2021 and Kiwi Pipe & Fittings in 2022 and Transport Strategy in 2024
A chart in todays preso shows EBITDA from these for H125 is about $3m (maybe more). So pretty good.
But the whole business reported EBITDA of $2.0m
Jeez doesn't say much the core Steel & Tube business does it
The rhetoric coming from STU is beyond belief now ... Malpass and Patterson live in another universe and are just taking the mickey out of shareholders
I agree that hearing (again) that the recovery is around the corner is annoying to say the least. We've heard this for the last 2-3 years and yet revenue/EBit/NPAT all continue to decline. Until the political/economic environment changes, STU's results won't improve. End of story. Everything else is just wishful thinking.
But I do give credit that they have done what they could have - lowered costs, no debt, cash in hand, inventory levels controlled. It's just that the industry they are in, requires growth and investment in the wider economy, both of which are in short supply.
Management do say that they have a significant pipeline of work and expect growth in the second half of the year, but until we get some actual positive guidance numbers - and they are achieved - then investors are right to be extremely cynical.
Not much joy in Jan consents sdata out today
Residential bottoming is the havourite phrase ..non residential still going down
Still reckon Mark will have to wait to 2028 for better times
Building activity done in year to December 24 down 6% on pcp ..Stats NZ
In same period STU sales down 23%
Again they have underperformed against this metric. For many years their sales followed the trend in activity but not the last few years
Mark and Susan blame the economy blah blah and tell good stories etc ..but I suspect things arent entirely thst great at STU
Feb consents data shows both residential and commercial numbers still declining.
Outlook for STU still a bit grim in spite of Mark saying otherwise. Still reckon it'll be 2028 at the earliest before STU has a reasonable year
Doubt whether we'll hear much from Mark until June/July and no doubt he'll repeat stuff like " Early signs of market improvement, anticipated to build momentum from mid-2025; long term macro trends remain favourable"
https://www.interest.co.nz/property/132688/residential-and-commercial-building-consents-both-continue-decline
Quote from: winner (n) on Apr 03, 2025, 08:19 AMFeb consents data shows both residential and commercial numbers still declining.
Outlook for STU still a bit grim in spite of Mark saying otherwise. Still reckon it'll be 2028 at the earliest before STU has a reasonable year
Doubt whether we'll hear much from Mark until June/July and no doubt he'll repeat stuff like " Early signs of market improvement, anticipated to build momentum from mid-2025; long term macro trends remain favourable"
https://www.interest.co.nz/property/132688/residential-and-commercial-building-consents-both-continue-decline
Plenty of building activity in our nick of the woods, but hey - apparently Selwyn is NZ's fastest growing district.
Maybe STU should open an outlet in Rolleston?
STU tracking as predicted by TA will exit wedge early October, recovery dependant on prevailing construction industry conditions improvement. I note RVGI barely made it over 0 in this impulse which hasn't happen since late 2015 to mid 2016 when it dropped from $2.50 to $1.70
STU_2025-04-03_15-10-06~2.png
... maybe October comes early?
Anyway - somebody seems to see value right now: Quite happy buying on Thursday:
Screenshot 2025-04-21 103646.png
But who knows, maybe somebody just sacrifizing to the goddess of spring and fertility - Happy Eostre everybody!
Quote from: BlackPeter on Apr 21, 2025, 10:44 AM... maybe October comes early?
Anyway - somebody seems to see value right now: Quite happy buying on Thursday:
Screenshot 2025-04-21 103646.png
But who knows, maybe somebody just sacrifizing to the goddess of spring and fertility - Happy Eostre everybody!
Closed up at 77c but that large volume of 3.2 million shares went through at 70c near closing time
Will be interesting to watch any follow through in next few days
Looks like it was a very keen seller at that 70 cent price.?
Malpass coming out with some news soon?
Stu buys Perry's
Gosh I would have thought the ceo would have looked at how things worked out when they went down the track of buying non distribution businesses under previous management. Stu used to be the largest supplier of their own web grating, but over time like a lot of thier acquisitions key staff left and so did the customers.
Issuing new shares for Perry's dilutes existing holders. This time must be different I guess. New shares issues at $.84
https://api.nzx.com/public/announcement/450834/attachment/442409/450834-442409.pdf
Quote from: Shareguy on May 02, 2025, 01:00 PMStu buys Perry's
Gosh I would have thought the ceo would have looked at how things worked out when they went down the track of buying non distribution businesses under previous management. Stu used to be the largest supplier of their own web grating, but over time like a lot of thier acquisitions key staff left and so did the customers.
Issuing new shares for Perry's dilutes existing holders. This time must be different I guess. New shares issues at $.84
https://www.nzx.com/announcements/450909
Dilutive ...yes the sellers now own 8.2% of STU and if it works out maybe 9% in a year or 2
Wonder how much STU needed to borrow to pay the ~$30m needed?
EPS accretive they say lol ...so no worries
Announcement here ...your link was Mainfreight
https://api.nzx.com/public/announcement/450834/attachment/442409/450834-442409.pdf
March building consents out from Stats NZ. Residential 12 months March down 3% on pcp ...non-residential down 7%
As Westpac says residential numbers at best remain 'flat' but should pick up later in year ...just like Malpass saying F25 going to be OK
Non-residential still going down ....future not so bright looking
Residential long term trend chart from Stats NZ quite interesting ...maybe this is where Mark gets his optimism from
IMG_6131.jpeg
Just had a look at FBU and just added the STU chart (the thick pink line ... don't ask me about the colour :) ;
Screenshot 2025-05-02 180903.png
Sort of interesting - it looks like they (FBU and STU) are quite well correlated (well, not that surprising) with STU lagging roughly 6 months behind FBU. Ah yes, and FBU started rising - well, yes 6 months ago (ok - golden cross early March).
Might not be the worst time for aquisitions ...
A grumpy Mark in the press
The head of NZX-listed steel product maker and distributor Steel & Tube has expressed frustration about a number of major projects cancelled under the current government, saying if they had gone ahead they would have created much-needed momentum in the economy.
"We were hoping, with the National Coalition coming in, that 18 months ago, we would have started seeing some investment", Mark Malpass told The Post.
Sorry Mark ....you need to wait until 2027/2028 before things get any better
https://www.thepost.co.nz/business/360674116/steel-tube-boss-frustrated-over-cancelled-infrastructure-projects
Quote from: winner (n) on May 06, 2025, 06:21 PMA grumpy Mark in the press
The head of NZX-listed steel product maker and distributor Steel & Tube has expressed frustration about a number of major projects cancelled under the current government, saying if they had gone ahead they would have created much-needed momentum in the economy.
"We were hoping, with the National Coalition coming in, that 18 months ago, we would have started seeing some investment", Mark Malpass told The Post.
Sorry Mark ....you need to wait until 2027/2028 before things get any better
https://www.thepost.co.nz/business/360674116/steel-tube-boss-frustrated-over-cancelled-infrastructure-projects
Yep, it's a race to the bottom with this Coalition. If the Government doesn't have the confidence to invest in NZ's future, why should anyone else? (rhetorical).
Quote from: winner (n) on May 02, 2025, 02:22 PMMarch building consents out from Stats NZ. Residential 12 months March down 3% on pcp ...non-residential down 7%
As Westpac says residential numbers at best remain 'flat' but should pick up later in year ...just like Malpass saying F25 going to be OK
Non-residential still going down ....future not so bright looking
Residential long term trend chart from Stats NZ quite interesting ...maybe this is where Mark gets his optimism from
IMG_6131.jpeg
Just came across this (probably paywalled) article - 26 (really) big commercial building projects starting or continuing this year in Akl alone:
https://www.nzherald.co.nz/property/from-ikea-to-kmart-cbre-names-the-biggest-building-projects-taking-shape-in-auckland/36ZUYKRYF5BPDFVRII55MBLN44
IKEA
Biggest NZ KMart
Tesla (oh dear, but I guess even they will need steel)
... and 23 more huge development projects ...
... add to that whats happeing in the rest of the country - at least here in Canterbury it feels pretty busy as well.
While we don't know, who is supplying the steel, I recon somebody will get the orders ...
April building consents down again.
Residential -12% for month v pcp ...12 months April -5%
Nonresidential -6% for month and year -7%
Westpac man says as no worries as bottomingbout and the future looks good ....for STU 2027 maybe
Off the PF Olsen website May 2025 Log Report, NZ saw milling businesses seem to be picking not much demand likely for their products until Q4, but anticipate it will be a rush when it is certain that building confidence is returning, supply chain issues impacts down the track maybe??
Stats NZ Building Work March Qtr a bit dismal
But Westpac guy is as optimistic as mark Malpass
On residential they say
A meaningful turnaround in activity is still some way off. However, the seeds of a recovery are in place, with falls in interest rates in recent months and a gradual firming in the housing market taking shape. Those conditions are expected to support a gradual lift in new housing development as we approach the end of this year.
And on non-residential
Non-residential building fell 4% over the past quarter and has been trending down over the past couple of years. Some of the fall in spending has been due to public sector projects. However, weak economic activity has seen businesses winding back their capital expenditure and has also discouraged the development of new commercial space. In our recent talks with businesses, a number of those we spoke to indicated that they're holding off on major capital expenditure for the time being due to uncertainty about the economic landscape. Consistent with that, we expect some further softness through the middle part of the year.
Mark probaby doesn't worry about such things as it's looking good later in the year he says
Architects are shedding staff, shortening their work week, taking leave and foregoing salaries as they struggle to survive the biggest economic crisis to hit the industry in 50 years.
https://newsroom.co.nz/2025/06/10/architects-suffer-worst-slump-in-50-years/
Jeez architects not doing much now sort of says little work to be done in 2007 and beyond
Everything is proceeding exactly as I have forseen. ---- Mwahahahaha.
STU_2025-06-11_13-47-02~3.png
Quote from: Cod on Jun 11, 2025, 01:52 PMEverything is proceeding exactly as I have forseen. ---- Mwahahahaha.
STU_2025-06-11_13-47-02~3.png
Beautiful falling wedge. Normally seen as a bullish signal.
https://www.investopedia.com/terms/w/wedge.asp
Hey BP do you recall last time we discussed triangles Re STU ...share price was in 120's and TA gurus said share price could go to 75cents if it broke out of that triangle
They were pretty clever eh
I better refresh myself what happens to bullish triangles / wedges. Share price might go back to 130 plus
Quote from: winner (n) on Jun 11, 2025, 03:40 PMHey BP do you recall last time we discussed triangles Re STU ...share price was in 120's and TA gurus said share price could go to 75cents if it broke out of that triangle
They were pretty clever eh
I better refresh myself what happens to bullish triangles / wedges. Share price might go back to 130 plus
I guess this is the thing with all these TA patterns - while they have the stats behind them, there is no guarantee. Not sure about the falling wedge pattern, but for most of these patterns the successrate is something like 60% - i.e. 40% are not so good :):
The other thing is - its a rather unusual duration for a wedge ... if you just look at the chart, it might continue until late 2026, i.e. things might take their time. Good thing about that is however, that you predicted a upturn for 2027 - i.e. the STU chart might be well on schedule for that.
And yes, if & when things do turn around - didn't the STU board turn down a take over offer of $1.80 in some past life? Remeber when they still had earnings of more than 20 cents per share? Who knows, maybe history is repeating itself after all?
The STU chart - I see non wedges or triangles on it
Just one long downtrend that started 20 years ago when share price hit $5
Quote from: winner (n) on Jun 13, 2025, 10:58 AMThe STU chart - I see non wedges or triangles on it
Just one long downtrend that started 20 years ago when share price hit $5
As always - it depends on the perspective and on the scale.
I suppose I don't need to draw the lines for you, but from 2022 to 2025 the borders of the "channel" clearly come closer ... this is what one tends to call a wedge.
May building consents down again
Stats NZ say flattening out ....I say still going backwards but at slower rate.
2028 seems a long way off for Mark
Starting to look good for STU
National JUST ANNOUNCED: $6 billion worth of infrastructure projects are getting underway in the next few months, which will grow NZ's economy and create thousands of jobs across the country.
And help the likes of STU
It seems that a large selling order blocks the way, anyone can see the amount?
Kiwirail will kick start soon, hopefully STU will share a slide of the pie.
Quote from: anotherday on Jul 25, 2025, 03:44 PMIt seems that a large selling order blocks the way, anyone can see the amount?
Kiwirail will kick start soon, hopefully STU will share a slide of the pie.
Can't see it myself. Buy side looks heavy but not with great conviction. Market needs to see the talk being translated into better financials - a dividend would be a good place to start - and then we might see some action.
Vulcan results and commentary just out - I suspect they may be referencing STU amongst others in regard to unsustainable pricing...
Commenting on these results, Vulcan's Managing Director and Chief Executive Officer Rhys Jones said,
"The 2025 financial year was influenced by persistent economic challenges in both New Zealand and Australia. These ongoing challenges contributed to a demanding trading environment and triggered aggressive, and in our view unsustainable, pricing by some market participants in the industry. During the year, cautious consumer and business sentiment, and broader macroeconomic uncertainties affected trading.
Despite this decline, there are encouraging signs that the downward trend is beginning to level out. In the last three months, our overall daily sales activity has shown signs of stabilisation, suggesting that the business may be moving towards a more consistent footing. Furthermore, we are beginning to see early signs of renewed momentum in specific customer segments, and a modest uplift in activity.
Readymix volumes for June quarter were 10% less than last year
Green shoots eh ...poor Mark will be lamenting another bad period ...maybeceven worse than what Vulcan just experienced
Full year results tomorrow
Probably pretty horrible but Mark will say the worst is behind them and F26 will be pretty good.
Looking forward to the result ....even if it just because of my morbid fascination with how bad/ disappointing they've been over the years
Steel & Tube FY25 Results
Disciplined Execution of Strategy in a Challenging Cyclical Market
Steel & Tube Holdings Limited (NZX: STU) has reported its audited results for the 12 months ended 30 June 2025 (FY25).
• Economic headwinds affected volumes, revenue and margins
• Recent growth investments delivering revenue, margin and earnings growth
• Responsiveness to cycle; ~$7m annualised cost out programme and prudent inventory management
• Customer service remains a key strength with c.13,000 active customers
• Some activity lift in 2H25 and expected to improve through FY26, market remains highly competitive
• Significant operating leverage, driven by cost out and addition of higher value products and services
CEO Mark Malpass commented: "In a very challenging bottom of cycle trading environment, we have continued to execute on our strategy – strengthening our core and investing in high value products and services that further expand our leading range of steel solutions and businesses. Unfortunately our financial results are so bad that we are not giving you the figure till the very end of this release. The acquisition of Perry Metal Protection – a market leader in galvanizing services – was a highlight for the year and is performing ahead of expectations. We have also strengthened our customer value proposition and are increasingly being selected as a preferred supplier, delivering quality and reliability. Our operating leverage has increased as we have focussed on IT/digital systems, costs and efficiency. This will drive margin expansion and profit growth as the economic cycle recovers though we may not be around to see it.
There's a cool chart in the STU preso giving comfort to how good things are going to be
Attached below
Note the LONG TERM GROWTH trend line they have included
Sad thing is that over the years STU's sales and profits don't follow an upward trend
STU Cycles chart.png
Not much to cheer about in the result. No dividend, net loss, revenue and Ebitda still going backwards significantly. The SP will get hammered I would imagine.
Companies like STU are the canary in the coal-mine and until (or if!) the economy recovers the construction and related industries are going to be in the doldrums for some time. STU's management have done pretty much all they can do cost-wise. Not much they can do about the absence of demand for their products. The coalition government are diligently eradicating any signs of growth through their austerity policies, so until there's a change in Government I don't see any change in STU's, or the country's, fortunes.
Continuation of trend, fractal 4 evolving, decision point (exit of wedge) $0.50c.
STU_2025-08-25_18-08-02.png
Shareholders must be feeling super excited about the annual report Cover. Our purpose, to make life easier for our customers. https://api.nzx.com/public/announcement/457362/attachment/450300/457362-450300.pdf
Quote from: Basil on Aug 25, 2025, 06:18 PMShareholders must be feeling super excited about the annual report Cover. Our purpose, to make life easier for our customers. https://api.nzx.com/public/announcement/457362/attachment/450300/457362-450300.pdf
Well well.....selling prices were on average down about 10%.
That's a good start
But wil need to try harder as Net Promoter Score fell from 50 to 42 in year
Fantastic. Need some really big price drops this year. This well proven strategy has created vast wealth for WHS shareholders, so what could possibly go wrong ;)
Quote from: Basil on Aug 25, 2025, 10:23 PMFantastic. Need some really big price drops this year. This well proven strategy has created vast wealth for WHS shareholders, so what could possibly go wrong ;)
Was quite surprised there wasn't that many sellers on open, so took advantage and sold out my holding at 70c and broke even. Bought more SKT and FSF throughout the day. They doing very well the last few months.
It was bad, very bad.
EBIT loss for 2H25 was $11.9m (vs. -$9.5m in 1H). Against a challenging economic backdrop they say, not a loss in market share..... Gross margin per tonne continued to deteriorate down the tube, due to the competitive market pricing environment they say. Finished the year down 24% (-18% in 1H25). With Perry Metal Protection acquired for c.$43m in May-25 (70% debt funded), STU's net debt position at 30 June was $36.3m, down from net cash of $8.7m in the pcp. Yes the cash is gone, as has the divi.
They say it's going to improve.......
Quote from: Shareguy on Aug 26, 2025, 06:45 AMIt was bad, very bad.
EBIT loss for 2H25 was $11.9m (vs. -$9.5m in 1H). Against a challenging economic backdrop they say, not a loss in market share..... Gross margin per tonne continued to deteriorate down the tube, due to the competitive market pricing environment they say. Finished the year down 24% (-18% in 1H25). With Perry Metal Protection acquired for c.$43m in May-25 (70% debt funded), STU's net debt position at 30 June was $36.3m, down from net cash of $8.7m in the pcp. Yes the cash is gone, as has the divi.
They say it's going to improve.......
Still have $50m spare facility with bank to buy a new toy .....they come cheap at bottom of cycle eh
My worst ever NZ stock.
I don't know how the board can look at themselves the mirror.
FBU offered from memory $1.70 a share and they seemed to laugh it off.
August building consents not that good. Westpac man says 'signs of stabalising' so suppose that goods new
Non-residential numbers a bit dismal .... Year to August floor area consented down 6% on pcp but August month down 40% on August last year
Any recovery long way off methinks
Quote from: winner (n) on Oct 01, 2025, 01:44 PMAugust building consents not that good. Westpac man says 'signs of stabalising' so suppose that goods new
Non-residential numbers a bit dismal .... Year to August floor area consented down 6% on pcp but August month down 40% on August last year
Any recovery long way off methinks
So - will they drop in the current downtrend under the 2020 low (I think 47.5 cents ...), or is this just the next higher minimum and overall a slow move upwards?
So hard to predict the road into the future based on looking into the rear mirror.
How do we think the future will look?
I'm calling a bottom in the housing market and construction here, and also in STU.
Quote from: entrep on Oct 03, 2025, 10:09 AMI'm calling a bottom in the housing market and construction here, and also in STU.
Yes and Yes and I think we are close. No insider buying yet...........
Chart following a predictable pattern, if a good result it will bounce hard, mediocre result will drift out of the capture triangle, bad result it will head to ATL at 47.5c and next earnings result.
STU_2025-10-03_13-38-25.png
STU's ASM today so should get an update on how F26 going
No doubt Mark will remind us it's tough out there but full of optimism with billions and billions of work coming up in NZ
FMA Launches prosecution for Market manipulation
https://www.fma.govt.nz/news/all-releases/media-releases/market-manipulation-for-stu-shares/
Quote from: Poet on Nov 06, 2025, 10:59 AMFMA Launches prosecution for Market manipulation
https://www.fma.govt.nz/news/all-releases/media-releases/market-manipulation-for-stu-shares/
I suspect this goes on quite a bit in little old NZ, particularly in low volume stocks.
FB downgraded to sell at $.60. Buying Perrys has left STU with a leveraged balance sheet at the bottom of the cycle and paid far too much.
Industry contacts say that things are not good there. They keep running out of key items and often they can't supply the whole order of products forcing customers to deal with competitors. They are no longer a specialist supplier.
The long-held acquisition strategy has been a failure. Lose business overtime to a competitor buy the competitor then key staff leave and so do the customers. Rinse and repeat.
Quote from: Shareguy on Nov 21, 2025, 08:34 AMFB downgraded to sell at $.60. Buying Perrys has left STU with a leveraged balance sheet at the bottom of the cycle and paid far too much.
Industry contacts say that things are not good there. They keep running out of key items and often they can't supply the whole order of products forcing customers to deal with competitors. They are no longer a specialist supplier.
The long-held acquisition strategy has been a failure. Lose business overtime to a competitor buy the competitor then key staff leave and so do the customers. Rinse and repeat.
Pretty damning report Guy, especially from one who has been generally pretty positive about them (and loyal)
I've heard much the same
On 4th November I thought the tide was starting to come in for STU, and bought a small parcel at 71 cents.
Yesterday after reading Forbar's STU report I saw the tide would stay out longer.
Sold at 68 cents and recycled the funds into more SEK.
Last weeks update for 4 months showed they had sold 5% more steel (volume) v pcp but average price was nearly 3% lower.
It looks like costs/expenses are up a lot ... no wonder the loss is getting bigger
But they remqib ;leveraged' to gain from any upturn in market conditions. Love how many companies use this term 'leverage' these days
Quote from: winner (n) on Nov 22, 2025, 08:01 AMPretty damning report Guy, especially from one who has been generally pretty positive about them (and loyal)
I've heard much the same
Yes a real shame. Heading towards Forbars target price.
Price reenters descending triangle, after bump out -- Fractal 5 commences.
STU_2025-11-24_18-18-16.png
Gosh long term steel man John Beveridge retires from the board and sells his shares.
https://api.nzx.com/public/announcement/463525/attachment/457820/463525-457820.pdf
Quote from: Shareguy on Nov 27, 2025, 01:20 PMGosh long term steel man John Beveridge retires from the board and sells his shares.
https://api.nzx.com/public/announcement/463525/attachment/457820/463525-457820.pdf
Gosh - 20k down, these are $12.7k.
Still - interesting, he did this now, given that business copnfidence just starting to go up again ... (based on the last ANZ business report went up from mid 30ies to mid 40ies).
Maybe he had to fund the XMas meal ...
Quote from: BlackPeter on Nov 28, 2025, 09:20 AMGosh - 20k down, these are $12.7k.
Still - interesting, he did this now, given that business copnfidence just starting to go up again ... (based on the last ANZ business report went up from mid 30ies to mid 40ies).
Maybe he had to fund the XMas meal ...
And that was my point BP. He can't be thinking the future prospects are that great .
Quote from: Shareguy on Nov 28, 2025, 09:34 AMAnd that was my point BP. He can't be thinking the future prospects are that great .
Sure ... the question is just whether he really neeeds to optimise his petty cash?
Not sure I would put any significance on a less than $13k transaction of a previous board member.
Looks like a CR has leaked judging by the price action.
Quote from: entrep on Dec 03, 2025, 04:39 PMLooks like a CR has leaked judging by the price action.
Would be bad timing if that is the case - bottom of the cycle, no dividends, spent $43m on Perrys only 6 months ago. A big ask putting the hand out in these circumstances - would have to be heavily discounted which would be bad for everyone. Maybe the trading is just reflective of investors patience wearing thin?
Mark sometimes talks to a chart showing Building Activity from Stats NZ so it's fair to use that as a proxy for market / Size rpthat STU is playing in.
Chart below goes back many years. For a long time STU sales tracked the market but no longer
It does show how bad STU have performed in the last 6 years
Amount of building activity is current about 30% higher than before the pandemic. STU sales are about 20% lower, in spite of acquisitions etc etc
Something not right with STU in spite of Mark's raves
PS ...same chart foe Metro Glass shows them to be not as bad.
IMG_6295.jpeg
Quote from: winner (n) on Dec 05, 2025, 10:08 AMMark sometimes talks to a chart showing Building Activity from Stats NZ so it's fair to use that as a proxy for market / Size rpthat STU is playing in.
Chart below goes back many years. For a long time STU sales tracked the market but no longer
It does show how bad STU have performed in the last 6 years
Amount of building activity is current about 30% higher than before the pandemic. STU sales are about 20% lower, in spite of acquisitions etc etc
Something not right with STU in spite of Mark's raves
PS ...same chart foe Metro Glass shows them to be not as bad.
IMG_6295.jpeg
To be fair, you'd have to put this is in the context of increasing competition from Vulcan ( a much bigger outfit), lower global steel prices generally, and a government that has reneged on its promises to pour billions into infrastructure.
Quote from: LoungeLizard on Dec 05, 2025, 10:42 AMTo be fair, you'd have to put this is in the context of increasing competition from Vulcan ( a much bigger outfit), lower global steel prices generally, and a government that has reneged on its promises to pour billions into infrastructure.
Vulcan sales in NZ are $312m compared to STU of $385m. Also need to take into account Vulcan sales were boosted by the Ullrich acquisition in F23 which probably added about $80m sales to NZ.
Vulcan sales trend in NZ over last couple of years is much the same as STUs so STU seem to be doing quite handling the smaller competitor quite well
Building Activity as per Stats NZ peaked in Q223 and is down 12% since then (volume is -18%)
STU sales are down about 30% in sa,e period
Maybe steel related products not being used as much these days?
Quote from: winner (n) on Dec 05, 2025, 03:09 PMVulcan sales in NZ are $312m compared to STU of $385m. Also need to take into account Vulcan sales were boosted by the Ullrich acquisition in F23 which probably added about $80m sales to NZ.
Vulcan sales trend in NZ over last couple of years is much the same as STUs so STU seem to be doing quite handling the smaller competitor quite well
Vulcan are over 10 times the capitalisation of STU, so much deeper pockets. And being solely a distributor they can access the product from the cheapest source (probably China). It would be illogical to ignore the Vulcan effect... ;)
Gosh $.60. Are we going to see $.50?
Just had lunch with a competitor of STU who said
"Morale is shot at STU, currently going through across the board redundancies.
Competitors particularly Vulcan are doing far better in what was described as a soft market, with positive signs of improvement, but nothing to be excited about.
Current ceo and board need a total refresh".
Inventory management is a joke with customers forced to deal with competitors.
Sounds like STU have got rusty and need a clean out.
Interesting feedback. I know one major STU shareholder that will not be happy to read that. The board mostly made up of the same team that rejected FBU's offer of $1.90 all those years ago as being below fair value ?
Thanks for thase comments shareguy.
Dave Taylor was CEO for about 8 years and when he left in 2017 sales were about the same as when started
Mark Malpass been in charge sinc3 and sales are now significantly lower than they were when he started. Except for the stupid times during 2022/23 when nobody could do wrong sales have been trending down in spite of several 'value adding acquisitions'
STU seems to be one sad company ..and has been struggling all century.
Maloass stepped down from the Board to come CEO in 2017
About the same Susan Paterson, Steve Reindler and Chris Ellis joined the Board about the same time
All refreshed to meet the challenges and make STU great
As Guy and his lunch mates suggest time for them to go ....and hope the notices don't say they've done a great job
Quote from: winner (n) on Dec 12, 2025, 04:28 PMMaloass stepped down from the Board to come CEO in 2017
About the same Susan Paterson, Steve Reindler and Chris Ellis joined the Board about the same time
All refreshed to meet the challenges and make STU great
As Guy and his lunch mates suggest time for them to go ....and hope the notices don't say they've done a great job
Yes Winner and Basil, Would have thought it's time for shareholders to call for change.
Conclusion: Is this a contrarian buy? Not yet.
The financial history from 2010 to 2025 is dire reading. The highlights & lowlights:
1) Total turnover from 2010-2025 was $7,480m; annual turnover has gone from $380m in 2010 to $385m in 2025, after acquiring Tata Steel, HPI, S&T plastics (since impaired & disposed), Composite Floor Decks, Kiwi Pipe & Fittings and most recently Perry Metal Protection.
2) Total NPAT over the same period was $96m (1.3% of turnover) - normalisation adjustments have been ignored given impaired business acquisitions & written off stock were paid for with cash
3) Free cash flow (excluding acquisitions) over 2010-2025 was $235m (3.1% of turnover)
4) GP has averaged 21.4%; last year was the lowest at 18.1%
5) shares on issue have gone from 88.5m to 183.6m
6) Peak NPAT was 2022 at $30m or 18c/share; it would take a herculean effort to get anywhere near that nowadays.
The latest announcement is pretty grim reading too: https://www.nzx.com/announcements/462982
Whilst it is trading at a rough ~20% discount to it's 'net net value', that's still a no thanks from me.
The following graph showing sales per share, NPAT as a % of sales and EPS. Note all the share issues for acquisitions and debt restructuring has not contributed to increased sales per share.
STU-EPS - Copy.JPG
Good work Ferg
A sad story eh but no doubt some will say avoid bet because it can't get any worse and share price can't go any lower
Smile when people call Steel and Tube iconic
Quote from: winner (n) on Dec 13, 2025, 09:45 AMGood work Ferg
A sad story eh but no doubt some will say avoid bet because it can't get any worse and share price can't go any lower
Smile when people call Steel and Tube iconic
Yes, good work - and agree that 2026 (well, the FY) might be still a bit early, just looking at the provided data so far.
What do people say? Wait for 2027? Actually, I think this could be the strategy for STU. Not really assuming them to get on an exponential growth cycle, but they might well get back to the EPS (well, half of it, given the number of shares) they used to have. Who knows, maybe they even add some additional value with the stuff they bought, though I doubt it.
This dark green line might well turn into an inverted head and shoulders ...
But whats wrong with calling them iconic? According to Googles AI "Iconic" describes something or someone extremely famous, recognizable, symbolic, and influential, representing a particular idea, time, or culture. STU was always good in producing good tales which it didn't realize. That's an icon as well.
STU share price on fire today
Might even hit 70 cents
Obviously punters thinking that 2026 will see a big construction recovery
having a little punt on STU
Not because I think it's a good company but hoping many will think they are a good company and the bad period is over and like all good companies do well in the recovery cycle
Be good if Cod could put up a new chart
Cod'd last report said Price reenters descending triangle, after bump out -- Fractal 5 commences.. I hope that's a good sign
Good luck Winner. No insider buying for some time. Retiring
director selling. Distribution manager sidelined to head of
Acquisitions which I would have thought in such a small company would be the ceos job.
Here you go, IMHO I may have been early calling fractal 5 commencing, looks to me as if price is going to just rumble along the bottom for a while, earnings (early Feb) will signal direction. If it's bad news then the lowest price should be around 0.475, but I suspect even "status quo earnings talk" might make price jump a bit from the 0.60-0.70 price range it is in now, based on the perception that the worst is over. -- enjoy
STU_2025-12-29_14-10-06.png
Quote from: Shareguy on Dec 29, 2025, 02:03 PMGood luck Winner. No insider buying for some time. Retiring
director selling. Distribution manager sidelined to head of
Acquisitions which I would have thought in such a small company would be the ceos job.
Just a punt on market expectations pushing price up in the hope of better times ... ie a punt on market sentiment
Watching squiggly line on chart .... might be short term punt lol
Could be interesting
"There's also been some corporate activity in Australia with a takeover bid for BlueScope Steel, which has a 14.3% stake in Steel & Tube, and we'll see how this pans out,"
MBIE ConstructionnPipeline Report
Future looks good
But activity only forecast to increase by about 3% pa from 2026 thru 2025
Chart will please Mark
IMG_6322.jpeg
Marks time must surely be up soon.
Promised so much delivered so little
Quote from: Crackity on Jan 16, 2026, 10:32 AMMarks time must surely be up soon.
Promised so much delivered so little
He started as interim CEO in 2017 and since early 2018 he was full time CEO. Looks like he survived the 5 years (2023) - i.e. next big milestone for him would be early 2028.
Maybe the recent trend (if it keeps) might help him, but yes - his optimism clearly exceeded his achievements. Maybe he should try himself as stock analyst?
Results out
The Front Cover snappy tagline should read Basket Case instead of Stronger Together
Quote from: Crackity on Feb 25, 2026, 08:43 AMResults out
The Front Cover snappy tagline should read Basket Case instead of Stronger Together
Here's the report ..... more losses.
https://www.nzx.com/announcements/468115
Net loss after tax of $(12.4)m. No dividend has been declared.
Quote from: Left Field on Feb 25, 2026, 08:55 AMHere's the report ..... more losses.
https://www.nzx.com/announcements/468115
Net loss after tax of $(12.4)m. No dividend has been declared.
Oh dear. Analysts predicted for full year a loss of 9 cents per share. Given that they lost already 7.4 cents in the first HY, I hope that the second HY will be better - with a smaller 2HY loss.
Clearly some light at the end of the tunnel? Lets hope FY 27 will be still better?
Gosh what a result. Forbar say sell and target price reduced to 50 cents.
Craig's say sell and target price reduced to 50 cents.
Craigs say "We expect STU will remain loss making in the near-term and we see significant risk in regard to the Group's B/S positioning."
Forbar say "Net debt continues to rise, reflecting operating losses partly offset by working capital management. This is not a sustainable position"
Just caught up with someone in the industry and a competitor of STU. Made the comment that things are not getting any better and in some cases are getting worse especially with the structural fabricators.
Made the comment that there is a lot of talk about STU surviving.
Quote from: Shareguy on Mar 04, 2026, 05:32 PMJust caught up with someone in the industry and a competitor of STU. Made the comment that things are not getting any better and in some cases are getting worse especially with the structural fabricators.
Made the comment that there is a lot of talk about STU surviving.
I quickly did the Altman Z Score on STU
Came out as -
Gray zone: The quality of the financial structure of the company is average. The payment behavior has to be monitored closely. Default risk is present but not major.
But not far off -
Bankruptcy Zone: The financial situation of the company is very deteriorated. A soon bankruptcy is very probable.
FB latest not good reading.
STU's debt levels remain a concern. We understand revised banking covenants are based on absolute earnings milestones (vs an EBIT multiple given current losses). Hm I guess a cap raise is coming unless they increase something or sell something..
The latest Iran fiasco won't be helping either.
Another KMD in the making. Wonder if the raise will be framed as BAU too.
Quote from: entrep on Apr 21, 2026, 09:39 AMAnother KMD in the making. Wonder if the raise will be framed as BAU too.
Even uglier chart with interesting (in a bad way) volume over the last few weeks.
It's gonna be swingeing.
Mark resigned yet?
Quote from: Crackity on May 04, 2026, 09:56 PMEven uglier chart with interesting (in a bad way) volume over the last few weeks.
It's gonna be swingeing.
Mark resigned yet?
Both ceo and the chair need to go at a minimum. I'm surprised that there has been no shareholder action.
Malpsss clearing his desk at moment?
I can smell a $30m rights issue being priced at about 10-15c...call it the Kathmandu effect!
Quote from: Crackity on May 04, 2026, 09:56 PMEven uglier chart with interesting (in a bad way) volume over the last few weeks.
It's gonna be swingeing.
Mark resigned yet?
Interesting - somebody tried to sell over the past weeks (though - overall volume wasn't that high - something like 600k shares over the last 3 weeks), but hey - last (though not so good) announcement was in late February. Either people with small portfolios but insider knowledge selling or otherwise people with small portfolios witout insider knowldege and the desire to sell based on well aged data.
Currently it looks like whoever is selling doesn't want to go below 34 cents ... maybe the bidders need to tune up?
Opportunity for traders to either ride the dead cat bounce or get into the stock at its bottom? Well, or not ...
Who knows ... some years ago they declined a takeover offer at $1.80 - I am wondering when the board is starting to buy in at this amazing price ...???
That requires FCF which I think they are looking in all the cupboards for...
Quote from: BlackPeter on May 05, 2026, 12:07 PMInteresting - somebody tried to sell over the past weeks (though - overall volume wasn't that high - something like 600k shares over the last 3 weeks), but hey - last (though not so good) announcement was in late February. Either people with small portfolios but insider knowledge selling or otherwise people with small portfolios witout insider knowldege and the desire to sell based on well aged data.
Currently it looks like whoever is selling doesn't want to go below 34 cents ... maybe the bidders need to tune up?
Opportunity for traders to either ride the dead cat bounce or get into the stock at its bottom? Well, or not ...
Who knows ... some years ago they declined a takeover offer at $1.80 - I am wondering when the board is starting to buy in at this amazing price ...???
Dealer room will decide on parcel size to sell based on past volume and buy side liquidity, so could be a large seller reducing or getting out.
Jenny Ruth has a good article just recently out titled
"Can Steel & Tube survive the ever-delayed recovery?"
Quote from: Shareguy on May 05, 2026, 01:06 PMDealer room will decide on parcel size to sell based on past volume and buy side liquidity, so could be a large seller reducing or getting out.
Jenny Ruth has a good article just recently out titled
"Can Steel & Tube survive the ever-delayed recovery?"
Without reading her - I assume the answer was: Maybe?
Next to the quality of STU's board and management (ok - their capability to correctly predict the future has in the past not been very good, and their communication seems to be not infallible) I assume it probably all depends on whether the for 2025 expected recovery still comes in this decade, the outcome of the next election (more austerity or more waste) and whether Dump manages to get something right before he gets pushed or drifts away?
Do you want to give us a one sentence summary of the article?
Quote from: BlackPeter on May 06, 2026, 10:15 AMWithout reading her - I assume the answer was: Maybe?
Next to the quality of STU's board and management (ok - their capability to correctly predict the future has in the past not been very good, and their communication seems to be not infallible) I assume it probably all depends on whether the for 2025 expected recovery still comes in this decade, the outcome of the next election (more austerity or more waste) and whether Dump manages to get something right before he gets pushed or drifts away?
Do you want to give us a one sentence summary of the article?
Yes S&T should survive, but more capital may be needed if things don't improve soon.