STU - Steel & Tube Holdings

[LoungeLizard]

Probably punters are relieved and we'll see a relief rally with share price heading back over $1.20

Curb your enthusiasm, Winner 

$1.20-$1.25 is certainly achievable in the short term, above that we'll need to see the infrastructure-spend tailwind kick in.

[Shareguy]

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..................

[winner (n)]

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

[Teitei]

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

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.

[winner (n)]

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.

I hear starts are down quite a lot as well ......but no hard evidence

What does your town planner say?

[BlackPeter]

I 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 ...

[BlackPeter]

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 ...

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?

[winner (n)]

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?

And they have a Pipes division ...what else is needed

[Teitei]

I 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.

[winner (n)]

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

You cannot view this attachment.

[BlackPeter]

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

You cannot view this attachment.

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?

[winner (n)]

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?

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

[winner (n)]

Fletchers outlook for rest of year pretty gloomy

Must be a guide as to STU 2ill

Punters still optimistic ...share price holding up well

[LoungeLizard]

Fletchers 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.

[BlackPeter]

Fletchers 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?