VSL - Vulcan Steel

[Left Field]

Vulcan Steel to acquire Ullrich Aluminium..... impressive move IMO.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/VSL/395761/375142.pdf

[Ferg]

A 3.8x multiple on EBITDA looks like a good price, even in a climate of funding costs increasing.  Given the jump in earnings for Ullrich in the last fiscal year over the previous FY, one wonders if Vulcan have bought at the top of the cycle?  We are currently seeing a gradual reduction in DIY activity.

On a lighter note, one hopes mixing steel and aluminium does not result in galvanic corrosion.....
https://metalprofy.com/blog/how-to-prevent-galvanic-corrosion-between-aluminum-and-steel/
 

[winner (n)]

Vulcan ASM today

• Reaffirming FY23 EBITDA guidance of NZ$215m - NZ$235m (compared with NZ$243m recorded in FY22)

So ebitda could be 12% less than last year

Start of tougher times over next year or two

I also see that the share price at the moment isn't that far above the IPO price

At least as they proudly pointed out at the ASM those who got at IPO price got a 11.6% yield from their dividend

.... and share price done well - VSL share price: +31% vs Peer & +11% vs S&P/ASX 300 since IPO and 22% ahead of NZX50 Gross Index

[Left Field]

Latest report out...mixed result, but slight upgrade to expected FY23 results.....STU results on Wed will be interesting

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/VSL/406616/388433.pdf

� Adjusted EBITDA was NZ$115 million (m), down 3% from NZ$118m in 1H FY22
� Adjusted NPAT NZ$54m, down 22% from NZ$70m in 1H FY22
� Reported EBITDA was NZ$115m, up 12% from NZ$102m in 1H FY22
� Reported NPAT of NZ$54m, in line with the level recorded in 1H FY22
� Revenue of NZ$638m, up 38% from NZ$463m in 1H FY22

Based on current view of market conditions and recent trading, we have narrowed our FY23 EBITDA guidance range to NZ$215m - NZ$230m from previously NZ$215m - NZ$235m (pre-IFRS 16 EBITDA of between NZ$180m and NZ$200m). We expect FY23 NPAT to be between NZ$95m and NZ$109m from previously NZ$93m and NZ$107m. With the ongoing economic and market volatility, we will update our guidance as appropriate.

[Teitei]

Latest report out...mixed result, but slight upgrade to expected FY23 results.....STU results on Wed will be interesting

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/VSL/406616/388433.pdf

� Adjusted EBITDA was NZ$115 million (m), down 3% from NZ$118m in 1H FY22
� Adjusted NPAT NZ$54m, down 22% from NZ$70m in 1H FY22
� Reported EBITDA was NZ$115m, up 12% from NZ$102m in 1H FY22
� Reported NPAT of NZ$54m, in line with the level recorded in 1H FY22
� Revenue of NZ$638m, up 38% from NZ$463m in 1H FY22

Based on current view of market conditions and recent trading, we have narrowed our FY23 EBITDA guidance range to NZ$215m - NZ$230m from previously NZ$215m - NZ$235m (pre-IFRS 16 EBITDA of between NZ$180m and NZ$200m). We expect FY23 NPAT to be between NZ$95m and NZ$109m from previously NZ$93m and NZ$107m. With the ongoing economic and market volatility, we will update our guidance as appropriate.

In line with market expectations.

No surprises except for those who are out of touch with market & company expectations?

[winner (n)]

Kingfish have added Vulcan to their portfolio

Seem pretty keen on them

Kingfish also added Vulcan Steel to the portfolio in May. Vulcan is the leading steel distributor and value-add processing player in New Zealand and Australia. It is an impressive business in an unexciting industry.
Vulcan has a differentiated business model built around a leading customer service proposition, in an industry where customer service is typically poor. Vulcan's 'delivery in full and on time' metrics are far ahead of competitors, which enables it to charge a premium for this reliability. This translates to higher profit margins and returns on capital invested. While it sounds simple, this high service model is driven by Vulcan's performance culture and customer-centric mentality.

It is enabled by its self-built technology platform and own in-house fleet of delivery vehicles, but moreover by its people and approach to customer service. The current management team have grown the business organically and have a business owner mentality with plenty of 'skin in the game'. This mentality is pushed down throughout the organisation through its flat organisational structure and de-centralised management approach, with its team members on the floor also participating in the business's success through profit share Incentives

From its beginnings in the 1990s, Vulcan has grown to command the leading position in the New Zealand steel distribution market. Its growth journey in Australia is at an early stage and there is ample runway to take market share in the fragmented Australian market from a very low base using its proven strategy. And it is succeeding; it is already larger in Australia than New Zealand. It has also more recently moved into aluminium by acquiring Ullrich Aluminium, the leading trans-Tasman player in this space, at a reasonable valuation. This increases the company's growth opportunities moving forwards in a variety of ways.

We have been following Vulcan since its IPO in late 2021. The company has been building an emerging track record of performance as a listed company. The recent share price weakness has provided the opportunity to initiate a position For Kingfish

[Left Field]

A downgrade....Ullrich new business integration costs up $5 mill.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/VSL/414750/398545.pdf

[winner (n)]

A downgrade....Ullrich new business integration costs up $5 mill.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/VSL/414750/398545.pdf

Even without integration costs this is still a downgrade

And last year normalised npat was $142m ....this year about $95m

Not a good year in construction industry

[Crackity]

Even without integration costs this is still a downgrade

And last year normalised npat was $142m ....this year about $95m

Not a good year in construction industry

Down only a cent at the open - wait till Oz opens at midday for the big fall? Anyone in NZ that doesn't like this announcement has a window of a couple of hours......

[Onemootpoint]

Posted over at STU, but valid here too:

Steel supercycle officially over: How distributors are responding | nzherald.co.nz

https://www.youtube.com/watch?v=t2RYnf58Quo

[Left Field]

Vulcan steel divi down in a tough year

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/VSL/417241/401634.pdf

[winner (n)]

This doesn't seem too good ...from ASM

EBITDA year to date is lower by 29% due to lower volume, reduced revenue per tonne and increased operational expenses

Jeez 29% is pretty bad


http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/VSL/421234/406655.pdf

[Hectorplains]

"Early signs" of stabilising in the first four months of trading in 2024 financial year.

The lead activity indicators for New Zealand suggest some recovery in 2H FY24, although this could remain tepid
but the outlook for Australia appeared to be "weakening".

Attractive yield (9.2%) at current prices, if you believe they can retain that rate, given that they cut last years by 15%. I'm happy to keep watching this one for now.

[winner (n)]

Probably a little worse than expected.

NPAT down 52% on pcp

Last three 6 monthly NPAT has been 54m then 33m and last half 26m

But well positioned for growth

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/VSL/426062/412410.pdf

[Left Field]

A lot of 'down' words in FY24 results...... divvy reduced (down.)

https://api.nzx.com/public/announcement/436873/attachment/425669/436873-425669.pdf

� Reported NPAT of NZ$40m*, down 55% from NZ$88m in FY23
� Reported EBITDA of NZ$148m, down 29% from NZ$208m in FY23
� Adjusted NPAT of NZ$40m*, down 58% from NZ$95m in 1H FY23
� Adjusted EBITDA of NZ$148m, down 33% from NZ$219m in FY23
� Operating cashflow of NZ$169m, up 16% from $145m in FY23
� 12.0 NZ cents per share final dividend declared for FY24