Steel & Tube Holdings Limited (NZX: STU) Interim Results to 31 December 2020

Steel & Tube operates through two divisions. The Distribution division saw a steady return to prior trading levels during the period with a doubling of earnings compared to prior year. The Infrastructure division softened slightly due to increased competition and tightening market conditions in some sectors, particularly vertical construction. Pleasingly, project work and contracts continue to be won, with a solid pipeline of activity secured.

Financial Performance

Revenue of $226.3m was slightly down on prior year, with the flow on effect of COVID-19 on Q1 sales, before a stronger Q2 returning to prior year trading levels.

Margins have progressively recovered to prior year levels in most sectors (excluding the softer non-residential construction market) and as gains from cost efficiencies and pricing disciplines are realised.

Earnings before Interest and Tax were $8.9m for the six months, with normalised EBIT of $7.6m, up 33% on the prior comparative period (pcp) and above the December 2020 guidance range.

The company has reported a Net Profit After Tax of $4.3m, up from a loss of $(37.0)m the prior year.

Operating cashflow increased 40% year on year to $24.0m, with continued improvements in working capital management. All debt was repaid during the period, with a net cash position of $23.9m as at 31 December 2020 to support capital investment and growth initiatives.

Given the turnaround in performance and the improved economic outlook, the Board has been pleased to resume dividend payments with an interim dividend of 1.2 cents per share (unimputed), in line with Steel & Tube’s dividend policy of 60% - 80% of NPAT.

Please see the links below for details:

Steel & Tube HY21 Distribution Notice

Steel & Tube HY21 Interim Report

Steel &Tube HY21 Results Announcement

Steel & Tube HY21 Results Media Release

Steel & Tube HY21 Results Presentation

Source: Steel & Tube Holdings Limited

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