Steel and Tube annual profit of $18.3 million boosted by sales

By NZPA

Friday 16th August 2002

Steel & Tube increased its annual net profit by 23 percent to $18.28 million on higher sales.

The steel products company will pay a fully imputed 10 cents per share dividend on September 6, compared with 9cps last year.

Steel & Tube chief executive Nick Calavrias said in a statement to the stock exchange today that sales revenue for the year ended June was up 8 percent, including revenue from Pipeline Supplies NZ, acquired in May.

Steel & Tube, primarily a steel products distributor, bought Pipeline Supplies for $11.7 million from Australian steelmaker OneSteel Ltd.

"The company experienced strong demand for its goods and services from all regions, with the exception of the Auckland market which remained flat."

Increased demand from the rural sector boosted the performance of the steel distribution and processing business, while a healthy residential building sector supported the company's roofing business.

Pre-tax earnings rose to $28.51 million for the year, from $25.39 million the previous year.

"Steel & Tube will continue to improve its sales mix and enhance its services while looking for further opportunities for bolt on acquisitions.

"The economic outlook is expected to remain steady with the potential for some downside due to an expected reduction in farm incomes, although an increase in consumer spending may offset this," Mr Calavrias said.

Steel & Tube sold its Canadian joint venture, AJ Forsyth, in October 2001, in order to focus on business closer to home. The net proceeds received for the sale were slightly above book value.

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