Steel & Tube’s revenue forecast is on track to hit $500 million this year, says CEO Dave Taylor.
At today’s AGM, Mr Taylor told shareholders the company was in good shape with net profit up, an expanded customer base and a $30m investment programme set to further boost productivity.
Its acquisition in April this year of the company now trading as S&T Stainless positions Steel & Tube as New Zealand’s leading stainless and engineering steels business, with exclusive distribution rights to several key product lines.
The company enjoyed a strong year, and continues to deliver solid year-on-year improvements. It posted a net profit of $17.9m for the year to June 2014 – up almost 15 per cent on 2013. Revenue for the same period was up from $393m in 2013 to $441m – $13m of which came from S&T Stainless.
Mr Taylor told shareholders: “Our new entity offers opportunity for both companies to grow faster together, with an ability to create value through new and innovative customer solutions.”
The acquisition has seen the company’s geographic reach expand to include 48 facilities across New Zealand, with three new purpose-built plants – one in Palmerston North and two under development in Auckland.
“These will enhance our processing capability and efficiency and better service the expanding North Island building and construction requirements whilst underpinning our business with the manufacturing sector,” said Mr Taylor.
The One Company reinvigoration programme, launched in 2011, has created opportunities for Steel & Tube to contribute to some of New Zealand’s biggest infrastructure projects.
“These include the National War Memorial Park in Wellington, the Waterview Connect project in Auckland, the Hamilton Avantidrome, Burwood Hospital in Christchurch and the Len Lye centre in New Plymouth.”
This year, the company celebrated 60 years since its inception in 1954. Mr Taylor said it is “a remarkable achievement and testament to our ability to adapt to changing market needs.”
Looking ahead Mr Taylor said competition within the industry remained intense, with over-capacity continuing to restrain margins. Against a backdrop of softening raw material and finished steel prices, pricing had remained subdued. However, the depreciating dollar means imported product is more expensive which will need to be recovered.
“As a consequence, we expect the first half of this year will reflect six months of S&T Stainless trading and a more buoyant market than the comparable period last year.”
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For further information: Diane Robinson, Steel & Tube Communications Manager: 027 569 1919