Address by Sir John Anderson, Chairman of the Board
S&T’s full-year results to June 2015 saw the Company continue its steady upward trajectory, reporting a 14% lift in sales to just beyond $500 million.
The after-tax profit was up by 20% on last year, taking it to $21.4 million, compared to $17.9 million after tax last year.
Earnings per share for the year to June 2015 were 24.5 cents compared to 20.4 cents for the year before.
Total equity increased by $6.6 million to $167 million.
Total assets increased by $9.1 million to $287.8 million, compared with $278.7 million the year before.
Pleasingly, cash flow almost doubled to $23.9 million, reflecting the benefits of multiple supply-chain initiatives from earlier periods.
The Company’s debt-to-equity ratio at June 2015 was 28.8%. Since then we have been able to leverage this to acquire MSL and Aquaduct. Following these acquisitions the current gearing is just under 40%. The Company remains in a sound position.
The Board remains committed to providing shareholders with a consistent dividend stream.
We declared a dividend of 9 cents per share in March, and a final dividend of 10 cents per share in September, bringing the total dividends for the year to 19 cents. This represents a pay-out ratio of 78%.
The Company’s key achievements this year are founded on an extensive $30-million investment programme which has included new plant, equipment, facilities and technology, all of which improve the customer experience. Dave Taylor will talk more about these later on.
In addition, we have recently completed a series of acquisitions. These include:
- MSL, one of the largest fastenings businesses in New Zealand. Its iconic Fortress brand has become a market leader with a reputation for quality and reliability. This acquisition represents an excellent opportunity for both S&T and its customers: enhancing S&T’s fastenings offering and expertise, and providing access to a wider range of products.
- Our second acquisition, Aquaduct NZ, is the producer of the largest high-density polyethylene pipes in New Zealand. Its service Company, Bosch Irrigation, carries out on-farm installation and maintenance of irrigation systems.
With S&T already established as a key supplier of reticulation products, the acquisition of Aquaduct and Bosch will further enhance the Company’s capability in this field.
We envisage these acquisitions will take S&T into new and exciting territory, positioning the Company as a leader in several product categories, as well as helping to off-set potential downturns in other product categories as steel globally, and the New Zealand economy, continue to moderate.
Moving on to the Board of Directors…
In line with our constitution, and NZX rules, Dean Pritchard is retiring and has made himself available for re-election which will be addressed later in the proceedings.
Janine Smith is retiring from the Board at the conclusion of this meeting. Janine joined the S&T Board in September 2010 and has made a significant contribution to the Board and the Company during her time with S&T.
On behalf of the Board, management and shareholders, we acknowledge and thank Janine for her contribution and wish her well with her future activities.
And so I come to the economic outlook…
While the New Zealand economy will continue to experience modest growth, led by construction and key infrastructure projects, other sectors important to S&T are expected to be more restrained.
Deferred dairy investment is impacting several parts of the business.
Increasing excess global steel capacity and soft raw material and finished-steel prices are likely to continue increasing the competitive nature of the industry and impacting overall profitability across all parts of the steel supply chain, not just steel producers.
As a Company, S&T remains in very good shape and is focused on delivering the many change initiatives that are providing improved solutions and better service to its customers, while at the same time offering greater opportunities for staff.
Looking ahead, S&T will continue to leverage its investments and explore additional products and services that it can introduce to the benefit of its shareholders, its customers and its people.
Before I hand over to Dave Taylor for his presentation, on behalf of the Directors I would like to extend our sincere thanks to Dave, his leadership team and all of the staff at S&T for their ongoing commitment to excellence, which the Board acknowledges as creating a strong foundation for the Company for the foreseeable future.
[Ends]