NZX ANNOUNCEMENT – 2016 HALF YEAR RESULTS

Media Release

For the six-month period ending 31 December 2015:

• Revenue increased by $7.5 million to $266 million, a record half -year result for Steel & Tube.
• Net profit after tax was $15.9 million, including a $6 million one–off gain from the sale of property.
• The underlying trading result was a net profit after tax of $9.9 million.
• Net operating cash flow remained strong at $9.4 million.
• Net assets per share increased to $1.59, compared with $1.58 at 31 December 2014.
• An interim dividend of 9.0 cents per share was declared and will be paid on 31 March 2016.

Steel & Tube’s ongoing operational and productivity improvements, combined with earnings from the acquisition of MSL and Aquaduct/Bosch Irrigation, boosted the company’s half-year results. However, these gains were offset by the continuing decline in steel prices.

“Global steel prices have now fallen by 30 per cent, reaching lows not seen since 2003,” says Dave Taylor, Steel & Tube’s Chief Executive Officer. “This has created an intensely competitive domestic steel environment, yet it is pleasing to see our company initiatives almost fully compensate for the impact of this decline.”

He says that upgraded plant and facilities continue to improve productivity and enhance customer service, while acquisitions extend Steel & Tube’s capability and position it as the market leader in several new product categories.

This investment continued throughout the half-year and the business achieved several key milestones, including:

• commissioning of the new Auckland reinforcing and wire processing facility, which was officially opened by the Prime Minister, John Key.
• commissioning a new coil and purlins processing facility in Auckland,
• acquisition of MSL and Fortress Fastenings,
• acquisition of Aquaduct and Bosch Irrigation.

Although net profit after tax for the half-year was $15.9 million, an increase of 47 per cent compared with the same period last year, this figure includes a $6 million gain from the sale of property. The underlying profit after tax was therefore $9.9 million, a reduction of 8.3 per cent compared with last year. This result is consistent with our previous guidance.

Domestically, demand for steel and steel-related products remained moderate, with demand from the construction and related sectors continuing to strengthen and support the business’s overall results.

“While we remain in a challenging global steel environment, there are indications that the decrease in steel prices may be slowing. When coupled with a reasonably robust domestic economy, I’m optimistic that we’ll see a stronger performance from the business in the second half of the year, such that the underlying performance will be comparable with 2015” says Mr Taylor.

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For further information, please contact Dave Taylor on 04 570 5001.

Note for editors:

Steel & Tube is New Zealand’s leading supplier and distributor of steel products and services. We import, distribute and manufacture around 58,000 steel products – from nuts, bolts, nails, piping, roofing, seismic mesh and farm fencing, to the largest structural steel products used in commercial construction, such as purlins, girts, joists and universal beams. From our head office in Petone, we support a network of 56 processing and distribution facilities in locations across the country. Our key industry sectors include commercial and residential construction, manufacturing, heavy and light engineering, energy, viticulture and rural.