Photo: RNZ / Nate McKinnon
Steel and manufacturing company Steel & Tube's full-year net profit is down on the year earlier, but at the top end of its guidance.
The company said it was a solid result with no bank debt and a positive cash balance.
Key numbers for the year ended June compared with a year ago:
- net profit $17.0m vs $30.2m
- revenue $589.1m vs $599.1m
- underlying profit $51.9m vs $66.6m
- net operating cash flow $98.3m vs ($34.1m)
- final dividend 4 cents per share vs 7.5 cps.
The company said demand for steel continued in the first half of the year, but volumes softened in the second half as building activity eased; though elevated pricing from steel mills almost offset softer volumes, which were down by 12 percent on the prior year.
It said inventory management was a priority for the company, with a focus on reducing higher inventory levels built up during a prior period of supply chain disruptions.
"We have focused on providing high levels of service to our customers while also strengthening the core business and maintaining a disciplined growth focus," chief executive Mark Malpass said.
He said new growth initiatives included plate processing and aluminium, as well as recent acquisitions, including Kiwi Pipe & Fittings and Fasteners NZ.
"In a recessionary environment, the most important thing we can do is maintain a strong balance sheet and tightly manage costs.
"We are cautiously optimistic that 2023 represents the bottom of the cycle and although we don't expect a fast recovery, we anticipate there will be some improvement from early 2024 - the second half of our FY24 financial year."
The company was in a position to respond to an uplift in activity and demand, he said.
"There are plenty of green lights ahead across our multi-sector exposures.
"Commercial construction is expected to improve, there is still a strong pipeline in residential construction from consents granted previously, and large scale infrastructure projects are progressing."