A booming construction sector and tighter cost controls has seen the steel and manufacturing company Steel & Tube (STU) return to profitability.
Steel & Tube has benefited from a strong recovery in residential construction. Photo: 123RF
Key Numbers
(For the 12 months to June 2021 against 2020)
- Net profit after tax - 16.1m vs $60m loss
- Revenue - $480m vs $417.9m
- Dividend - 3.3 cps vs no dividend
Chief executive Mark Malpass said he was incredibly proud of the result given the challenges Covid-19 presented for its business and many others.
The company benefited from a strong recovery in residential construction and infrastructure activity over the past year, which also saw an uplift in commercial tenders and growth in its manufacturing business.
The numbers of residential building consents had continued to grow nationwide, with 44,000 approved in the year to June.
"We have seen improvements in all areas, with volumes, revenue and margins recovering across the year and a strong pipeline of secured work," Malpass said.
[https://www.rnz.co.nz/news/business/410212/steel-and-tube-posts-37m-half-year-loss
A string of poor financial performances] in recent years had seen the company write down the value of underperforming businesses and consolidate large parts of its operations.
[https://www.rnz.co.nz/news/business/415287/steel-and-tube-to-make-up-to-200-staff-redundant
This included laying off staff] and almost halving the number of sites it had around the country.
As a result, its operating expenses were now $79.9 million compared with $92.4m a year ago.
Steel & Tube was optimistic about its outlook as it had a strong pipeline of future work and market indicators suggest that current construction activity would continue.
There were a number of headwinds however, including high global prices for steel, increased labour costs and supply chain disruptions.
It was managing the latter through the appointment of a general manager of supply chains and distribution management.
"We increased fast moving inventory in response to current global supply chain and capacity issues while at the same time reducing aged inventory," Malpass said.
The company had also invested in analytical software that it said would help it trace products and manage prices.
Chair Susan Patterson said it had also identified a number of opportunities for growth and investment but did not specify what they were.