Steel & Tube Holdings Ltd lifted itself from a low first-half profit last year & a second-half loss to a $5.6 million net profit after tax in the December half.
The company reaffirmed guidance that it would make $25 million in ebit (earnings before interest & tax) for the year to June.
Ebit went from $7.5 million in the December 2017 half to a $43.7 million loss in June, and now a $9.8 million profit for the December 2018 half.
Normalised ebit went from $13.4 million in the December 2017 half to $4.5 million in June and up to $9.7 million in December 2018. Normalised ebit excludes non-trading adjustments including writedowns, impairments, business rationalisation & restructuring costs and gains on sale of property, as well as contributions from S&T Plastics.
Steel & Tube’s assets have shrunk from $364 million in 2017 to $346 million in June and $330 million in December 2018 – but it has slashed debt in the meantime – to just $16 million, from $96 million a year ago and $104 million in June.
“Net debt reduced significantly to $16 million due to capital raise, improved operating cashflows, tighter working capital management & prudent capital expenditure,” chief executive Mark Malpass said.
“Solid improvement in operating cashflows to $11.1 million (from $17.7 million a year ago and a negative flow of $16.4 million in June) enabled a return to dividend payments, with the board declaring an interim dividend of 3.5c/share.”
Susan Paterson, who took over the chair last year, said: “While it has been a difficult period, we now have a strong foundation with the right strategy, people & systems in place to drive the business forward and deliver earnings growth.
“We have a clear focus on growth & shareholder value and it is pleasing to see the business is now benefiting from the significant work undertaken in the first half to transform & turn around the organisation. The board remains confident in the company’s positive trajectory and is pleased to reinstate dividend payments.”
Attribution: Steel & Tube.