Steel & Tube Holdings Ltd reaffirmed its 2019 financial year guidance of $25 million ebit (earnings before interest & tax) today, citing positive progress under its “Striving for excellence” strategy.
In the June 2018 year, Steel & Tube made a $36.2 million loss before interest & tax, a $67.8 million turnaround from the 2017 profit of $31.6 million.
Susan Paterson, who took over as chair from Sir John Anderson in January 2017, listed the major supply contract for the Westfield Newmarket construction project – and 7 ways the company has sharpened its performance – for her confidence in an improved result.
“The company has a clear focus on growth & improving financial performance as it positions itself as New Zealand’s leading supplier of steel products. While the market remains highly competitive, Steel & Tube continues to win new customers, sign large contracts, increase efficiencies & reduce costs.”
Ms Paterson’s list of positives:
- Improved service levels & delivery performance across the business, with sales remaining on a positive trajectory
• Underway with a significant contract to supply steel to the Westfield Newmarket project, the largest commercial construction project in Australasia; supply had begun to the Puhoi-Warkworth motorway project & an unidentified lower North Island infrastructure project
• Established a more efficient & cost-effective freight & supply chain, including integration & consolidation of existing facilities, exiting third party warehousing arrangements and rationalising & retendering freight runs
• The manufacturing excellence programme is delivering increasing machine efficiency & reduced overtime in many locations
• Renewed commitment to the customer, with comprehensive sales training programmes across the group, the launch of a refreshed website and the launch of BIM-Spec, an innovation to make it easier for construction & design professionals to connect with Steel & Tube’s products
• Reviewed product ranges with the customer in mind, added new products, such as the SR flooring platform for Comflor, which was already proving very popular
• Investment in the new ERP IT system is delivering benefits and has set the platform for further customer-focused solutions
• Enhanced quality systems further, including recent ISO 9001:2015 certification, and the company has partnered with Lloyd’s Register to complete annual independent audits across its international steel supply mills.
Ms Paterson commented: “The company now has a solid foundation from which to build Steel & Tube, and the financial flexibility to implement our business transformation initiatives, achieve longer-term strategic objectives and create long-term value for shareholders. The board remains confident in the improving performance of the company under its significantly advanced turn-around strategy.”
She said the company would give a further update on progress at the annual meeting on 25 October.
13 September 2018: Steel & Tube bookbuild scaled
30 August 2018: Steel & Tube completes books-clearing, future already brighter
7 August 2018: Updated: Steel & Tube seeks $80.9 million from placement & rights issue, updates guidance
23 May 2018: Review puts Steel & Tube ebit loss at $38 million
21 August 2017: Steel & Tube performance dissatisfies new chair
Attribution: Company release.