New Zealand Professional Investment Services Firm, Forsyth Barr

Forsyth Barr

New Zealand Professional Investment Services Firm

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

Equity Bottom-Up

<ul><li>Steel and Tube (STU) reported a slightly worse-than-feared 1H26 result.</li><li>Net debt continues to rise, reflecting operating losses partly offset by working capital management.</li><li>We forecast NPAT losses in 2H26 and a further increase in debt.</li></ul>

Steel and Tube (STU) reported a slightly worse-than-feared 1H26 result.Net debt continues to rise, reflecting operating losses partly offset by working capital management.We forecast NPAT losses in 2H26 and a further increase in debt.

Steel & Tube Holdings 1H26 Result—Somethings Gotta Give

Thematic (Sector/Industry)

<ul><li>Ready-mix concrete (RMC) production volumes were strong in the June quarter despite Iran War-related volatility, up +12% on the prior year.</li><li>The South Island remains the key driver of volume growth, but there were signs of life in the upper North Island.</li><li>The medium-term outlook is improving; the underlying trend in non-residential activity is improving, there have been numerous fast-track approvals, and the infrastructure pipeline is building.</li></ul>

Ready-mix concrete (RMC) production volumes were strong in the June quarter despite Iran War-related volatility, up +12% on the prior year.The South Island remains the key driver of volume growth, but there were signs of life in the upper North Island.The medium-term outlook is improving; the underlying trend in non-residential activity is improving, there have been numerous fast-track approvals, and the infrastructure pipeline is building.

Building Sector Ready-Mix Concrete—Starting to Set

<ul><li>We downgrade Steel &amp; Tube (STU) from NEUTRAL to UNDERPERFORM.</li><li>It has been a tough 18 months for STU, delivering a -NZ$21m EBIT loss in FY25, followed by a -NZ$7m EBIT loss through the first four months of FY26.</li><li>We expect losses to continue in the coming months, with breakeven EBIT unlikely until at least February/March 2026 given low trading days in December and January.</li></ul>

We downgrade Steel &amp; Tube (STU) from NEUTRAL to UNDERPERFORM.It has been a tough 18 months for STU, delivering a -NZ$21m EBIT loss in FY25, followed by a -NZ$7m EBIT loss through the first four months of FY26.We expect losses to continue in the coming months, with breakeven EBIT unlikely until at least February/March 2026 given low trading days in December and January.

Steel & Tube Holdings More Losses Ahead—UNDERPERFORM

<ul><li>Steel &amp; Tube’s (STU) four-month trading update highlighted that its volumes are stabilising and prices are improving.</li><li>Further, the Perry Metal Protection (Perry) acquisition is performing ahead of expectations.</li><li>Whilst STU sees itself as a natural consolidator of the fragmented NZ steel industry, any near-term acquisitions would likely require additional equity.</li></ul>

Steel &amp; Tube’s (STU) four-month trading update highlighted that its volumes are stabilising and prices are improving.Further, the Perry Metal Protection (Perry) acquisition is performing ahead of expectations.Whilst STU sees itself as a natural consolidator of the fragmented NZ steel industry, any near-term acquisitions would likely require additional equity.

Steel & Tube Holdings Perry Protecting Profits

<ul><li>Residential consents increased by 10.9% month-on-month seasonally adjusted and 49.7% year-on-year, with a 12-month rolling increase of 16.5% year-on-year to 39.1k.</li><li>Auckland residential sales were up 2.6% month-on-month and down 17.4% year-on-year. New listings fell 14.5% year-on-year, with housing inventory up 1.7% year-on-year to 6,188.</li><li>James Hardie is increasing prices across its product ranges to offset an estimated US$80-100m increase in raw material and freight costs.</li></ul>

Residential consents increased by 10.9% month-on-month seasonally adjusted and 49.7% year-on-year, with a 12-month rolling increase of 16.5% year-on-year to 39.1k.Auckland residential sales were up 2.6% month-on-month and down 17.4% year-on-year. New listings fell 14.5% year-on-year, with housing inventory up 1.7% year-on-year to 6,188.James Hardie is increasing prices across its product ranges to offset an estimated US$80-100m increase in raw material and freight costs.

New Zealand

Steel & Tube Holdings Limited produces and distributes steel throughout New Zealand and its products include steel fasteners, nuts, bolts and screws.  The Company's other activities include steel reinforcing.

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Steel & Tube Holdings (STU NZ)

Steel & Tube Holdings 1H26 Result—Somethings Gotta Give

Steel and Tube (STU) reported a slightly worse-than-feared 1H26 result. Net debt continues to rise, reflecting operating losses partly offset by...

Forsyth Barr

Building Sector Ready-Mix Concrete—Starting to Set

Ready-mix concrete (RMC) production volumes were strong in the June quarter despite Iran War-related volatility, up +12% on the prior year. The...

Forsyth Barr

Steel & Tube Holdings More Losses Ahead—UNDERPERFORM

We expect losses to continue in the coming months, with breakeven EBIT unlikely until at least February/March 2026 given low trading days in...

Forsyth Barr

Steel & Tube Holdings Perry Protecting Profits

Whilst STU sees itself as a natural consolidator of the fragmented NZ steel industry, any near-term acquisitions would likely require additional...

Forsyth Barr

Building News Wrap

Residential consents increased by 10.9% month-on-month seasonally adjusted and 49.7% year-on-year, with a 12-month rolling increase of 16.5%...

Forsyth Barr

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