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.

Thematic (Sector/Industry)

<ul><li>Ready-mix concrete (RMC) production fell -6% year-on-year in the December 2024 quarter, marking another down year for the sector.</li><li>Total 2024 volumes declined -8%, and on a 12-month rolling basis, concrete production is now -20% below its September 2022 peak.</li><li>As an early construction material, weak concrete production suggests activity is likely to remain subdued over the first half of 2025. </li></ul>

Ready-mix concrete (RMC) production fell -6% year-on-year in the December 2024 quarter, marking another down year for the sector.Total 2024 volumes declined -8%, and on a 12-month rolling basis, concrete production is now -20% below its September 2022 peak.As an early construction material, weak concrete production suggests activity is likely to remain subdued over the first half of 2025. 

Building Sector - Ready-Mix Concrete—2024 Sets

<ul><li>Total residential consents for 2024 settled c.-10% lower than the prior year at 33.6k.</li><li>This decline was driven by a c.-17% drop in high-density consents, while detached housing remained broadly flat (+1%).</li><li>Monthly consent numbers have remained stable within the 30k–35k range throughout the year. </li></ul>

Total residential consents for 2024 settled c.-10% lower than the prior year at 33.6k.This decline was driven by a c.-17% drop in high-density consents, while detached housing remained broadly flat (+1%).Monthly consent numbers have remained stable within the 30k–35k range throughout the year. 

Building Sector - NZ Consents—Another Year Down

Equity Bottom-Up

<ul><li>Vulcan Steel's (VSL) trading update highlighted near-term volume and margin pressure has continued to a greater degree than we had forecast.</li><li>The Steel division has seen the largest impacts, with activity declines and competitive pressures the most acute.</li><li>Whilst near-term risks remain, there are signs VSL is nearing the end of the downgrade cycle, with lower interest rates and improved business confidence. </li></ul>

Vulcan Steel's (VSL) trading update highlighted near-term volume and margin pressure has continued to a greater degree than we had forecast.The Steel division has seen the largest impacts, with activity declines and competitive pressures the most acute.Whilst near-term risks remain, there are signs VSL is nearing the end of the downgrade cycle, with lower interest rates and improved business confidence. 

Vulcan Steel - A Long Trek Through the Trough

<ul><li>Vulcan Steel (VSL) reported an unsurprisingly soft FY24 result. 2H24 volumes were broadly in line with expectations, but margins were weaker.</li><li>Higher depreciation and tax saw NPAT miss our expectation. We have adjusted our estimates accordingly.</li><li>Outlook comments were in line with expectations, with a modest pick up in NZ demand expected in 2H25 but a more cautious tone on Australia. </li></ul>

Vulcan Steel (VSL) reported an unsurprisingly soft FY24 result. 2H24 volumes were broadly in line with expectations, but margins were weaker.Higher depreciation and tax saw NPAT miss our expectation. We have adjusted our estimates accordingly.Outlook comments were in line with expectations, with a modest pick up in NZ demand expected in 2H25 but a more cautious tone on Australia. 

Vulcan Steel - FY24 Result — Steely Resolve

<ul><li>We downgrade Vulcan Steel (VSL) to NEUTRAL from OUTPERFORM.</li><li>This reflects: (1) VSL now trading in-line with our view of fair value and peer multiples, FY25 PE of 15x, after a recent lift in the share price; and (2) recent business survey data and our channel checks that have highlighted subdued NZ activity after some green shoots over the first few months of the year.</li><li>As a result we have tempered our 2H24 volume assumptions and are now more in-line with consensus. </li></ul>

We downgrade Vulcan Steel (VSL) to NEUTRAL from OUTPERFORM.This reflects: (1) VSL now trading in-line with our view of fair value and peer multiples, FY25 PE of 15x, after a recent lift in the share price; and (2) recent business survey data and our channel checks that have highlighted subdued NZ activity after some green shoots over the first few months of the year.As a result we have tempered our 2H24 volume assumptions and are now more in-line with consensus. 

Vulcan Steel - Solid Steel Price, Down to Neutral

New Zealand

Vulcan Steel Ltd operates as a metals distributing and processing company. The Company offers stainless and engineering steel products. Vulcan Steel serves customers in Australia and New Zealand.

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Vulcan Steel Limited (VSL NZ)

Building Sector - Ready-Mix Concrete—2024 Sets

Ready-mix concrete (RMC) production fell -6% year-on-year in the December 2024 quarter, marking another down year for the sector.

Forsyth Barr

Building Sector - NZ Consents—Another Year Down

Total residential consents for 2024 settled c.-10% lower than the prior year at 33.6k. This decline was driven by a c.-17% drop in high-density...

Forsyth Barr

Vulcan Steel - A Long Trek Through the Trough

Vulcan Steel's (VSL) trading update highlighted near-term volume and margin pressure has continued to a greater degree than we had forecast.

Forsyth Barr

Vulcan Steel - FY24 Result — Steely Resolve

Vulcan Steel (VSL) reported an unsurprisingly soft FY24 result. 2H24 volumes were broadly in line with expectations, but margins were weaker.

Forsyth Barr

Vulcan Steel - Solid Steel Price, Down to Neutral

We downgrade Vulcan Steel (VSL) to NEUTRAL from OUTPERFORM. This reflects: (1) VSL now trading in-line with our view of fair value and peer multiples

Forsyth Barr

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