New Zealand Professional Investment Services Firm

Forsyth Barr

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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).

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New Zealand Professional Investment Services Firm, Forsyth Barr

Equity Bottom-Up

<h2>Steel &amp; Tube (STU)<br>Another Month Another Upgrade</h2>
<p>Steel &amp; Tube (STU) has provided another upgrade to 1H22 guidance less than a month after the previous upgrade. Total revenue in the first five months of FY22 vs. the pcp is up +22%, driven broadly half by price growth and half by volume growth.&nbsp;This compares to revenue growth of +14% (and we estimate volume +5%) for the first four months of FY22 at last month’s update suggesting a very strong November.&nbsp;The new guidance is for 1H22 EBIT of NZ$20-22m, +176% on the pcp and c. +23% on last month’s upgrade (at the midpoint). EBITDA guidance of between NZ$30-32m is +84%on the pcp and +17% on prior guidance at the midpoint. There is clear upside risk to our full year FY22E EBITDA/EBIT forecast of NZ$51/33m.</p>
<p>With STU having upgraded guidance twice in two months demand is clearly not currently an issue for building materials suppliers and producers. In our view STU’s update bodes well Fletcher Building’s (FBU) 1H22 result as well as potential for upside to Vulcan Steel’s (VSL) recent guidance upgrade. &nbsp;&nbsp;</p>
<p><strong>Key points:</strong></p>
<ul>
<li>STU’s Distribution segment has seen sales revenue increase +35% on the pcp in the first five months, driven by a +16% volume increase and the remainder price. STU’s infrastructure segment has had a +5% increase in sale, driven primarily by volume (+4%). Infrastructure had a larger impact as a result of Auckland manufacturing operations having to cease for the majority of the August/September 202 lockdown. This update is broadly in line with competitor Vulcan who reported revenue +35% and volume+11% on the pcp in the first five months of FY22 (albeit Vulcan has more exposure to Australia).</li>
<li>The NZ$25m of cash held on balance sheet at STU’s 1H22 result in June 21 appears to have largely been used, as STU’s has continued to source inventory through the half. STU expects this cash position to rebuild in 2H22 as deferred income from lockdowns is recovered.</li>
<li>STU remains positive about the market outlook, citing a strong pipeline of secured work and an expectation of positive market conditions over “at least the medium term”.</li>
</ul>

Steel &amp; Tube (STU) Another Month Another Upgrade
Steel &amp; Tube (STU) has provided another upgrade to 1H22 guidance less than a month after the previous upgrade. Total revenue in the first five months of FY22 vs. the pcp is up +22%, driven broadly half by price growth and half by volume growth.&nbsp;This compares to revenue growth of +14% (and we estimate volume +5%) for the first four months of FY22 at last month’s update suggesting a very strong November.&nbsp;The new guidance is for 1H22 EBIT of NZ$20-22m, +176% on the pcp and c. +23% on last month’s upgrade (at the midpoint). EBITDA guidance of between NZ$30-32m is +84%on the pcp and +17% on prior guidance at the midpoint. There is clear upside risk to our full year FY22E EBITDA/EBIT forecast of NZ$51/33m.
With STU having upgraded guidance twice in two months demand is clearly not currently an issue for building materials suppliers and producers. In our view STU’s update bodes well Fletcher Building’s (FBU) 1H22 result as well as potential for upside to Vulcan Steel’s (VSL) recent guidance upgrade. &nbsp;&nbsp;
Key points:

STU’s Distribution segment has seen sales revenue increase +35% on the pcp in the first five months, driven by a +16% volume increase and the remainder price. STU’s infrastructure segment has had a +5% increase in sale, driven primarily by volume (+4%). Infrastructure had a larger impact as a result of Auckland manufacturing operations having to cease for the majority of the August/September 202 lockdown. This update is broadly in line with competitor Vulcan who reported revenue +35% and volume+11% on the pcp in the first five months of FY22 (albeit Vulcan has more exposure to Australia).
The NZ$25m of cash held on balance sheet at STU’s 1H22 result in June 21 appears to have largely been used, as STU’s has continued to source inventory through the half. STU expects this cash position to rebuild in 2H22 as deferred income from lockdowns is recovered.
STU remains positive about the market outlook, citing a strong pipeline of secured work and an expectation of positive market conditions over “at least the medium term”.


Steel &amp; Tube(STU): 또 한 달, 또 다른 업그레이드

Steel & Tube Holdings

Steel & Tube(STU): 또 한 달, 또 다른 업그레이드

Steel & Tube Holdings

Steel &amp; Tube(STU): 또 한 달, 또 다른 업그레이드

Steel & Tube(STU): 또 한 달, 또 다른 업그레이드