Steel & Tube FY19 Results

FY19 Results
Presentation
For the 12 months ended
30 June 2019

FY19 CHALLENGING MARKET, HOWEVER GOOD PROGRESS
ON BUSINESS TURNAROUND
CHALLENGING TRADING ENVIRONMENT
1H19 trading in line with expectations
χMarket contraction in some sectors and price pressures in 2H19
Responded to unsolicited non-binding indicative offer in September 2018
GOOD STRATEGIC PROGRESS
$10m in benefit delivered in FY19
Structural improvements will provide long term value
Operating costs reduced 4% on a normalised
1
basis
STRENGTHENED BALANCE SHEET
Completed capital raise
Disciplined working capital management
Prudent capital management with capex slightly below depreciation
Net debt reduced from $104m to $15m
ENGAGED & FOCUSED ORGANISATION
Strong commitment to quality and safety
Strengthened leadership and operational teams
AX ERP system enabling more detailed data for better business analysis
Reduced from 48 to 35 sites while maintaining regional presence
Exited Plastics business
2
1) See Slide 32 and 33 for definitions of financial terms and reconciliation of normalisedresults

CHALLENGING TRADING CONDITIONS IN 2H19
Second half trading FY19 (2H19)
•Growing market share and volumes were more than
offset by market contraction in some sectors and
price pressures in 2H19
•Significant industry contraction in higher value
segments such as stainless steel, combined with
changes in product mix impacted on 2H19 margins
•Resulted in S&T margins reducing slightly from 1H19
instead of expected improvement
3
10.0%
12.5%
15.0%
17.5%
20.0%
22.5%
25.0%
27.5%
30.0%
32.5%
180
200
220
240
260
280
1H192H19
$M
NORMALISED SALES AND MARGIN
1
SalesMargin %
1) See Slide 32 and 33 for definitions of financial terms and reconciliation of normalisedresults
JulAugSepOctNovDecJanFebMarAprMayJun
Tonnes
VOLUME FY18:FY19
FY18FY19
Easter/ANZAC
1H19 trading in line with expectations;
2H19 margin performance lower than expected and
impacted on result

CONTINUING COMMITMENT TO QUALITY & SAFETY
6.9
14.1
9.9
5.5
1.5
0
5
10
15
FY15FY16FY17FY18FY19
EMPLOYEE TOTAL RECORDABLE INJURY
FREQUENCY RATE (TRIFR)
Quality:
•Telarc ISO 9001:2015 quality certification
•Continued implementation of Lloyd’s Register
independent steel mill audits
•Introduction of monthly traceability audits
•Reviewed risk categorisation of all products
•Capability improvement through competency-
based training programs
•All QHSE staff are ISO 9001:2015 certified Lead
Auditors, allowing them to lead and manage
audits in line with the standard
•Supporting Steel Construction NZ (SCNZ) charter
Safety, Health, Environment:
•Focus on management of critical risks
•Continuing improvement in health and safety
with Employee TRIFR down to 1.5
•Improved QHSE auditing compliance schedules
•Significant investment in a further $1.3m in
machine guarding
4

FY19 GROUP FINANCIAL SUMMARY
1) See Slide 32 and 33 for definitions of financial terms and reconciliation of normalisedresults
2) For comparability, the FY18 dividend per share has been adjusted to reflect the revised number of shares on issue following the capital raise, concluded in September 2018
5
$mFY19FY18
%
change
Revenue
498.1495.80.5%
Normalised Revenue
1
497.1473.55%
EBIT
16.8(36.2)
Normalised EBIT
1
16.013.1
22%
NPAT
10.4(32.1)
Normalised NPAT
1
9.95.7
74%
Dividend (centsper share)
5.03.8
2
Shareholder Equity
253.9172.6
Net Debt
15.0104.4
(86)%
Net operating cash flow
21.31.3
RESULTS IMPACTED BY
2H19 GROSS MARGIN
PERFORMANCE
STRONG CASHFLOW
GENERATION
$21.3M
NORMALISED REVENUE
1
$497.1M +5%
REDUCTION IN NET
DEBT TO $15M
NORMALISED EBIT
1
$16M +22%
FY19 FINAL DIVIDEND
1.5 CENTS PER SHARE
NORMALISED NPAT
1
$9.9M +74%
TOTAL FY19 DIVIDEND
5 CENTS PER SHARE

INCREASED REVENUE DRIVEN BY NEW AND EXISTING
CUSTOMERS
288.3
185.2
473.5
287.7
209.4
497.1
100
150
200
250
300
350
400
450
500
550
DistributionInfrastructureGroup
$M
NORMALISED REVENUE
1
FY18FY19
5% increase in Group normalised revenue
1
•Gains in market share and volumes
•New business growth due to a combination of
delivery performance and better customer offer
•Distribution: Particularly impacted by market
contraction in some sectors and pricing pressure.
Market share gains were achieved in a number of
categories due to improving product availability,
DIFOTIS and sales team focus. Revenue flat year on
year reflecting the impact of market contraction in
some sectors and pricing pressures
•Infrastructure: Revenue growth of 13% was driven
by strong sales in Rollforming, Reinforcing and
CFDL. Revenue benefited from re-building and
growing a strong reputation for delivery and
investments such as the introduction of a new
composite floor decking profile
6
1) See Slide 32 and 33 for definitions of financial terms and reconciliation of normalisedresults

REDUCTION IN NORMALISED OPERATING EXPENSES
4% reduction in operating expenses on a
normalised basis
1
Underlying structural reduction of ~$5m achieved partially
offset by increased lease costs from sale and lease backs in
FY18 and Strive execution costs
•Operating lease costs up $1.3m reflecting the
annualisedfull year impact from new leases of $2.6m,
being partially offset by efficiencies from site
consolidations of $1.3m
•Efficiencies from business change activities have more
than offset wage & salary escalation and change
execution costs; more benefits expected to flow in
FY20
•Overall prudent and disciplined management of
expenditure
$mFY19N
1
FY18N
1
% ChangeFY18
Opex95.999.4(4)%115.9
23%
21%
19%
0%
5%
10%
15%
20%
25%
FY18FY18NFY19N
OPEX/SALES %
7
1) See Slide 32 and 33 for definitions of financial terms and reconciliation of normalisedresults

13.1
16.0
16.8
7.8
2.2
(9.2)
2.1
0.8
-
5.0
10.0
15.0
20.0
25.0
FY 18 EBIT Normalised
Sales & Margin
Opex
Sales & Margin
Opex and Other income
FY19 EBIT Normalised
S&T Plastics
FY 19 EBIT
EBIT ($M)
EBIT BRIDGE: FY18N
1
TO FY19
Base
8
1) See Slide 32 and 33 for definitions of financial terms and reconciliation of normalisedresults

STRENGTHENED BALANCE SHEET
Tight capital management and reduction in debt
creating a strong balance sheet –critical for
companies in softening economic environment
•Receivables and inventory reductions achieved,
improving working capital and cash flow, enabling further
reduction in debt, whilst also increasing sales
•$78.8m net proceeds from capital raise applied to
reducing debt, providing significant headroom
•Gearing ratio of 5.6% (FY18: 37.7%)
Dividend:
Board has declared a final FY19 dividend of 1.5 cps, taking
total FY19 dividends to 5 cps (3.5 cps at half year)
$mFY19FY18
Trade and other receivables90.799.2
Inventories114.0116.0
Trade and other payables(41.1)(49.9)
Working Capital163.6165.3
Cash and cash equivalents9.05.6
Borrowings(24.0)(109.9)
Property, plant and equipment52.052.7
Intangibles56.957.4
Other Assets and Liabilities(3.6)1.5
Total Assets & Liabilities253.9172.6
Equity253.9172.6
9

DISCIPLINED WORKING CAPITAL MANAGEMENT
•Disciplined management and improved collections
leading to reduction in accounts receivable,
particularly in the second half
•Collections improvement with debtors days
reduced from 65 to 48
•Improved inventory management: pleasing
improvements in stock availability and reductions in
slow moving inventory
•Detailed inventory analysis has delivered a better
inventory mix with more availability of in-demand
stock where needed
DaysFY19
FY18 Excl
Plastics
FY18
TradeReceivables (DSO)
486555
Inventories (DIO)
107110106
Trade Payables (DPO)
262625
Overdue 6%
$4.7m
FY19
Overdue 11%
$11.3m
FY18
TRADE RECEIVABLES
DSO: Days sales outstanding = trade receivables/annual credit sales
DIO: Days inventory outstanding = inventory/annual cost of goods sold
DPO: Days payable outstanding = trade payable/annual purchases
10

SIGNIFICANT REDUCTION IN NET DEBT
Strong balance sheet provides the financial
strength to execute strategies and manage
business trading cycles
•Significant reduction in debt following capital
raise concluded in September 2018
•Further repayments from improved operating
cash flows, prudent capital expenditure and
working capital improvements –debt reduced
by a further $7.1m
•New $70m senior debt facilities executed in
December 2018 providing strong liquidity,
leading to reduced finance costs in 2H19
•Net Debt at year-end of $15m
104.3
109.9
24.0
15.0
5.6
(78.8)
(7.1)
(9.0)
0
15
30
45
60
75
90
105
120
$M
FY18:FY19 NET DEBT BRIDGE
11

PRUDENT CAPITAL EXPENDITURE FOCUSED ON
PRODUCTIVITY IMPROVEMENTS
Capex back to ‘business as usual’ levels after
significant investments in previous years
•Slightly below depreciation and amortisation
•Funded through operating cash flow
Major projects in FY19:
•Replacement of guarding equipment
•IT investment
•Health & safety initiatives
•Chain and rigging vans
•Upgrades to operational infrastructure
0
10
20
30
40
50
FY15FY16FY17FY18FY19
CAPITAL INVESTMENT
AcquisitionsPlant & Equipment
Land & BuildingSoftware
Depreciation and amortisation
12

NZ IFRS 16 EFFECTIVE 1 JULY 2019
•Removes the distinction between operating
and finance leases, with all leases now on
balance sheet
•Results in a shift of operating lease costs,
currently reported within other operating
expenses, to interest and depreciation
•Impact on cash flows and net earnings over
the lease term remains the same, however
interest expense is higher in the earlier years
of the lease and lower in later years
•Results in the recognition of “right of use”
assets of $102m and lease liabilities of $113m
upon adoption
•Estimated to result in an increase to reported
EBIT of $5.7m and a decrease to reported
NPAT of $1.5m
100
200
300
400
500
Before IFRS 16After IFRS 16Before IFRS 16After IFRS 16
$M
BALANCE SHEET
ASSETS
LIABILITIES
PROFIT & LOSS
1
1) Estimated financial impact on adoption applied to FY19 reported results
5
10
15
20
25
Before IFRS 16After IFRS 16
$M
EBIT
Before IFRS 16After IFRS 16
PROFIT BEFORE TAX
13

DIVISIONAL
REVIEW
Distribution
Infrastructure

OUR BUSINESS: DIVISIONS
DISTRIBUTION
Products are sourced from preferred steel mills and distributed through
Steel & Tube’s national network of branches
FY19: ~58% of revenue
INFRASTRUCTURE
Products are processed before sale and typically on a contract or project
basis, including onsite installation services
FY19: ~42% of revenue
STEEL
STAINLESS STEEL
PIPING SYSTEMS
CHAIN & RIGGING
RURAL PRODUCTS
FASTENINGS
CFDL
ROOFING
COIL PROCESSING
PURLINS
COMFLOR®
Composite Floor Decks Ltd.
REINFORCING
Roll
-
forming
REO / CFDL
15

Distribution
•Hardest hit by market
segment contraction in some
segments and pricing
pressure
•Cost management and
efficiencies focus delivering
benefits
Infrastructure
•Pleasing improvements in
revenue and EBIT
•Focused on efficiencies and
continuous improvement of
customer service and offer
FY19 DIVISIONAL PERFORMANCE
58%
42%
FY19 REVENUE
18%
82%
FY19 EBIT
Distribution
FY19FY18N
1
% ChangeFY18
$m
Revenue287.7288.3(0)%288.3
EBIT2.92.6
2
9%(12.8)
Infrastructure
FY19FY18N
1
% ChangeFY18
$m
Revenue209.4185.213%185.2
EBIT11.99.3
2
27%5.0
1)See Slide 32 and 33 for definitions of financial terms and reconciliation of normalisedresults
2)FY18N EBIT has been adjusted to be consistent with the current year presentation
16

DISTRIBUTION
Revenue $287.7m EBIT $2.9m
Lower margin, higher volume business -being impacted by market
and pricing pressures
Progress
Warehousing of stock brought back in-house from November
2018 ($2.2m savings)
Consolidation of 10 sites across the network, reducing costs and
enhancing collaboration ($1.0m savings)
Growth in the high margin Chain & Rigging market segment,
including addition of four new vans ($0.2m uplift in EBIT)
Labour efficiencies as part of operational restructure and
network optimisation ($2.1m savings)
Focus on freight savings and efficiencies, including tenders for key
line-haul runs ($0.6m savings/benefit)
Sales force excellence with number of new key customer account
wins and management of new customers, introduction of No. 8
Wire programme ($0.6m savings/benefit)
17

INFRASTRUCTURE
Revenue $209.4m EBIT $11.9m
Higher margin business, with sales tailored to customers’ requirements
Progress
Margin improvements due to manufacturing efficiencies ($0.3m in
Rollforming)
Freight savings and efficiencies in Rollforming($0.7m)
Strong focus on Health & Safety with equipment guarding and
training
Improved labour productivity in Rollforming($0.5m) and
Reinforcing ($1.3m) –decreasing labour cost, increasing
productivity
Decreased costs through outsourcing of netting production ($0.1m)
Labour restructuring as part of operational optimisation ($0.3m)
Specialised project wins for the Reinforcing business
Introduction of new flooring profile, opening up new markets for
ComFlorand CFDL
18

STRIVE IN
ACTION

INTEGRATION OF SITES AND ACQUISITIONS
Sites reduced from 48 to 35, optimising product range and resources with further network
optimisation planned, whilst maintaining regional presence and services
20

OPERATIONAL & SUPPLY CHAIN EXCELLENCE: DISTRIBUTION
21
Warehousing brought in-house from November 2018
•Over 12,000 product lines transferred to ‘mother
centres’ from external warehouses
•Resulted in $2.2m of savings compared to FY18
•Evaluating supply chain for further efficiencies -
annualised benefits expected in FY20 onwards
Labour cost efficiencies and integration of acquisitions
•Integration of acquisitions to core business,
reducing duplication of sites and labour
•Inter-branch resources shared to improve
operational capacity
-
500
1,000
1,500
2,000
2,500
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
$K
YTD
DISTRIBUTION LABOUR COSTS SAVINGS
FY19 BenefitsFY18 Baseline (Relative)
-
1,000
2,000
3,000
4,000
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
$K
YTD
DISTRIBUTION WAREHOUSE COSTS
FY19 ActualFY18 Baseline
Savings
Achieved
Savings
Achieved

OPERATIONAL & SUPPLY CHAIN EXCELLENCE: INFRASTRUCTURE
Manufacturing efficiencies in reinforcing
•Introduction of management processes to drive
machine efficiencies
•FY19 direct labour costs/tonne reduced by 31%
compared to FY18
•Consolidation of manufacturing sites to improve
machine utilisation and reduce costs
Freight efficiencies
•Management & business process changes
introduced to improve freight recoveries in the
Rollformingbusiness
•88% improvement in benefits achieved relative to
the FY18 baseline
22
200
400
600
800
1,000
1,200
1,400
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
$K
YTD
INFRASTRUCTURE FREIGHT EFFICIENCIES
FY18 BaselineFY19 Actual
Benefits
Achieved
0%
50%
100%
150%
200%
JulAugSepOctNovDecJanFebMarAprMayJun
REINFORCING MANUFACTURING LABOUR COST
(% FY18 annual average cost)
FY18FY19
Savings
Achieved

STRATEGY
AND OUTLOOK

STRATEGIC PILLARS AND GOALS
STRATEGIC PILLARS
BUSINESS GOALS
DELIVER ON OUR CUSTOMER
SERVICE PROMISE –ON TIME,
EVERY TIME
FURTHER RESTRUCTURE OUR
BUSINESS MODEL TO REDUCE
SUPPLY CHAIN & BUSINESS
COMPLEXITY
IMPROVE BUSINESS PROCESS &
CONTROLS
SAFE AND HEALTHY WORK
ENVIRONMENT
QUALITY PROCESSES
QUALITY PRODUCTS
CONTINUAL IMPROVEMENT
PRODUCTS AND SERVICES TO
MEET CUSTOMERS’ NEEDS
LEVERAGE OUR TECHNICAL
EXPERTISE
DELIVERY ON TIME AND ON
SPEC
LEVERAGE OUR PROCUREMENT
AND SUPPLY CHAIN SCALE
EXCELLENT INVENTORY
MANAGEMENT
EMPLOY DATA ANALYTICS TO
BETTER SERVICE CUSTOMERS
DRIVE EFFICIENCIES
DEVELOP LEADERS
EVERYONE MATTERS
RECOGNISE PERSONAL AND
TEAM CONTRIBUTIONS
PROVIDE A REWARDING
WORKPLACE
OUR GOAL IS TO BE THE LEADER IN BUYING, SELLING, PROCESSING AND PLACING STEEL PRODUCTS IN NZ
24

ACHIEVING OUR GOALS
25
BUSINESS
GOALS
DELIVER ON OUR CUSTOMER
SERVICE PROMISE –ON TIME,
EVERY TIME
•Refinecustomer segmentation tobetter support our customers needs
•Improvesales effectiveness through solution bundling and identification of cross
category opportunities
•Continuebusiness-wide focus on delivering products in full, on time and in spec
FURTHER RESTRUCTURE
BUSINESS MODEL TO REDUCE
SUPPLY CHAIN AND BUSINESS
COMPLEXITY
•Continue SKU rationalisation, including repricing and removing products that don’t
meet required returns
•Realign supply chain capability to the business units to ensure decision making is
closest to the customer
•Optimise propertyfootprint and freight network to both deliver on our customer
service promise and minimise cost
•Finetune demand forecast and sales and operation planning processes to maximise
inventory availability
•Ensure products are handled efficiently and held for the minimum amount of time –
from mills, shipping, freight to warehouse, warehousing and freight to customer
IMPROVE BUSINESS PROCESS
AND CONTROLS
•Improve pricemanagement by incorporating analytics
•Increase product margin through point of sale controls and training , and ongoing
production efficiency initiatives
•Active weekly monitoring of gross margin performance by senior management
•Continue automation of financial processes
•Capture benefits from our IT investments

Construction
•Highly competitive market experiencing high demand,
but risk sharing and profitability an issue
•Residential consents remain healthy
•Weakening construction sentiment and ongoing price
pressures, key headwinds to monitor
Infrastructure
•Large infrastructure projects ongoing, opportunities in
energy, water and marine
•Infrastructure pipeline promising; $1.7b in capital
funding for hospitals over the next two years
Manufacturing
•Softening demand and confidence domestically
•Lower interest rates and labourmarket constraints likely
to incentiviseinvestment
Rural
•Stable outlook
•Changing dynamics with move from dairy conversion to
maintenance programmes and other opportunities
SECTOR DYNAMICS
Steel & Tube Market Segments
Based on sales data for FY19
26
Steel & Tube has identified a number of initiatives to
better respond to changing sector dynamics

OPPORTUNITIES AND CHALLENGES
Focus On Maximising Opportunities And Mitigating Challenges
Opportunities
•Steel remains a preferred building material
•Multi-unit dwellings are an increasing share in the
residential sector
•Increased central and local government funded
infrastructure, housing and development projects
•Increased intensity of steel in buildings including seismic
reinforcement
•Leveraging cross-selling of complimentary product
offerings
Challenges
•Ongoing competitive pressures
•Construction outlook more challenging impacting business
confidence
•Rising steel prices and input costs
27

FY20 OUTLOOK
Priority is margin improvement leading to profitable growth
•FY20 results will reflect market trends and competitive intensity
across majority of sectors in which S&T operates
•Focus on further cost efficiencies, reducing business complexity
and streamlining the supply chain
•Competitive advantage to be built through maximising cross-
selling opportunities, margin management and leveraging the AX
ERP system to support customers with digital solutions
•Product and asset footprint will continue to be improved. Plans
being reviewed for the three remaining owned properties –
anticipated that two are surplus to requirements
•Additional benefits to be gained from Strive programme.Costs
associated with Strive initiatives will be realised in the first half
results, however, will benefit the full year results.
28
28

QUESTIONS

CAPITAL MANAGEMENT
Annual Capital Structure Targets
•Gearing Ratio (Net debt to net debt + equity)
within target range of < 30% -35%
•Net debt to EBITDA to be < 2.0 times
1)FY16 dividend reflects gain on sale of Bowden Road
2)Adjusted for the impact of the capital raise concluded in September 2018
CapitalMetricsFY18FY19
Gearing Ratio
37.7%5.6%
Net Debt: EBITDA4.60.6
Dividend Policy
Dividend payoutratio target of between 60% and 80%
of ‘normalised’ net earnings adjusted for any material
non-trading items and subject to relevant factors at
the time including working capital and opportunities
for growth
FY19 Final dividend of 1.5 cents per share to be paid
on 27 September 2019
Cents per
Share
FinalTotal
ActualAdj
2
ActualAdj
2
FY1510.05.519.010.4
FY1613.5
1
7.422.512.3
FY177.03.816.08.7
FY180.00.07.03.8
FY191.51.55.05.0
30

FY19 HALF YEAR PERFORMANCE
•2H19 Normalised
1
revenue was $17.3m lower
than 1H19 Normalised
1
revenue of $257.2m
•2H19 Normalised
1
EBIT of $6.3m was $3.4m
lower than 1H19 Normalised EBIT of $9.7m
•Margin shortfall due to significant industry
contraction to higher value segments
combined with changes in product mix
•NZ IFRS 9 impact was flat across the year but
half-on-half volatility impacted comparability
and construction sector stresses also affected
2H19 debtor provisioning
13.4
9.7
(0.3)
6.3
(5)
0
5
10
15
20
1H181H192H182H19
$M
NORMALISED
1
EBIT 1H:2H
249.3
257.2
224.2
239.9
200
220
240
260
1H181H192H182H19
$M
NORMALISED
1
REVENUE 1H:2H
31
1) See Slide 32 and 33 for definitions of financial terms and reconciliation of normalisedresults

NON-GAAP FINANCIAL INFORMATION
Non-GAAP financial information: Steel & Tube uses several non-GAAP
measures when discussing financial performance. These include
NormalisedEBIT and Working Capital. Management believes that these
measures provide useful information on the underlying performance of
Steel & Tube’s business. They may be used internally to evaluate
performance, analysetrends and allocate resources. Non-GAAP financial
measures should not be viewed in isolation nor considered as a substitute
for measures reported in accordance with NZ IFRS.
Non-trading adjustments/Unusual transactions: The financial results for
FY18 included a number of unusual transactions, considered to be non-
trading in either their nature or size. These transactions were excluded
from normalisedearnings. The following reconciliation is intended to assist
readers understand how the earnings reported in the Financial Statements
for the year ended 30 June 2019 and 30 June 2018 reconcile to normalised
earnings. Non-trading adjustments of $0.8 million and $(49.3) million were
included in the FY19 and FY18 results respectively. Steel & Tube’s
unaudited reconciliation of non-GAAP measures to GAAP measures for the
financial year ended 30 June 2019 is detailed in the following table.
*FY18 Inventory write-downs and write-offs have been reduced by approximately $3.9m following further information becoming available during FY19,
which identified that $3.9m of the FY18 write-off related to that year’s production process. Further detail is contained in Steel & Tube’s updated trading
guidance for FY19 as notified to the NZX on 20 May 2019.
RECONCILIATION OF GAAP TO NON GAAP MEASURESJuneJune
Year ended 30 June 201920192018
$000$000
GAAP: Earnings/(Loss) before interest and tax (EBIT)16,795(36,187)
Add back unusual transactions (non-trading adjustments):
Inventory write-downs and write-offs *-20,056
Costs of exit from S & T Plastics-10,849
Impairment of Intangible assets (Note C2)-12,127
Business rationalisation (Note E2)-2,727
Organisational restructuring (Note E2)-3,317
Other unusual costs-762
S & T Plastics EBIT (no longer contributing to trading EBIT)(773)(558)
Normalised EBIT -Non -GAAP16,02213,093
32

GLOSSARY OF TERMS
EBIT: This means Earnings/ (Loss) before the deduction of interest and tax and is calculated as profit for the year before net interest
costs and tax. FY18 EBIT was impacted by a number of non-trading adjustments totalling$(49.3) million, details of which are included in
S&T’s Annual Report. Management have also excluded non-trading gains from the disposal of S&T Plastics assets in FY19.
Non-trading adjustments include:
•FY18 Business rationalisation: Includes business change costs incurred to rationalise Steel & Tube’s property footprint including
onerous leases, rationalisation and re-organisation of manufacturing operations and delivery logistics operations, and costs
incurred in reviewing and streamlining operations.
•FY18 Organisational restructuring: Includes the costs incurred to improve capabilities, remove duplication and inefficiencies and
capture synergies from acquisitions.
•FY18 Other Unusual Costs: Include significant doubtful debt and contract disputes provisions, offset by a net gain on sale of
properties and settlement of acquisition earn out payments.
•FY18 and FY19 S&T Plastics: S&T announced it was exiting its Plastics business in May 2018 and wrote-down the value of assets.
The financial results of this business has been excluded from FY18 and FY19, which has also excluded a small gain realisedfrom
disposal of assets.
Normalised EBIT: This means EBIT after normalisationadjustments.
NormalisedNet Profit after Tax (NPAT): This means NPAT after normalisationadjustments net of tax.
Working Capital:This means the net position after current liabilities are deducted from current assets. The major individual components
of working capital for the Group are Inventories, Trade and other receivables and Trade and other payables. How the Group manages
these has an impact on operating cash flow and borrowings.
33

This presentation has been prepared by Steel & Tube Limited (“STU”).The information in this presentation is of a general nature only. It is not
a complete description of STU.
This presentation is not a recommendation or offer of financial products for subscription, purchase or sale, or an invitationorsolicitation for
such offers.
This presentation is not intended as investment, financial or other advice and must not be relied on by any prospective investor.It does not
take into account any particular prospective investor’s objectives, financial situation, circumstances or needs, and does notpurport to contain
all the information that a prospective investor may require. Any person who is considering an investment in STU securities should obtain
independent professional advice prior to making an investment decision, and should make any investment decision having regardtothat
person’s own objectives, financial situation, circumstances and needs.
Past performance information contained in this presentation should not be relied upon (and is not) an indication of future performance.This
presentation may also contain forward looking statements with respect to the financial condition, results of operations and business, and
business strategy of STU. Information about the future, by its nature, involves inherent risks and uncertainties. Accordingly, nothing in this
presentation is a promise or representation as to the future or a promise or representation that an transaction or outcome referred to in this
presentation will proceed or occur on the basis described in this presentation. Statements or assumptions in this presentation as to future
matters may prove to be incorrect.
A number of financial measures are used in this presentation and should not be considered in isolation from, or as a substitutefor, the
information provided in STU’s financial statements available at www.steelandtube.co.nz.
STU and its related companies and their respective directors, employees and representatives make no representation or warranty of any
nature (including as to accuracy or completeness) in respect of this presentation and will have no liability (including for negligence) for any
errors in or omissions from, or for any loss (whether foreseeable or not) arising in connection with the use of or reliance on, information in this
presentation.
DISCLAIMER
34

---

Template
Results announcement
(for Equity Security issuer/Equity and Debt Security issuer)
Updated as at 8 May 2019

Results for announcement to the market
Name of issuer Steel & Tube Holdings Limited
Reporting Period 12 months to 30 June 2019
Previous Reporting Period 12 months to 30 June 2018
Currency NZD

FY19 Amount
(000s)
FY18 Amount
(000s)
Percentage
change
Revenue from continuing
operations
$497,063 $473,490 5.0%
Total Revenue $498,110 $495,806 0.5%

GAAP Net profit/(loss) after
tax attributable to security
holders
$10,415 ($32,050)
Add Back: Unusual
Transactions/Non-Trading
Adjustments
($772) $49,280
Tax Impact of the Above $216 ($11,553)
Normalised Net profit/(loss)
after tax attributable to
security holders (non-GAAP)
$9,859 $5,677 73.7%

GAAP: Earnings/(Loss)
before interest and tax (EBIT)
$16,795 ($36,187)

Add Back Unusual
Transactions/Non Trading
Adjustments
($772) $49,280

Normalised EBIT comparable
to May 2019 Earnings
Guidance (non-GAAP)
$16,022 $13,093 22.3%

Net profit/(loss) attributable
to security holders
$10,415 ($32,050)

Final Dividend
Amount per Quoted Equity
Security
$0.01500000
Supplementary dividend per
Quoted Equity Security
$0.00264706
Imputed amount per Quoted
Equity Security
$0.00583333
Record Date 13 September 2019
Dividend Payment Date 27 September 2019

Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$1.19 $1.27
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
Non-GAAP financial information
Steel & Tube uses several non-GAAP measures when
discussing financial performance. These include normalised
EBIT and normalised NPAT. Management believes that these
measures provide useful information on the underlying
performance of Steel & Tube’s business. They may be used
internally to evaluate performance, analyse trends and allocate
resources. Non-GAAP financial measures should not be viewed
in isolation nor considered as a substitute for measures reported
in accordance with NZ IFRS. Reconciliations of non-GAAP
measures to GAAP measures are detailed within this
announcement.
Steel & Tube reports it’s normalised EBIT as $16.0m for
FY2019. This is directly comparable to the earnings guidance
issued on 20 May 2019, which forecast normalised EBIT of
$15.5m to $17.5m. Further details on the unusual
transactions/non-trading adjustments are included in the investor
presentation and audited financial statements for the year ended
30 June 2019.
Definitions:
 EBIT: This means earnings before interest and tax and is
calculated as profit for the period before net finance costs
and tax.
 Normalised EBIT: This means EBIT after normalisation
adjustments.
 Normalised Net Profit after Tax: This means Net Profit after
Tax after normalisation adjustments net of tax.
 Normalisation adjustments: These are transactions that are
unusual by size or nature in a particular accounting period.
Excluding these transactions can assist users in forming a
view of the underlying performance of the Group. Unusual
transactions can be as a result of specific events or
circumstances or major acquisitions, disposals or
divestments that are not expected to occur frequently.
Authority for this announcement
Name of person

authorised
to make this announcement
Mark Malpass
Contact person for this
announcement
Mark Malpass
Contact phone number +64 27 777 0327
Contact email address mark.malpass@steelandtube.co.nz
Date of release through MAP

23 August 2019

Audited financial statements accompany this announcement.

---

Template
Distribution Notice

Updated as at 8 May 2019

Please note: all cash amounts in this form should be provided to 8 decimal places

Section 1: Issuer information
Name of issuer Steel & Tube Holdings Limited
Financial product name/description Ordinary Shares
NZX ticker code STU
ISIN (If unknown, check on NZX
website)
NZSUTE0001S5
Type of distribution
(Please mark with an X in the
relevant box/es)
Full Year X Quarterly
Half Year Special
DRP applies
Record date 13 September 2019
Ex-Date (one business day before
the Record Date)
12 September 2019
Payment date (and allotment date for
DRP)
27 September 2019
Total monies associated with the
distribution
1

$2,489,588
Source of distribution (for example,
retained earnings)
Retained Earnings
Currency NZD
Section 2: Distribution amounts per financial product
Gross distribution
2
$0.02083333
Total cash distribution
3
$0.01500000
Excluded amount (applicable to listed
PIEs)
NIL
Supplementary distribution amount $0.00264706
Section 3: Imputation credits and Resident Withholding Tax
4

Is the distribution imputed Fully imputed
Partial imputation
No imputation
If fully or partially imputed, please
state imputation rate as % applied
100%
Imputation tax credits per financial $0.00583333

1
Continuous issuers should indicate that this is based on the number of units on issue at the date of the form
2
“Gross distribution” is the total cash distribution plus the amount of imputation credits, per financial product, before the deduction of
Resident Withholding Tax (RWT).
3
“Total cash distribution” is the cash distribution excluding imputation credits, per financial product, before the deduction of RWT.
This should include any excluded amounts, where applicable to listed PIEs.
4
The imputation credits plus the RWT amount is 33% of the gross distribution for the purposes of this form. If the distribution is fully
imputed the imputation credits will be 28% of the gross distribution with remaining 5% being RWT. This does not constitute advice
as to whether or not RWT needs to be withheld.

product
Resident Withholding Tax per
financial product
$0.00104167
Section 4: Distribution re-investment plan (if applicable)
DRP % discount (if any)
N/A
Start date and end date for
determining market price for DRP
N/A N/A
Date strike price to be announced (if
not available at this time)
N/A
Specify source of financial products
to be issued under DRP programme
(new issue or to be bought on
market)
N/A
DRP strike price per financial product
N/A
Last date to submit a participation
notice for this distribution in
accordance with DRP participation
terms
N/A
Section 5: Authority for this announcement
Name of person

authorised to make
this announcement
Greg Smith
Contact person for this
announcement
Greg Smith
Contact phone number (04) 570-5000
Contact email address Greg.Smith@steelandtube.co.nz
Date of release through MAP

23 August 2019

---

ANNUAL REPORT
STEEL & TUBE HOLDINGS LIMITED

STEEL & TUBE ANNUAL REPORT 2019

BUILDING
STRENGTH &
RESILIENCE
Steel & Tube is a proud New Zealand company and a leading
provider of steel solutions, from nuts and bolts through to
roofing, reinforcing and floor decking.
Every day, we are helping to build strength and resilience in
some of the most important infrastructure and construction
developments nationally, and across many sectors of the
economy.
We are building resilience in our own company too, as
we focus on creating a business that is fit for the future.
With decades of experience and an unrelenting focus
on superior customer service, quality and safety, we are
positioning Steel & Tube as the preferred choice for steel
customers across New Zealand.
STEEL IS EVERYWHERE – IN
OUR HOMES, WORK PLACES,
ON FARMS, ROADS, BRIDGES,
AND FACTORIES. EVERYWHERE
YOU LOOK, STEEL IS BEING
USED TO ADD STRENGTH AND
DURABILITY. IT IS ONE OF THE
MOST COMMON MATERIALS
USED AROUND THE WORLD,
CHOSEN FOR ITS VERSATILITY,
HIGH PERFORMANCE LEVELS
AND RELIABILITY.
01

ON BEHALF OF THE BOARD AND MANAGEMENT,
WE ARE PLEASED TO PRESENT TO YOU THE ANNUAL
REPORT FOR STEEL & TUBE HOLDINGS LIMITED FOR
THE FINANCIAL YEAR ENDED 30 JUNE 2019.
Mark Malpass
Chief Executive Officer
Susan Paterson
Chair
22 August 2019
02
STEEL & TUBE ANNUAL REPORT 2019

FY19 AT A GLANCE 04
CHAIR AND CEO’S REPORT 06
OUR STRATEGY AND FOCUS 13
COMMITTED TO SAFETY AND QUALITY 14
PUTTING THE CUSTOMER AT THE
HEART OF OUR BUSINESS 16
OPERATIONAL AND SUPPLY
CHAIN EXCELLENCE 18
SUPPORTING A WINNING TEAM 20
IN OUR COMMUNITIES 21
LEADERSHIP TEAM 22
BOARD 24
FY19 FINANCIAL MEASURES EXPLAINED 26
FIVE YEAR FINANCIAL PERFORMANCE 28
FINANCIAL STATEMENTS 30
INDEPENDENT AUDITOR'S REPORT 72
GOVERNANCE 77
DIRECTORY 92
CONTENTS
Franklin: The Centre
03

STRIVE BUSINESS TURNAROUND
programme contributed $10m in FY19,
with initiatives strengthening the
company and providing longer term value.
GROSS MARGIN PERFORMANCE
impacting on results, with Project Strive
benefits offset by market contraction
in some sectors and competitive price
pressures, particularly in 2H19.
STRONG FOCUS ON CUSTOMER
needs resulting in increased business
f rom existing and new customers.
DISCIPLINED COST MANAGEMENT
leading to reduction in normalised
operating costs with underlying
structural efficiencies more than
offsetting cost increases.
IMPROVED INVENTORY
MANAGEMENT and procurement and
pricing strategies expected to deliver
further benefit in FY20.
PRUDENT CAPITAL MANAGEMENT
and strong balance sheet with net
debt reduced to $15m, and our
gearing ratio down to 5.6%.
CONTINUING OPTIMISATION of
Steel & Tube’s national network, with
sites reduced f rom 48 in January
2018 to 35 at 30 June 2019.
STRENGTHENED LEADERSHIP TEAM
to support earnings drive and project
execution focus including digital ambition.
AX ERP SYSTEM enabling more
detailed data for better business analysis.
RESPONDED TO UNSOLICITED
INDICATIVE OFFER in September
2018 f rom Fletcher Building Limited
– Board considered the indicative
price undervalued Steel & Tube and
that it was not likely to be executable
due to regulatory hurdles.
FY19
AT A GLANCE
04
STEEL & TUBE ANNUAL REPORT 2019

1
See pages 26 and 27 for definitions of financial terms and reconciliation of normalised results
REPORTED ($M)FY19FY18
REVENUE
498.1495.8
EBIT
16.8(36.2)
NPAT
10.4(32.1)
NORMALISED
1
REVENUE
$497.1M
5% normalised revenue increase driven by
focus on delivering high levels of customer
service.
STRIVE BUSINESS
TURNAROUND PROGRAMME
$10.0M
CONTRIBUTION
Work is continuing with further benefits
expected in FY20.
NORMALISED
1
EBIT
$16.0M, UP 22%
Gross margin performance below
expectations, with Strive benefits
offset by market contraction and
competitive price pressures.
DISCIPLINED COST
MANAGEMENT
4% REDUCTION
in normalised operating costs due to
underlying structural efficiencies more
than offsetting cost increases.
NET DEBT
$15.0M
Net debt reduced significantly to $15m due to
capital raise, improved operating cashflows,
tighter working capital management and
prudent capital expenditure.
NORMALISED
1
NPAT
$9.9M,
UP 74%
TOTAL FY19
DIVIDENDS
5.0 CENTS
PER SHARE
FY20 OUTLOOK
Improved performance expected in
FY20. Focus on customer service, margin
improvement, further cost and supply chain
efficiencies and business simplification will
enable longer term earnings growth.
05

THE 2019 FINANCIAL YEAR DID NOT DELIVER
THE RESULT WE WERE SEEKING, HOWEVER
GOOD PROGRESS ON OUR BUSINESS TURN
AROUND PROGRAMME WAS ACHIEVED.
WE DELIVERED ON COMMITMENTS SUCH
AS REVENUE GROWTH, OPERATING COST
EFFICIENCIES AND IMPROVED WORKING
CAPITAL MANAGEMENT. WHILE THERE
IS MORE TO BE DONE, OUR COMPANY
IS NOW STRONGER, MORE EFFICIENT
AND DELIVERING A MORE ATTRACTIVE
CUSTOMER PROPOSITION.
W
e went into the FY19 year with a
continued focus on strengthening
our underlying business units,
through our Project Strive
initiatives. These were targeted at four areas –
safety and quality, our customers, operational
and supply chain excellence and our people. The
goals were to make our business more efficient,
improve the customer service and lift our financial
performance, while continuing to deliver a
rewarding and safe workplace for our people.
We have made good progress, with Project
Strive delivering $10m in benefits and savings.
Revenues increased on the back of a stronger
focus on customer needs and structural long term
efficiencies in operating costs were delivered.
Improved inventory management, working capital
disciplines, procurement and pricing strategies
have also been achieved.
As expected, the benefits from Project Strive
continued to flow through in the second half
of the year. However, at the same time, we
also saw a change in market conditions with a
softening in business confidence, contraction
in some high value categories and increased
competitive pricing pressure which impacted
on gross margins. The positive revenue gains
and cost efficiencies we were achieving were
not enough to offset market contraction and
price pressures, and as a result, our FY19 financial
performance was below our expectations.
The tighter market conditions and competitive
landscape are expected to prevail in FY20.
While the work we have already done has
better positioned us for this more challenging
environment, we are adapting further to ensure
our business model is fit for purpose.
Further changes are being undertaken to reduce
business and supply chain complexity and we are
continuing to identify ways to improve business
processes and controls. Our pursuit of customer
excellence will help to ensure we remain a relevant
and attractive option for customers.
Steel & Tube has a number of strengths, including
our national network providing a regional and
metropolitan presence, a broad product range,
technical capability, operational integrity and high
standards of safety and quality.
The underlying value inherent in our business
was reflected in last year’s non-binding indicative
offer (NBIO) to buy the company. While the Board
considered the offer did not reflect full value
and had advice that regulatory hurdles would be
unlikely to be overcome, we had moved to secure
an independent valuation, before the NBIO was
then withdrawn.
We are very focused on building a business that
is fit for the future and, while this is taking longer
than originally anticipated, we remain confident
in our long-term prospects as a leader in the steel
industry in New Zealand.
CHAIR AND
CEO’S REPORT
06
STEEL & TUBE ANNUAL REPORT 2019

BUILDING A STRONGER BUSINESS
Following a company-wide review in FY18, we
commenced a restructure of our organisation to
capture synergies from the business acquisitions
in prior years and improve capabilities and
efficiencies. We continued this work in FY19,
with further gains being made.
The organisational restructuring has seen our
property footprint streamlined, with businesses
co-located onto the same sites and improved
utilisation of existing capacity. Our network
has reduced from 48 sites in January 2018 to
35 sites at the end of June 2019, with further
network optimisation underway. This is providing
operational and supply chain efficiencies as
well as improving our ability to offer a more
comprehensive customer service while
maintaining regional services and presence.
In addition, the exit from the Plastics business
was completed during the financial year.
Within our organisation, the AX ERP system is
providing more detailed data for better business
analysis. This is allowing us to be more flexible
and adapt to changing dynamics around pricing,
procurement and inventory, as well as measure
and monitor key metrics. We are also using this
information to develop further customer focused
solutions.
Improved service levels and delivery performance
across the business has benefited sales, with a
number of large projects being won on the back
of a growing reputation for quality, customer
service, delivery and operational performance.
Particular highlights include supplying the
Westfield Newmarket project, the New Zealand
International Convention Centre, Commercial Bay,
the Puhoi to Warkworth and Transmission Gully
motorway projects, and the Auckland City Rail
Link development.
Product ranges have been reviewed with the
customer in mind and new, desirable products
have been added, such as the new SR flooring
platform for ComFlor which is proving very
popular.
We have established more efficient and cost-
effective freight and supply chain logistics. As well
as the integration and consolidation of existing
facilities, we have exited third party warehousing
arrangements and rationalised and retendered
freight runs.
The manufacturing excellence programmes in
Reinforcing are delivering increasing machine
efficiency and productivity, and reducing overtime
in many locations. We have also invested in our
own reinforcing and composite floor decking site
installation capability to provide our customers
with a service offering that is safe, high quality,
reliable and customer service focused.
Quality systems have been further enhanced
including achievement of ISO 9001:2015
certification and commencement of independent
audits across our international steel mill suppliers
by Lloyd’s Register.
Safety remains a priority and investment has been
made into machine guarding and training across
our manufacturing sites. Of note, the Employee
Total Recordable Injury Frequency Rate (TRIFR) fell
to 1.5, significantly below industry benchmarks.
A new operating structure has been established
including a strengthened leadership team
to support our focus on earnings and project
execution, including our digital ambitions.
We have finished the FY19 year with a
stronger and more efficient business. While
further work is still to be done to adapt to
the more challenging market conditions, the
initiatives being undertaken are expected
to deliver an improvement in both our
Distribution and Infrastructure divisions
and position us well for the future.
07

FY19 FINANCIAL PERFORMANCE
Revenues were $498.1m, earnings before interest
and tax (EBIT) were $16.8m and net profit after tax
(NPAT) was $10.4m.
On a normalised basis (excluding Plastics and FY18
non-trading adjustments), EBIT improved 22% to
$16.0m and NPAT increased 74% to $9.9m.
The Project Strive turnaround programme
delivered a $10m benefit in FY19, contributing
to a 5% improvement in revenues and a 4%
reduction in operating costs (on a normalised
basis). Good progress was also made improving
safety performance and quality systems.
The 5% normalised revenue gain was a result
of new business being won on a combination
of improved customer service, delivery and
operational performance.
Operating costs were down 4% year on year on
a normalised basis, with significant structural
efficiencies achieved and more being targeted.
Key drivers included benefits from network
optimisation, labour and other cost efficiencies.
Some short term cost impacts were absorbed
from Strive initiatives which will deliver long term
benefits and value.
Gross margin performance was below
expectations with revenue gains and
cost efficiencies not enough to offset
the impact of market contraction and
competitive price pressures.
Price competition was significant throughout
the second half of FY19, business confidence has
softened and some higher value sectors have
contracted (stainless market particularly).
The impact has mainly been seen in the
Distribution businesses.
A disciplined approach to managing working
capital resulted in improved inventory availability
across the business whilst reducing inventory
holdings, and improving debt collection rates
led to a reduction in overdue debt balances and
improved cash flow.
Prudent capital expenditure of $7.2m was slightly
below depreciation & amortisation and focused on
productivity improvements.
The company significantly improved cash flow
generation with net operating cash flow of $21.3m.
Net debt reduced to $15.0m due to a combination
of the capital raise, improved operating cash flows,
tighter working capital management and prudent
capital expenditure. The company has a strong
balance sheet providing the financial strength to
execute strategies and manage business trading
cycles.
While Directors are cognisant of the work still
to be done, the Board remains confident in the
company’s strategic progress and declared a
final FY19 dividend of 1.5 cps, taking total FY19
dividends to 5.0 cps.
08
STEEL & TUBE ANNUAL REPORT 2019

STRIVE IN ACTION
2,500
2,000
1,500
1,000
500
DISTRIBUTION DIVISION LABOUR COSTS SAVINGS
FY18 Basellne
(Relative)
FY19 Benefits
Jul 18
Aug 18
Sep 18
Oct 18
Nov 18
Dec 18
Jan 19
Feb 19
Mar 19
Apr 19
May 19
Jun 19
YTD
$K
4,000
3,000
2,000
1,000
DISTRIBUTION DIVISION WAREHOUSE COSTS
FY18 Baseline
Savings
Achieved
Savings
Achieved
Benefits
Achieved
FY19 Actual
Jul 18
Aug 18
Sep 18
Oct 18
Nov 18
Dec 18
Jan 19
Feb 19
Mar 19
Apr 19
May 19
Jun 19
YTD
$K
INFRASTRUCTURE DIVISION FREIGHT EFFICIENCIES
FY18 Baseline
FY19 Actual
Jul 18
Aug 18
Sep 18
Oct 18
Nov 18
Dec 18
Jan 19
Feb 19
Mar 19
Apr 19
May 19
Jun 19
YTD
1,600
1,400
1.200
1,000
800
600
400
200
 
$K
09

INFRASTRUCTURE
Products are processed by Steel & Tube
before sale and are typically sold on
a contract or project basis, including
onsite installation.
DISTRIBUTION
Products are sourced from
preferred steel mills and distributed
through Steel & Tube’s national
network of branches.
PURLINS
CFDL
COIL PROCESSING
REINFORCING
ROOFING
CHAIN & RIGGING
STAINLESS STEEL
PIPING SYSTEMS
FASTENINGS
STEEL
RURAL PRODUCTS
COMFLOR®
ROLL-FORMING
REO/CFDL
OUR BUSINESS DIVISIONS
10
STEEL & TUBE ANNUAL REPORT 2019

FY19 DIVISION PERFORMANCE
DISTRIBUTION
The Distribution division is a lower margin, high
volume business and was the hardest hit by the
changing market conditions and competitive
pressure, with stainless steels, in particular,
suffering from a significant market contraction.
FY19 revenue of $287.7m was in line with last year,
while normalised EBIT improved slightly from
$2.6m
1
to $2.9m, reflecting a changing product
mix and the adverse impact on gross margins.
Volumes increased driven by improving product
availability, deliveries and sales team focus, and
despite aggressive price pressures from several
key competitors.
Overall costs reduced significantly with the exit
from third party warehousing, site integrations
and optimisation of staffing levels. A focus on
cash also resulted in improved debtor days and
total inventory levels. Attention to sales force
excellence saw a number of new key customer
account wins, and investment was made into the
Chain & Rigging business, including the addition
of four new mobile vans.
The focus for FY20 is on further streamlining and
simplifying business operations whilst embedding
an improved service model and better leveraging
cross selling opportunities that ensure customer
needs are met.
INFRASTRUCTURE
The Infrastructure division reported pleasing
improvements in revenue and EBIT, to $209.4m
and $11.9m respectively. Revenue growth and
EBIT improvement were driven by strong sales
in rollforming and metal floor decking products,
project tender success and machine efficiency
gains in reinforcing.
Although margins were under pressure, freight
savings and improved labour productivity helped
drive the improved results. Revenues benefited
from building a strong and growing reputation for
delivery and investments such as the introduction
of a new composite floor decking profile.
The focus for FY20 is on continuing to drive
manufacturing efficiencies, growing new product
offerings and leveraging our strong quality and
safety performance to demonstrate the value
customers get when buying from us.
DistributionInfrastructure
FY19 REVENUE
$209.4m
$287.7m
FY19 EBIT
$2.9m
$11.9m
1
FY18 normalised EBIT has been adjusted to be consistent with the divisional allocation of costs in FY19.
11

STRATEGY, GOALS AND OUTLOOK
Our four pillars remain the foundation of our
strategy. These are the areas which we believe
are essential to creating a great business – safety
& quality, operational & supply chain excellence,
a strong customer focus, and our people.
Improving margin performance and delivering
profitable growth are the priorities for
management this year. We have identified three
key goals which are of primary importance and
have a range of initiatives planned for each.
Project Strive initiatives will continue to focus on
additional cost efficiencies by reducing business
complexity and streamlining the supply chain.
Competitive advantage is expected to be built
through maximising cross-selling opportunities,
continued focus on margin improvement and
leveraging the AX ERP system to support
customers with digital solutions. Benefits will
include improved product availability, service
and delivery times for customers, and lower
inventory and logistics costs for the business.
The product and asset footprint will continue to be
improved and we are reviewing options for the sale
of remaining owned properties which are surplus
to requirements. Costs associated with Strive
initiatives will be realised in the first half results,
however, will benefit the full year results.
Steel & Tube remains an important part of New
Zealand’s economy, providing customers with
choice and access to specialised products and
technical knowledge. We remain absolutely
focused on improving the return on investment
and delivering value to our shareholders.
We expect to see a continuing improvement of
performance in FY20, as we focus on delivering
a stronger, sustainable, long term future for our
business.
The Annual Shareholders’ Meeting will be held in
Christchurch on 25 September 2019. We would
like to extend our thanks to Rosemary Warnock,
who has notified her intention to retire from the
Board at the Meeting. Rosemary has been a valued
member of the Board and has provided excellent
guidance through her role as Chair of the Health,
Safety and Environment Committee. Steel & Tube’s
health and safety performance has improved
significantly under her stewardship. As announced
on 15 August 2019, John Beveridge has been
appointed as an independent director and will
stand for election at the Meeting.
We look forward to welcoming shareholders and
updating you on our progress at that time.
Mark Malpass
Chief Executive Officer
Susan Paterson
Chair
12
STEEL & TUBE ANNUAL REPORT 2019

OUR GOAL IS TO BE THE LEADER IN BUYING, SELLING,
PROCESSING AND PLACING STEEL PRODUCTS IN NZ
BUSINESS GOALS
STRATEGIC PILLARS
PRODUCTS AND
SERVICES TO MEET
CUSTOMER NEEDS
LEVERAGE OUR
TECHNICAL EXPERTISE
DELIVERY ON
TIME AND ON SPEC
DEVELOP LEADERS
EVERYONE MATTERS
RECOGNISE PERSONAL
AND TEAM
CONTRIBUTIONS
PROVIDE A REWARDING
WORKPLACE
SAFE AND HEALTHY
WORK ENVIRONMENT
QUALITY PROCESSES
QUALITY PRODUCTS
CONTINUAL
IMPROVEMENT
LEVERAGE OUR
PROCUREMENT AND
SUPPLY CHAIN SCALE
EXCELLENT INVENTORY
MANAGEMENT
EMPLOY DATA ANALYTICS
TO BETTER SERVICE OUR
CUSTOMERS
DRIVE EFFICIENCIES
DELIVER ON OUR
CUSTOMER SERVICE
PROMISE - ON TIME
EVERY TIME
Refine customer segmentation to better support our
customers needs
Improve sales effectiveness through solution
bundling and identification of cross category
opportunities
Continue business-wide focus on delivering products
in full, on time and in spec
FURTHER
RESTRUCTURE OUR
BUSINESS MODEL
TO REDUCE SUPPLY
CHAIN AND BUSINESS
COMPLEXITY
Continue SKU rationalisation, including repricing and
removing products that don’t meet required returns
Realign supply chain capability to the business units to
ensure decision making is closest to the customer
Optimise property footprint and freight network to both
deliver on our customer service promise and minimise
cost
Fine tune demand forecast and sales and operation
planning processes to maximise inventory availability
Ensure products are handled efficiently and held for the
minimum amount of time – from mills, shipping, freight
to warehouse, warehousing and freight to customer
IMPROVE BUSINESS
PROCESS AND
CONTROLS
Improve price management by incorporating analytics
Increase product margin through point of sale controls and
training, and ongoing production efficiency initiatives
Active weekly monitoring of gross margin performance by
senior management
Continue automation of financial processes
Capture benefits from our IT investments
13

ISO 9001 CERTIFICATION
We know quality products and practices are
critical for our customers. Having ISO 9001
certification demonstrates our commitment
to meeting our customer and stakeholders’
needs and expectations through quality and
continual improvement.
The updated 2015 standard is the best
practice quality management framework.
Steel & Tube has achieved ISO 9001
certification for the majority of its businesses,
with the remainder planned in the FY20 year.
INDEPENDENT SUPPLIER
AUDITING
As part of our strategy to place quality at the
fore and introduce ground breaking initiatives
that will set the benchmark for our quality
systems, Lloyd’s Register has been contracted
to perform assessments of Steel & Tube’s
key international and domestic suppliers.
Assessments commenced in October 2018
and these provide assurance that steel supply
mills meet local requirements and gives
our customers further independent quality
assurance of the products we supply.
INVESTMENT IN SAFE
WORKPLACES
People are at the centre of our organisation
and we consider health and safety to be of
fundamental importance. Our key deliverable
is to ensure that all Steel & Tube employees
perform their shift in a safe and efficient
manner and return home safely to their
families at the end of the day. Ensuring a
safe working environment is key to this.
A national machinery safeguarding assessment
and optimisation programme has recently
been completed, using AS/NZS 4024 as a
benchmark for compliance along with relevant
machine specific standards and WorkSafe
best practice guidelines. This has seen a
significant investment of a further $1.3m in
machinery guarding during the financial year.
EMPLOYEE TOTAL RECORDABLE INJURY
FREQUENCY RATE (TRIFR)
Continued safety focus and discipline has
contributed to a recordable injury frequency
rate well below industry average.
COMMITMENT TO
SAFETY & QUALITY
15
12
10
8
6
4
2
0
FY15
FY16
FY17
FY18
FY19
9.9
14.1
6.95.5
1.5
14
STEEL & TUBE ANNUAL REPORT 2019

15

INNOVATIVE THINKING
Putting the customer at the heart of
our business means putting ourselves
in our customers’ shoes and continually
looking for ways in which we can add
further value. The launch of the Building
Information Modelling specifications
portal – BIM-spec – is a case in point.
There continues to be the need for good
quality manufacturers BIM objects,
for use by designers and specifiers,
in the development and creation of
information-rich Building Information
Models. Within the industry at present,
there are few manufacturers who
have delved into the development of
BIM content for use by designers.
Steel & Tube has been quick to adapt to the
world of BIM content, developing our suite
of objects in collaboration with designers
and specifiers, ensuring what was being
developed would meet the varied needs
across the industry. The content is hosted
within an accessible platform on Steel &
Tube’s recently refreshed website, providing
technical users with access to a large library
of 2D and 3D content and building models
across a wide range of our products.
This is an outstanding advancement and
allows us to support architects at the
leading edge of design, as well as our more
traditional clients. Feedback from the
architectural community is that Steel & Tube
is a market leader in Building Information
Modelling.
WINNING NEW BUSINESS
We have a number of strengths, including
our national network, a broad product range,
technical capability, and high standards of
safety and quality. As experts in our field,
we pride ourselves on being able to offer
customers with a consistent end to end
experience, advising, sourcing and supplying
them with their steel requirements.
Our specialist technical knowledge and
growing reputation for being able to meet
the specifications and timing of crucial
jobs are key advantages in winning new
business.
Steel & Tube was recently selected to work
on the City Rail Link project, providing and
installing epoxy-coated reinforcing bars to
provide electrical isolation between sections
of the tunnel.
The City Rail Link project is the largest
single transport infrastructure project in
New Zealand’s history. Currently underway
is stage 1, which encompasses the stretch
of tunnel between Britomart and Queen St
station, with 16 tunnel sections.
Throughout the course of this project,
Steel & Tube will supply 1,500 tonnes of
reinforcing, with a team of up to 43 people
working on the job including a specialised
CAD draughtsman, two construction
managers and 30 to 40 steel fixers.
PUTTING THE
CUSTOMER AT
THE HEART OF
OUR BUSINESS
16
STEEL & TUBE ANNUAL REPORT 2019

17

BETTER BUSINESS
A number of big supply chain projects were undertaken during the year
including the move from an external warehousing supplier to managing it
in-house; the optimisation of freight logistics; and a focus on manufacturing
efficiencies in reinforcing. All of these initiatives are delivering customer and
business benefits, from improved product availability, service and delivery
times through to cost efficiencies and better inventory management.
IN-HOUSING THE WAREHOUSING FUNCTION
Warehouse costs have been reduced significantly, thanks to Steel & Tube’s
move away from an external warehouse supplier. We are now utilising
the capacity in our own assets and employees to warehouse stock in four
distribution centres on existing Steel & Tube sites. Over 12,000 product lines,
stored on 4,800 pallets were moved into the ‘mother centres’ over seven
months last year, with additional racking installed and temporary labour
bought in to receipt the large amount of product as it was transferred. The
move will allow product to be moved quickly to customers, on spec and on
time. Total cost savings in FY19 were $2.2m, with further gains expected in
future years now that the internal warehousing function has been established.
DRIVING EFFICIENCIES THROUGH FREIGHT
With more than 7,500 products delivered to customers every month, ranging
from boxes of nuts and bolts through to multi-tonne steel deliveries, freight is
a big part of our supply chain cost. Our requirements were put out to tender
in FY19, and a detailed review of freight runs and costs was undertaken. We
have now renegotiated contracts, resulting in significant savings, and are better
utilising freight runs, saving on costs and benefitting the environment with less
trucks on the road.
MANUFACTURING EFFICIENCIES IN REINFORCING
Every day we are measuring and better understanding our manufacturing
efficiency. During FY19, we introduced new management processes to help
drive further machine efficiencies. We also further consolidated manufacturing
sites to improve machine utilisation. These changes resulted in FY19 direct
labour costs/tonne reducing by 31% compared to FY18, improvements in our
performance and better engagement with our machine operators.
OPERATIONAL
AND SUPPLY
CHAIN
EXCELLENCE
18
STEEL & TUBE ANNUAL REPORT 2019

19

SUPPORTING A
WINNING TEAM
IMPROVING CONVERSATIONS ACROSS OUR COMPANY
Having a great culture and strong employee
engagement are essential to our success.
Following the recent employee engagement
survey, volunteers from across the business
banded together to identify opportunities
to improve the quality and frequency of
interactions between employees and their
managers.
The team developed MyChat - short fortnightly
check-ins between employees and their leaders.
Following a nationwide roadshow, we have now
adopted this initiative across the company.
As part of this, the team also developed a series
of interactive tools to help demonstrate an
effective conversation, including videos of role
plays (with the employees as actors).
Supporting this has been Courageous
Conversations training for leaders across the
organisation. These one-day workshops are
helping our leaders be effective and confident
holding conversations about challenging topics.
Together with the MyChat conversations, this
focus is driving an increase in the frequency
and quality of performance conversations and
feedback between employees and their leaders.
20
STEEL & TUBE ANNUAL REPORT 2019

Steel & Tube has long been a supporter of the First Foundation with
Scholarships awarded this year to two family members of Steel &
Tube employees. The Scholarships will help these academically
talented students achieve their potential through tertiary education
and prepare them to positively influence and benefit their
communities.
In a new community initiative, Steel & Tube is proud to be taking
a lead role in the Manukau Sector Workforce Engagement
Programme (SWEP). The programme aims to enable students from
low decile South Auckland schools gain 12 months’ work experience
at Steel & Tube and ongoing employment at the completion of the
programme.
We are working collaboratively with MBIE and other government
agencies to support construction skills development, with a member
of the SWEP Manukau Establishment Committee overseeing the
programme. The objectives are to build a pipeline of future talent
in each business area, make a contribution to supporting local
communities and invest in building construction skill.
Leaders from each of our business units are working with SWEP to
promote the construction industry and Steel & Tube to students.
The programme has recently been launched to schools and the
inaugural students will commence work experience in 2020.
Steel & Tube is also proud to be an inaugural sponsor of the Mates
in Construction programme, supporting the mental health and
wellbeing of the industry.
IN OUR
COMMUNITIES
21

LEADERSHIP TEAM
MARK MALPASS
Chief Executive Officer
MARC HAINEN
General Manager Distribution
DAVID MCGREGOR
General Manager Reinforcing & Wire
ANNA MORRIS
General Manager People & Culture
GREG SMITH
Chief Financial Officer
DARRYN ROSS
General Manager Roll-Forming
22
STEEL & TUBE ANNUAL REPORT 2019

CLAIRE RADLEY
General Manager Strategy
MIKE HENDRY
Chief Digital Officer
DAMIAN MILLER
General Manager Quality, Health, Safety
and Environment
FOR MANAGEMENT
PROFILES GO TO:
https://steelandtube.co.nz/corporate/
senior-management
23

SUSAN PATERSON
ONZM, CFINSTD, MBA (LDN), BPHARM
CHAIR AND INDEPENDENT DIRECTOR
Susan became a Director on 16 January 2017 and was
appointed Chair on 16 February 2017. A professional
Director since 1996, in 2015 Susan was appointed an
Officer of the Order of New Zealand (ONZM) for her
services to corporate governance. Having trained
and practiced as a pharmacist, Susan completed
her MBA at London Business School, then worked in
strategy and IT consulting and management roles
in New Zealand, Europe and USA. She worked in the
steel sector at Fletcher Challenge and was General
Manager of Wiremakers. Susan’s directorships
also include Sky Network TV, Goodman NZ, Arvida
Group, Theta Systems (Chair), Les Mills NZ, Electricity
Authority, the Reserve Bank and ERoad.
ANNE URLWIN
BCOM, FCA, CFINSTD, FNZIM, ACIS, MAICD
INDEPENDENT DIRECTOR
A chartered accountant, business consultant and
professional director, with more than 20 years’
directorship experience. She was appointed a
Director on 1 June 2013. She commenced her
professional career with KPMG before undertaking
senior management roles in the corporate sector
including in the IT and meat industries. Anne has
considerable governance experience as director,
chairman and deputy chairman with a range of
organisations in the private and publicly listed
sectors, as well as Crown and local government
and not-for-profit entities. Anne’s directorships also
include Chorus, Southern Response Earthquake
Services, One Path Life (NZ), Summerset Group
Holdings, City Rail Link and Tilt Renewables.
ROSEMARY WARNOCK
BA DIST, MAICD
INDEPENDENT DIRECTOR
Appointed a Director on 22 September 2010,
Rosemary has held senior leadership positions in the
BP Group including sales, marketing & distribution
in ANZ, global manufacturing and supply chain
based out of London and was Chief Executive Castrol
Asia Pacific based out of Singapore. Rosemary
is a founding partner of the Adelante Group, a
partnership that provides executive leadership
development services, and has governance
experience in both Australia and New Zealand.
Rosemary’s directorships also include The Adelante
Group and The Buttery.
STEVE REINDLER
BE MECH HONS, AMP, FIPENZ, CHFIOD
INDEPENDENT DIRECTOR
Appointed a Director on 1 October 2017, Steve
is an engineer with a background in large-scale
infrastructure and heavy industry. He was GM
Engineering at Auckland International Airport for 11
years, and prior employment included 22 years with
BHP-New Zealand Steel where he held various roles
including GM Engineering and Environment. Steve
was inaugural chairman of the Chartered Professional
Engineers Council, and President of the New Zealand
Institution of Professional Engineers in 2013. His
directorships include Z Energy, Broome International
Airport Group, WorkSafe NZ, Yachting New Zealand,
Waste Disposal Services Unincorp JV, Whitford
Community Charitable Trust, and chairman of D&H
Steel Construction and Clearwater Construction.
CHRIS ELLIS
BE, MS
INDEPENDENT DIRECTOR
Appointed a Director on 1 October 2017, Chris’
background spans the manufacturing, heavy
construction and engineering sectors. He is an
experienced, strategy-focused director with an
extensive career in the Australasian building industry.
He has held CEO roles with Brightwater Group and
at Fletcher Building where he was Chief Executive of
the Building Products Division. Chris’s directorships
also include HiWay Group, WorkSafe NZ, Horizon
Energy Group, and Steelpipe.
BOARD
24
STEEL & TUBE ANNUAL REPORT 2019

CHRIS ELLIS
ROSEMARY WARNOCK
ANNE URLWIN
SUSAN PATERSON
STEVE REINDLER
25

An overview of the financial results for the year
ended 30 June 2019 can be found in the Chair’s
and CEO’s commentary on pages 06 to 12 with
more detailed disclosure included in the Financial
Statements and accompanying notes on pages 30
to 71.
NON-TRADING ADJUSTMENTS /
UNUSUAL TRANSACTIONS:
The financial results for FY18 included a number
of unusual transactions, considered to be non-
trading in either their nature or size. These
transactions were excluded from normalised
earnings. The following reconciliation is intended
to assist readers to understand how the earnings
reported in the Financial Statements for the years
ended 30 June 2019 and 30 June 2018 reconcile to
normalised earnings. Non-trading adjustments of
$0.8 million and $(49.3) million were included in
the FY19 and FY18 results respectively.
NON-GAAP FINANCIAL INFORMATION:
Steel & Tube uses several non-GAAP measures
when discussing financial performance. These
include Normalised EBIT and Working Capital.
Management believes that these measures
provide useful information on the underlying
performance of Steel & Tube’s business. They
may be used internally to evaluate performance,
analyse trends and allocate resources. Non-
GAAP financial measures should not be viewed
in isolation nor considered as a substitute for
measures reported in accordance with NZ IFRS.
Steel & Tube’s unaudited reconciliation of non-
GAAP measures to GAAP measures for the
financial years ended 30 June 2019 and 30 June
2018 is detailed below.
* FY18 Inventory write-downs and write-offs have been reduced by approximately $3.9m following further information becoming available during FY19,
which identified that $3.9m of the FY18 write-off related to that year’s production process. Further detail is contained in Steel & Tube’s updated trading
guidance for FY19 as notified to the NZX on 20 May 2019.
RECONCILIATION OF GAAP TO NON GAAP MEASURES
Year ended 30 June 2019
June
2019
$000
June
2018
$000
GAAP: Earnings/(Loss) before interest and tax (EBIT)16,795(36,187)
Add back unusual transactions (non-trading adjustments):
Inventory write-downs and write-offs*-20,056
Costs of exit from S & T Plastics -10,849
Impairment of Intangible assets (Note C2)-12,127
Business Rationalisation (Note E2)-2,727
Organisational Restructuring (Note E2)-3,317
Other unusual costs-762
S & T Plastics EBIT (no longer contributing to trading EBIT)(773)(558)
Normalised EBIT – non-GAAP16,022 13,093
FY19 FINANCIAL
MEASURES EXPLAINED
26
STEEL & TUBE ANNUAL REPORT 2019

BUSINESS RATIONALISATION includes
business change costs incurred to rationalise Steel
& Tube’s property footprint including onerous
leases, rationalisation and re-organisation of
manufacturing operations and delivery logistics
operations, and costs incurred in reviewing and
streamlining operations. These costs are included
in Note E2 to the Financial Statements.
ORGANISATIONAL RESTRUCTURING
includes the costs incurred to improve capabilities,
remove duplication and inefficiencies and capture
synergies from acquisitions. These costs are
included in Note E2 to the Financial Statements.
OTHER UNUSUAL COSTS include significant
doubtful debt and contract disputes provisions.
EBIT: This means Earnings / (Loss) before the
deduction of interest and tax and is calculated as
profit for the year before net interest costs and
tax. FY18 EBIT was impacted by a number of non-
trading adjustments totalling $(49.3m) million, as
shown in the table above.
NORMALISED EBIT: This means EBIT after
Normalisation adjustments.
NORMALISATION ADJUSTMENTS: These
are transactions that are unusual by size or nature
in a particular accounting period. Excluding these
transactions can assist users in forming a view of
the underlying performance of the Group. Unusual
transactions can be as a result of specific events
or circumstances or major acquisitions, disposals
or divestments that are not expected to occur
frequently.
Steel & Tube reports its Normalised EBIT as $16.0
million for FY19. This is directly comparable to the
earnings guidance issued on 20 May 2019, which
forecast Normalised EBIT of between $15.5 million
to $17.5 million.
WORKING CAPITAL: This means the net
position after Current liabilities are deducted from
Current assets. The major individual components
of Working capital for the Group are Inventories,
Trade and other receivables and Trade and other
payables. How the Group manages these has an
impact on operating cash flow and borrowings.
27

2019 2018 2017 20162015
$000$000$000$000$000
Financial Performance
Sales498,110 495,806 511,400 515,947 501,795
EBITDA24,085 (28,127)3 9, 3 10 43,160 38,267
Depreciation and amortisation( 7, 2 9 0) (8,060)(7,681)(6, 3 5 4)(4,94 5)
EBIT16,795 (36,187)31,629 36,806 33,322
Net Interest expense(2,828) (4,6 3 1)(3,577)(3,638)(3,496)
Profit before tax1 3,967 (4 0,818)28,052 33,168 2 9, 8 26
Tax (expense) / benefit(3, 552) 8,768 (8,012)( 7, 3 4 2)(8, 3 79)
Profit after tax10,415 (32,050)20,040 25,826 21,447
Funds Employed
Equity2 5 3,901 17 2 , 612 2 12 ,13 0 18 0,245 167, 0 0 9
Non-current liabilities26,699 113, 8 26 14 0,9 8 8 100,296 75,0 07
280,600 286,438 3 5 3 ,118 28 0,541 242,016
Comprises:
Current assets213,827 228,887 243,290 221,539 204,895
Current liabilities
(4 5 , 5 6 3) (59,099)(59,609)(49,8 9 9)(45,785)
Working capital168,264 169,78 8 183,6 81 171,6 4 0 159,110
Non-current assets112,336 116 ,6 5 0 169,437 10 8 ,9 01 82,906
280,600 286,438 3 5 3 ,118 28 0,541 242,016
Statistics
Dividends per share (cents)
1
5.03.88.7 12.3 10.4
Basic Earnings per share (cents)
1
6.8 (20.9)13.1 16.8 14.0
Return on sales2.1% (6. 5%)3 .9 %5.0%4.3%
Return on equity4.1% (18.6%)9.4%14.3%12.8%
Working capital (times)4.7 3 .9 4.1 4.4 4.5
Net tangible assets per share$1.19 $1.27$1.60$1.47$1.59
Equity to total assets7 7. 8 % 50.0%51.4%54.5%58.0%
Gearing (debt to debt plus equity)5.6% 3 7. 7 %3 7. 4%34.7%28.8%
Net interest cover (times)5.9 ( 7. 8)8.8 10.1 9. 5
Ordinary shareholders8,310 8,163 8,404 8,506 8,299
Employees1,003 1,015 972 918 781
- Female214 203 193 193 154
- Male789 812 779 725 627
Directors & Officers
- Female6 4 4 3 4
- Male9 8 10 10 9
EBITDA - Earnings before interest, tax, depreciation and amortisation.
EBIT - Earnings before interest and tax.
1


For comparability the comparative “per share” figures for FY15 to FY18 have been adjusted to reflect the revised number of ordinary shares on
issue following the capital raise concluded in September 2018 (see Note D3).

FIVE YEAR FINANCIAL
PERFORMANCE
FINANCIAL
REVIEW
28
STEEL & TUBE ANNUAL REPORT 2019

FINANCIAL
REVIEW
CONTENTS
FINANCIAL STATEMENTS 2019 30
STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME 31
STATEMENT OF CHANGES IN EQUITY 32
BALANCE SHEET 33
STATEMENT OF CASH FLOWS 34
NOTES TO THE FINANCIAL STATEMENTS 35
SECTION A – PERFORMANCE 35
SECTION B – WORKING CAPITAL 40
SECTION C – FIXED CAPITAL 46
SECTION D – FUNDING 53
SECTION E – OTHER 57
INDEPENDENT AUDITOR'S REPORT 72
GENERAL INFORMATION 77
GOVERNANCE 77
REMUNERATION 84
DISCLOSURES 88
DIRECTORY 92
29
29

THE FINANCIAL REPORT FOR STEEL & TUBE INCLUDES
THESE SECTIONS:
Financial Statements
Performance
Working Capital
Fixed Capital
Funding
Other
SIGNIFICANT MATTERS IN THE FINANCIAL YEAR:
During the financial year ended 30 June 2019 the Group
was impacted by the following significant transactions:
- $80.9m capital raise completed in September 2018 (see
Note D3); and
- the successful refinancing of the Group’s banking
facilities in December 2018 (see Note D1).
Significant accounting policies which
are relevant to the understanding of
the financial statements are provided
throughout the report in boxes outlined in
red.
KEY POLICY
CRITICAL ACCOUNTING ESTIMATES AND
JUDGEMENTS
Preparation of these financial statements requires the
exercise of judgements that affect the application of
accounting policies, the reported amounts of assets and
liabilities, and income and expenses.
Estimates and judgements are continually evaluated,
based on historical experience and other factors,
including expectations of future events that are believed
to be reasonable under the circumstances. The Group
makes estimates and assumptions about the future.
Actual results may differ from these estimates.
The estimates and assumptions that have
a significant risk of causing a material
adjustment to the carrying value of assets
and liabilities within the next financial year
are highlighted throughout the report in
boxes shaded in red.
KEY JUDGEMENT
GENERAL INFORMATION
Steel & Tube Holdings Limited (the Company or Steel &
Tube) is registered under the Companies Act 1993 and is a
FMC Reporting Entity under the Financial Markets Conduct
Act 2013. The Company is a limited liability company
incorporated and domiciled in New Zealand. The Group
comprises Steel & Tube Holdings Limited and its
subsidiaries.
The Group’s principal activities relate to the distribution
and processing of steel products, fastenings and metal
floor decking.
The registered office of the Company is Level 7, 25 Victoria
Street, Petone, Lower Hutt 5012, New Zealand.
These financial statements have been prepared:
– In accordance with New Zealand Generally Accepted
Accounting Practice (NZ GAAP), for which Steel & Tube
is a for-profit entity
– To comply with New Zealand Equivalents to
International Financial Reporting Standards (NZ IFRS)
and with International Financial Reporting Standards
(IFR S)
– In accordance with the requirements of Part 7 of the
Financial Markets Conduct Act 2013 and the NZX Main
Board Listing Rules (issued 1 January 2019)
– In New Zealand dollars (which is the Company’s and
subsidiaries’ functional currency and the Group’s
presentation currency) and rounded to the nearest
thousand dollars
– Under the historical cost convention, as modified by
the revaluation of certain assets as identified in specific
accounting policies.

FINANCIAL STATEMENTS 2019
30
STEEL & TUBE ANNUAL REPORT 2019

2019 2018
Notes$000 $000
Sales revenue
498,110495,806
Other operating income
972994
Cost of sales
A2(387,140)(398,399)
Operating expenses
A2
(95,599)(115 ,9 24)
Operating earnings / (loss) before impairment, other gains and financing costs
16,343( 1 7, 5 2 3)
Impairment of property, plant and equipment and intangibles
C 1/C 2-(20,100)
Other gains
4521,436
Earnings / (Loss) before interest and tax
16,795(36,187)
Interest income
10953
Interest expense
(2 ,9 3 7)(4,6 8 4)
Profit / (Loss) before tax
1 3,967(4 0,818)
Tax (expense) / credit
A4
(3, 552)8,768
Profit / (Loss) for the year attributable to owners of the Company
10,415(32,050)
Items that may subsequently be reclassified to profit or loss
Other comprehensive (loss) / income - hedging reserve
(1,045)2,136
Items that may not subsequently be reclassified to profit or loss
Other comprehensive (loss) / income - revaluation reserve
(940)960
Other comprehensive income - deferred tax on revaluation reserve
2631,9 2 2
Total comprehensive income / (loss)
8,693( 2 7, 0 3 2)
Basic earnings / (loss) per share (cents)
A16.8(3 3 .9)
Diluted earnings / (loss) per share (cents)
A16.8(3 3 .9)
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2019
The accompanying notes form part of these financial statements.
FINANCIAL

STATEMENTS
31

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2019
Share
capital
Retained
earnings
Hedging
reserve
Revaluation
reserve
Treasury
shares
Share-
based
payments
Total
equity
Notes$000 $000 $000 $000 $000 $000 $000

Balance at 1 July 20177 7, 8 0 4105,552( 1,19 3)32,805(3,431)5932 12 ,13 0
Comprehensive income
(Loss) after tax
-(32,050)----(32,050)
Other comprehensive (loss) / income
Hedging reserve (net of tax)--2 ,13 6---2 ,13 6
Deferred tax on asset sale---2 ,19 1--2 ,19 1
Asset revaluation (gross)960960
Deferred tax on asset revaluation
---(269)--(269)
Total comprehensive income
-(32,050)2 ,13 62,882--(27,032)
Transfer on sale of property-2 9,17 8-( 2 9,17 8)---
Transactions with owners
Dividends paidA1-(12,6 62)----(12,6 62)
Proceeds from partly paid sharesD341-----41
Employee share schemes-----(4 0 0)(4 0 0)
Issue / (purchase) of own shares - net
of transaction costs
D3----535-535
Balance at 30 June 20187 7, 8 4 59 0,0189436,509(2 ,896)19317 2 , 612
Balance at 1 July 20187 7, 8 4 590,0189436,509(2 ,896)193172,612
Impact of adoption of new accounting
standard (net of tax)
E10
-(617)----(617)
Restated total equity at the beginning
of the financial year
7 7, 8 4 589,4019436,509(2 ,896)19317 1,9 95
Comprehensive income
Profit after tax-10,415----10,415
Other comprehensive (loss) / income
Hedging reserve (net of tax)--(1,045)---(1,045)
Asset revaluation (gross)---(940)--(940)
Deferred tax on asset revaluation---263--263
Total comprehensive income-10,415(1,0 45)(677)--8,693
Transactions with owners


Dividends paidA1-(5,877)----(5,877)
Employee share schemes -203---63266
Issue of share capital (net of issue
cos t s)
D3
78,824-----78,824
Balance at 30 June 2019156,66994,142(102)5,832(2 , 896)256253,901

The accompanying notes form part of these financial statements.
32
STEEL & TUBE ANNUAL REPORT 2019

BALANCE SHEET
AS AT 30 JUNE 2019
2019 2018
Notes$000 $000
Current assets
Cash and cash equivalents
E69,0105,584
Trade and other receivables
B290,7349 9,18 1
Inventories
B111 3,96 2116,047
Income tax receivable
15,165
Derivative assets
E61201,271
Assets held for sale
C4
-1,639
213,827228,887
Non-current assets
Deferred tax assets
A43,3806,488
Property, plant and equipment
C152,03452,739
Intangibles
C2
56,9 2 25 7, 4 2 3
112,336116,650
Total assets326,163345,537
Current liabilities
Trade and other payables
B341,07949, 8 67
Provisions
E24,2219, 2 15
Derivative liabilities
E6
26317
45,56359,0 9 9
Non-current liabilities
Trade and other payables
B31,8352,108
Borrowings
D124,00010 9,9 3 5
Provisions
E2
8641,783
26,699113,826
Equity
Share capital
D3156,6697 7, 8 4 5
Retained earnings
94,14290,018
Other reserves3,0904,749
253,901172,612
Total equity and liabilities326,163345,537
These financial statements and the accompanying notes were authorised by the Board on 22 August 2019.
For the Board
Susan Paterson Anne Urlwin
Chair Director
The accompanying notes form part of these financial statements.
FINANCIAL

STATEMENTS
33

STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2019
Group
2019 2018
Notes$000 $000
Cash flows from operating activities
Customer receipts505,5914 89,6 8 6
Interest receipts10953
Payments to suppliers and employees(4 8 6 , 5 76)(478 ,6 01)
Income tax refunds/(payments)5,614(5,620)
Interest payments(3,43 4)(4,195)
Net cash inflow from operating activities21,3041,323
Cash flows (to) / from investing activities
Property, plant and equipment disposal net proceeds2,26452,768
Property, plant and equipment and intangible asset purchases( 7,1 5 4)(18,964)
Net cash (outflow) / inflow from investing activities(4, 8 9 0)33,084
Cash flows to financing activities
Issue of share capital (net of issue costs)D378,824-
Proceeds from partly paid sharesD3-41
Repayment of borrowingsD2(8 5,9 3 5)(23,439)
Dividends paidA1(5,877)(12,662)
Net cash outflow from financing activities(12 ,98 8)(36,060)
Net increase / (decrease) in cash and cash equivalentsD23,426(9 3 3)
Cash and cash equivalents at the beginning of the year5,5846,517
Cash and cash equivalents at the end of the year9,0105,584
Represented by:
Cash and cash equivalents9,0105,584

Reconciliation of profit / (loss) after tax to net cash inflow from operating activities
Profit / (loss) after tax10,415(32,050)
Non-cash adjustments:
Depreciation and amortisation7, 2 9 08,060
Deferred tax expense4,002(9, 5 7 2)
Impairment of property, plant, equipment and intangibles-20,100
Other253(4 0 0)
Gain on items classified as investing activities:
Net gains on property, plant and equipment disposals(4 5 2)(1,43 6)
21,508(15,298)
Movements in working capital:
Income tax receivable5,165(4,947)
Inventories2,0852 7, 0 1 7
Trade and other receivables7, 5 9 0(5,692)
Trade and other payables(15,04 4)243
Net cash inflow from operating activities21,3041,323
The accompanying notes form part of these financial statements.
34
STEEL & TUBE ANNUAL REPORT 2019

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
This section focuses on the Group’s financial performance and returns provided to Shareholders.
A1: DIVIDENDS AND EARNINGS PER SHARE
On 22 August 2019 the Board declared a fully imputed final dividend of 1.5 cents per share (2018: Nil) or $2.49m
(2018: Nil) and a supplementary dividend to non-resident shareholders of 0.26 cents per share.
Final Dividend Paid: 2018: Nil cents per share (2017: 7.0 cents)
Interim Dividend Paid: 2019: 3.5 cents per share (2018: 7.0 cents)
25,000
20,000
15,000
10,000
5,000
0
201720182019
Dividends Paid ($000s)
Dividends Paid
Dividends paid are fully imputed. The Group is entitled to a tax credit for supplementary dividends paid to overseas
shareholders of $0.10m (2018: $0.25m).
Basic earnings per share is calculated by dividing the net profit attributable to shareholders by the weighted
average number of fully paid shares less treasury shares.
Diluted earnings per share includes partly paid shares (see Note D3) and represents the Group’s earnings per share
if unvested share options were exercised. The weighted average number of shares is adjusted by the number of
outstanding rights to executive shares that are deemed to vest at their future vesting dates.
Earnings / (Loss) per share (EPS)
2019 2018
$000 $000
Profit / (Loss) after tax
10,415(32,050)
Weighted average number of shares for basic EPS
153,17694,595
Weighted average number of shares for diluted EPS
153,17694,595
Basic earnings / (loss) per share (cents)
6.8(3 3 .9)
Diluted earnings / (loss) per share (cents)
6.8(3 3 .9)

SECTION A - PERFORMANCE
NOTES – SECTION A

PERFORMANCE
35

A2: EXPENSES
2019 2018*
Included in operating activities:
Notes$000 $000
Inventories expensed in cost of sales
354,4963 5 2,745
Inventory written down / impairment
B1-20,056
Bad and doubtful debts
912,855
Depreciation and amortisation
C 1/C 27, 2 9 08,060
Directors' fees
504478
Donations
158
Employee benefits
76, 20676,64 6
Defined contribution plans
1,5651,625
Information technology expenses
5,4636,058
Foreign exchange gains
(6 3 0)(2,105)
Operating leases
C3/E21 7,9 0 019,10 8
Other expenses19, 8 3 928,789
Total cost of sales and operating expenses482,739514,323
* The group has reclassified the prior period balances to align with the presentation at 30 June 2019.
Inventory sold during the period is expensed as cost of sales. Inventory write-downs including scrap incurred in
the ordinary course of business are included within Inventories expensed in cost of sales.
Depreciation of $1.6 million (2018: $1.7 million) related to equipment used to manufacture products is included in
cost of sales. Other depreciation is included in operating expenses.
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are
classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-
line basis over the term of the lease.
36
STEEL & TUBE ANNUAL REPORT 2019

A3: OPERATING SEGMENTS
The Group has identified two reporting segments as at 30 June 2019 having regard for the criteria outlined in NZ IFRS
8 Operating Segments (NZ IFRS 8). The Group’s Chief Operating Decision Maker (being the CEO) receives financial
reports which aggregate the activities of the Group’s six operating segments into two distinct divisions, being
Distribution and Infrastructure.
These reportable segments have been determined by having regard to the nature of products, services
and processes the various business units undertake to service customers. The Group has a diverse range of
customers from various industries, with no single customer contributing more than 10% of the Group’s revenue.
The Group derives its revenue from the distribution and processing of steel and associated products. Within
the Distribution business, the primary focus is on the distribution of steel products and fasteners, servicing
similar customer groups, sharing similar business models and trading skills, and using similar sales channels.
The majority of product is traded and sales staff are tasked to know the full range of products. Within the
Infrastructure business, product is predominately steel product which is bought and processed/manufactured in
warehouse facilities for project/contract customers.
As outlined in Note E10, the Group has adopted NZ IFRS 15 Revenue from Contracts with Customers in the
current financial year, which requires the disaggregation of revenue to provide clear and meaningful information.
For the Group, Management concluded that presentation of revenue in terms of the method of revenue
recognition was most appropriate. Therefore, revenue is disaggregated below between the operating segments
as amounts recognised at a point in time and over time. The Group applied the modified retrospective approach
for the transition to NZ IFRS 15 and as such no comparative information has been restated.
The CEO uses EBIT as a measure to assess the performance of segments. The segment information provided to
the CEO for the year ended 30 June 2019 is as follows:
DistributionInfrastructure*
Other/
Elimination*
Reconciled
to Group
$000 $000 $000 $000
2019
Timing of revenue recognition
At a point in time
1
287,6781 0 7, 3 2 91,033396,040
Over time
1
-102,070-102,070
Revenue from external customers
287,6782 0 9,39 91,0334 9 8 ,110
Amortisation and depreciation(1,76 6)(2,342)(3,182)( 7, 2 9 0)
Segment EBIT
2,86911,8652,06116,795
Interest (net)
(2 ,828)
Reconciled to Group Profit Before Tax
1 3,967
2018
Revenue from external customers288,29918 5 ,19 122,316495,806
Amortisation and depreciation(1,94 3)(2,74 6)(3, 37 1)(8,060)
Impairment of property, plant, equipment and intangibles(4,391)(2,833)(12,876)( 2 0 ,1 0 0 )
Segment EBIT
(12,752)5,029(28,4 6 4)(36,187)
Interest (net)
(4,6 3 1)
Reconciled to Group Loss Before Tax
(4 0,818)
* The Group has reclassified the S & T Plastics business from the Infrastructure segment to the Other/ Elimination column as the business
and/or its assets are held for sale and are no longer contributing to the Group’s trading EBIT. The comparative period has been adjusted to
be consistent with the current presentation.
1
Refer to Note E10 for further details.
NOTES – SECTION A

PERFORMANCE
37

Interest income and expense are not allocated to segments, as this type of activity is driven by the central
treasury function, which manages the cash position of the Group.
Assets and liabilities are provided to the CEO on a Group basis, and are not separately reported with respect to
the individual operating segments.
Sales between segments are eliminated on consolidation. The amounts provided to the CEO with respect to
segment revenue assets are measured in a manner consistent with that of the financial statements.
A4: INCOME AND DEFERRED TAX
Income tax comprises both current and deferred tax.
All entities in the Group are part of the same income tax group.
Current tax is the expected tax payable on the taxable income for the period, using current tax rates,
and any adjustment required to tax payable in respect of prior periods.
Deferred tax is recognised in respect of temporary differences arising between the tax base of assets
and liabilities and their carrying amounts in the financial statements. Deferred tax assets are only
recognised to the extent that it is probable future taxable profits will offset temporary differences. Tax
rates used are those that have been enacted or substantially enacted at balance date and which are
expected to apply when the deferred tax asset or liability crystalises.
Deferred tax is not provided if it arises from the following differences:
- goodwill not deductible for tax purposes
- initial recognition of assets and liabilities in a transaction other than a business combination that
affects neither accounting or taxable profit and
- investment in subsidiaries where the timing of the reversal of the temporary difference is controlled
by the Group to the extent that they will probably not reverse in the foreseeable future.
KEY POLICY
Income and deferred tax
Income tax expense
2019 2018
The income tax expense is determined as follows:
$000$000
Profit or loss
Current income tax
Current year income tax expense
-804
Adjustments in respect of prior periods
(4 5 0)-
Deferred income tax
Depreciation, provisions, accruals, tax losses and other
4,002(9, 5 7 2)
Adjustments in respect of prior periods--
Income tax expense recognised in profit or loss3,552(8,768)
Tax Losses
Steel & Tube has recognised tax losses available to carry forward of $16.1m (2018: $4.9m). A deferred tax asset has
been recognised for these losses as they are expected to be realised within the foreseeable future.
38
STEEL & TUBE ANNUAL REPORT 2019

2019 2018
Reconciliation of income tax expense / (credit)
$000 $000
Profit / (Loss) before tax
1 3,967(4 0,818)
Non-assessable income
(2)(2,076)
Non-deductible expenditure32811,581
14,293(31,313)
Tax at current rate of 28% (2018: 28%)
4,002(8,768)
Prior period adjustment
(4 5 0)-
Total income tax expense / (credit)
3,552(8,768)
Represented by:
Current tax
(4 5 0)804
Deferred tax4,002(9, 5 7 2)
3,552(8,768)
Deferred tax assets and liabilities
The table below shows the movement in the deferred tax balances that are recognised at the beginning and end of the
period.
Opening
balance
Prior
period
adjustments
NZ IFRS 9
Transition
tax impact
Recognised in
income
Recognised
in equity
Closing
balance
$000 $000$000 $000 $000 $000
2019
Property, plant and equipment(1,745)(545)-(2,444)263(4,47 1)
Employee benefits1,193298-(108)-1,383
Provisions6,009(37)240(4,285)-1,9 2 7
Cash flow hedging reserve(3 50)---39141
Net tax loss to carry forward
1,381284-2,835-4,500
6,488-240(4,0 0 2)6543,380
2018
Property, plant and equipment( 7, 8 5 2)--4,1851,9 2 2(1,745)
Employee benefits1,872--(679)-1,193
Provisions1,74 0--4,269-6,009
Cash flow hedging reserve499---(8 49)(350)
Customer relationship(113)--113--
Customer contracts(225)--225--
Licenses(78)--78--
Net tax loss to carry forward
---1,381-1,381
(4,157)--9, 5 7 21,0736,488
2019 2018
$000 $000
The analysis of deferred tax assets and deferred tax liabilities is as follows:

Deferred tax liabilities
(4,471)(2,095)
Deferred tax assets7, 8 5 18,583
3,3806,488
Imputation credits available at 30 June 2019 were $0.7m (2018: $2.6m).
NOTES – SECTION A

PERFORMANCE
39

This section contains details of the short term operating assets and liabilities required to service the Group’s
distribution branches and processing sites.
B1: INVENTORIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
SECTION B - WORKING CAPITAL
Key judgement
Inventory Valuation
The Group undertook an assessment of its inventory holdings at 30 June 2019, including a review of slow
moving and aged inventory. The Group conducted an assessment to determine whether the net realisable
value (NRV) of inventory was greater than the inventory cost. At 30 June 2019 an impairment provision
of $1.4m (2018: $8.4m) was recognised to reduce the carrying value of inventory to its NRV. Judgement
was required in determining if the aged inventory can be sold and hence whether inventory should be
impaired.
To further support the valuation of inventory the Group operates a regular stock count programme which
requires inventory to be counted on a cycle count basis, and through a full wall-to-wall count to ensure the
accuracy of the Group’s Inventory records.

KEY JUDGEMENT
Inventories are stated at the lower of cost and net realisable value, with cost determined on a
moving average cost basis or standard cost basis. Costs include expenditure incurred in acquiring
the inventories and bringing them to their existing location and condition. Net realisable value is the
estimated selling price in the ordinary course of business less the estimated costs of completion,
and selling expenses. The cost of manufactured/fabricated finished inventories includes a share of
overheads based on normal operating capacity.
KEY POLICY
40
STEEL & TUBE ANNUAL REPORT 2019

The Group holds inventories valued at $114.0 million (2018: $116.0 million).
The Group is exposed to foreign exchange risk arising mainly from overseas purchases of inventory. In
accordance with its Treasury Policy, all committed overseas purchase orders are hedged using forward foreign
exchange contracts where payment is made in a foreign currency. The Group qualifies for hedge accounting.
The effective portion of the changes in fair value is recognised in other comprehensive income and accumulated
in the Hedging reserve in equity as described in section E10.
As at balance date foreign exchange contracts recorded as assets were $0.12m (2018: $1.27m) and as liabilities
were $0.26m (2018: $0.02m). The notional value of foreign exchange contracts in place as at 30 June 2019 totaled
$27.18m (2018: $37.70m). The fair value of the foreign currency forward exchange contracts is as shown on the
Balance Sheet. Refer to section E6 for the fair value hierarchy determination.
If the NZ dollar had weakened/strengthened by 5% against foreign currencies (primarily US dollar) at balance
date, there would be no impact on profit or loss, as the Group qualifies for hedge accounting and all hedges
are 100% effective at balance date. The effect would be to equity +$1.27m if NZ dollar strengthened by 5% and
-$1.44m if the NZ dollar weakened by 5% (2018: + $1.85m /- $2.05m respectively).
Provision for write-down
Finished goods at realisable value
Inventories ($000s)
2019

2018

150,000
120,000
90,000
60,000
30,000
0
(8,388)
116,0471 1 3,9 6 2
(1,416)
SECTION B - WORKING CAPITAL
NOTES – SECTION B

WORKING CAPITAL
41

B2: TRADE AND OTHER RECEIVABLES
Key judgement
Provision for impairment
The Group has applied the simplified approach to providing for expected credit losses, which requires
the recognition of a lifetime expected loss provision for Trade and other receivables. This has resulted
in an increase in provisioning for expected credit losses on adoption of NZ IFRS 9, as potential losses
are recognised earlier. Previously, allowances for credit losses were only recognised when a loss event
occurred.
The expected credit loss (ECL) allowances for financial assets are based on assumptions about the risk
of default and expected credit loss rates. The Group uses its judgement in making these assumptions
and selecting the inputs to the impairment calculation, which is based on the Group’s historical
experience, the aging profile of the financial assets, existing market conditions as well as external
economic forecasts at each reporting date. Details of key considerations and judgements are set out
below.
The Group considers the lifetime expected credit losses associated with its receivables upon initial
recognition, and on an ongoing basis at the end of each reporting period. To assess whether there is a
specific increase in credit risk, the Group compares the risk of default occurring on these receivables at
the reporting date with the risk of default at the date of initial recognition. Available forward looking
information is considered, including actual or expected significant adverse changes in business,
financial or economic conditions that are expected to cause a significant change to the customer or
counterparty’s ability to meet their obligations. This also incorporates any objective evidence that
indicates that the customers will not be able to pay their debts when due, these include significant
financial difficulties of customers and the probability of entering receivership or bankruptcy.
The Group has analysed its Trade receivables balances using three different characteristics and
calculated the ECL allowance by considering the impact of each:
Consideration/Judgements
Baseline/AgingThe Group’s “baseline” expectation for credit loss is informed by past
experience and the aging profile of the balances, applying an increasing
expected credit loss estimate as the balance ages incorporating forward
looking information, such as forecasted economic conditions. This
expectation incorporates any available objective evidence that the customers
will not be able to pay their debts when due, including significant financial
difficulties of customers and the probability of entering receivership,
administration or liquidation.
SectorThe Group has considered the credit risk related to the market sector that
the customers operate in and has made an adjustment to the ECL allowance
base on assessment of the respective financial strength of each industry
se c tor.
RegionThe Group has considered the credit risk of its trade receivables portfolio
based on the respective financial strength of each geographic region, and
has made an adjustment to the baseline ECL allowance to reflect this.
KEY JUDGEMENT
42
STEEL & TUBE ANNUAL REPORT 2019

Trade receivables at 30 June 2019 are $77.2m (2018: $87.9m) and are recognised initially at fair value and
subsequently at amortised cost less any provision for impairment. The carrying value of Trade and other
receivables are equivalent to their fair value.
Prepayments and sundry receivables
Provision for impairment
Past due
Current due
15,437
(1,946)
4,683
72,560
2019
$90,734
Trade and Other Receivables ($000s)
3,045
2019
2018
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
Within
1 month
8,028
3,715
1,638
4,231
7,106
Within
1 to 3 months
Beyond
3 months
Trade receivables excluding current at 30 June 2019 ($000s)
14,213
(2,980)
11,336
76,612
2018
$99,181
No one customer accounts for more than 5% of Trade receivables at 30 June 2019 (30 June 2018: 2%).
At 30 June 2019 trade receivables of $3.6m (2018: $8.3m) were greater than 60 days overdue. These relate to a
number of independent customers for whom there is no recent history of default. The Group’s credit terms are
in line with industry peers. The Group does not have any customers with payment terms exceeding one year. As
a result the Group does not adjust transaction prices for the time value of money.
The aging profile of these customers is shown below.
NOTES – SECTION B

WORKING CAPITAL
43

Provision for impairment
As outlined in Note E10, the Group has adopted NZ IFRS 9 in the current financial year, which includes the
recognition of impairment provisions based on expected credit losses (ECL) rather than only incurred credit
losses as was the case under NZ IAS 39. The ECL provision was restated applying the new NZ IFRS 9 model as at 1
July 2018 and the cumulative impact of the change has been adjusted through retained earnings and as such no
comparative information has been restated.
At 30 June 2019 an impairment provision of $1.9m (2018: $3.0m) was held.
The expected credit loss allowance provision has been determined as follows:

Current
Within 1
Month
1 - 2
Months
2-3
Months
Beyond 3
MonthsTotal

$000$000$000$000$000$000
Gross carrying amount 68,8453,7151,0535853,0457 7, 24 3
Baseline/Aging 2386351181,5651,9 3 5
Region 2---24
Sector 311-27
Expected credit loss
allowance
2436452181,5691,94 6
Movements in the provision for impairment during the year ended 30 June 2019, including the adjustment on
transition to NZ IFRS 9, are as follows:
Provision for impairment
20192018
Notes$000 $000
Provision as at 1 July2 ,980438
Adjustment on adoption of NZ IFRS 9E10
857 -
Restated as at 1 July3,837438
Recognised8722,855
Utilisation of provision / bad debts recovered
(2 ,763)(313)
Provision as at 30 June
1,9462,98 0
The Group is exposed to the risk of customers being unable to pay their debts as they fall due. The maximum
exposure is the total value of these balances. Customers who trade on credit terms are subject to credit
verification procedures and credit limits are set for each customer. The Group’s credit policy is monitored
regularly. In some circumstances security over assets may be obtained from Trade receivables to mitigate the
risk of default. There are no significant concentrations of credit risk in the current or prior years.
The Group also has credit risk in respect of financial institutions that hold the Group’s cash. These institutions
have credit ratings of AA-.
44
STEEL & TUBE ANNUAL REPORT 2019

B3: TRADE AND OTHER PAYABLES
Trade and other payables comprise $41.1m (2018: $49.9m) payable within a year and $1.8m (2018: $2.1m) payable
beyond 12 months.
Trade and other payables ($000s)
Lease incentives (Non-Current)
Employee benefits
Accrued expenses
Trade payables
32,145
3,657
5,277
1,835
2019
Current: $41,079
Non current: $1,835
34,148
9, 7 0 0
6,019
2,108
2018
Current: $49,867
Non current: $2,108
The carrying amounts of the above items are equivalent to their fair values. Trade payables denominated in a
foreign currency are not material either in the current or comparative year.
NOTES – SECTION B

WORKING CAPITAL
45

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
SECTION C - FIXED CAPITAL
This section includes details of the Group’s long term assets including tangible and intangible assets and related capital
commitments.
C1: PROPERTY, PLANT AND EQUIPMENT
Plant and equipment are stated at cost less accumulated depreciation with the exception of land and
buildings and capital work in progress. Land and buildings are stated at fair value, and capital work in
progress is stated at cost less impairment. Assets are tested annually for indicators of impairment and
adjusted if required.
Depreciation is charged on a straight-line basis over the estimated useful lives of the assets, with the
exception of land and capital work in progress, which are not depreciated. This allocates the cost
or fair value amount of an asset, less any residual value, over its estimated remaining useful life. The
residual values and useful lives are reviewed annually.
The estimated useful lives are as follows:
Buildings 50 years
Plant and machinery and motor vehicles 3 - 20 years
Furniture, fittings and equipment 2 - 10 years
Land and buildings are recognised at fair value based on valuations by external independent valuers,
less subsequent depreciation for buildings. Valuations are undertaken when there is evidence that
the carrying value of the property is materially different to fair value. A revaluation surplus/(deficit) is
credited/(debited) to other reserves in shareholder’s equity.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount and
are included in profit or loss. When revalued assets are sold, it is the Group’s policy to transfer any
amounts included in other reserves in respect of those assets to retained earnings.
KEY POLICY
46
STEEL & TUBE ANNUAL REPORT 2019

Land &
buildings
at fair value
Plant,
machinery
& vehicles
at cost
Furniture,
fittings &
equipment
at costTotal
$000 $000 $000 $000
2019
Opening cost15,37585,88518,301119, 5 61
Opening accumulated depreciation
-(51,838)(14,98 4)(6 6,822)
Opening net book value15,37534,0473,31752,739
Additions-4,3596635,022
Land and building revaluations:
Decrease to revaluation reserve(940)--(940)
Disposals-(9 7)(26)(123)
Depreciation
(176)(3,150)(1, 3 38)(4, 6 6 4)
Closing net book value
14,25935,1592,61652,034
Comprised of:
Cost or fair value14,27388,80418,454121,531
Accumulated depreciation
(14)(53,645)(15,838)(69,49 7)
Closing net book value
14,25935,1592,61652,034
2018
Opening cost5 7, 5 19102,85324,44018 4,812
Opening accumulated depreciation
-(61,7 76)(20,4 47)(82,223)
Opening net book value5 7, 5 1941,0773,9 9 3102,589
Additions7,17 06 , 3 611,73115, 262
Land and building revaluations:
Increase to revaluation reserve960--960
Disposals(49,915)(471)(22)(50,4 08)
Impairments -( 7, 8 0 2 )(171)(7,973)
Transfer to assets held for sale -(1,30 0)(339)(1,639)
Depreciation
(359)(3,818)(1,875)(6,052)
Closing net book value
15,37534,0 473,31752,739
Comprised of:
Cost or fair value15,37585,88518,301119,561
Accumulated depreciation
-(51,838)(14,9 8 4)(6 6,822)
Closing net book value
15,37534,0 473,31752,739
Included within the plant, property and equipment categories is capital work in progress totaling $2.1m (2018:
$5.2m). Capital work in progress was tested for indicators of impairment. No impairment indicators were
identified.
At 30 June 2019 had land and buildings been carried at historical cost less accumulated depreciation their
carrying amount would have been approximately $8.5m (2018: $8.7m).

NOTES – SECTION C

FIXED CAPITAL
47

Valuation of land and buildings:
The Group undertook a fair value assessment of land and buildings owned by the Group at 30 June 2019. The
fair value of these land and buildings was determined based on the market comparable approach that reflects
transaction prices for similar properties adjusted for identifiable differences. The valuations were prepared by
independent and qualified registered valuers and are based on relevant general and economic factors such as
land use, economic conditions, zoning and location, quality and condition, recent sales, leasing transactions
of comparable properties, and seismic strengthening costs. They are categorised as Level 3 of the fair value
hierarchy as unobservable inputs (as described in NZ IFRS 13).
The significant unobservable inputs to these valuations are described in section E8.
The previous independent valuation of these land and buildings was performed in June 2018.
C2: INTANGIBLES
Goodwill
Software &
LicencesOtherTotal
$000 $000 $000 $000
2019
Opening cost4 7,17 124,8322,52274, 52 5
Opening accumulated amortisation-(3, 262)(1,713)(4,9 75)
Opening accumulated impairment
(10,10 0)(2,027)-(12 ,127)
Opening net book value3 7, 0 7 119,5438095 7, 4 2 3
Additions-2 ,12 5-2 ,12 5
Amortisation charge
-(2,420)(20 6)(2 ,626)
Closing net book value
3 7, 0 7 119, 24 860356,922
Comprised of:
Cost4 7,17 126,7782,52276,650
Accumulated amortisation-(5, 503)(1,919)(7,601)
Accumulated impairment
(10,10 0)(2,027)-(12 ,127)
Closing net book value
3 7, 0 7 119, 24860356,92 2
2018
Opening cost4 7,17 124,4642,52274 ,15 7
Opening accumulated amortisation
-(6,4 0 6)(9 03)( 7, 3 0 9 )
Opening net book value4 7,17 118,0581, 61966,848
Additions
-4,710-4,710
Amortisation charge
-( 1,19 8)(810)(2,0 08)
Impairment
(10,10 0)(2,027)-(12,127)
Closing net book value
3 7, 0 7 119, 5 438095 7, 4 2 3
Comprised of:
Cost
4 7,1 7 124,8322,52274, 5 2 5
Accumulated amortisation-(3,262)(1,713)(4,9 75)
Accumulated impairment
(10,10 0)(2,027)-(12,127)
Closing net book value
3 7, 0 7 119, 5 438095 7, 4 2 3
48
STEEL & TUBE ANNUAL REPORT 2019

Included within the intangibles categories is work in progress totalling $2.6m (2018: $2.7m). Capital work in
progress was assessed for impairment as part of the value-in-use (VIU) calculations performed for Goodwill
impairment testing. Other intangibles comprises customer relationships and customer contracts arising from
business combinations.
NOTES – SECTION C

FIXED CAPITAL
Goodwill is recognised on a business combination and represents the excess of the acquisition cost over
the fair value of the acquired net assets. Goodwill is allocated to cash-generating units, tested annually for
impairment, or more frequently if events or circumstances indicate it may be impaired, and is carried at
cost less accumulated impairment losses.
Computer software and licences are capitalised on the basis of costs incurred to acquire and use the
specific licences and are amortised on a straight-line basis over their estimated useful lives of 3 to 10 years.
Computer software and licence amortisation charges are included in other operating expenses.
Customer relationships and customer contracts are capitalised at fair value on acquisition date and
are amortised on a straight-line basis over their estimated useful lives of 10 and 2 years respectively.
Amortisation charges are included in other operating expenses.
Costs associated with maintaining software programmes are recognised as an expense as incurred.
Development costs that are directly attributable to the design and testing of identifiable and unique
software products controlled by the Group are recognised as intangible assets when the following criteria
are met:
- it is technically feasible to complete the software so that it will be available for use
- management intends to complete the software and use it
- there is an ability to use the software
- it can be demonstrated how the software will generate probable future economic benefits
- adequate technical, financial and other resources to complete the development and to use or sell the
software are available, and
- the expenditure attributable to the software during its development can be reliably measured.
Directly attributable costs that are capitalised as part of the software include employee costs and an
appropriate portion of relevant overheads.
Capitalised development costs are recorded as intangible assets and amortised from the point at which
the asset is ready for use.
KEY POLICY
49

KEY JUDGEMENT
Key judgement – Goodwill Impairment testing:
The Group has undertaken value-in-use (VIU) calculations for the Group as a whole and for each cash
generating unit (CGU) that recognises Goodwill. A VIU calculation is a valuation based on forecast cash
flows. These forecast cash flows are discounted back to present value to estimate a value for the Group or
individual CGU. If the VIU exceeds the carrying value of the assets no impairment is recognised.
A number of judgements have been made in respect to the assumptions used in the valuations. The key
assumptions are summarised below:
ASSUMPTION20192018
Discount Rate (post tax)7.9% - 9.6%
8.5% - 10.4%
The Group engaged an independent expert
to assess the Group’s post-tax weighted
average cost of capital. A premium was
applied to smaller CGU’s. These post-tax
discount rates were applied to post-tax cash
flows. Through back solving the pre-tax
WACC was calculated.
Discount Rate (pre tax)11.0% - 13.4%
11.3% - 13.9%
Terminal Growth Rate1.50%
1.50%
Forecast Period5 Year s
5 Year s
Board approved budget used for FY20
Forecast Period Cash Flow
Growth Rate
2.6% - 2.9%
3.4% - 4.0%
In addition to the above forecast period cash flow growth rate the Group has included cash flows expected
from network consolidation and other performance improvement projects. The Group is committed to these
projects and has already commenced implementation as at 30 June 2019. Forecast cash flows from these
projects have been included as part of the Board approved FY20 budget, upon which the VIU calculations
were based. The forecast cash flows exclude certain other expected benefits from projects not deemed to be
sufficiently progressed as at 30 June 2019. The cash flows also make allowances for a return over the forecast
period to long-term achievable financial performance.
All forecast cash flows included in the VIU calculations as at 30 June 2019 were considered to meet the
requirements of NZ IAS 36 Impairment of Assets (NZ IAS 36).
A range of forecast cash flow scenarios were considered by Management for the VIU calculation. In assessing
the VIU of the Group, Management has considered the most likely outcome within the range of scenarios
prepared, and concluded that a mid-point scenario is most appropriate. This scenario applies a pre-tax
discount rate of 12.2%.
The VIU calculation indicated that the VIU was greater than the carrying amount of the Group (including
Goodwill) by approximately $11m.
The projected cash flows over the forecast period incorporate forward looking assumptions around the
market and the timing and execution of business strategy which could be affected by other factors not
currently foreseeable by the Group or beyond its control. Should this occur, a further evaluation of goodwill
may be required.
The following summarises the effect of a change in the key assumptions for the Group with all other
assumptions remaining constant:
- Applying a 2.0% terminal growth rate, in line with long-term New Zealand inflation forecasts, would
increase the available headroom by approximately $15.3m;
- Incorporating a 6.5% reduction in the expected level of terminal EBIT in the forecast cash flows would
result in the elimination of the excess of the recoverable amount over the carrying amount;
- Increasing the Discount Rate (pre-tax) by 50 basis points would result in the elimination of the excess of
the recoverable amount over the carrying amount.
The Group also compared the net book value of assets with its market capitalisation value at 30 June 2019.
This market capitalisation value excludes any control premium and may not reflect the value of 100% of the
Group’s net assets. Management considered the reasons for any difference at 30 June 2019 and whether all
relevant factors had been allowed for in the VIU model.
Based on the calculations and assumptions outlined above, the Group has not identified any impairment as
at 30 June 2019.
50
STEEL & TUBE ANNUAL REPORT 2019

Intangible assets with indefinite useful lives and intangibles not yet available for use are not subject to
amortisation. This applies to both goodwill and software under development.
The Group tests annually for impairment of these intangibles, or when events or circumstances
indicate the carrying value may not be recoverable.
An impairment loss is recognised for the excess of the carrying value of an asset or cash-generating
unit over its recoverable amount and is charged to profit or loss.
The recoverable amount is the higher of an asset’s fair value less costs to sell and value-in-use. For
the purpose of assessing impairment, assets are grouped at the lowest levels for which there are
separately identifiable cash flows.
KEY POLICY
Based on the calculations completed, the carrying value of Goodwill as at 30 June 2019 are as follows:
Hurricane Wire Products / Roofing Products / Manufacturing Suppliers Limited / Composite Floor Decks
Limited
A number of VIU scenarios were analysed for CGUs with Goodwill at 30 June 2019 to ensure a broad range of
possible outcomes were considered. Among the variables considered were sensitivity analysis on discount rates,
and the allocation of corporate shared costs. All cash flows included in the VIU calculations for these CGUs at 30
June 2019 were considered to meet the requirements of NZ IAS 36.
Based on the calculations and pre-tax discount rate sensitivity analysis, there is no impairment of these CGUs
with Goodwill as at 30 June 2019.
Assessment of CGUs without Goodwill
In assessing the CGUs without Goodwill indicators of impairment such as the CGU’s current and future
performance, asset make-up of the CGU and market conditions were taken into consideration.
The Group considered whether the fair value less costs to sell of the assets held by these CGUs would be greater
than their carrying value. The majority of the remaining assets in these CGUs at 30 June 2019 related to Trade
receivables and Inventories and the carrying value of these assets was specifically assessed for impairment at
30 June 2019. The remaining assets in these CGUs were considered to be readily marketable assets for which
the recoverable amount was unlikely to be materially different from the carrying value.
Based on the assessment outlined above, it was determined there is no impairment of the CGUs without
Goodwill as at 30 June 2019.
15,602
11,713
4,046
5,710
2019
$ 3 7, 0 7 1
Carrying Value of Goodwill ($000s)
Hurricane Wire Products
Roofing Products
Manufacturing Suppliers Limited
Composite Floor Decks Limited
15,602
11,713
4,046
5,710
2018
$ 3 7, 0 7 1
NOTES – SECTION C

FIXED CAPITAL
51

C3: COMMITMENTS
80,000
60,000
40,000
20,000
0
Lease commitments on non-cancellable leases ($000s)
Within
1 year
18,213
51,536
48,682
68,7 7468,737
Within
1 to 5 years
Beyond
5 years
17,489
2019
2018
The Group occupies a number of warehouse and office premises under operating leases. The leases have varying
terms and renewal rights.
The Group has an operating lease agreement for the majority of its vehicle fleet. The lease agreement has varying
terms and renewal rights for each vehicle.
Capital commitments
The Group has contractual commitments of $0.5m (2018: $2.6m) for purchase of plant and equipment.
C4: ASSETS HELD FOR SALE
In the previous financial year the $9.6m of property, plant and equipment related to S & T Plastics was impaired
down to their fair value less costs to sell of $1.6m and presented as held for sale. As at 30 June 2019, the sale and
close down of the S & T Plastics business is almost complete, with all significant property, plant & equipment
related to S & T Plastics having been sold or fully impaired as at 30 June 2019. In addition to the impairment of
assets, the Group has retained $0.4m (2018: $2.9m) of provisions within the Infrastructure operating segment
to exit S & T Plastics, being predominately the onerous provision on the related leased property. For the period
ended 30 June 2019, S & T Plastics contributed sales revenue of $1.0m and an EBIT contribution of $0.8m arising
from activities associated with exiting the business.
Non-current assets are classified as assets held for sale and carried at the lower of carrying amount
and fair value less costs to sell if their carrying amount is recovered principally through a sale
transaction rather than through continuing use. The assets are not depreciated or amortised while
they are classified as held for sale. Any impairment loss on initial classification and subsequent
measurement is recognised as an expense. Any subsequent increase in fair value less costs to sell (not
exceeding the accumulated impairment loss that has been previously recognised) is recognised in
profit or loss.
KEY POLICY
52
STEEL & TUBE ANNUAL REPORT 2019

This section includes details of the Group’s cash, borrowings and capital reserves which provide funds for current and
future activities.
D1: BORROWINGS
20192018
$000 $000
Bank loans
24,00010 9,9 3 5
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
SECTION D – FUNDING
The Group successfully refinanced its banking facilities in December 2018 on terms and conditions commercially
acceptable to the Group. The Group has in place syndicated committed bank borrowing facilities of $70m,
comprising a $25m Working capital facility with a maturity date of 30 November 2019 (30 June 2019: nil drawn),
and a $45m Revolving credit facility with a maturity date of 30 November 2021 (30 June 2019: $24m drawn). The
Working capital facility is expected to be renewed on an annual basis. The previous bank borrowing facilities
were repaid and cancelled during December 2018.
Borrowing facilities arranged with the Group’s banking syndicate can be drawn at any time, subject to meeting
the terms of the Group’s Syndicated Facilities Agreement.
The Group is exposed to interest rate risk through its drawings under the Group’s bank borrowing facilities at
variable interest rates.
During the year ended 30 June 2019, if bank interest rates had been 100 basis points higher/lower with all other
variables held constant, it would change post-tax profit/equity for the year by $0.4m lower/higher (2018: $0.8m).
The Group has committed bank borrowing facilities at balance date of $70m (2018: $147m).
Borrowings are recognised initially at fair value and net of transaction costs incurred. Borrowings are
subsequently stated at amortised cost and any difference between the net proceeds and redemption
value is recognised in profit or loss over the period of the borrowings using the effective interest
method. The movement in borrowings shown in the Statement of Cash Flows is the net of repayments
and drawdowns of borrowings. Borrowings are classified as current liabilities if there is no unconditional
right to defer settlement for greater than 12 months.
The Group is required to comply with certain financial covenants that relate to interest cover, group
coverage and leverage. Management has completed a detailed assessment of compliance with these
covenants and the Group complies as at 30 June 2019 and was compliant at each test date throughout
the year.
KEY POLICY
NOTES – SECTION D
FUNDING
53

The Group manages its liquidity risk by maintaining availability of sufficient cash and funding via an adequate
amount of committed bank borrowing facilities. Owing to the nature of the underlying business, the Group aims
to maintain funding flexibility through committed credit lines. The Group monitors actual and forecast cash
flows on a regular basis and rearranges credit facilities where appropriate.
The table below analyses the Group’s financial liabilities and derivative financial instruments into maturity
groupings based on the remaining period from balance date to the contractual maturity date. The amounts
disclosed are the contractual undiscounted cash flows.
Average6 months 6 to 121 to 3Carrying
Interestor lessmonthsyearsTotalValue
rate$000$000$000$000$000
2019
Borrowings4 .10 % 50248225,39426,37824,000
Trade payables & accruals 40,818--4 0,81840,818
Cash flow hedging of derivatives:
Outflow 26,079 1,096 -2 7,1 7 5 2 7,17 5
Inflow
(2 5,947) (1,085) - ( 2 7,0 3 2) (27,032)
13211-143143
2018
Borrowings3.77%2 ,11 42,031110 ,9 9 2115 ,13 7109,935
Trade payables & accruals4 8 ,9 2 2--4 8 ,9 2 24 8 ,9 2 2
Cash flow hedging of derivatives:
Outflow36,0271,676-3 7, 7 0 33 7, 7 0 3
Inflow
( 3 7, 2 6 2 )(1,695)-(3 8 ,957 )(3 8 ,957 )
(1,235)(19)-(1,254)(1,254)
D2: NET DEBT RECONCILIATION
Cash and cash
equivalents
Borrowings
repayable
after one yearTotal
$000 $000 $000
Net debt as at 1 July 20185,584(109,935)(10 4,351)
Cash flows
3,42685,9358 9, 3 61
Net debt as at 30 June 2019
9,010(24,000)(14,9 9 0)
Net debt as at 1 July 20176,517(13 3, 3 74)(126,857)
Cash flows
(9 3 3)23,43922,506
Net debt as at 30 June 2018
5,584(109,935)(104,351)
The Group’s current bank loans are based on variable rates.
54
STEEL & TUBE ANNUAL REPORT 2019

D3: SHARE CAPITAL
The Group’s capital includes share capital, treasury shares, long term borrowings, reserves and retained
earnings. The objectives for managing capital are to safeguard the Group’s ability to continue as a going
concern, to provide returns and benefits for Shareholders and other stakeholders and to maintain a strong
capital base for investor, creditor and market confidence. The Group may adjust the dividends paid to
Shareholders, return capital to Shareholders, issue new shares or sell assets to maintain or adjust its capital
structure.
Capital Structure Policy Targets
The Group’s formal capital structure targets are as follows:
1. Net Debt: EBITDA less than 2.0x
2. Gearing ratio less than 30% - 35%
3. Dividend pay-out of between 60% - 80% of Net Earnings (NPAT) adjusted for any significant non-trading items
Issue of share capital
The Group concluded a placement and pro-rata rights offer capital raise (‘capital raise’) on 6 September 2018,
issuing an additional 75,364,514 shares, with net proceeds of $78.8m being received. The capital raise comprised
an upfront placement of $20.8m to eligible institutional investors and a pro-rata rights offer to eligible
shareholders for $60.1m. Both the upfront placement and pro-rata rights offer were fully subscribed. Incremental
directly attributable issue costs of $2.1m were incurred and have been netted off against the proceeds of the
capital raising.
With the exception of the capital raise, there has been no other material change in the management of capital
during the year.
Movement in the Company’s issued ordinary shares were as follows:
2019 2018 2019 2018
$000 $000 SharesShares
Fully paid:
Balance at the beginning of the year7 7, 8 4 47 7, 8 0 390,608,02690,588,026
Proceeds from partly paid shares-41-20,000
Issue of share capital
78,824-75,364,514-
Balance at the end of the year156,6687 7, 8 4 4165,972,54090,608,026
Partly paid:
Balance at the beginning of the year1125,00045,000
Transfer to fully paid shares
---(20,000)
Balance at the end of the year1125,00025,000
Total balance at the end of the year
156,6697 7, 8 4 5165,997,54090,633,026
NOTES – SECTION D
FUNDING
55

The holders of ordinary shares are entitled to receive dividends declared from time to time and to one vote per
share at meetings of the Company. Ordinary shares issued and partly paid as part of the Senior Executives’ Share
Scheme 1993 do not have dividend or voting entitlements until the shares are paid in full but qualify for bonus
and cash issues.
Ordinary shares are classified as equity. Where any controlled entities purchase Company shares that have not
been allocated, the consideration paid and directly attributable costs are deducted from equity and classified as
treasury shares.
Treasury shares
2019 2018 2019 2018
$000 $000 SharesShares
Balance at the beginning of the year2,8963,431972,8491,150,787
Purchases----
Used in share schemes
-(535)-( 1 7 7,9 3 8)
Balance at the end of the year
2,8962,896972,849972,849
Treasury shares are unallocated Company shares held by the Trustee of the Executive Share Plan 2003 and are
recognised as a reduction in shareholders’ funds of the Group. There were no Treasury shares purchased during
the year.
56
STEEL & TUBE ANNUAL REPORT 2019

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
SECTION E – OTHER
This section contains additional notes and disclosures which do not form part of the primary sections but which are
required to comply with financial reporting standards.
• Financial risk management
• Provisions
• Contingent liabilities
• Auditor remuneration
• Related party and share based plans
• Financial instruments
• Financial assets
• Land and buildings
• Subsequent events
• Other accounting policies
E1: FINANCIAL RISK MANAGEMENT
The Group is exposed to financial risk: market risk, credit risk and liquidity risk.
The Group’s Treasury Policy is approved by the Board and is reviewed annually. The Treasury Policy establishes
principles and risk tolerance levels to guide management in carrying out risk management activities to minimise
potential adverse effects on the financial performance of the Group. Compliance with policy is monitored and
reviewed on a monthly basis.
Detail relevant to the following risks are covered in relevant sections:
Foreign exchange risk (a market risk) Inventories B1
Interest rate risk (a market risk) Borrowings D1
Credit risk Trade & other receivables B2
Liquidity risk Borrowings D1
E2: PROVISIONS
Restructure
provision
Onerous Contract
and Contract
Dispute Provision
Onerous Lease
and Make Good
Provision
Commerce
Commission
ProvisionTotal
$000 $000 $000 $000 $000
Opening balance4,74 01,13 43,9 241,20010,9 9 8
Additions--4816851,16 6
Used
(4,695)( 1,13 4)(1,250)-( 7, 0 7 9 )
Closing balance
45-3,1551,8855,085
Current45-2,2911,8854,221
Non-Current--864-864
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result
of a past event. This occurs when it is probable that a cost will be incurred to settle the obligation
and a reliable estimate can be made of that obligation. Where material, provisions are determined by
discounting the expected cash flows at a pre-tax rate that reflects current market assessments of the
time value of money. Where discounting is used, the increase in the provision due to the passage of time
is recognised as an expense.
KEY POLICY
NOTES – SECTION E

OTHER
57

– Make-good obligations on existing tenanted properties, including Stonedon Drive remediation work agreed
as part of the sale and purchase agreement, estimated at $1.7m. Actual payment dates and costs will be known
once each lease reaches its expiry date.
– Onerous Contract and Contract Dispute Provision is an estimate of the costs of customer claims for faulty or
defective products supplied and an assessment of the shortfall between costs and future revenue on certain
projects where the Group is committed to providing a service within the next 12 months for which the costs will
exceed the revenue.
– Restructure and Rationalisation Provision. The Group undertook a review of the business and commenced a
restructure in a number of areas during the year ended 30 June 2018. Although the network consolidation
and other performance improvement projects remain ongoing as at 30 June 2019, the activities related to the
restructure and rationalisation provision recognised in the preceding year have largely concluded as at 30 June
2019. Included within these provisions were costs associated with the exit from S & T Plastics. Refer Note C4 for
details.
– Provision for Commerce Commission Fine
In December 2016 the Commence Commission announced that it had completed its investigation in relation
to several steel companies, and that it intended to prosecute multiple companies under the Fair Trading Act,
including Steel & Tube. The Commission’s prosecution of Steel & Tube relates to the inadvertent use of a
testing laboratory’s logo on test certificates, and application of testing methodologies.
In October 2018 the Auckland District Court imposed a fine of $1.885m. Both Steel & Tube and the
Commission have appealed the decision. As at 30 June 2019 a decision on the appeal has not been given.
A provision for fines, penalties, costs and expected recoveries in relation to this prosecution has been
provided for in the Group’s financial statements at 30 June 2019.
E3: CONTINGENT LIABILITIES
Indemnities given to the Company’s trading banks in respect of performance bonds were $2.0m (2018: $2.7m) at
balance date and were transacted in the ordinary course of business.
Key judgements:
– The Provision for Onerous Leases is for the remaining lease term on the properties that have
been vacated as part of the Group’s change programme. The provision is partially offset by
Management’s assessment that a future sub-lease may be possible on some of the properties
with longer than 12 month lease terms remaining. If the Group’s assumptions on time required to
sub-let the properties increased by three months and the expected sub-lease rentals were 10%
less, the provisions would increase by $0.1m.
KEY JUDGEMENT
58
STEEL & TUBE ANNUAL REPORT 2019

E4: AUDITOR REMUNERATION
20192018
$000 $000
Fees paid to PwC
– annual audit & half year review345337
– audit of the transition to NZ IFRS 9 and NZ IFRS 15497
– additional fees paid for FY18 annual audit billed in 201975-
– direct expenses associated with performance of the audit (eg. reimbursement
of travel and accommodation costs)
518
Total audit and review fees
474362
– tax compliance: annual tax return2525
– other tax advisory services93
– other assurance services related to the Company's ERP system-10
– tax advisory services in relation to the Company's Executive Share Scheme-41
– treasury policy review
24-
Total non-audit fees
5879
532441
E5: RELATED PARTY AND SHARE BASED PLANS
The Group has related party relationships with its controlled entities and with key management personnel.
The subsidiaries in the Group are:
20192018
SubsidiariesPrincipal ActivityBalance DateHoldingHolding
Steel & Tube New Zealand LimitedNon-trading30 June100%100%
Composite Floor Decks Holdings LimitedNon-trading30 June100%100%
Studwelders LimitedNon-trading30 June100%100%
S & T Plastics LimitedNon-trading30 June100%100%
S & T Stainless LimitedStainless Distributor30 June100%100%
Manufacturing Suppliers LimitedFastenings Distributor30 June100%100%
Composite Floor Decks LimitedFloor Decking Installer30 June100%100%
Transactions with Key Management Personnel
20192018
$000 $000
Short-term benefits3,3082,591
Termination benefits282972
Share-based benefits
-270
3,5903,833
The Key Management Personnel are the Non-Executive Directors and Executive Management. Included in short-
term benefits are Directors’ fees of $504,375 (2018: $477,500), of which $30,000 relates to additional fees paid to
directors in FY19 for attendance at special board meetings and takeover committee meetings held in response
to the unsolicited, non-indicative offer from Fletcher Building Limited. Fees paid were scaled back to be within
the pool available for additional fees.
NOTES – SECTION E

OTHER
59

Executive Share Plan 2003
The Executive Share Plan offered certain personnel an opportunity to subscribe for rights to Company shares, as
directed by the Board. Vesting of the rights occurs upon achieving certain service and non-market performance
conditions in addition to Board-approved targets, based on total shareholder returns, after a minimum of three
years to a maximum of five years from grant date and vest as equity. The rights to shares are equity settled.
Whilst no further Rights will be issued relative to the Executive Share Plan 2003, it will continue to operate until
such time as the prior years’ Rights that have been granted are either vested and exercised, forfeited or lapse,
in accordance with that plan's rules. At 30 June 2019 there were two employees remaining with Rights available
under the Executive Share Plan 2003.
Performance Rights Plan 2017
In February 2018 a new Executive share plan was approved by the Board, known as the Performance Rights Plan
2017 (PRP). The performance period for this scheme runs for 3 years and comprises two performance conditions
(50% each) as follows:
a) The Benchmark Comparator (BC) ranks the Company’s Total Shareholder Return (TSR) relative to the TSR of the
NZX 50 Index securities.
– Where the Company TSR equals the 50th percentile TSR of the Index Companies over the Performance
Period, 50% of (BC) Performance Rights will vest.
– Where the Company TSR equals or exceeds the 75th percentile TSR of the Index Companies over the
Performance Period, 100% of (BC) Performance Rights will vest.
– Where the Company’s TSR over the Performance Period exceeds the 50th percentile TSR of the Index
Companies but does not reach the 75th percentile, then between 50% and 100% of the (BC) Performance
Rights, will vest as determined on a linear pro-rata basis.
b) The Absolute Comparator (AC) ranks the Company’s TSR relative to the Company’s Cost of Equity (CoE) plus a
premium of 2% annualised and compounding.
– Where the Company TSR is less than or equal CoE no (AC) Performance Rights will be vested
– Where the Company TSR is greater than CoE but less than (CoE) + 2%, 50% of (AC) Performance Rights will
vest
– Where the Company TSR is equal to or greater than CoE + 2%, 100% of (AC) Performance Rights will vest
Performance Rights are only able to be exercised after completion of the three year performance period,
providing and only to the extent that the performance conditions, and other relevant service and non-market
performance conditions, have been satisfied. Any Benchmark and Absolute Comparator Performance Rights that
do not vest at the Measurement Date will lapse.
60
STEEL & TUBE ANNUAL REPORT 2019

During the year the following movements of rights to shares occurred in accordance with the rules of the share
plans:
No. of Rights
Available
2019
No. of Rights
Available
2018
Opening Balance5 67, 2 2 11,102,558
New Shares Granted1,12 3 , 3 61371,366
Rights Forfeited or Lapsed(411,7 9 3)(728,765)
Rights Exercised
-( 17 7,9 3 8 )
To t a l
1,278,7895 67, 2 2 1
Rights Performance Conditions
Start Dates
Expiry date
Issue date
fair value
Total Rights
Issued
Rights
available
30 June 2019
Rights
available
30 June 2018
1 July 2013 - 2003 Tranche 1130/06/2018$ 3 .1 0303,74 0-5,355
1 July 2014 - 2003 Tranche 1230/06/2019$2.852 8 8 ,7112,40710,623
1 July 2015 - 2003 Tranche 1330/06/2020$2.66493,4 416,84640,200
1 July 2016 - 2003 Tranche 1430/06/2021$2.21445,59613, 24 8139,67 7
1 September 2017 - PRP Tranche 11/09/2020$2.09371,366224,662371,366
12 September 2018 - PRP Tranche 212/09/2021$1.20
1,16 0 , 2 0 41,031,626-
To t a l
2 ,759,3181,278,7895 67, 2 2 1
The fair value of rights is determined using a Monte Carlo share price simulation model. The significant inputs
into the model for shares granted during the period were the market share price at grant date, an exercise price
of zero (as shares are issued to the employees at nil consideration on vesting), volatility of 33.1%, expected option
life of between 1 and 3 years and an annual risk free interest rate of 1.91%. Volatility has been calculated based on
the annualised volatility for the three years prior to the rights issue.
Both the Executive Share Plan 2003 and the Performance Rights Plan 2017 are considered to be equity-
settled schemes under NZ IFRS 2 and the vesting conditions for both schemes include both service and
performance conditions.
Executive Share Plan 2003
The Board appoints a Trustee to administer the 2003 plan. The cost associated with this plan is
measured at fair value at grant date and is recognised as an expense in profit or loss over the vesting
period, with a corresponding entry to the reserve in equity. The estimate of the number of rights for
which the service conditions are expected to be satisfied is revised at each reporting date, with any
cumulative catch-up adjustment recognised in profit or loss in the period that the change in estimate
occurred. Any rights not vested after the expiry of five years are cancelled. Shares purchased in this
plan are recognised as treasury shares until they are distributed.
Performance Rights Plan 2017
The cost associated with this plan is measured at fair value at grant date and is recognised as an
expense in profit or loss over the vesting period, with a corresponding entry to the reserve in equity.
The estimate of the number of rights for which the service conditions are expected to be satisfied is
revised at each reporting date, with any cumulative catch-up adjustment recognised in profit or loss in
the period that the change in estimate occurred. Any rights not vested after the expiry of three years
are cancelled.
KEY POLICY
NOTES – SECTION E

OTHER
61

E6: FINANCIAL INSTRUMENTS
Financial
assets at
amortised
cost*
Derivatives
for hedging
at fair value
Financial
liabilities at
amortised cost
2019
$000$000$000
Cash and cash equivalents9,010--
Trade and other receivables excluding prepayments88,211--
Derivative financial instruments
1
-120-
Total financial assets
9 7, 2 2 1120-
Borrowings--24,000
Trade and other payables--42 ,914
Derivative financial instruments
1
-263-
Total financial liabilities
-26366,914
2018
Cash and cash equivalents5,584--
Trade and other receivables excluding prepayments88,235--
Derivative financial instruments
1
-1,271-
Total financial assets
93,8191,271-
Borrowings--10 9,9 3 5
Trade and other payables--4 4,615
Derivative financial instruments
1
-17-
Total financial liabilities
-17154,550
* (2018: Loans and receivables)
1

Derivative financial instruments are measured at fair value calculated using forward exchange rates that are quoted in an active market
(Level 2 of the fair value hierarchy).
E7: FINANCIAL ASSETS
The Group classifies its non-derivative financial assets as being measured at amortised cost, including any
expected credit loss allowance provisions. They are included in current assets, except for those with maturities
greater than 12 months after the end of the reporting period, these are classified as non-current assets. The
Group’s non-derivative financial assets comprise trade and other receivables and cash and cash equivalents.
Derivatives are measured at fair value. The portion of any fair value movement that is an effective hedge is
measured in other comprehensive income, but any ineffective portion is included in profit or loss.
Management determines the classification of the assets at the initial recognition and re-evaluates the
designation at each reporting date based on the business model and whether cash flows represent solely
payments of principal and interest.
Purchases and sales of financial assets are recognised on the date the Group has committed to the transaction.
De-recognition of financial assets occurs when the rights to receive cash flows have expired or the Group has
transferred substantially all the risks and rewards of ownership.
62
STEEL & TUBE ANNUAL REPORT 2019