Steel & Tube Upgrades Earnings Guidance for 1H FY22

15 December 2021
STU / NZX ANNOUNCEMENT


7 Bruce Roderick Drive, East Tamaki, 2013, Auckland PO Box 30543, Botany, 2163, Auckland
P 04 570 5000 F 04 570 2453www.steelandtube.co.nz


UPGRADE TO HALF YEAR GUIDANCE ON THE BACK OF POSITIVE TRADING
MOMENTUM

Steel & Tube Holdings Limited (NZX: STU) has upgraded its earnings guidance for the six months to
31 December 2021 (1H22), on the back of continued strong trading across the Group.
Earnings Before Interest and Tax (EBIT) is now expected to be between $20m and $22m (Normalised
1H21 $7.6m), with Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) of
between $30m and $32m (Normalised 1H21 $16.8m)
1
.

$m 1H FY22
Guidance
1

1H FY21
Normalised
EBIT $20m-$22m $7.6m
EBITDA $30m-$32m $16.8m

The upgrade follows a continuation of strong trading across the Group driven by volume growth in
target segments and positive market conditions, gross margin disciplines and a continued reduction
in percentage operating costs.
For the first five months of the financial year to the end of November, Group revenue increased 22%
over the prior comparative period (PCP). Volumes were up 11% on PCP.
Steel & Tube’s Distribution Division has performed well with revenue 35% ahead of PCP. The
Infrastructure Division also grew on the same period last year, although was more heavily impacted
by the August/September 2021 Covid-19 lockdown as Auckland manufacturing operations were not
permitted during Alert Level 4, other than approval for Roofing for a two-week period prior to the
move to Alert Level 3.

Products Sales
5MYTD FY22 vs PCP
Volume
5MYTD FY22 vs PCP
Distribution Products sourced from preferred steel
mills and distributed through Steel &
Tube’s national network
35% 16%
Infrastructure Products processed before sale, typically
on a contract or project basis, including
onsite installation services
5% 4%
STU Total All products 22% 11%

1
Guidance is subject to any impact of the recent IFRS Interpretations Committee agenda decision on Software as a Service
(SaaS); and excludes the release of a $0.85m provision following the decision on the Metro Performance Glass Limited
Holidays Act Court of Appeal case.

Steel & Tube CEO, Mark Malpass, commented: “Since our last update, positive trading momentum
has continued, and demand growth has been solid. Our key focus has been to maintain availability
and high levels of service for our loyal customers while navigating global supply chain constraints, a
higher pricing environment and Covid-19 restrictions.
“We have carefully invested in high demand inventory using our strong 30 June 2021 cash position
which we expect to rebuild in the second half of the financial year as deferred income during the
lockdowns is fully recovered. We have a strong pipeline of secured work in place across the country
and market conditions are expected to remain positive for at least the medium term.”
The Company is not providing guidance for the second half of the financial year at this stage, given
the ongoing uncertainty surrounding Covid-19 impacts. The Company notes that there are seven
(6%) less trading days in the second half of the financial year.
ENDS

For media or investor enquiries, please contact: Jackie Ellis Tel: +64 27 246 2505 or
email: jackie@ellisandco.co.nz
For further information please contact:
Mark Malpass
Steel & Tube CEO
Tel: +64 27 777 0327
Email: mark.malpass@steelandtube.co.nz

Richard Smyth
Steel & Tube CFO
Tel: +64 21 646 822
Email: richard.smyth@steelandtube.co.nz