Vulcan steel

[winner69]

IPO coming in a few weeks

Listing on ASX and NZX

Raising $400m to start with

Valued at about 13 times earnings or 9 times EBITDA so looks reasonably attractive


https://businessdesk.co.nz/article/markets/here-it-comes-400m-float-for-steel-titan-vulcan
Maybe paywalled

[Muse]

There is also an article on NBR.co.nz with a good interview with Peter Wells.
While the EBITDA multiples are higher than you would find at comparables like STU, vulcan's margins are dramatically higher and has lower capital intensity which translates into better cashflow and dividend payout. Plus its a bloody good business - the best in its industry in australasia - so some premium warranted. I hope it goes well. I don't have any allocation but will look to buy some on the aftermarket if I can get it near to issue price. Nice to have something new to watch & invest in. I see this as a good super long term investment for my own portfolio. Not advice DYOR.

[Balance]

IPO coming in a few weeks

Listing on ASX and NZX

Raising $400m to start with

Valued at about 13 times earnings or 9 times EBITDA so looks reasonably attractive


https://businessdesk.co.nz/article/markets/here-it-comes-400m-float-for-steel-titan-vulcan
Maybe paywalled

Forbar as NZ’s co IPO manager - does Vulcan actually know what it is doing inviting in the kiss of death broker?

MFB, CBL, Wynyard, Intueri, Orion etc etc

[Muse]

Forbar as NZ’s co IPO manager - does Vulcan actually know what it is doing inviting in the kiss of death broker?

MFB, CBL, Wynyard, Intueri, Orion etc etc

hahaha - I hear ya. Anytime forbar are mentioned in a float I immediately wonder why the company had to go with a second rate broker. But I'd say Jarden are top tier and they have had some woeful floats too so who knows. Brent Sheather writes some great articles on the NBR about IPO performance interesting reading and enough to put you off investing in initial offerings.

Here they are a 2 bit player on the wings and not leading the charge - that is done by the aussie JLMs.

Vulcan has a lot of substance and is a grunty company with long term history and exceptional management - particularly relative to the list you have above. Question as always is if the valuation is too rich.

[Balance]

hahaha - I hear ya. Anytime forbar are mentioned in a float I immediately wonder why the company had to go with a second rate broker. But I'd say Jarden are top tier and they have had some woeful floats too so who knows. Brent Sheather writes some great articles on the NBR about IPO performance interesting reading and enough to put you off investing in initial offerings.

Here they are a 2 bit player on the wings and not leading the charge - that is done by the aussie JLMs.

Vulcan has a lot of substance and is a grunty company with long term history and exceptional management - particularly relative to the list you have above. Question as always is if the valuation is too rich.

Jarden is not involved in this IPO from what I can read?

[Muse]

Jarden is not involved in this IPO from what I can read?

no they aren't - I was just saying the quality of a float isn't necessarily determined by the quality of its broker (and went on to reference jarden as a great investment bank that has led some poor floats). apols for any confusion

[Snow Leopard]

Listing day -- not sure whether they have a steel band to play them in and a buffet lunch after but I expect the action will be on the ASX and once the initial few days are over the SP will not be trending up for the first few months.

Disc: do not hold

[percy]

Some interesting comments at www.chrislee.co.nz taking stock

[Pegasus2000]

Thanks Percy. Some people/books suggest not participating in the IPO. It seems that most of NZX IPOs 2021 are going under their IPO prices (DGC is an exception).

[Daytr]

I used to work with Rhys Jones almost 30 years ago when he was an up & coming manager at Fletcher Steel. He was a sharp cookie back then & also was a straight shooter. All good attributes to take a company like this forward. I assume he just received a substantial pay day! Good for him.

[FTG]

I used to work with Rhys Jones almost 30 years ago when he was an up & coming manager at Fletcher Steel. He was a sharp cookie back then & also was a straight shooter. All good attributes to take a company like this forward. I assume he just received a substantial pay day! Good for him.

Based on his shareholding, a well over $30M payday for him!

What a great story for him and Peter! A classic example of the merits of putting the head down, ar$e up; and not bothering with all the big song & dance.

[Muse]

Mother of all post IPO prospectus upgrades and there are only 860 shares available for sale on the NZX - classic. 10,000 on the ASX.

[Captain]

Mother of all post IPO prospectus upgrades and there are only 860 shares available for sale on the NZX - classic. 10,000 on the ASX.

Very good sign to already receive upgraded guidance only one month after listing.

[bull....]

nice results always thought the stock looked interesting

[Muse]

What a sensational performance today, and post IPO this business has been. Would have been in my top 5 pick (which I am still to do) had it not run so much. Wish I had bought a bit more but a nice one to have in the portfolio

[winner69]

What a sensational performance today, and post IPO this business has been. Would have been in my top 5 pick (which I am still to do) had it not run so much. Wish I had bought a bit more but a nice one to have in the portfolio

Pretty amazing eh moose

Vulcan puts STU to shame ……makes them a also run.

I doubt STU will ever go at Vulcan speed

[Muse]

Pretty amazing eh moose

Vulcan puts STU to shame ……makes them a also run.

I doubt STU will ever go at Vulcan speed

I still picked up a tranche of STU happy holder there too. About half the size of my VSL stake. At least with STU you have option value associated with a continued turn around. And i presumed better imputed dividends but not sure how their IC account is looking. VSL strong exposure into a fragmented AU market which I have a feel may grow and stay higher for longer. Happy days

[alokdhir]

First HY results being reported today with FB forecast of $ 74 Mil ...lets see how it does ?

[winner69]

Shareguy got his abacus ready

Vulcan H1 EBIT times 1.2 (to annualise) divided by 10 (Vulcan share price) multiplied by 50 (STU conservative esp EBIT) divided by 166m (number STU shares) equals what STU share price should be

Cool eh ..excitement builds

Me, just be happy to see VSL share price 11 buck tomorrow

[alokdhir]

Shareguy got his abacus ready

Vulcan H1 EBIT times 1.2 (to annualise) divided by 10 (Vulcan share price) multiplied by 50 (STU conservative esp EBIT) divided by 166m (number STU shares) equals what STU share price should be

Cool eh ..excitement builds

Me, just be happy to see VSL share price 11 buck tomorrow

$ 11 with 20 cents or more divvy will be perfect . Holder

[maclir]

Better than perfect then, alokdhir.

[Shareguy]

Read the end of presentation . Another upgrade of 11 percent for full year EBITDA and 15 percent NPAT. Oh yes

[winner69]

Jeez …$70m NPAT in first half ….full year $130m plus what further upgrades bring. They pretty down on second half prospects

Can’t do much better

[alokdhir]

Jeez …$70m NPAT in first half ….full year $130m plus what further upgrades bring. They pretty down on second half prospects

Can’t do much better

It is Forbar pick for 2022 ...but they expected $ 74 mil NPAT ...divvy is better then 20 cents ...so great news ...think $ 11 possible ??


" Accordingly, Vulcan is increasing its proforma post-IFRS 16 EBITDA guidance by approximately 11% at the mid-point to NZ$194m-NZ$204m from previously $174m- $184m, and proforma post IFRS 16 NPAT guidance by approximately 15% at the mid- point to NZ$107m-NZ$114m from previously $93m-$100m."

[winner69]

Jeez …$70m NPAT in first half ….full year $130m plus what further upgrades bring. They pretty down on second half prospects

Can’t do much better

At 10 bucks on. PE of 10

[alokdhir]

At 10 bucks on. PE of 10

Deep value as per your perimeters ??

[Muse]

This company is rapidly establishing itself as one of the blue chips

Peers like EBOS, MFT, FPH, SKL, TRA, HGH, etc.

[percy]

This company is rapidly establishing itself as one of the blue chips

Peers like EBOS, MFT, FPH, SKL, TRA, HGH, etc.

Do not hold............Wish I did......lol.
An outstanding company.

[sb9]

Shareguy got his abacus ready

Vulcan H1 EBIT times 1.2 (to annualise) divided by 10 (Vulcan share price) multiplied by 50 (STU conservative esp EBIT) divided by 166m (number STU shares) equals what STU share price should be

Cool eh ..excitement builds

Me, just be happy to see VSL share price 11 buck tomorrow

My rough calculation gives STU price to be north of $3 based on above formula. Someone more arithmetic savvy could validate this.

[winner69]

Steel prices on average up 29% and Metals prices up 14% with Total Group up 23%

Gross margin improved 6.1% points YOY to 41.3% in 1H FY22

That's pretty impressive

[winner69]

Pretty muted market response to that news

[sb9]

At least STU is winning the race thus far today, up about 5% compared to VSL's 3%. Punters realising STU has more deep value than VSL in times ahead.

[alokdhir]

Pretty muted market response to that news

Hopefully they will wake up next week ...need time to absorb the data ...not all are as genius as u ...U analysed it like a Cray mainframe ...nano seconds :p

[winner69]

Great result but market excitement dies pretty quick and back to about 10 bucks

Nearly 10% of recent high ..hmmm

[nztx]

Indeed it is Winner

Looking at the NZX announced NZD 32.353c Div payable 8 Apr 2022
there are no Imputation credits - so it gets slugged with full 33.0 DWT
by the long hairy arm of our IRD

[winner69]

Indeed it is Winner

Looking at the NZX announced NZD 32.353c Div payable 8 Apr 2022
there are no Imputation credits - so it gets slugged with full 33.0 DWT
by the long hairy arm of our IRD

They stated divie is 27.5 cents and fully imputed for NZ and unfranked for Aussies

Think the numbers on NZX a bit misleading

[nztx]

They stated divie is 27.5 cents and fully imputed for NZ and unfranked for Aussies

Think the numbers on NZX a bit misleading


Where do NZX get their figures for publishing on NZX site from though ? ;)

from the Company's filings - would you say ? :)


Nothing on Imputation here -

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/VSL/387094/364339.pdf

in fact NZD 27.5c is Unfranked if I'm reading correctly :)

It makes a heck of a difference on what a NZ holder sees in the hand IMO

[percy]

NZX Main Board Dividends
Upcoming dividends
Code Ex Dividend Period Amount Supp. Imputation Payable Currency
SEK 27 Jan 2022 Final 13.000c 2.294c 5.056c 23 Feb 2022 NZD
HFL 27 Jan 2022 Interim 5.900p 0.000p 0.000p 25 Feb 2022 GBP
BIT 27 Jan 2022 Final 0.550p 0.000p 0.000p 28 Feb 2022 GBP
TCL 27 Jan 2022 Interim 4.800p 0.000p 0.000p 28 Feb 2022 GBP
AFI 09 Feb 2022 Interim 10.000c 0.000c 0.000c 25 Feb 2022 AUD
IPL 17 Feb 2022 Interim 2.313c 0.153c 0.338c 04 Mar 2022 NZD
SPN 22 Feb 2022 Interim 7.500c 1.324c 2.917c 08 Mar 2022 NZD
DOW 23 Feb 2022 Interim 12.000c 0.000c 0.000c 24 Mar 2022 AUD
GMT 02 Mar 2022 Interim 1.627c 0.114c 0.252c 17 Mar 2022 NZD
VSL 10 Mar 2022 Interim 32.353c 4.853c 0.000c 08 Apr 2022 NZD

[winner69]

Where do NZX get their figures for publishing on NZX site from though ? ;)

from the Company's filings - would you say ? :)


Nothing on Imputation here -

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/VSL/387094/364339.pdf

in fact NZD 27.5c is Unfranked if I'm reading correctly :)

It makes a heck of a difference on what a NZ holder sees in the hand IMO

That’s what they filed on the ASX for Aussies …note the Supplementary bitbtonhelp them out.


What does Point 3E.1 say …in NZ fully imputed eh

Usually a NZX Distribution Notice form has to filed ….but too sure if Vulcan need to do this as their main listing is on ASX (I think)

[nztx]

That’s what they filed on the ASX for Aussies …note the Supplementary bitbtonhelp them out.


What does Point 3E.1 say …in NZ fully imputed eh


Must be that the sleepy scribe at NZX could have been having a bad day then :)

probably still think they're on holiday as nothing much on the NZX Div front has been happening

thanks for clarifying - Winner :)

[winner69]

Good to be recognised this way - well done Vulcan

https://stocknessmonster.com/announcements/vsl.nzx-388292/

EBOS was runner up in this category with Warehouse third

Warm fuzzzies here - the Vulcan video entry
https://www.youtube.com/watch?v=qWt6U9cjdTE

[nztx]

Both NZX & Sharesies, possibly other participants still appear to incorrectly
reporting the 8 April 2022 Dividend as not having any NZ Imputation Credits attached


Vulcan Steel announcement 18 March 2022

https://www.nzx.com/announcements/389124

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/VSL/389124/366993.pdf

Part 3E

Clause 3E.1:

3E.1 Please indicate where and when information about tax components can be obtained (you may enter a url).

"New Zealand imputation credits are attached to 100% of the dividend"

Watch for grossly incorrect DWT being extracted if this is not fixed before payment date, as in
475% more DWT being taken out than should be, instead of 5% of Gross Div with full Imputation

Perhaps someone here in the loop can stir up NZX & NZRegCo on the incorrect NZX Reporting ? :)

[winner69]

Huge profit upgrade today

Will put a rocket under thee share price

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/VSL/390971/369226.pdf

[Muse]

Amazing what a marvellous company can achieve with marvellous trading conditions. Go vulcan.

[winner69]

From the announcement

Vulcan’s overall revenue is up 34% year-on-year (“yoy”) for the nine months to 31 March
2022 to approximately NZ$700 million (unaudited). The Company’s Steel segment
revenue lifted 42% yoy while its Metals segment revenue grew 21% yoy during this
period. Overall sales volume recorded a 5% yoy increase for the same period. Steel
volume lifted 6% yoy while Metals volume grew 2% yoy during this period

I assume they are all 9 month comparisons (yoy)

So revenues up 34% yoy over 9 months - after 6 months they were up 35% you so not too bad

Volume up 5% yoy over 9 months but after 6 months they were up 10% yoy

Seems to suggest that volume growth over the last 3 months have declined yoy (the 10% falling to 5%)

Great that prices are holding at elevated levels and the extra margin no doubt feeding to increased profits as per guidance

Bit of worry looking forward if volumes are on the decline

[Muse]

From the announcement

Vulcan’s overall revenue is up 34% year-on-year (“yoy”) for the nine months to 31 March
2022 to approximately NZ$700 million (unaudited). The Company’s Steel segment
revenue lifted 42% yoy while its Metals segment revenue grew 21% yoy during this
period. Overall sales volume recorded a 5% yoy increase for the same period. Steel
volume lifted 6% yoy while Metals volume grew 2% yoy during this period

I assume they are all 9 month comparisons (yoy)

So revenues up 34% yoy over 9 months - after 6 months they were up 35% you so not too bad

Volume up 5% yoy over 9 months but after 6 months they were up 10% yoy

Seems to suggest that volume growth over the last 3 months have declined yoy (the 10% falling to 5%)

Great that prices are holding at elevated levels and the extra margin no doubt feeding to increased profits as per guidance

Bit of worry looking forward if volumes are on the decline

nearing (or passing) the peak of the cycle no doubt - hence the muted SP reaction

the impact of falling steel prices - whenever that may occur - will be far more pronounced than the slippage of volumes

[winner69]

Good on mr and Mrs wells gifting nearly 300,000 shares to Vulcan employees

Well done


https://www.nzx.com/announcements/393009

[Muse]

Good on mr and Mrs wells gifting nearly 300,000 shares to Vulcan employees

Well done


https://www.nzx.com/announcements/393009

Extremely classy.

Nothing but the utmost respect for Peter, and more latterly Vulcan.

[Sideshow Bob]

Vulcan Steel delivers a record result for FY22 - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/397489)

Vulcan (ASX: VSL, NZX: VSL) an Australasian-wide steel and metal products distributor and value-added processor has announced a record performance for year ended 30 June 2022 (FY22).

 Reported NPAT of NZ$124 million (m), up 91% from NZ$65m in FY21
 Reported EBITDA NZ$224m, up 68% from NZ$133m in FY21
 Adjusted NPAT NZ$142m, up 119% from NZ$65m in FY21
 Adjusted EBITDA NZ$243m, up 82% from NZ$133m in FY21
 37.5 NZ cents per share final dividend1, bring total dividend declared for the financial year to 65.0 NZ cents per share

[Sideshow Bob]

....................

[winner69]

Interesting article how Vulcan grew from a scratch …and Peter Wells early connections with Steel and Tube

https://www.nzherald.co.nz/business/vulcan-steel-how-an-east-tamaki-startup-became-a-billion-dollar-company/XWLGCPZMGCYKE3T2LCTAIL56HU/
Hopefully not paywalled

[winner69]

Vulcan ASM today

• Reaffirming FY23 EBITDA guidance of NZ$215m - NZ$235m (compared with NZ$243m recorded in FY22)

So ebitda could be 12% less than last year

Start of tougher times over next year or two

[winner69]

I see that the share price at the moment isn't that far above the IPO price

At least as they proudly pointed out at the ASM those who got at IPO price got a dividend with a 11.6%

.... and share price done well - VSL share price: +31% vs Peer & +11% vs S&P/ASX 300 since IPO and 22% ahead of NZX50 Gross Index

[winner69]

Inclusion in NZX50 doing wonders for share price

Be 10 bucks by Christmas

[Sideshow Bob]

Vulcan an Australasian-wide industrial product distributor and value-added processorannounced today the company’s financial performance for the six months ended 31 December2022 (1H FY23).

 Adjusted EBITDA was NZ$115 million (m), down 3% from NZ$118m in 1H FY22
 Adjusted NPAT NZ$54m, down 22% from NZ$70m in 1H FY22
 Reported EBITDA was NZ$115m, up 12% from NZ$102m in 1H FY22
 Reported NPAT of NZ$54m, in line with the level recorded in 1H FY22
 Revenue of NZ$638m, up 38% from NZ$463m in 1H FY22

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/VSL/406616/388433.pdf
https://www.nzx.com/announcements/406614

[winner69]

Bob, on the face of it seeing there’s 5 months of Urlich included not the greatest result

Things don’t look too hot in the market

[Balance]

Bob, on the face of it seeing there’s 5 months of Urlich included not the greatest result

Things don’t look too hot in the market

No surprises.

In line with their guidance and in line with market consensus.

Time for STU to shine.

[X-men]

Market is disliking the result.

If STU presents an average result n same outlook like Vulcan....then SP will follow the downhill

[alokdhir]

Market is disliking the result.

If STU presents an average result n same outlook like Vulcan....then SP will follow the downhill

So far two construction / building materials company have enlightened market with current situation and both have tanked ...Will STU buck that trend ? Tmrw will know but not looking good ....

[winner69]

So Vulcan going to report that NPAT is about 15% DOWN on guidance issued a few months ago.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/VSL/414750/398545.pdf

[winner69]

F22 Adjusted NPAT was $142m ….this year $94m

Thats some decline …..indicative of construction market these days I suppose

[Daytr]

The SP has performed contra to the economy & now results. Be interesting to see what the SP does today.

[winner69]

Guidance today implies H223 npat normalised of $40m …down a whooping 45% on last years $72m in same period

Challenging times indeed and the man is hinting that things aren’t going to get much better in near future.

Normalised npat of $94m is an eps of 72 cents so currently on a PE of 12 trailing earnings ……..some would say not too outrageous

[bull....]

Guidance today implies H223 npat normalised of $40m …down a whooping 45% on last years $72m in same period

Challenging times indeed and the man is hinting that things aren’t going to get much better in near future.

Normalised npat of $94m is an eps of 72 cents so currently on a PE of 12 trailing earnings ……..some would say not too outrageous

big drop alright
anyway its only temporary part of the cycle
KFL has started investing in them so they must not see much downside ahead

[Lego_Man]

big drop alright
anyway its only temporary part of the cycle
KFL has started investing in them so they must not see much downside ahead

They are a quality management team, just too cyclical to own too much of at this point in the cycle. I like them long term and happy to accumulate on significant drops. Not cheap enough to buy yet IMO.

[Daytr]

They are a quality management team, just too cyclical to own too much of at this point in the cycle. I like them long term and happy to accumulate on significant drops. Not cheap enough to buy yet IMO.

Totally agree.

[Balance]

Guidance today implies H223 npat normalised of $40m …down a whooping 45% on last years $72m in same period

Challenging times indeed and the man is hinting that things aren’t going to get much better in near future.

Normalised npat of $94m is an eps of 72 cents so currently on a PE of 12 trailing earnings ……..some would say not too outrageous

They made windfall profit from the rise and rise of steel prices in 2020 and 2021.

I dread NZ companies going over to Australia as most come back to NZ with their tails between their legs. Will VSL be any different?

[whatsup]

big drop alright
anyway its only temporary part of the cycle
KFL has started investing in them so they must not see much downside ahead

Too early in the building cycle down turn to do that,

Q can you see the whites of their eyes yet ?

[Lego_Man]

Too early in the building cycle down turn to do that,

Q can you see the whites of their eyes yet ?

Forsyth Barr have downgraded them to Neutral. They were early followers of the name post IPO.

[winner69]

Forsyth Barr have downgraded them to Neutral. They were early followers of the name post IPO.

Love affair over. ..from co-leader of IPO to a Neutral in just over a year

[alokdhir]

Love affair over. ..from co-leader of IPO to a Neutral in just over a year

Your famous KISS of death ...lol

[winner69]

Your famous KISS of death ...lol

Some 15% down since the announcement says a lot

I’d say another buck to go

[alokdhir]

Some 15% down since the announcement says a lot

I’d say another buck to go

To be fair to KFL they reported getting into this in May when price was flirting $ 8 ...so far they just lost the gains ...another buck will help them increase small position to medium maybe ...:D

[Jaa]

Love affair over. ..from co-leader of IPO to a Neutral in just over a year

Another IPO pump and dump?

[Daytr]

Cylical stock and with the appetite for construction waning its got to hurt the sale of rebar & aluminum from their Ulrich purchase in the residential housing market.
Higher interest rates will also hit commercial builds.
Good company but not the time to buy yet.
Hopefully they decent credit control as steel fabricators are notorious for going broke.
Needs to be around the $5 - $6 mark for me to become interested.

[winner69]

"………….duplicated

[winner69]

From Vulcan -

Speculation on Vulcan Steel’s interest in Metro Performance Glass Vulcan (ASX: VSL, NZX: VSL) is aware of recent media reports speculating that the company is in some way associated with Peter Wells, Vulcan’s founder and former director who remains a substantial shareholder (through his interest in Takutai Limited), and who together with an associate has initiated a proposal to acquire Metro Performance Glass Limited (NZX: MPG). Vulcan wishes to clarify that this is not the case and that it has no financial or commercial interests, directly or indirectly, in that proposal.

[Sideshow Bob]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/VSL/417241/401634.pdf

Vulcan (ASX: VSL, NZX: VSL), an Australasian-wide industrial product distributor and valueadded processor has announced its results for the financial year ended 30 June 2023(FY23).
 Return on capital employed of 21%, equivalent to 32% on a pre-NZ IFRS 16 basis4, thesecond highest for the company in the last 10 years
 Reported NPAT of NZ$88m*, down 29% from NZ$124m in FY22
 Reported EBITDA NZ$209m, down 7% from NZ$224m in FY22
 Adjusted NPAT NZ$95m, down 33% from NZ$142m in FY22
 Adjusted EBITDA NZ$219m, down 10% from NZ$243m in FY22
 30.5 NZ cents per share final dividend, bringing the total dividend declared for FY23 to55.0 NZ cents per share

[SailorRob]

Dealt with these guys as a first time retail purchaser.

Very impressive.

Friendly and helpful and know their stuff.

[winner69]

Dealt with these guys as a first time retail purchaser.

Very impressive.

Friendly and helpful and know their stuff.


Better buy the company then mate

[SailorRob]

Better buy the company then mate

Sorry sport, I don't understand your comment?

Are you suggesting I should buy shares in this company based on the observations I made?

Not hard to understand why you're having such a tough time of it!

[Sideshow Bob]

AGM Preso

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/VSL/421234/406655.pdf

EBITDA down 29% for the 1st 4 months of this year, on the corresponding period last year.

[winner69]

AGM Preso

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/VSL/421234/406655.pdf

EBITDA down 29% for the 1st 4 months of this year, on the corresponding period last year.


Jeez that’s pretty shocking update Bob

H123 ebitda was down 9% on pcp ….H223 was down 24% and current last year going to be about 30%

Things getting worse

No worries ….rest of year will be OK

[Balance]

Jeez that’s pretty shocking update Bob

H123 ebitda was down 9% on pcp ….H223 was down 24% and current last year going to be about 30%

Things getting worse

No worries ….rest of year will be OK

So how much of VSL's profits in 2021 and 2022 came from windfall profits from the rise and rise of steel prices on their stock and forward purchase order?

Guess we have a bit of an inkling now that it was substantial?

[Muse]

So how much of VSL's profits in 2021 and 2022 came from windfall profits from the rise and rise of steel prices on their stock and forward purchase order?

Guess we have a bit of an inkling now that it was substantial?

It shouldn't take the deflating of a commodity bubble to provide the evidence that earnings were unsustainable...should have been evident enough when earnings (& margins) shot up when steel prices inflated

From april 2022...

nearing (or passing) the peak of the cycle no doubt - hence the muted SP reaction

the impact of falling steel prices - whenever that may occur - will be far more pronounced than the slippage of volumes

Whether it be steel, freight, retail, etc...always interesting how the market is surprised when a bubble pops.

[Balance]

It shouldn't take the deflating of a commodity bubble to provide the evidence that earnings were unsustainable...should have been evident enough when earnings (& margins) shot up when steel prices inflated

From april 2022...


Whether it be steel, freight, retail, etc...always interesting how the market is surprised when a bubble pops.

Indeed, Muse.

Which is why I remain bemused with all the angst over the share prices of the RV stocks when the property market has well and truly popped!

[Muse]

I still believe Vulcan to be a very good business with a high class management team. I'm patiently watching the share though not committed to purchasing...the financial metrics at the current price don't do much for me.

[winner69]

Probably a little worse than expected.

NPAT down 52% on pcp

Last three 6 monthly NPAT has been 54m then 33m and last half 26m

But well positioned for growth

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/VSL/426062/412410.pdf

[winner69]

Rhys said at ASM that first 4 months EBITDA was down 29% on pcp

For the whole 6 months EBITDA down 36% …… Nov/Dec must have been tough

note ….a few different EBITDA measures so maybe not apples to apples

[X-men]

STU is doing better.....no bank debts....$26m cash in the account n $11m ebit

[winner69]

STU is doing better.....no bank debts....$26m cash in the account n $11m ebit

STU profits down 50% as well though …tough industry these days

[winner69]

VSL trading 17x last 12 months earnings

About right at bottom cycle when PEs expand

[X-men]

Yes...profit down but....no debts....Vulcan has a lot of debts!!!

[winner69]

VSL trading 17x last 12 months earnings

About right at bottom cycle when PEs expand

But they did remind us that seasonally H2 is lower than H1 so full year profit might only be something like $45m … so PE of 22

Maybe a bit rich

[Leemsip]

Tough results... Cant see it imprving for quite a while. Building permits in NZ cratering.
I think this has quite a bit to drop before there is value.

[bull....]

having bit of a run at the moment , outlook must be good eh

[winner69]

having bit of a run at the moment , outlook must be good eh

Maybe some thinking they may get caught up in the corporate activity current in construction industry

[Lego_Man]

Maybe some thinking they may get caught up in the corporate activity current in construction industry


Based on my understanding of the business and the current state of the economy, i certainly don't get the current price action.

[nztx]

Maybe some thinking they may get caught up in the corporate activity current in construction industry


Wonder how the bad & doubtfull debts provisioning is going ?

If the number of building companies falling over & Com Property outfits writing back on creative revaluations is any indication - things wont likely be merry or exciting for a while in construction ;)

On the back of a recessionary economy - only the most vibrant of companies out there is not going to be reviewing their forwards Capex very closely I would imagine..

[Davexl]

Maybe some thinking they may get caught up in the corporate activity current in construction industry

Perhaps a bit of anticipation of Fast-Track infrastructural decisions - looking forward...

[bull....]

powering to new recent high;s yesterday on asx

[bull....]

still on a tear , stu starting to get interest again now another 1m crossed yesterday

[Davexl]

Anyone know what happened to Vulcan last week ? Dropped from $9.30 to $8.50 over 5 days or so...

[winner69]

Anyone know what happened to Vulcan last week ? Dropped from $9.30 to $8.50 over 5 days or so...

Many building related stocks on ASX/NZX last week or so

Vulcan probably caught up in bad sector sentiment atmoment

[Davexl]

Maybe - thought they might be salivating over big infrastructural projects still, especially with Fast-track coming thru...

[winner69]

Maybe - thought they might be salivating over big infrastructural projects still, especially with Fast-track coming thru...

The rewards from big infrastructure overstated

Wherewithal, cash and capability will hold it all back and if zillions of work is done it'll be spread over decades.....and other work that might have been done in normal course of events will be deferred

At best steady work flows in next few years ...but no boom

That's how I see it anyway

[winner69]

BusinessDesk has an article about Fletcher steel division and it problems and the need to dispense with a lot of staff. Paywalled but here’s a couple of extracts -

. In fact, Vulcan Steel – whose chief executive, Rhys Jones, had once been an executive of the 95-year-old Easysteel division – said the market was the toughest it’s faced since 2008 and the Australasian steel and aluminium company shed 157 staff in the six months ended Dec 31, leaving it with 1,283 across its trans-Tasman operations at the start of the year.

And

The recent first-half result doesn’t bode well for the business in the current financial year, with the building sector still in the doldrums as residential intentions remain soggy and the outlook for commercial construction unclear given the tightening government purse strings.

Both Vulcan and Steel & Tube are optimistic the sector will perk up in the latter half of this year, and the prospect of building much-needed infrastructure should provide a boost, if it ever appears.

I bolded the bits containing the ‘toughest since 2008’ and ‘unclear’ and ‘if it ever appears’ bits as I reckon building/construction activity in NZ will still be at current levels in 2028 and then might start recovery.

[bull....]

Anyone know what happened to Vulcan last week ? Dropped from $9.30 to $8.50 over 5 days or so...

hit the top of the trading range its been in for a yr

[Davexl]

Thanks guys, Winner esp. !

[Daytr]

BusinessDesk has an article about Fletcher steel division and it problems and the need to dispense with a lot of staff. Paywalled but here’s a couple of extracts -

. In fact, Vulcan Steel – whose chief executive, Rhys Jones, had once been an executive of the 95-year-old Easysteel division – said the market was the toughest it’s faced since 2008 and the Australasian steel and aluminium company shed 157 staff in the six months ended Dec 31, leaving it with 1,283 across its trans-Tasman operations at the start of the year.

And

The recent first-half result doesn’t bode well for the business in the current financial year, with the building sector still in the doldrums as residential intentions remain soggy and the outlook for commercial construction unclear given the tightening government purse strings.

Both Vulcan and Steel & Tube are optimistic the sector will perk up in the latter half of this year, and the prospect of building much-needed infrastructure should provide a boost, if it ever appears.

I bolded the bits containing the ‘toughest since 2008’ and ‘unclear’ and ‘if it ever appears’ bits as I reckon building/construction activity in NZ will still be at current levels in 2028 and then might start recovery.

I started my working career at Fletchers as a Management Cadet based within Fletcher Steel.
I worked under Rhys both in Wellington when he was sales manager of the local branch & in Auckland when he became Auckland branch manager. He was ahead of his time within the industry. Very smart bloke.

I found out when I left that he had thought about sacking me when he moved to Auckland, as he thought I was a trouble maker & I probably was as I pushed everyone above me hard. I ended up being the top sales rep in the country. Not sure what to take from that, as his initial instinct was wrong, but he was also prepared to listen to advice & not act on it. He was pretty young then, as we all were.

I met with Fletchers again when I came back from overseas about 10 years ago and after a twenty minute meeting, quickly realised they had no clue. I doubt much has changed in that time.

[whatsup]

I started my working career at Fletchers as a Management Cadet based within Fletcher Steel.
I worked under Rhys both in Wellington when he was sales manager of the local branch & in Auckland when he became Auckland branch manager. He was ahead of his time within the industry. Very smart bloke.

I found out when I left that he had thought about sacking me when he moved to Auckland, as he thought I was a trouble maker & I probably was as I pushed everyone above me hard. I ended up being the top sales rep in the country. Not sure what to take from that, as his initial instinct was wrong, but he was also prepared to listen to advice & not act on it. He was pretty young then, as we all were.

I met with Fletchers again when I came back from overseas about 10 years ago and after a twenty minute meeting, quickly realised they had no clue. I doubt much has changed in that time.

Mate of mine worked at FBU said that they survived inspite of themselves not because of themselves !!

[Lego_Man]

Anyone know what happened to Vulcan last week ? Dropped from $9.30 to $8.50 over 5 days or so...

Insider sell too.

[winner69]

MarketClose report

Vulcan Steel fell 46c or 5.48% to $7.94 after two brokers downgraded the stock on earnings risk.

[malreid]

We are in the manufacturing sector and based on the reduced level of enquiries currently and going back 6-9 months, are in total agreement with of Rhys' comment regarding outlook which is also a recurring theme in conversations across the full gamut of customers, suppliers and competitors.

A very tough 12-18 months lies ahead.