STU - Steel & Tube Holdings

[steveb]

Yup - put $10k on number 20 and hope like hell that number 20 comes out of 37 numbers! I work that out though at more like 2.6%?
Don't most casino's work with zero and double zero now?(just being picky)

[Beagle]

Don't most casino's work with zero and double zero now?(just being picky)

Yes they do but there's always Blackjack where a skilled player can get the house advantage well below the level I suggested.

[Balance]

Don't most casino's work with zero and double zero now?(just being picky)

Note that there's a blank on the wheel which means the house takes EVERYTHING?

[blackcap]

Note that there's a blank on the wheel which means the house takes EVERYTHING?

Yeah there is as "zero" the house takes everything. But that only occurs once every 37 spins. So 1/37 is 2.7% which is the house advantage. Which to be fair is bugger all. Lotto etc take about 35% off the punters and the TAB about 80-85%. With roulette and blackjack you can pretty much walk out almost evens every times. Blackjack you can win because the house has pre-determined levels where they need to stay and cannot deviate from those. But you need a very sharp mind and card counting ability to win consistently long term and I do not have those.

[mfd]

Yes they do but there's always Blackjack where a skilled player can get the house advantage well below the level I suggested.

Depends on the specific rules and how many decks of cards they use, playing a perfect game brings house edge down to about 0.5%. Best of a bad bunch.

[Balance]

Yeah there is as "zero" the house takes everything. But that only occurs once every 37 spins. So 1/37 is 2.7% which is the house advantage. Which to be fair is bugger all. Lotto etc take about 35% off the punters and the TAB about 80-85%. With roulette and blackjack you can pretty much walk out almost evens every times. Blackjack you can win because the house has pre-determined levels where they need to stay and cannot deviate from those. But you need a very sharp mind and card counting ability to win consistently long term and I do not have those.

Odds for the House is different with the kind of odds Beagle was talking about for the punter?

Put a number on a roulette wheel and your odds of winning is 2.7%?

[mfd]

Yeah there is as "zero" the house takes everything. But that only occurs once every 37 spins. So 1/37 is 2.7% which is the house advantage. Which to be fair is bugger all. Lotto etc take about 35% off the punters and the TAB about 80-85%. With roulette and blackjack you can pretty much walk out almost evens every times. Blackjack you can win because the house has pre-determined levels where they need to stay and cannot deviate from those. But you need a very sharp mind and card counting ability to win consistently long term and I do not have those.

Never got into card counting but I understand any decent casino will spot the betting pattern a mile away these days.

[blackcap]

Odds for the House is different with the kind of odds Beagle was talking about for the punter?

Put a number on a roulette wheel and your odds of winning is 2.7%?

Yes it is 2.7% but the payoff is 36x your investment. So you put $1 on say 18 and it comes up 18, the casino gives you $36!

[Balance]

Yes it is 2.7% but the payoff is 36x your investment. So you put $1 on say 18 and it comes up 18, the casino gives you $36!

Should be giving you $37 if it's fair odds.

[Beagle]

Should be giving you $37 if it's fair odds.


Then how would the Casino pay for its cost of doing business ? The point of this analogy is that everything is above board and fully transparent when speculating at some venue's and certainly not at others ! Anyway...like all good train wrecks this one will be interesting to watch. I suspect that in the medium term if STU remains a stand alone company anyone putting any credibility on their ability to accurately forecast future profits is playing their own version of roulette as are FBU shareholders in hoping future synergies would be realized from any successful takeover and the transaction would be eps accretive.

[Balance]

Then how would the Casino pay for its cost of doin g business ? The point of this analogy is that everything is above board and fully transparent when speculating at some venue's and certainly not at others !

All good, Beagle.

Just pulling your tail.

[boysy]

How can stu still be trading after not respond to the FBU notice .....

[blackcap]

How can stu still be trading after not respond to the FBU notice .....

That has me totally baffled. Where is the STU board?

[Beagle]

That has me totally baffled. Where is the STU board?

Here https://www.youtube.com/watch?v=3JxSLnvxP0w

[winner69]

How can stu still be trading after not respond to the FBU notice .....

STU has nothing else to disclose ....that’s why they still trading

[boysy]

Not sure I agree with that winner - STU announced the updated offer yesterday the least they can do is now update the market that the offer has now been rescinded simple as I would of though .... continuous disclosure required afterall bring on the NZX please explain ....

[steveb]

Perhaps FBU have not advised them formally of their intentions.They might have let the NZX know but not STU

[Snow Leopard]

Currently trading on a FY20 forward P/E of only 10 and with those dividends to be resumed it must be an absolute bargain at the current price even without the possible takeover premium. :p

Disc: Definitely do your own.
Disc: Told you $1.20 was good buying. :p :p

[winner69]

Not sure I agree with that winner - STU announced the updated offer yesterday the least they can do is now update the market that the offer has now been rescinded simple as I would of though .... continuous disclosure required afterall bring on the NZX please explain ....

STU said ‘The Board does not support the indicative offer’ but in light of the circumstances there are ‘commissioning an independent expert report which will take 3 -4 weeks, and will further consult its legal and financial advisers about the implications of the revised offer. Fletcher Building has been advised of this (copy attached).’

So at this stage STU haven’t much more to say have they.....nothing material to disclose I reckon unless things have changed dramatically.

Wonder if they still getting this report done? Might be and STU might reengage with Fletcher’s

No doubt further comment at AGM

[trader_jackson]

How can stu still be trading after not respond to the FBU notice .....

They don't want the share price to tank further?

[Balance]

They don't want the share price to tank further?

FBU is waiting.

[steveb]

FBU is waiting.
FBU would be fools not be round at Harbour Milford and ACC.If they are still intending to be a player,they would need to get these 3 on board before a third party enters the fray.

[Beagle]

Currently trading on a FY20 forward P/E of only 10 and with those dividends to be resumed it must be an absolute bargain at the current price even without the possible takeover premium. :p

Disc: Definitely do your own.
Disc: Told you $1.20 was good buying. :p :p

Getting my car serviced on Thursday and my Mechanic needs that big ramp back if you don't mind. Market doesn't believe in the credibility of STU board's earnings so the question of the real PE in this systemically problematic and highly cyclical industry is wide open. Some would even argue a PE of only 7 is applicable in an industry at the top of its cycle...and that assumes you can reliably predict the earnings and in the case of the two ugly construction cousins we know that's impossible :p
Back to $1.20 when all this nonsense is over ?

[steveb]

the dodgy reinforcing steel they sold has not been settled yet has it?

[Snow Leopard]

Getting my car serviced on Thursday and my Mechanic needs that big ramp back if you don't mind. Market doesn't believe in the credibility of STU board's earnings so the question of the real PE in this systemically problematic and highly cyclical industry is wide open. Some would even argue a PE of only 7 is applicable in an industry at the top of its cycle...and that assumes you can reliably predict the earnings and in the case of the two ugly construction cousins we know that's impossible :p
Back to $1.20 when all this nonsense is over ?

Actually borrowed the ramp from your garage.
My, do you have a big collection of them.
Up ramps, down ramps and that big funny corkscrew thing.


Forward P/E of 10 with dividends it is up, up and away.

Disc: Really, do do your own research.

[trader_jackson]

Actually borrowed the ramp from your garage.
My, do you have a big collection of them.
Up ramps, down ramps and that big funny corkscrew thing.


Forward P/E of 10 with dividends it is up, up and away.

Disc: Really, do do your own research.

Over in Aussie FXL is guiding for a potential double digit cash NPAT growth (which may lead to a record cash NPAT result) and has always paid a dividend (current yield is 4.5%) and facing no class action... but is over 30% 'cheaper' than STU, with a forward PE of 6.6 (waay lower than STU) ... it is far from up, up and away!

[Beagle]

the dodgy reinforcing steel they sold has not been settled yet has it?

Some people like to pretend that issue is behind the company for reasons best suited to themselves.

[Beagle]

Over in Aussie FXL is guiding for a potential double digit cash NPAT growth (which may lead to a record cash NPAT result) and has always paid a dividend (current yield is 4.5%) and facing no class action... but is over 30% 'cheaper' than STU, with a forward PE of 6.6 (waay lower than STU) ... it is far from up, up and away!

Oh my goodness, that's another inconvenient truth some will do their best to try and ignore. Can't possibly be a valid comparative...surely not lol

[trader_jackson]

Oh my goodness, that's another inconvenient truth some will do their best to try and ignore. Can't possibly be a valid comparative...surely not lol

No it is not... alot of other factors involved, for both companies, etc
But one seemingly only valuing on 1. if they pay a dividend and 2. have a low PE ratio does not equal a recipe for success/reason to buy...

[Balance]

No it is not... alot of other factors involved, for both companies, etc
But one seemingly only valuing on 1. if they pay a dividend and 2. have a low PE ratio does not equal a recipe for success/reason to buy...

Backtracking so quickly?

This FXL is the one whose sp is down 64% in the last 4 years?

Looks like a big Beagle (dog) to me!

[Balance]

Oh my goodness, that's another inconvenient truth some will do their best to try and ignore. Can't possibly be a valid comparative...surely not lol

Not strident enough, Beagle.

Need that sp down so you need to bark louder.

Or is it whimper louder?

[macduffy]

Over in Aussie FXL is guiding for a potential double digit cash NPAT growth (which may lead to a record cash NPAT result) and has always paid a dividend (current yield is 4.5%) and facing no class action... but is over 30% 'cheaper' than STU, with a forward PE of 6.6 (waay lower than STU) ... it is far from up, up and away!

Speak up, t j ! I'm not due to see my optometrist for another two months!

:ohmy:

[Balance]

Speak up, t j ! I'm not due to see my optometrist for another two months!

:ohmy:

Hear! Hear!

[winner69]

Wonder who that delegation of suits that turned up at STU HQ represent

[Arbroath]

Looks like game on with a crossing of 15.8% of the company at $1.75 this morning...

[blackcap]

Looks like game on with a crossing of 15.8% of the company at $1.75 this morning...

I wonder if FBU is the buyer? Or otherwise who is the buyer? The seller/s should be easy enough to work out.

[Balance]

I wonder if FBU is the buyer? Or otherwise who is the buyer? The seller/s should be easy enough to work out.

https://www.nzx.com/announcements/325431

Game On!

[Balance]

Can I be bothered barking, the fireworks are all over and there must be something better to do... https://www.youtube.com/watch?v=VTI_c5KvdHE

Fireworks are rather loud, no?

I always thought beagles do not like loud noises?

[steveb]

Probably Milford:-
https://www.marketscreener.com/STEEL-TUBE-HOLDINGS-LIM-6491420/company/

[Balance]

Probably Milford:-
https://www.marketscreener.com/STEEL-TUBE-HOLDINGS-LIM-6491420/company/

Will be. So who has bought off them and probably, a couple of other institutions.

Most probably FBU but also, could be white knight?

All will be revealed.

[Beagle]

Fireworks are rather loud, no?

I always thought beagles do not like loud noises?

Congrats where they're due. This pedigree hound is too old and tired to play with mutt companies and dislikes fireworks, quite right...I simply don't need to go there these days which I suppose is vindication of the success of my own investment methodologies over the years. That said, well done mate, you correctly called this as in play and indeed it is.

[Balance]

Will be. So who has bought off them and probably, a couple of other institutions.

Most probably FBU but also, could be white knight?

All will be revealed.

https://www.nzx.com/announcements/325436

And it's NZ Steel, white knight!

[boysy]

Game on .....

[blackcap]

Will be. So who has bought off them and probably, a couple of other institutions.

Most probably FBU but also, could be white knight?

All will be revealed.

That register is so open its not funny, after Milford the next best holder has 4.88%, Acc 2.88% and then its rats and mice.

If it is FBU buying the AGM is going to be fireworks. Unfortunately I have another function in Wellington that day otherwise I would have booked my tickets this morning. Not to be missed for sure, especially with the Chair up for re-election.

[Balance]

That register is so open its not funny, after Milford the next best holder has 4.88%, Acc 2.88% and then its rats and mice.

If it is FBU buying the AGM is going to be fireworks. Unfortunately I have another function in Wellington that day otherwise I would have booked my tickets this morning. Not to be missed for sure, especially with the Chair up for re-election.


NZ Steel,subsidiary of BlueScope Steel, competitor of OneSteel, is the buyer.

Now will they go for the rest?

[blackcap]

NZ Steel,subsidiary of BlueScope Steel, competitor of OneSteel, is the buyer.

Now will they go for the rest?

That is the million $ question. But you have to wonder if they will be happy with a 15% stake and leave it at that? Maybe they think they can exert influence at board level?
Whatever their reasoning, if they want to take over the register, there is not much headway there at all. No blocking stakes available for the current STU board. Methinks the current board are toast whichever way the wind blows.

Unless of course NZ Steel has bought this stake as a blocking stake in itself. (ie stop FBU taking over STU). That would not be a bad strategy in itself.

[Jantar]

Who owns NZ Steel? It doesn't appear to be listed.

Edit: Thanks Balance. you have provided the answer.
So NZ Steel is not actually a NZ company. That being the case I would view FBU as the white knight and NZ Steel as the aggressor.

[blackcap]

Who owns NZ Steel? It doesn't appear to be listed.

New Zealand Steel Limited is the owner of the Glenbrook Steel Mill, the steel mill located 40 kilometres south east of Auckland in Glenbrook, New Zealand. The mill was constructed in 1968 and began producing steel products in 1969. Wikipedia
Founded: 1965
Parent organization: BlueScope

BlueScope Steel Limited is a flat product steel producer with operations in Australia, New Zealand, Pacific Islands, North America, and Asia. It was demerged from BHP Billiton on 22 July 2002 as BHP Steel and renamed BlueScope Steel on 17 November 2003. Wikipedia

[steveb]

could be problems with the com com

[Balance]

could be problems with the com com

OneSteel sold its 50% of STU in 2012 at $2.05.

Now Bluescope Steel buys at $1.75.

Starts getting confusing?

[King1212]

OneSteel sold its 50% of STU in 2012 at $2.05.

Now Bluescope Steel buys at $1.75.

Starts getting confusing?

that was 6 years ago....business conditions were different at that time. 6 years ago...Auckland houses were just around 400k....

[Balance]

that was 6 years ago....business conditions were different at that time. 6 years ago...Auckland houses were just around 400k....

True and cost of building has gone up and the building sector (FBU, Mainzeal, Evert, STU, MPG etc) has gone and buggered themselves up!

[Balance]

NZ Steel,subsidiary of BlueScope Steel, competitor of OneSteel, is the buyer.

Now will they go for the rest?

Bluescope Steel is capitalized at A$8 billion.

So a takeover will not be a problem from a funding point of view.

17.5% does not really give NZ Steel much by way of leverage.

[blackcap]

Bluescope Steel is capitalized at A$8 billion.

So a takeover will not be a problem from a funding point of view.

17.5% does not really give NZ Steel much by way of leverage.

It gives them a blocking stake though. But agree, Bluescope has the spare change (they have been doing very well of late) to buy all of STU. I am surprised by this morning's trading and price action. I would have thought that backing up the truck would be the way to go. Either STU get taken over at $1.75 plus or Bluescope come and influence the board, got to be good for STU longer term. I guess its the blocking stake that has potential buyers worried? Or am I over thinking things?

[Balance]

It gives them a blocking stake though. But agree, Bluescope has the spare change (they have been doing very well of late) to buy all of STU. I am surprised by this morning's trading and price action. I would have thought that backing up the truck would be the way to go. Either STU get taken over at $1.75 plus or Bluescope come and influence the board, got to be good for STU longer term. I guess its the blocking stake that has potential buyers worried? Or am I over thinking things?

Nope - you are not overthinking at all.

Milford has sold out on the basis that a takeover is now unlikely (otherwise, they would have negotiated an escalation clause) and they do not see value at more than $1.75.

That's why others are selling.

[whatsup]

falling knife .

[steveb]

Surely the only way Bluescope could go forward would be through a hostile takeover.They could hardly approach STU with $1.75cps as they have already rejected that price.If the 5c dividend is still on the cards,then Milford have not done very well out of this if there is no escalation clause.
So to me it looks like a blocking position,if FBU still want to do something they would now have to go to Bluescope,so win win for Bluescope.

[BlackPeter]

falling knife .

I guess a typical situation where short term hype is uncorrelated to fundamentals.

FBU (though admittedly not the best example for a successful company) thinks the share is worth $1.95;

Blue Scope (actually a quite succesfull steel producer) thinks the share is worth more than $1.75 (and puts their money where their mouth is);

Market believes it must be worth nothing, given that Milford sold out at $1.75;

Go figure ... might be a good time to accumulate ;);

[Scrunch]

Surely the only way Bluescope could go forward would be through a hostile takeover.They could hardly approach STU with $1.75cps as they have already rejected that price.If the 5c dividend is still on the cards,then Milford have not done very well out of this if there is no escalation clause.
So to me it looks like a blocking position,if FBU still want to do something they would now have to go to Bluescope,so win win for Bluescope.

If it's a blocking stake, why buy all Milfords stake and not just offer to buy 10.1%?

[Beagle]

Nope - you are not overthinking at all.

Milford has sold out on the basis that a takeover is now unlikely (otherwise, they would have negotiated an escalation clause) and they do not see value at more than $1.75.

That's why others are selling.

In your opinion mate if one were looking for a ticket to ride this "dance of the mutts" what would be an attractive entry point ? $1.40, the same price as before this whole fiasco started unfolding ? (keep quiet in the cheap seats snow leopard, I'm not asking you).

[trader_jackson]

Surely the only way Bluescope could go forward would be through a hostile takeover.They could hardly approach STU with $1.75cps as they have already rejected that price.If the 5c dividend is still on the cards,then Milford have not done very well out of this if there is no escalation clause.
So to me it looks like a blocking position,if FBU still want to do something they would now have to go to Bluescope,so win win for Bluescope.

Bluescope probably wanted to snap something up fast, Milford clearly wanted out fast.
Bluescope porbably now assessing their options before mounting any further moves, as is FBU (and, indeed STU!)

Intriguing, the takeover story is far from over it would appear!

[blackcap]

If it's a blocking stake, why buy all Milfords stake and not just offer to buy 10.1%?

Because Milford may have said "all or nothing"! No lose situation for Milford, if called bluff and nothing, they the FBU play is still on table etc.

[Balance]

Because Milford may have said "all or nothing"! No lose situation for Milford, if called bluff and nothing, they the FBU play is still on table etc.

Nice turn for Milford - bet you they are the one buying back now from the sellers at under $1.50

[King1212]

Well..we all can say anything..but what for sure...the share is currently at least worth $1.75 until further announcement of earnings upgrade.....glad I top up a bit this morning.

[mfd]

Well..we all can say anything..but what for sure...the share is currently at least worth $1.75 until further announcement of earnings upgrade.....glad I top up a bit this morning.

Not necessarily, maybe it's just worth 1.75 to a competitor wanting to block FBU from taking it over. Anyone got any idea how likely it is a NZ steel takeover would get past comcom?

[Balance]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12143842

Institutions not happy with STU board for not negotiating with FBU.

FBU may now regret pulling its proposal/offer as it resulted in NZ Steel being able to snare the 17.5% at $1.75?

[Beagle]

I think the STU board are delusional. Their results in recent years have been very poor and their most recent result is truly appalling considering we're at the peak of the building cycle. Further, anyone that thinks their recent write-downs represent the full extent of all the skeletons in the closet is clearly extremely optimistic or simply naïve.
They were so desperate to raise new equity they had to issue it at a truly massive discount to vwap but 5 minutes later so too speak they're trying to say the shares are worth double that. Who are they trying to kid ? This dog keeping his snout pretty close to the ground is hearings murmurings from private construction companies that things are coming off the boil.

As for FBU, talk about the blind trying to lead the blind..their truly appalling track record of trying to achieve synergies and their own appalling track record of massive write-downs and false claims of all dirty laundry now being clean are far too keen to write a big cheque before they've even got one for the divisions they're trying to sell to fix up past gross mistakes. I think the FBU board need to be far more conservative before they start playing Russian Roulette with hundreds of millions more of shareholders funds that represents money that's not even in the bank yet.

Which is the uglier cousin lol.

[GR8DAY]

C'mon FBU it's been ages now since we've had a counter or better offer.........$2.10 and I suggest the deals as good as done. Gotta be a bargain. Any day now I reckon......by the end of the month for sure.??

[steveb]

I would suggest FBU are dead in the water with this one.they had their chance,if you look at the $1.95 offer they certainly would have picked up the Milford shares.If it had been me I would have had Milford locked up a long time ago,and gone to the STU board with strength.So no FBU have shown yet again that they don't have a clue what they are doing.

Unless of course they had a tip of about problems with the com com boys!

[Snow Leopard]

... (keep quiet in the cheap seats snow leopard, I'm not asking you).

Might be better if you keep quiet ?

[Timesurfer]

Looking for a brightside in the current fiasco at least my Milford account will profit even if my own shares don't!

[Justin]

Why Bluescope pay premium price to stop fbu take over?

[clearasmud]

They must have thought it was cheap.

[Marilyn Munroe]

Why Bluescope pay premium price to stop fbu take over?

Because Fletchers would be in a dominant market position able to rip off both customers and suppliers.

Boop boop de do
Marilyn

[Balance]

https://www.odt.co.nz/business/fletcher-blocked-out-st

Takeover play over.

Back to fundamentals.

All eyes on AGM tomorrow.

[winner69]

https://www.odt.co.nz/business/fletcher-blocked-out-st

Takeover play over.

Back to fundamentals.

All eyes on AGM tomorrow.

Hey Balance, not over but definitively over

'The proposed takeover of Steel & Tube by Fletcher is now definitively over,'' he said.

[Scrunch]

Hey Balance, not over but definitively over

'The proposed takeover of Steel & Tube by Fletcher is now definitively over,'' he said.

Or they are still playing games and want any takeover premium in the share price to disappear. If they do still have an interest in STU they should imo work behind the scenes with com com and get any clearances necessary to announce an unconditional offer. They should then follow this up by locking up 20%+ of the stock triggering a requirement to make an offer.

The problem for STU shareholders is that this looks identical to FBU walking away.

[trader_jackson]

It seems just as fast as the flurry of activity started, it is now coming to an end with the share price slowly getting back down to the $1.20's it was prior to the takeover speculation.

[steveb]

It seems just as fast as the flurry of activity started, it is now coming to an end with the share price slowly getting back down to the $1.20's it was prior to the takeover speculation.
Except $1.20 would attract other suitors to the party.It would be in the boards best interest to try and drive the sp up.

[GR8DAY]

Starting to look bloody cheap with recent professional? valuations of $1.70 and $1.95.

[Scrunch]

Starting to look bloody cheap with recent professional? valuations of $1.70 and $1.95.

But what we don't know is the value of the gains expected from combining STU / Fletcher and what proportion of these were estimated to be retained by FBU / provided to STU shareholders through a higher offer. These could have been a tiny portion of the prices which makes the current share price cheap. If there were a lot of assumed synergies, current prices can still be consistent with these offer prices.

IMO STU management needs to get some runs on the board towards delivering their new strategy.

[Justin]

But what we don't know is the value of the gains expected from combining STU / Fletcher and what proportion of these were estimated to be retained by FBU / provided to STU shareholders through a higher offer. These could have been a tiny portion of the prices which makes the current share price cheap. If there were a lot of assumed synergies, current prices can still be consistent with these offer prices.

IMO STU management needs to get some runs on the board towards delivering their new strategy.

If it is the value gains from combining STU / Fletcher，that's win-win situation，STU management will accept it at first Fletcher offer $1.7.

The STU management must believe their company worth more than $2, and current SP $1.36 will make STU management look like they really silly，even lost their jobs， the Thursday AGM they definitely have to provide some fundamental proof to prove their company worth more than $2 at current or near future.

[King1212]

Done and dusted...move on from now...no more guessing 7b fine..blalabla

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/STU/325722/289107.pdf

[steveb]

Done and dusted...move on from now...no more guessing 7b fine..blalabla

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/STU/325722/289107.pdf
Far from done and dusted,it's the class action suit that is the problem

[Jantar]

Far from done and dusted,it's the class action suit that is the problem The class action would be almost certain to fail without engineering advice showing that the stell used posed a risk to buildings. This comment in the decision advice should kill off any hope of the class action being successful
"
The Ministry of Business, Innovation and Employment (MBIE) has indicated homeowners should not be concerned about the safety of the steel mesh. The Structural Engineering Society of New Zealand has also stated homeowners should not be unnecessarily concerned about the ductility of steel mesh in their houses."

[BlackPeter]

Far from done and dusted,it's the class action suit that is the problem

May or may not be a problem. I really wonder how the class action is going to prove that there was any disadvantage to customers using the STU steel in their building projects. It is not that the steel used has been inferior, it just had not been properly tested and certified ... and it was well above previous specifications which have been as well good enough for previous buildings.

Government and Industry say there are no issues - i.e. what damage did happen?


The Ministry of Business, Innovation and Employment (MBIE) has indicated homeowners should not
be concerned about the safety of the steel mesh. The Structural Engineering Society of New Zealand
has also stated homeowners should not be unnecessarily concerned about the ductility of steel
mesh in their houses.

[waikare]

Today (24th) I received my Proxy/Voting in the post, and the voting closed yesterday 23 Oct at 2.pm. Has any body else had the same issue...…………….

[forest]

Same here.

[Justin]

Why they can’t send the voting by email or sms?

[waikare]

Why they can’t send the voting by email or sms?


One has the option to receive communications by post or electronically, I choose post.

[Timesurfer]

Auckland District Court Judge Warren Cathcart today sentenced the company to a fine of $1.89 million on 24 charges under the Fair Trading Act after an earlier guilty plea.

That might hurt a little.

[Beagle]

Today (24th) I received my Proxy/Voting in the post, and the voting closed yesterday 23 Oct at 2.pm. Has any body else had the same issue...…………….

No question about it, the governance and administration of this company is a real "top class" act.

[King1212]

Today (24th) I received my Proxy/Voting in the post, and the voting closed yesterday 23 Oct at 2.pm. Has any body else had the same issue...…………….


Blame it to kiwipost....

[blackcap]

Blame it to kiwipost....

Maybe, but surely the company should be cognisant of the fact that the post can take up to 7 days these days?

[winner69]

They say the big fine won’t impact F19 result

Annual Accounts show a provision of only $1.2m for this — to cover expected fines and costs and likely insurance recovery.

Insurors must be up for a bit then.

Must

[Scrunch]

So the ASM is on tomorrow. I wonder what, if anything new will emerge from this meeting.

[BlackPeter]

Today (24th) I received my Proxy/Voting in the post, and the voting closed yesterday 23 Oct at 2.pm. Has any body else had the same issue...…………….

Same issue here - pretty outrageous!

Luckily I happened to log into Computershare the days before (for some unrelated reason) and saw the reminder - i.e. I did vote, but not quite right that they just leave that up to a lucky accident whether people get the message.

Obviously - NZ Post's wanting performance and the Monday holiday did not help.

About time NZX is extending the ridiculous short period of notice for AGMS's - 2 weeks is clearly not enough if a letter needs even under benign circumstances a week or more to be delivered.

[Justin]

If they achieved FY2019 guidance of $25 million in earnings before interest and tax. What’s the EPS and SP will be? Thanks

[winner69]

If they achieved FY2019 guidance of $25 million in earnings before interest and tax. What’s the EPS and SP will be? Thanks

EPS about 10 cents and share price about $1.10

Justin — What you reckon a good PE for a company like STU is

[Balance]

EPS about 10 cents and share price about $1.10

Justin — What you reckon a good PE for a company like STU is

If they achieved EBIT of $25m, the guidance for F20 will then determine the sp.

If their guidance for F20 is $35m (eps of 15c), market will accord the company a forward growth PER of 15 imo at that point = sp will be $2.25.

That's just how the market works - analysts never ever forecast a downturn until it happens. They always forecast growing EPS when a company is turning around.

I always like companies with fundamentally good market positioning getting themselves into trouble due to poorly executed acquisitions and expansions - opportunity to get set during their capital raising.

Best examples I can think of where spectacular gains were made - FBU, WBC, BHP & News Corp.

[BlackPeter]

EPS about 10 cents and share price about $1.10

Justin — What you reckon a good PE for a company like STU is

10 cents EPS? Where is this coming from?

If we assume that they have very little tax to pay this year (for sure they accrued some losses), and that their interest payments dropped due to the recent recapitalisation, than it would be more like 14 cents / share.

For what it is worth - 4-traders is coming up with 16.5 cents EPS, but not sure how they calculated that (maybe assuming a tax refund from last years loss?). Their target price is 144 cents.

https://www.marketscreener.com/STEEL-TUBE-HOLDINGS-LIM-6491420/financials/

Haven't yet met anybody who is not just able to predict future shrare prices (anybody can do that), but to get them right as well ... but yes - on a PE of 10 would this be something like $1.50 - add or deduct any hype and (as couta correctly states) the forecasts for 2020.

I will lean myself wide out of the window and predict that the STU share price within a year will be between 110 and 250 cents. For disclaimers, please check above :p;

[winner69]

10 cents EPS? Where is this coming from?

If we assume that they have very little tax to pay this year (for sure they accrued some losses), and that their interest payments dropped due to the recent recapitalisation, than it would be more like 14 cents / share.

For what it is worth - 4-traders is coming up with 16.5 cents EPS, but not sure how they calculated that (maybe assuming a tax refund from last years loss?). Their target price is 144 cents.

https://www.marketscreener.com/STEEL-TUBE-HOLDINGS-LIM-6491420/financials/

Haven't yet met anybody who is not just able to predict future shrare prices (anybody can do that), but to get them right as well ... but yes - on a PE of 10 would this be something like $1.50 - add or deduct any hype and (as couta correctly states) the forecasts for 2020.

I will lean myself wide out of the window and predict that the STU share price within a year will be between 110 and 250 cents. For disclaimers, please check above :p;

I just assumed they were going to pay tax

Wrong again eh as I see they have $4.9m in tax losses to carrry forward

[Justin]

show over，there are only one winner， milfie:)

[BlackPeter]

show over，there are only one winner， milfie:)

Depends on your perspective and time horizon. If you discount for the "FBU-takeover-hype peak", than the SP is nicely and steadily rising since the CR.

10107

The show ain't over - you just watched the end of the first act (since CR) ;);

[Filthy]

http://www.scoop.co.nz/stories/BU1810/S00766/lawyer-challenges-steel-tube-to-indemnify.htm

[winner69]

http://www.scoop.co.nz/stories/BU1810/S00766/lawyer-challenges-steel-tube-to-indemnify.htm

STU will continue to be arrogant and won’t even consider that course of action.

[Beagle]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/STU/326475/290065.pdf

Well regarded Harbour Asset management selling down close to 2 million shares at average of $1.337. They must think any prospect of a takeover is well and truly dead and buried and that prospects for this company with its highly chequered track record are anything but bright. FWIW I think the market is dead right to be highly skeptical in regard to future profit "forecasts" STU have made. Their response to the FBU takeover was farcical in my opinion and the market clearly does not share the directors high opinion of the companies future prospects.
I remain of the view that the construction sector is best avoided.

[Justin]

Who bought this 2 million shares?

[Balance]

Who bought this 2 million shares?

https://www.nzx.com/announcements/326709

Not him but always good to see directors and management buy shares on market.

[Scrunch]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/STU/326475/290065.pdf

Well regarded Harbour Asset management selling down close to 2 million shares at average of $1.337. They must think any prospect of a takeover is well and truly dead and buried and that prospects for this company with its highly chequered track record are anything but bright. FWIW I think the market is dead right to be highly skeptical in regard to future profit "forecasts" STU have made. Their response to the FBU takeover was farcical in my opinion and the market clearly does not share the directors high opinion of the companies future prospects.
I remain of the view that the construction sector is best avoided.

Or they just sold down additional shares and booked a profit. Part of the sell-down has been redistributed within the same wider First NZ Capital Group so the group didn't want out completely.

7 Sept - Announce they have gone over 5% (8,754,574 = 5.274%)

10 Sept - Announce increase from 5.274% to 6.556% (8,754,574 to 10,882,258 shares). Its confusingly titled First NZ Capital Group Limited but First NZ Capital securities only hold 22,424 shares at this point in time.

7 Nov - Announce they have decreased from 6.542% to 5.492% (10,859,834 to 9,117,284 shares). What is less clearly stated is that of this 1.74m share reduction, 0.56m was purchased by the related entity First NZ Capital Securities which has increased to 579,302 shares.

What is more interesting is the purchase by Ngaire Malpass of another 50,000 shares which Mark Malpass (CFO) disclosed today.

[peat]

quite scary to think the Commerce Commission not giving up and seeking further penalties!

[winner69]

STU back under 120 again

Milford must have a big smile

Doesn’t seem to be much reason to buy even at today’s price

[Filthy]

shouldv'e taken the FBU deal eh W

[Justin]

"This business is on the way up," Mr Malpass told The Australian Financial Review. "Fletcher has seen that. I see great bones, it's a very solid business."

The STU management they are so confident of their business，hope they won’t let shareholders down at 2019 half year results.

[Balance]

"This business is on the way up," Mr Malpass told The Australian Financial Review. "Fletcher has seen that. I see great bones, it's a very solid business."

The STU management they are so confident of their business，hope they won’t let shareholders down at 2019 half year results.

https://www.nzx.com/announcements/330039

Reporting for half year on 18 Feb 2019.

No dreaded earnings update like Air NZ so means STU on track?

[winner69]

STU still on track

Believe the story and punters are on to a winner with STU

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/STU/330654/295052.pdf

[BlackPeter]

STU still on track

Believe the story and punters are on to a winner with STU

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/STU/330654/295052.pdf

Sure - underlying business seems to tick on and recover. The big question is - will there be a fallout from supplying sub-quality steel for some time? Didn't follow them that close, but don't think that this story is already sorted - is it?

[Balance]

"This business is on the way up," Mr Malpass told The Australian Financial Review. "Fletcher has seen that. I see great bones, it's a very solid business."

The STU management they are so confident of their business，hope they won’t let shareholders down at 2019 half year results.

Well, they have delivered and for those who love high-yield stocks, STU has resumed dividend payments.

[Ekrub]

3.5 cents, on March 29. Well done STU management.....I thought recovery would take a lot longer.
Glad I took up all the entitlement in the cap raising.

[Ekrub]

http://www.sharechat.co.nz/article/57e0756e/steel-tube-turnaround-continues-with-49-jump-in-first-half-net-profit.html

[Balance]

http://www.sharechat.co.nz/article/88a34b1f/steel-tube-recovery-to-include-5-6m-of-2nd-half-cost-savings.html

A bit more colour on the results.

Obviously more work yet go be done but looking good.

[Snow Leopard]

Earnings 4.0c; Dividend 3.5c. Oh well, won't complain.
(No one listens when you do. Look at these shoes, only had them....)

[Justin]

Mr market dont like the result？

[BlackPeter]

Mr market dont like the result？

I guess the result was ok, but not really skyrocketing. As well, SP didn't really crash down either, didn't it? Latest SP movement could have lots of causes including further deteriorating sentiment in the building industry - though, how can something at rock bottom keep deteriorating?

Just wondering what STU's exposure would be to the latest crash in the construction industry (Arrow): https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12208318

Plenty of steel in the Herald news paper picture (article above) - I am wondering whether it has already been paid for?

[Pmdv77]

Seems to be a little of the PGW creeping in here - Mr Malpass' comments talk about the positive first half result including the "optimization of the property footprint". Am i right in thinking that the building they sold is showing up in earnings and subsequently dividends?

[Balance]

Seems to be a little of the PGW creeping in here - Mr Malpass' comments talk about the positive first half result including the "optimization of the property footprint". Am i right in thinking that the building they sold is showing up in earnings and subsequently dividends?

Read the financials.

[Justin]

Will the FY19 earnings guidance coming soon？

[Jantar]

Obviously there are many out there expecting the guidance to be very positive. That is a steady trend upwards, and now through the 180 day MA.
https://www.directbroking.co.nz/DirectTrade/dynamic/superchart.aspx

[Balance]

Will the FY19 earnings guidance coming soon？

Guidance already provided in Feb when they announced their interim results - everything on track.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/STU/330654/295052.pdf

"Company has reaffirmed FY19 EBIT guidance of $25m"

[trader_jackson]

Guidance already provided in Feb when they announced their interim results - everything on track.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/STU/330654/295052.pdf

"Company has reaffirmed FY19 EBIT guidance of $25m"

No news is good news that is for sure... unfortunately there is still a good few months some news (good or bad or neutral) could be released) so 25m EBIT FY19 is far from a done deal in my view.
As a holder, I am confident $25m will be met and around 8 cents in dividends will be paid this FY19... the market seems to be gaining a bit of confidence in STU lately as well.

[Balance]

No news is good news that is for sure... unfortunately there is still a good few months some news (good or bad or neutral) could be released) so 25m EBIT FY19 is far from a done deal in my view.
As a holder, I am confident $25m will be met and around 8 cents in dividends will be paid this FY19... the market seems to be gaining a bit of confidence in STU lately as well.

FNZC's intrinsic valuation is way above current level - $1.96 +

As STU delivers, that valuation will become accepted as realistic.

Happy holder.

[Scrunch]

Broken back above $1.30 and if it closes there it will be the highest close since early Nov.

[Justin]

no news is good news👍

[clearasmud]

FBU offered around $1.70 but got rebuffed.
Was that because the offer was too low or the board wanted to keep their jobs...?
They certainly can afford to increase divis due to the large capital raise...

[blackcap]

FBU offered around $1.70 but got rebuffed.
Was that because the offer was too low or the board wanted to keep their jobs...?
They certainly can afford to increase divis due to the large capital raise...

Would it not seem a bit silly to have a cap raise and they pay a large dividend? I mean why do the cap raise in the first place?

[Justin]

pay divi better than pay debts

[Marilyn Munroe]

FBU offered around $1.70 but got rebuffed.
Was that because the offer was too low or the board wanted to keep their jobs...?


The board probably knew the Commerce Commission would waver between NO!!! and HELL NO!! because of concerns about the merged entity having a dominant position in the merchant steel market.

Boop boop de do
Marilyn

[Balance]

FBU offered around $1.70 but got rebuffed.
Was that because the offer was too low or the board wanted to keep their jobs...?
They certainly can afford to increase divis due to the large capital raise...

FBU actually increased its offer to $1.90 (plus 5c dividend) = $1.95

[Justin]

The board probably knew the Commerce Commission would waver between NO!!! and HELL NO!! because of concerns about the merged entity having a dominant position in the merchant steel market.

Boop boop de do
Marilyn

how come the FBU board dont knew？

[Balance]

how come the FBU board dont knew？

Judgement call on their part with the usual vested-interest lawyers urging them on. How else would the lawyers make money?

Remember that Commerce Commission rejected Vodafone & Sky TV merger?

[Justin]

Judgement call on their part with the usual vested-interest lawyers urging them on. How else would the lawyers make money?

Remember that Commerce Commission rejected Vodafone & Sky TV merger?

greedy lawyers

[Scrunch]

Would it not seem a bit silly to have a cap raise and they pay a large dividend? I mean why do the cap raise in the first place?

If you are selling a critical component into buildings, potential purchasers need confidence you will be around to deliver. This tilts the scales towards being well capitalised and could be a key factor in a capital raise then a high div payout.

If the level of capitalisation/debt has little or no impact on sales then lower/no dividends and a progressive repayment of borrowings over several years could work - assuming any high importance capital projects can still be done.

[Justin]

hype off 😢

[winner69]

Suppose this had too happen ....I take it amongst the most mumbo jumbo it’s actually a significant profit downgrade

The much touted $25m to be about $16m if I read it correctly ...even though everything going honky dory

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/STU/334726/300091.pdf

[winner69]

Whether the $16m odd ebit is down from either the original often touted $25m or a ‘restated’ $21m the announcement is a bit of a disaster eh

This bit is a bit of a worry “New information has identified that approximately $4m of the significant inventory write-offs taken in FY18 were related to that year’s production process and should have been included in the assessment of cost of goods sold in FY18 normalised earnings.........but it didn’t impact F18 GAAP reported earnings”. Must think about what that really means

[blackcap]

Suppose this had too happen ....I take it amongst the most mumbo jumbo it’s actually a significant profit downgrade

The much touted $25m to be about $16m if I read it correctly ...even though everything going honky dory

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/STU/334726/300091.pdf

Patterson really needs to go. The board also needs to ask "what the F are they doing". FBU gave them an out and they did not take it. That was in my opinion very self serving of them. Shareholders need to vote these numpties out at the next available opportunity.

[winner69]

Patterson really needs to go. The board also needs to ask "what the F are they doing". FBU gave them an out and they did not take it. That was in my opinion very self serving of them. Shareholders need to vote these numpties out at the next available opportunity.

They’ll live with the shame (and stigma) for a long time eh

[winner69]

Capital raise last August .....all those new shares at $1.15

Sold on this -

FY19 EBIT guidance is of at least $25.0 million, with normalised EBIT of $35 million to $40 million expected to be achieved in the next three years.


I suppose the $40m is now a pipe dream as well.

[Beagle]

Patterson really needs to go. The board also needs to ask "what the F are they doing". FBU gave them an out and they did not take it. That was in my opinion very self serving of them. Shareholders need to vote these numpties out at the next available opportunity.
Totally self serving. They're not there to represent shareholders interests and only interested in their own.


They’ll live with the shame (and stigma) for a long time eh

That's not enough. We need a shareholder activist like Bruce Sheppard to wear a Viking hat at the annual meeting and really rip these incompetent directors to shreds with a long series damming questions. I would oblige but I fear my blood pressure wouldn't allow it so owning shares is hazardous to my financial health and having to listen to that self serving bunch on incompetent directors at the annual meeting would be very bad for my physical health so probably best I stay well away !

[Beagle]

I Capital raise last August .....all those new shares at $1.15

Sold on this -

FY19 EBIT guidance is of at least $25.0 million, with normalised EBIT of $35 million to $40 million expected to be achieved in the next three years.


I suppose the $40m is now a pipe dream as well.

It was always a load of pipedream bull**** and called as such by me and others at the time.

[winner69]

It was always a load of pipedream bull**** and called as such by me and others at the time.

No ..a steel tube dream down the gurgler

Not just Board but seems finance dept not that clever either

Suppose Management pretty bad as well.

[winner69]

Seems weird that this magical $4m that should have been included in Cost of Sales in F18 didn’t seem to be an issue when they produced Half Year Accounts in February

Weird ....or fishy ...or just inept.

[Beagle]

I think the STU board are delusional. Their results in recent years have been very poor and their most recent result is truly appalling considering we're at the peak of the building cycle. Further, anyone that thinks their recent write-downs represent the full extent of all the skeletons in the closet is clearly extremely optimistic or simply naïve.
They were so desperate to raise new equity they had to issue it at a truly massive discount to vwap but 5 minutes later so too speak they're trying to say the shares are worth double that. Who are they trying to kid ? This dog keeping his snout pretty close to the ground is hearings murmurings from private construction companies that things are coming off the boil.

As for FBU, talk about the blind trying to lead the blind..their truly appalling track record of trying to achieve synergies and their own appalling track record of massive write-downs and false claims of all dirty laundry now being clean are far too keen to write a big cheque before they've even got one for the divisions they're trying to sell to fix up past gross mistakes. I think the FBU board need to be far more conservative before they start playing Russian Roulette with hundreds of millions more of shareholders funds that represents money that's not even in the bank yet.

Which is the uglier cousin lol.

Posted 17/10/2018. As usual I made my feelings quite clear. This and FBU are poorly governed, poorly managed and chock a block full of incompetent and heavily overpaid middle management as well. Balance was touting this as a takeover target back then and talking up future EBIT as being quite achievable.
Wonder what he would say now if he wasn't still banned.

[winner69]

Wonder if share price will go sub $1

Even at $1.13 it’s on a PE of 17 to 18 (based on EPS of 6.5 cents)

Trade at Metro Glass multiples it would be about 60 / 70 cents

But STU a much more robust company with a new computer system.

[winner69]

no news is good news👍

A month later and you get bad news mate.

[winner69]

No news is good news that is for sure... unfortunately there is still a good few months some news (good or bad or neutral) could be released) so 25m EBIT FY19 is far from a done deal in my view.
As a holder, I am confident $25m will be met and around 8 cents in dividends will be paid this FY19... the market seems to be gaining a bit of confidence in STU lately as well.

Doubt whether you’ll get your 8 cents ....unless they use the strong cash flows and super confident about the future trick

[Beagle]

Wonder if share price will go sub $1

Even at $1.13 it’s on a PE of 17 to 18 (based on EPS of 6.5 cents)

Trade at Metro Glass multiples it would be about 60 / 70 cents

But STU a much more robust company with a new computer system.

Where it belongs in my opinion and I know your last sentence was tongue in cheek.

[trader_jackson]

Doubt whether you’ll get your 8 cents ....unless they use the strong cash flows and super confident about the future trick

Yes, I was just thinking, damn... Lucky I only have punting money in STU, although I was hoping it would be more than a PEB style punt, I suppose it really was meant to be nothing more than a punt after all.
Despite all the normalization, it is pretty obvious it is a downgrade.
Lucky the market never really thought STU would produce 25m normalized earnings in the first place anyway, downgrade of 30% or so yet share price has only fallen 9% so far

[Beagle]

Yes, I was just thinking, damn... Lucky I only have punting money in STU, although I was hoping it would be more than a PEB style punt, I suppose it really was meant to be nothing more than a punt after all.
Despite all the normalization, it is pretty obvious it is a downgrade.
Lucky the market never really thought STU would produce 25m normalized earnings in the first place anyway, downgrade of 30% or so yet share price has only fallen 9% so far

LOL give it time, the market's been open for less than a hour. The local 3 legged pig dog riddled with mange, flea's, worms and ticks is more attractive than this mutt !

[winner69]

Yes, I was just thinking, damn... Lucky I only have punting money in STU, although I was hoping it would be more than a PEB style punt, I suppose it really was meant to be nothing more than a punt after all.
Despite all the normalization, it is pretty obvious it is a downgrade.
Lucky the market never really thought STU would produce 25m normalized earnings in the first place anyway, downgrade of 30% or so yet share price has only fallen 9% so far

A sort of positive rerating eh tj

[Arbroath]

I think the only reason its not on an MPG like multiple is the difference in gearing but pretty clear the Boards credibility is shot so it will lanquish until they actually put runs on the board...I think they shouldve said more about the $4m c*ck-up which is seriously concerning from a management and systems perspective

[winner69]

That $4m sure is confusing but it looks like they’ve used it to somehow come up with this 20% to 35% increase in F19 EBIT over the restated FY18 Normalised EBIT (excluding Plastics) of $13m.

Wow ...20% to 35% earnings growth is pretty cool stuff ...but not that far off the 47% growth first stated or the 60% growth on the restated numbers

I think they not being completely transparent here.

[steveb]

totally agree with you winner,they tried to get away with a little white lie,somehow got caught and had to come clean

[Beagle]

I am ready to hand out the wooden spoon prize for the most disingenuous company trading update of the week.
Deserves to be trading under $1 and probably will be soon enough.

[Baa_Baa]

I am ready to hand out the wooden spoon prize for the most disingenuous company trading update of the week.
Deserves to be trading under $1 and probably will be soon enough.

It’s only Monday lunchtime, a few others reporting this week.

[Beagle]

It’s only Monday lunchtime, a few others reporting this week.

LOL yes you never know, the week is young and some of the "corporate speak" emanating from many boardrooms lately has been VERY creative.

[winner69]

Tomorrow might see sub $1

[trader_jackson]

Something must be wrong - share price going up again.
I thought we were gonna see sub $1 yesterday winner?
Now going in the opposite direction to sub $1.

[winner69]

Something must be wrong - share price going up again.
I thought we were gonna see sub $1 yesterday winner?
Now going in the opposite direction to sub $1.

That’s good for you ...even BlackPeter might get tempted to have another bite at STU at these prices.

I ask them to clarify this magical $4m - like is it just a notional adjustment to F18 underlying profit (like they say GAAP profit remains unchanged) or whether is an actual additional cost in F19 (because as they said ‘including’ the adjustment F19 ebit is going to be $16m)

No response it

[steveb]

OK now under the $1.00 support level,we know the hound picked it but where to from here?Time to sack the board perhaps.

[Justin]

just wonder now is worst time for stu？even worst than last year？

[winner69]

Something must be wrong - share price going up again.
I thought we were gonna see sub $1 yesterday winner?
Now going in the opposite direction to sub $1.

T_j ....firmly ensconced around the $1 mark. Probably still over priced but while there’s life there’s hope.

I reckon it’ll stay down this low for some time

And they still intend paying a divie ...that’s good

[BlackPeter]

T_j

And they still intend paying a divie ...that’s good

"And they still intend ...."

What do they say about the road to hell?

Lets hope that this is not the road they are going ;);

[trader_jackson]

T_j ....firmly ensconced around the $1 mark. Probably still over priced but while there’s life there’s hope.

I reckon it’ll stay down this low for some time

And they still intend paying a divie ...that’s good

As our PM once said, "intention is reality" so lets hope shes right and STU doesn't turn into kiwibuild and we therefore see another dividend at full year, and continued dividends.

I agree what she said was pretty silly and nonsensical but lets cross our fingers and hope anyway

[Justin]

how much cents the final divie will be？

[winner69]

how much cents the final divie will be？

Maybe 4 cents, could even be 5 cents ......’strong cash flows and future prospects looking good’ they’ll say to justify it

Not the gospel truth ....just speculation

[KJ]

Just a few mths ago FBU thought they were worth $1.95,NZ Steel bought 15.8% at $1.75 & in Nov the CEO bought 50,000 shares at $1.32
Bit strange eh?

[Grimy]

Just shows that even those in the know, don't always know everything......

[Justin]

then, who knows?

[blackcap]

Just a few mths ago FBU thought they were worth $1.95,NZ Steel bought 15.8% at $1.75 & in Nov the CEO bought 50,000 shares at $1.32
Bit strange eh?

Yeah FBU thought they were $1.95 and the STU board thought they were worth more. The board in my opinion is currently in an untenable position and should resign en-masse. I have a hunch a few there did not want FBU to take over STU because that would mean losing their positions. (Bugger what the shareholders want)

[Scrunch]

how much cents the final divie will be？

I had a look back at some past records and about 75-80% of the time the final dividend was larger than the interim dividend. Their intention probably was a larger dividend in the 2nd half when the declared the 1st half. Given the profit down-grade, my guess would be a repeat of the 1st half even although this puts this guess into the minority of historical instances.

[winner69]

t_j, share price back to $1.00

That’s good

[trader_jackson]

t_j, share price back to $1.00

That’s good

Yea, surprising it hasn't continued to fall into oblivion
Mr Market must still have some belief in the turn around story

[winner69]

Yea, surprising it hasn't continued to fall into oblivion
Mr Market must still have some belief in the turn around story

If this year’s EPS is 6 cents odd and they pay another 3 cent divie (6.5 cents for year) the share price will hang in there.

Remember strong cash flows and confidence in the future go a long way.

[winner69]

Jeez ...share price fallen to 93 cents

That’s pretty dismal ...but.....

[percy]

The business's reputation remains intact.
How can you complain about rent ,after you have done a sale and rent back, when you set the rent to get the sale.?!
Avoid.

[Justin]

is that the book value still $1.21 per share？

[percy]

is that the book value still $1.21 per share？

Yes as far as I know.
However with stock adjustments it is coming down.

[Justin]

omg，since the management refuse the take over. Are they go to lead this business bankrupt soon？SP break the record low and low everyday

[winner69]

The business's reputation remains intact.
How can you complain about rent ,after you have done a sale and rent back, when you set the rent to get the sale.?!
Avoid.

Did they really do that ...hopeless if they did!

[Justin]

if the earning meet the highest predict 17.5m，will the SP bounce back again？if meet 15.5m，will the SP keep droping？

[Scrunch]

The business's reputation remains intact.
How can you complain about rent ,after you have done a sale and rent back, when you set the rent to get the sale.?!
Avoid.

The comment below appeared in the recent shareholder letter.
"We are generating cost savings from more efficient warehousing, freight, logistics and restructuring and expect operating costs to be down compared to the prior year, despite increases in rent following the sale and lease back of two sites and inflation pressures."

I read this as saying (fairly poorly) that the savings achieved were of a sufficient size to more than fully offset the rent increases created from the sale and leaseback and some unquantified inflation pressures.

[SilverBack]

The comment below appeared in the recent shareholder letter.
"We are generating cost savings from more efficient warehousing, freight, logistics and restructuring and expect operating costs to be down compared to the prior year, despite increases in rent following the sale and lease back of two sites and inflation pressures."

I read this as saying (fairly poorly) that the savings achieved were of a sufficient size to more than fully offset the rent increases created from the sale and leaseback and some unquantified inflation pressures.

Shareholder letters, like company newsletters to employees, always make every thing sound wonderful. It pays to think critically and question every clause and try to read between the lines. No figures given of course and it is the cost savings versus revenue increase/decrease that counts.

The summary from the trading update on 20 May is pertinent.
•Positive momentum being seen from focus on customer service and turnaround strategies.
•Steel & Tube has grown market share with year on year volumes and sales continuing to improve, however pricing pressure and product mix are impacting second half margins.
•FY18 Normalised EBIT1 has been restated and reduced by approximately $4m following further analysis of FY18 inventory write-offs. This lowers the original FY19 forecast EBIT from $25m to approximately $21m.
•Taking market conditions, trading performance and the inventory adjustment into account, the company now expects FY19 EBIT to be between $15.5m to $17.5m. This is an increase of approximately 20% to 35% on the restated FY18 Normalised EBIT (excluding Plastics) of $13m.
•Steel & Tube’s Board is confident in the medium to long term outlook for the company and anticipates paying a final FY19 dividend in line with its dividend policy.

Dividend policy these days is for 60-80% of NPAT and so shareholders can at least expect a profit for the final half, although the indications are that the final divvy may be down from the interim as a result of reduced margins.

[winner69]

STU were pretty proud of this chart in their half year announcement

But it says a lot more than what they intended to show ...not so good stuff

[Timesurfer]

STU were pretty proud of this chart in their half year announcement

But it says a lot more than what they intended to show ...not so good stuff
Twice as much work for half as much money?

[Arbroath]

STU were pretty proud of this chart in their half year announcement

But it says a lot more than what they intended to show ...not so good stuff

Depending on the composition of sales it can be interpreted negatively for sure...

What I like now though is the very low gearing - that buys management time to improve the business as long as they are up to it!

[winner69]

Normalised npat up 74% on last year

Pretty good ....even better growth than A2

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/STU/339641/306007.pdf

[trader_jackson]

Normalised npat up 74% on last year

Pretty good ....even better growth than A2

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/STU/339641/306007.pdf

Haven't read it yet winner, so why is the share price so low when growth is better than the famed A2?
Once I've read it I will probably understand why

[Lease]

EPS 0.068, PE ratio close to 14 based on SP 0.94. The PE is highest since 2013 as per my calculation. Given the fact STU operate in a very competitive market, I'm cautious if they can achieve $35-40m EBIT by FY21 as mentioned at 2018 AGM.

[winner69]

EPS 0.068, PE ratio close to 14 based on SP 0.94. The PE is highest since 2013 as per my calculation. Given the fact STU operate in a very competitive market, I'm cautious if they can achieve $35-40m EBIT by FY21 as mentioned at 2018 AGM.

I know they have bold plans etc etc etc but one would need to be totally optimistic in thinking they will achieve that $40m if the last 5 years is anything to go buy

Nice of them to proudly put this in the AR

[Pmdv77]

Step one of redemption acheived. Still another 99 steps to go but they could so easily have tripped up at this stage...

[Scrunch]

EPS 0.068, PE ratio close to 14 based on SP 0.94. The PE is highest since 2013 as per my calculation. Given the fact STU operate in a very competitive market, I'm cautious if they can achieve $35-40m EBIT by FY21 as mentioned at 2018 AGM.

Given that 2019 was well below the their earlier estimates, $35 to $40m EBIT in FY21 looks rather unlikely. If this was Mr Markets the best guess, the share price wouldn't be where it is. The interest expenses are now low before the accounting lease adjustments ($1m?). A $37.5m EBIT result is therefore a net surplus of about $26m. If say a 12x PE was applied in two years to an EBIT of $37.5m, the 2021 share price is $1.89. People wouldn't be prepared to sell at under $1 if they believed there's a good chance of the share price doubling in the next two years.

Assuming people are pricing in a 15% capital return and some dividends from the current 92c price, the expected share price in two years is $1.22. That's a market cap of just over $200m. A range of different future PE ratios and EBIT's can create a $200m market cap, but they are typically under an EBIT of $30m.

[clearasmud]

I can't find an investor conference call recording on their website,
Can anyone help me?

[peat]

I can't find an investor conference call recording on their website,
Can anyone help me?
Im not certain, but it looks to me as if there is only an online archive of the presentation (i.e. powerpoint slides) , not a recording of the live actual investor conference call.
If you cant find it after more looking give the company an email or a phone call.

[clearasmud]

Thanks for your help Peat.

[Independent Observer AUNZ]

Thanks for your help Peat.

Did you have any luck though? I need to review my position here, its such a mixed bag and hard to cut the wheat from the chaff.

[clearasmud]

Not yet.
Let us know if you do.

[trader_jackson]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12265951

Intriguing isn't it

[Snoopy]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12265951

Intriguing isn't it

Many moons ago I was a Steel and Tube shareholder. I sold out as part of portfolio rationalisation, as it was only a small position. I was also a shareholder in the majority shareholder at the time, which was Australia's 'Arrium'. Steel and Tube had historically performed quite well. But the equivalent Australian steel distribution business also run by Arrium has never had the same margins. This is what stopped me stepping back into Steel & Tube again, as I felt that the NZ business was in danger of slipping back into a permanent state of being no more profitable than the Australian operation. Perhaps this has now happened?

SNOOPY

[winner69]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12265951

Intriguing isn't it

Who wins price wars t_j?

[trader_jackson]

Who wins price wars t_j?

the consumer?

[King1212]

Whale down TJ....u passed the exam!😁

[winner69]

the consumer?

....unless standards are compromised to make a buck and shoddy goods are sold.

[winner69]

So the $30m plus operating profit target pushed out beyond 2021 to an undetermined time beyond that.

Is that STU lingo for NEVER


http://www.sharechat.co.nz/article/933388bb/steel-tube-pushes-return-to-normal-earnings-beyond-2021.html

[trader_jackson]

Hey winner, STU up 10 cents in less than a month - whats going on?

[winner69]

Hey winner, STU up 10 cents in less than a month - whats going on?

Maybe it’s a case of punters having to put their money somewhere and any great NZ company under a buck must be good.

[Balance]

Maybe it’s a case of punters having to put their money somewhere and any great NZ company under a buck must be good.

Oversold with all the negativity around the building and construction sector.

Latest stats show sector actually in good health - should lead to recovery and then, normalization of margins within next 2 years.

Heck, MPG has put on 28.5% without too much resistance since the big seller finished selling.

[winner69]

I think this is corporate speak for things aren’t going that well and we are still in the **** but don’t really know by how much yet.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/STU/344397/311974.pdf

[winner69]

Last guidance was ‘Our long term outlook target remains to generate $30m to $35m EBIT1, however current market headwinds mean this will take longer to achieve than the original three year plan.’

I think that’s just a pipe dream now.

[winner69]

Last year H1 npat was $3.8m

It’s going to be less this year

But never mind ...the second half is going to be fine ...no worries.

[trader_jackson]

This is really turning into a bad joke now... rejected a takeover offer of $1.90 something as the board was (arrogant?) insistent the company was worth more... and ever since then STU has gone from disappointment to disappointment... bluescope probably going to be successful with a takeover (should they choose to do one) at half the price fletcher's were willing to pay only a year or so ago. Another write off (or 'significant one off') coming as well by the looks of it.

[Independent Observer AUNZ]

This is really turning into a bad joke now... rejected a takeover offer of $1.90 something as the board was (arrogant?) insistent the company was worth more... and ever since then STU has gone from disappointment to disappointment... bluescope probably going to be successful with a takeover (should they choose to do one) at half the price fletcher's were willing to pay only a year or so ago. Another write off (or 'significant one off') coming as well by the looks of it.

I want to get out, but I don't know how to reduce the damage!!

[Balance]

Adding new meaning to the term 'Downgrades come in threes'.

This must be #5? :eek2:

[macduffy]

Adding new meaning to the term 'Downgrades come in threes'.

This must be #5? :eek2:

And adding weight to the old dictum that taking action at the first downgrade is often the least damaging.

[bull....]

weekly bollingers suggest room to move to 80c ( lower bollinger band)

[forest]

Last year H1 npat was $3.8m

It’s going to be less this year

But never mind ...the second half is going to be fine ...no worries.

Winner, 1H 2018 NPAT was $3.8m.
1H 2019 NPAT was $5.6m.

The announcement is a forecast of 1H 2020 and said 1H lower than prior year so that would be 1H 2019 less than $5.6m, hopefully not less than 2 years prior although that is possible.

[percy]

And adding weight to the old dictum that taking action at the first downgrade is often the least damaging.

Yes always the right thing to do to preserve capital.

[winner69]

Winner, 1H 2018 NPAT was $3.8m.
1H 2019 NPAT was $5.6m.

The announcement is a forecast of 1H 2020 and said 1H lower than prior year so that would be 1H 2019 less than $5.6m, hopefully not less than 2 years prior although that is possible.

You are so right ...it was $5.6m in H119 (confused by way they formatted the announcement)

Worst part of the announcement is ’....accounting carrying values will be reassessed at that time.’


Goodness gracious what that’ll deliver ....so soon after previous write offs.

[winner69]

At least STU still making a bob or two ....that’s good

[Beagle]

I've seen a 3 legged pig dog with mange which quite frankly looks more attractive than this mutt.

[bull....]

forgot to say mthly bollingers suggest prices could touch bottom line at 70c

[Sideshow Bob]

It will be great when there is finally a building boom in New Zeala........oh wait......

[winner69]

STU’s biggest mistake is always painting a rosy picture ....things will be OK next half etc etc

All these raised expectations just add to the inevitable disappointment

Board and management need to become less delusional and face up to reality and not just hope like hell.

[boysy]

Will they be able to hold onto paying 5c in divis at this rate ...

[Beagle]

STU’s biggest mistake is always painting a rosy picture ....things will be OK next half etc etc

All these raised expectations just add to the inevitable disappointment

Board and management need to become less delusional and face up to reality and not just hope like hell.

And a reminder in case anyone needs one of the way STU's board dismissed FBU's bid at $1.90 about this time last year
"The board remains of the view and has informed Fletcher Building that the
company's value exceeds the revised price of $1.90 per share. In addition":

They're completely delusional.
The markets present assessment of fair value is just 79 cents whereas the directors in their "infinite wisdom" think its worth materially more than $1.90.

[winner69]

Even those super super cheap heavily discounted $1.05 shares as part of the rights issue just over a year ago don’t look too cheap anymore

Easy come, easy go they say

[winner69]

Suppose Susan meant this when the offer was a mere $1.70:

Chair of Steel & Tube, Susan Paterson, said: “The fact that Fletchers has made this indicative offer speaks to our reputation and the strength of our business. Obviously Fletchers sees a lot of value in our business and its future potential as the benefits of our turn-around strategy start to become clear… as do we.”

[winner69]

Wonder what FNZC were smoking when they did these sums in response to the $1.90 revised offer -


1. Steel & Tube’s advisers’ (First NZ Capital) view on Steel & Tube’s intrinsic value is between $1.95 and $2.36 per share, excluding the company’s share of synergies.

[Beagle]

Even those super super cheap heavily discounted $1.05 shares as part of the rights issue just over a year ago don’t look too cheap anymore

Easy come, easy go they say

Was that the rights issue where they promised to turn things around and produce $25-$30m in annual profits ?

[Snow Leopard]

Just noticed this is still going down, now at $0.78.

Not one of my greatest success stories.

[waikare]

Just noticed this is still going down, now at $0.78.

Not one of my greatest success stories.

The very same here I brought in in Nov. 2009 @$3.10...…………….

[WAIKEN]

Is there any significance in the undisclosed buying yesterday and today?

[GR8DAY]

Is there any significance in the undisclosed buying yesterday and today?


.......not sure myself Waiken but Ive noticed the SP appears to be in recovery mode?..........inching up daily now.

[Scrunch]

.......not sure myself Waiken but Ive noticed the SP appears to be in recovery mode?..........inching up daily now.

It's improved from the high 70's and low 80's to now having a buyer at 89 and the lowest seller is 91. Are we back to around 90c +/- 5c as we has from around July to Nov last year?

[winner69]

Probably punters think there’s going to be lots of steel in the zillions of extra infrastructure spend and STU will benefit.

Hope our families $14,000 contribution is well spent ..yeah right

[percy]

Probably punters think there’s going to be lots of steel in the zillions of extra infrastructure spend and STU will benefit.

Hope our families $14,000 contribution is well spent ..yeah right

Yes we live in hope.?.........

[percy]

Yes we live in hope.?.........

Well our hope did not last long.
Plastic roads it is.?

[winner69]

STU still not making much money but ‘STRIVING’ hard and making good progress in challenging times

Scrunch et al should be pleased announcement is pretty positive.....except for the $35m writedown ....non cash so doesn’t matter but was cash once.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/STU/347761/315979.pdf

[percy]

STU still not making much money but ‘STRIVING’ hard and making good progress in challenging times

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/STU/347761/315979.pdf

No surprises there.!!.
Property sale means they will pay the divie.

[winner69]

No surprises there.!!.
Property sale means they will pay the divie.

Yep, always good selling things the shareholders own to give them a decent divie.