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Thread: STU

  1. #691
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    if the earning meet the highest predict 17.5m,will the SP bounce back again?if meet 15.5m,will the SP keep droping?

  2. #692
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    Quote Originally Posted by percy View Post
    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.

  3. #693
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    Quote Originally Posted by Scrunch View Post
    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.

  4. #694
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    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
    Attached Images Attached Images
    “In a roaring bull market, knowledge is superfluous and experience is a handicap.”

    –Benjamin Graham”

  5. #695
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    Quote Originally Posted by winner69 View Post
    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?
    “Better three hours too soon than a minute too late.”
    ― William Shakespeare

  6. #696
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    Quote Originally Posted by winner69 View Post
    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!

  7. #697
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    Normalised npat up 74% on last year

    Pretty good ....even better growth than A2

    http://nzx-prod-s7fsd7f98s.s3-websit...641/306007.pdf
    “In a roaring bull market, knowledge is superfluous and experience is a handicap.”

    –Benjamin Graham”

  8. #698
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    Quote Originally Posted by winner69 View Post
    Normalised npat up 74% on last year

    Pretty good ....even better growth than A2

    http://nzx-prod-s7fsd7f98s.s3-websit...641/306007.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

  9. #699
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    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.
    Last edited by Lease; 23-08-2019 at 11:29 AM.

  10. #700
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    Quote Originally Posted by Lease View Post
    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
    Attached Images Attached Images
    “In a roaring bull market, knowledge is superfluous and experience is a handicap.”

    –Benjamin Graham”

  11. #701
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    Step one of redemption acheived. Still another 99 steps to go but they could so easily have tripped up at this stage...

  12. #702
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    Quote Originally Posted by Lease View Post
    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.

  13. #703
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    I can't find an investor conference call recording on their website,
    Can anyone help me?

  14. #704
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    Quote Originally Posted by clearasmud View Post
    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.
    For clarity, nothing I say is advice....

  15. #705
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    Thanks for your help Peat.

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