STU - Steel & Tube Holdings

[waikare]

Good result imo. Gltah

Agree and paying a divi , be it 1.2cps...……………..

[Balance]

Good result imo. Gltah

And resumption of payment of dividends.

[BlackPeter]

Good result imo. Gltah

I'd second this:

$7.6m earnings - above top end of latest guidance
Strong balance sheet with all debt repaid and $23.9m cash (though - a bit lazy, isn't it?)

good outlook: "Strong pipeline of secured contract work for 2H21 with improving activity in most sectors"

... and yes, they are paying a divie.

This will give the SP a boost :

[freebee]

Market not liking it ,not sure why ? topped up more on open

[macduffy]

Market not liking it ,not sure why ? topped up more on open

The market's nervous. Anything not beating expectations will be either punished or ignored, forgetting that the world is still under the influence of Covid-19.

Disc: I hold a small parcel.

[BlackPeter]

Market not liking it ,not sure why ? topped up more on open

I guess you never know what markets expected in the first place. Markets turning more and more into a huge casino ...

[CraftyBeer]

I guess you never know what markets expected in the first place. Markets turning more and more into a huge casino ...

There does seem a real betting mentality going on rather than an investing mentality. I'm grateful to have STU returning a div again and having a positive outlook after the past few troublesome years.

[Balance]

There does seem a real betting mentality going on rather than an investing mentality. I'm grateful to have STU returning a div again and having a positive outlook after the past few troublesome years.

Traders getting out - part of the ebb & flow of the market.

[Poet]

Very disappointed that them beating their own forecast and resuming dividends resulted in a 5% fall in share price. Not sure what to make of it - could it be something to do with the small size of the dividend in comparison to their cash on hand of $24m and...
"with a net cash position of $23.9m as at 31 December 2020 to support capital investment and growth initiatives."

Are we off on some new trip into crazy "growth" investments and initiatives??? - come on directors and management, just get the existing company back on track reliably and start returning some cash to your long suffering shareholders - forget about empire building and stick to your knitting.

Also, can anyone explain the following for me

The NPAT is stated at
"The company has reported a Net Profit After Tax of $4.3m, up from a loss of $(37.0)m the prior year."

and dividend is

"Given the turnaround in performance and the improved economic outlook, the Board has been pleased to resume dividend payments with an interim dividend of 1.2 cents per share (unimputed), in line with Steel & Tube’s dividend policy of 60% - 80% of NPAT."

But 1.2c dividend on 165 m shares is $1.99 million which is 46.32% of NPAT

What's going on there?

Disclosure - reasonable size stake and probably looking to buy more on current weakness, but would like to understand said weakness first

[Balance]

Very disappointed that them beating their own forecast and resuming dividends resulted in a 5% fall in share price. Not sure what to make of it - could it be something to do with the small size of the dividend in comparison to their cash on hand of $24m and...
"with a net cash position of $23.9m as at 31 December 2020 to support capital investment and growth initiatives."

Are we off on some new trip into crazy "growth" investments and initiatives??? - come on directors and management, just get the existing company back on track reliably and start returning some cash to your long suffering shareholders - forget about empire building and stick to your knitting.

Also, can anyone explain the following for me

The NPAT is stated at
"The company has reported a Net Profit After Tax of $4.3m, up from a loss of $(37.0)m the prior year."

and dividend is

"Given the turnaround in performance and the improved economic outlook, the Board has been pleased to resume dividend payments with an interim dividend of 1.2 cents per share (unimputed), in line with Steel & Tube’s dividend policy of 60% - 80% of NPAT."

But 1.2c dividend on 165 m shares is $1.99 million which is 46.32% of NPAT

What's going on there?

Disclosure - reasonable size stake and probably looking to buy more on current weakness, but would like to understand said weakness first

1. Indiscriminate selling yesterday by traders and cautious /nervous investors in some stocks like STU which have performed exceptionally well YTD, rather than anything inherently wrong with the companies or economic settings imo. STU started the year at 93c and in a market which has gone backwards 7% YTD and 10.5% from its high, has still performed very well.

If inflation becomes a problem (which appears to be main reason for recent global selloff), then we know that well managed cyclical stocks with proven track records are actually the best inflation hedge.

STU is still a turnaround story so will need a few more runs on the board before investors and the market gain more confidence in the stock.

2. The 60% - 80% of NPAT will be made up with the final dividend. Directors are just being cautious and that's fair enough in the pandemic environment we are still in.