STU - Steel & Tube Holdings

[Dassets]

A capital return is another matter which has its own set of rules which have thresholds which have different requirements for things you have to do both with IRD and and the High Court. Buybacks in place of dividends can work but I believe they cannot be pro-rata otherwise can be deemed a divvy and taxed. A non-pro-rata buyback is now getting more difficult to execute in terms of avoiding price manipulation allegations and the NZX rules.

STU has a fair way to go to chew up the tax losses but the other thing to note which I do not believe we see are the differences between tax accounting and FRS/IFRS or whatever accounting for reporting purposes. Regardless STI+U has been paying small dividends to show intent and retain the option for cap return with the 2 minimum thresholds being 10% and 15% of a calc based around mkt cap. Even over 15% if the IRD commissioner decides that a pro rata payment is merely a dividend in lieu eg you save up 3 years of earnings and then make a "capital" payment then tax will be levied. There is tonnes of written stuff about this. If you want that I suggest writing to the board.

[Dassets]

Any one feel happy about the AGM? When the chair said they were going to pay imputed dividends I almost died laughing. Thankfully she was corrected.

[BlackPeter]

Just listening into the AGM. Not that many tangible numbers, but they certainly try to convey the message that they turned the corner and things are going upwards. Lots of talk about growth.

One of the slides shows 2022 revenues (so far) above last years (which was not too bad after the 2020 disaster) and it sounds margins are currently even improving.

Sounds like their stores are well filled and good relations with suppliers / supply chain promise to keep things that way :

Should be positive for this years results - cautiously optimistic;

Discl: holding;

[Shareguy]

I missed the agm but have read what was supplied. My thoughts are CEO stated that sales were 29 percent above last year before level 4. Now open at level 2 and 3 and demand with lockdowns is not lost… it’s just delayed. Stated they have significant back log of orders.

They have $25m cash which for a distribution company is very unusual (most have a debt up to 30 percent). Nav at year end 21 was $1.11.

To me it’s a screaming bargain which is why I have added to my already large holding this week.

[clearasmud]

I missed the agm but have read what was supplied. My thoughts are CEO stated that sales were 29 percent above last year before level 4. Now open at level 2 and 3 and demand with lockdowns is not lost… it’s just delayed. Stated they have significant back log of orders.

They have $25m cash which for a distribution company is very unusual (most have a debt up to 30 percent). Nav at year end 21 was $1.11.

To me it’s a screaming bargain which is why I have added to my already large holding this week.

You got a deal, I paid $1.13 cum div.

[Balance]

I missed the agm but have read what was supplied. My thoughts are CEO stated that sales were 29 percent above last year before level 4. Now open at level 2 and 3 and demand with lockdowns is not lost… it’s just delayed. Stated they have significant back log of orders.

They have $25m cash which for a distribution company is very unusual (most have a debt up to 30 percent). Nav at year end 21 was $1.11.

To me it’s a screaming bargain which is why I have added to my already large holding this week.

Likewise.

There is a big seller out there keeping a lid on the sp at $1.05. They seem content to keep feeding the stock out at $1.05 and not go lower.

[RTM]

You got a deal, I paid $1.13 cum div.

And I was 114 cum dividend which I did enjoy.

[Shareguy]

Ceo recently purchased 44000 at $1.12. Not only is the future bright there is also a possibility that a takeover happens, especially if it stays around these levels.

[SailorRob]

I wonder if there was a way to calculate the earnings yield for remaining owners if they could retire 25 million dollars worth of shares at around $1.05.

Then would it be possible to attribute a appropriate P/E for such an enterprise and thus come up with a likely share price?

Then would it be possible to comapre that to a pathetic 3 cent dividend that is fully taxed?

[Balance]

Likewise.

There is a big seller out there keeping a lid on the sp at $1.05. They seem content to keep feeding the stock out at $1.05 and not go lower.

Big seller still there imo but backing off as they appear to be the only real seller at this level.

I decided to buy a few more after talking to a builder/developer who bought some STU shares this week - he gets much of his steel products from STU and said he would be stuffed if he had not been with them. There's shortages of steel products all over the place and some builders are finding it impossible to get some products this side of Christmas, meaning delays to completing projects.

Prices have been going up but he is happy to pay as delays to completing projects are even more costly.

I sense another profit upgrade before the end of the year.