STU - Steel & Tube Holdings

[Shareguy]

Yes they are struggling to keep up with orders and as ceo stated demand was just delayed with lockdown level 4. Vulcan To list next month on asx and nzx.

[Shareguy]

Profitability The profit margins and profitability of Vulcan Steel and Steel & Tube have been as follows. Steel & Tube and Vulcan Steel profitability FY21 FY20 FY19 Revenue ($m) - Steel & Tube 480.0 417.9 498.1 - Vulcan Steel 731.5 640.5 685.2 Gross margin - Steel & Tube 20.4% 19.0% 22.3% - Vulcan Steel 37.0% 34.7% 34.6% EBIT margin - Steel & Tube 4.5% (13.8%) 3.4% - Vulcan Steel 13.6% 8.8% 8.7% All figures in NZ dollars & June year-ends.

[Shareguy]

Vulcan revealed that its excellent June 2021 result was due to several factors. An increase in underlying demand, particularly in New Zealand, with sales volume increasing by 20% in its home country, compared with 6% in Australia. The company experienced an increase in the number of monthly active trading accounts. Vulcan entered the New Zealand engineering steel market. As global demand increased, the company saw a rise in its average selling price (ASP) per tonne, notably in New Zealand. This resulted in an average group price of $2,817 per tonne for the June 2021 year (representing a gross profit of $1,041 per tonne), compared with $2,735 per tonne for the previous year.

[Shareguy]

So Stu CEO said that trading was up 29 percent before lockdown level 4 . All open at level 3 and demand was just delayed which is why I have a strong conviction that the profit this year is going to blow the analyst forecasts out the window.

[Shareguy]

According to STU annual report. Net asset value is $1.11. EPS for YEJ21 was 9.8 cps so PE at current price $1.14 is 11.6. So what’s the EPS going to be going forward I wonder. No debt and $25m cash in bank. It’s a bloody steel in my opinion.

[Balance]

Thanks, shareguy - very useful information.

Shows how a relatively new outfit like Vulcan (1995) can perform so much better - and imo, how much potential there is for STU to lift its performance.

[winner69]

According to STU annual report. Net asset value is $1.11. EPS for YEJ21 was 9.8 cps so PE at current price $1.14 is 11.6. So what’s the EPS going to be going forward I wonder. No debt and $25m cash in bank. It’s a bloody steel in my opinion.

You asked what’s the EPS going to be going forward ....I'll give it a go

I reckon F22 EPS will be 9.7 cents which is 21% increase on normalised F21 EPS (remember they had $2.8m in property sale profits etc in F21)

So current forward PE is about 12

But as Balance says the Vulcan numbers shows there is HUGE OPPORTUNITY to improve performance ... maybe they will overcome their inability to sustain improvement and things will be all hunky dory in the next few years

[Shareguy]

Thanks Winner69. Good point re the property sale . A distribution business with cash in the bank and a PE of 12 is still a steel in my books anyway. I’m finding it hard to stop buying at these prices. It’s my largest position.

[Rawz]

Has STU historically performed at Vulcan metrics? Big (or huge) opportunity yes.. but if they havnt done it before maybe they never will.

Some businesses are just superior with superior management

Disc. Hold STU

[freddagg]

Posts 1311 and 1312 are Brian Gaynors from a Business desk article, shareguy just did the copy/paste.

Thanks, shareguy - very useful information.

Shows how a relatively new outfit like Vulcan (1995) can perform so much better - and imo, how much potential there is for STU to lift its performance.