STU - Steel & Tube Holdings

[sideline]

A certain degree of backtracking by NZR this morning - shortly before 7.30am - from the claims made last week against STU. I didn't catch it all but didn't actually hear the word "apology"! Was anyone paying closer attention?

Thanks macduffy for pointing it out. I would have missed it otherwise - that's how quietly they try to slip through
their 'correction'.
The word apology wasn't mentioned.
And the way they 'corrected' their story bears no relation to the hype (and frequency) when they pushed
their original 'scoop' story. Altogether very unprofessional and lacking integrity by RadioNZ.

You can listen to the 'correction' here: http://podcast.radionz.co.nz/mnr/mnr...roblem-048.mp3

[Snoopy]

The 'corrected' their story bears no relation to the hype (and frequency) when they pushed
their original 'scoop' story. Altogether very unprofessional and lacking integrity by RadioNZ.

You can listen to the 'correction' here: http://podcast.radionz.co.nz/mnr/mnr...roblem-048.mp3

Looks like RNZ bought and tested threaded rods. A thread can act as a stress concentration and produce a test result materially lower than might be expected of the same structure with straight rods, made from otherwise the same metal and chemical composition. Then RNZ admits that the test results related to different rods, not the rods that RNZ actually purchased! That seems a total disconnect!

However, as part of the news release by STU to the NZX at 9am today:

--------

(Steel & Tube CEO) Mr Taylor says despite the laboratories testing against the same standard, Steel & Tube has been surprised by the variability in the results, including results provided by the Commerce Commission, and has encountered significant ambiguity around the interpretation of the testing standards.

Mr Taylor supports statements made by the Ministry of Business, Innovation and Employment (MBIE), that this is a question of standards.

“Given the ambiguity and interpretation encountered by Steel & Tube, perhaps it’s time to review the standards regime through the establishment of an Industry/Government working group”

-------

So it looks like, despite the dodgy testing methodology used by RNZ in the first place, they might be onto something after all?

SNOOPY

[sideline]

Looks like RNZ bought and tested threaded rods. A thread can act as a stress concentration and produce a test result materially lower than might be expected of the same structure with straight rods, made from otherwise the same metal and chemical composition. Then RNZ admits that the test results related to different rods, not the rods that RNZ actually purchased! That seems a total disconnect!

Sloppy and unprofessional research by RadioNZ at best, at worst they were trying to sex up their 'scoop' story by playing fast and loose with the facts.
Neither is acceptable from a media organisation that is after all taxpayer funded.

[LAC]

https://www.nzx.com/companies/STU/announcements/282534

Just when the SP was looking up.

[percy]

https://www.nzx.com/companies/STU/announcements/282534

Just when the SP was looking up.

The chart still looks as though the downtrend continues.
Take care.

[winner69]

https://www.nzx.com/companies/STU/announcements/282534

Just when the SP was looking up.

So They say ........FY16 full year underlying profit is expected to fall short of last year’s NPAT by between 10 and 15%.

That's pretty bad when you consider that this year also includes the profit from those recent acquisitions which didn't have a full year last year.

I doubt things will ever be easy for STU .....and the past few years have seen a pretty big upswing in building activity (some say a boom evenallow for Christchurch)

[winner69]

So on a like for like basis FY profits going to be down 20%-25% on LY

Thats accounting for the contribution from new business this year

[Highlander]

A tough week for STU, with Macquarie coming out with 35% fall in target price following this weeks earnings warnings (down to $1.80). Another factor to weigh up here is that there is a good chance that STU may drop out of the NZX50 when the quarterly update comes out in early June (best to check with your share broker on this though), which would see index based selling. Be careful on this one

[Highlander]

More on the Steel Mesh issue
From Radio New Zealand 8.35am
Steel mesh falls short in crucial tests
New figures show the extent that steel reinforcing mesh for house floors has been falling short in crucial tests, with mesh from three out of five companies failing to meet the mark.

The scores of failed tests released by the Commerce Commission under the Official Information Act - and the fact that three top laboratories rated the same pieces of steel differently - have prompted an overhaul of testing, four years after the seismic mesh first came on the market following the Christchurch quakes.
The Ministry of Business, Innovation and Employment (MBIE) has not explained why it did not try to find out sooner if the products and testing were up to scratch, in its role as regulator.
The Commerce Commission has pointed out that the failed tests alone did not prove a company had failed to comply with the standard in the Building Code.
It also said some of the companies were challenging the test results amid fears they would be prosecuted under the Fair Trading Act.
"Some steel mesh suppliers have raised concerns that release of the testing results could prejudice their right to a fair trial," said the Commission, though it added that this was unlikely.
The 70 pages of tests showed the sheets of mesh from three out of five companies failed in almost all cases to reach the required standard of 10 percent ductility, or stretchability.
Among the lows, sheets from Euro Corp scored just 1.7, 3 and 4.5 percent, while Steel and Tube had a run of three sheets with an average score of under 6.5 percent.
Mesh from Brilliance Steel recorded slightly higher test results, but still not above the 10 percent.
These tests resulted in these three companies having to withdraw their seismic mesh from the market for several weeks.
Mesh from Fletcher Building and United Steel passed the tests.
But other types of tests also failed, including for Fletcher, where the welds broke where they should not have on two of its three sheets. Welds also broke too soon on Steel & Tube and Euro Corp mesh.
The tests also showed up discrepancies between the testing laboratories - in this case SAI and SGS as well as Holmes Solutions, which did fewer of the tests.
In one instance, SAI scored a sheet at 8.6 percent ductility in one spot and SGS at 3.5 percent. Another test saw a difference of 7.5 percent versus 1.7 percent.
Across the dozens of results, discrepancies of 2-3 percentage points were common, throwing the averages out.
MBIE was now moving to fix these variations, which have thrown a spanner of uncertainty into four years of mesh production.
It has just issued draft guidelines setting out exactly what part of the mesh to test and how, which was not clear before, although it has refused to provide the draft to RNZ News.
While MBIE was using the term 'guidelines', they would be mandatory for any meshmaker wanting to meet the standard.
It points to MBIE switching from a hands-off approach to regulation that has predominated for years. It remains unclear whether it would push on with compulsory third-party testing, where other building products were judged to be critical.
As for steel mesh, only the smallest of the four grades - which range from 6mm up to 9mm - have been tested by the Commerce Commission.
RNZ News has been told by industry insiders that it was even harder to make the bigger sizes hit the ductility standard.

[winner69]

STU share price as weak as its steel mesh?

Sub $2 tomorrow?