Ann: HALFYR: STU: 2012 Half Year Results

• Release Date: 09/02/12 15:42
• Summary: HALFYR: STU: 2012 Half Year Results
• Price Sensitive: No
• Download Document  6.05KB

					

STU
09/02/2012 13:42
HALFYR

REL: 1342 HRS Steel & Tube Holdings Limited

HALFYR: STU: 2012 Half Year Results

The unaudited condensed consolidated interim financial statements have been
prepared in accordance, and comply, with, New Zealand Generally Accepted
Accounting Practice (NZ GAAP), New Zealand Equivalents to International
Financial Reporting Standard NZ IAS 34: Interim Financial Reporting and
International Accounting Standard IAS 34: Interim Financial Reporting.

Reporting Period     6 months to 31 December 2011
Previous Reporting Period   6 months to 31 December 2010
      Amount ($000)    Percentage change
Revenue from ordinary activities  202,907  6.54%
Profit before tax  8,903  (26%)
Tax expense - operating income   (2,530)   (31%)
Profit after tax attributable to security holders    6,373   (24%)

    Current year Prior year
Net tangible assets per share  $1.47    $1.45

   Amount per security Imputed amount per security
Interim dividend 5.5 cents     2.36 cents
Supplementary dividend 0.97 cents
Record date   16 March 2012
Payment date  30 March 2012

Review:        The financial statements attached to this report have been
reviewed.

Directors' Report

Results

The Directors are pleased to present the unaudited consolidated financial
statements for the 2012 half year that were authorised for issue on 9
February 2012. The trading result for the six months to 31 December 2011 is
a profit after tax of $6.4 million.  This is a decrease of $2 million or 24%
compared with the same period last year, and in line with previous guidance.

Sales increased by $12.5 million, or 7% to $202.9 million.  However margin
pressure resulted in a reduced overall trading result.

The net tangible assets per share at 31 December 2011 were $1.47 compared to
$1.45 at 31 December 2010.

Dividend

Directors have declared a fully-imputed interim dividend of 5.5 cents per
share to be paid on 30 March 2012 to holders of fully-paid ordinary shares
registered at 16 March 2012.  The amount payable is $4.86 million and a
supplementary dividend of 0.97 cents will be paid to non-resident
shareholders.

Performance

Industry activity levels saw no appreciable change from the prior year.
Notably demand in Auckland was very subdued across all product categories,
particularly during September and October, with November seeing some
improvement.

Although the key sectors of residential and non residential construction,
along with metal related manufacturing remained subdued, this was marginally
offset by improvements in the rural sector. The ongoing uncertainties
throughout the world continue to impact business sentiment, generally
resulting in a cautious approach.

Our Christchurch operations and people continue to demonstrate considerable
resilience as they deal with the ongoing earthquakes and aftershocks. There
had been early signs that some rebuild activities were commencing, however
the ongoing seismic activity may further impact the rebuild schedule.

Volatility in global raw material prices, finished steel prices and in the
New Zealand dollar has led to increased volatility in domestic steel prices.
This increased volatility along with inventory lead times is creating a more
dynamic and challenging pricing environment for steel manufacturers,
distributors and customers alike. In addition, the subdued demand led to some
manufacturers and distributors being prepared to discount prices early,
resulting in significant margin pressure. Prices were increased late in 2011,
reflecting international pricing, to reduce the continuation of the margin
decline.

At Steel & Tube, we remain focussed on delivering initiatives that focus in
improving customer service and growing the company. The One Company approach
has resulted in improved sales as the new operating model gains traction. The
new and exciting brand was introduced to our customers and staff in July and
rebranding was completed in September. Work continues to refresh other parts
of our business, which includes upgrades to numerous facilities over coming
periods as we continue with the facility rationalisation program.

Additionally our focus on costs, debtors and inventory management, position
the organisation for the environment ahead.

Health and safety remains a top priority.  Good progress is being made in
addressing higher consequence safety risks and although the number of medical
treatment injuries is higher than last year, none of the injuries were of a
serious nature.

Outlook

From the Company's perspective the economic recovery remains slow, and
although the September quarter GDP was stronger than widely expected, the
growth was not in those sectors of most relevance  to Steel & Tube.

The rural sector commodity pricing remains elevated, despite softening
through the second half of 2011, and we expect demand to reflect this. While
non-food manufactured exports and metal related manufacturing both declined
in the September 2011 quarter, the December Performance of Manufacturing
Index showed some improvement.

Residential construction activity is now at its lowest level since 1993 and
non residential building consents in December 2011 were down 3.3% year on
year. Any meaningful activity in the rebuild for Christchurch is likely to
extend further into the second half of the 2012 calendar year.

Ongoing global uncertainties and the impact these uncertainties have on the
NZ economy makes it very difficult to forecast with any degree of certainty.
Our view is that the issues overseas will continue to limit confidence and
curtail investment.  Other than the Christchurch rebuild, we see no reason
for demands to increase from the current level in the short term.

We remain focused on delivering our internal initiatives, and we believe that
they will increasingly generate benefits above that of the general trading
environment. Overall we expect that the results for the second half of the
year will be similar to or a little better than for the first six months.

For further information, plese contact Dave Taylor, Chief Executive Officer,
Steel & Tube Holdings Limited
on (04) 570-5001.
End CA:00219352 For:STU    Type:HALFYR     Time:2012-02-09 13:42:09