Thursday 17th December 2020
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Steel & Tube Holdings Limited has provided an update on its performance to end-November 2020, reporting trading above that expected since coming out of the March COVID-19 level 4 lockdown.
The positive performance reflects growing market demand driven in part by the busy residential and infrastructure sectors, which have provided some balance to a softening non-residential construction sector.
Chief Executive Officer of Steel & Tube, Mark Malpass, said: “COVID-19 has made for a difficult year, however, we are pleased with our progress in the year to date. We have seen positive signs of economic activity with a number of new projects and longer-term contracts secured. We remain focussed on optimising customer service and continuing to achieve further structural cost savings.
“We are executing on our key strategic initiatives which is improving focus and delivering structural efficiencies. Our strong balance sheet and a growing digital platform provide us with greater resilience to navigate through these uncertain times.”
Revenue for the first five months of the FY21 financial year to date (to end-November 2020) is tracking slightly lower than for the same period last year and pleasingly November revenue was back in line with the prior year.
Earnings Before Interest and Tax (EBIT) is ahead of the prior comparative period, as the company realises benefits from cost reduction initiatives and gains from sub-leasing properties.
For the half year ending 31 December 2020, based on trading to date and after adjusting for the gain on the sale of the Gisborne property and lease asset impairment reversals, Steel & Tube expects to report normalised EBIT (post NZ IFRS-16) of between $6.5 - $7.5m, up from the prior year normalised EBIT of $5.7m.
The improved earnings coupled with ongoing working capital discipline has enabled Steel & Tube to deliver robust operating cashflows. At the end of November 2020, the Group held cash of approximately $24m (up from $7m net cash at 30 June 2020) with zero debt.
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