STU profit up but outlook gloomy

By Phil Boeyen, ShareChat Business News Editor

Thursday 15th February 2001

Steel manufacturer Steel and Tube (NZSE: STU) has turned in a creditable if minor increase in half-year profit in a lacklustre market.

Its interim profit to the end of December rose by 4% compared with the previous year to $6.738 million in what it calls a difficult trading period. Sales were up more than $8 million to $195 million.

The company's Steel Distribution operations increased profits on the back of higher demand from the manufacturing and rural sectors coupled with operational improvements.

However cost cutting in the Reinforcing and Roofing Products business failed to offset what the company says has been a severe downturn in housing and a flat commercial sector.

Steel and Tube's Canadian subsidiary, A J Forsyth, has also failed to deliver, with a weak economy reducing its volumes and margins.

STU has a sombre outlook to the next six months trading.

"While there are some positives in the outlook for the manufacturing and agriculture sectors in the second six months, the construction sector is expected to remain weak. It is also unlikely that there will be an improvement in the markets serviced by A J Forsyth during the period," it said in a statement.

A fully imputed dividend of 7 cents per share will be paid.

Comments from our readers

No comments yet