Announcement
MKTUPDTE: STU: Steel & Tube Trading Update
08:30am
STU
18/11/2019 08:30
MKTUPDTE
PRICE SENSITIVE
REL: 0830 HRS Steel & Tube Holdings Limited
MKTUPDTE: STU: Steel & Tube Trading Update
Steel & Tube Holdings Limited (NZX: STU) advises that adverse trading
conditions are continuing and its first half results are expected to be lower
than the prior year.
As previously indicated, the first half result will be impacted by Project
Strive change execution costs, including site consolidation costs with an
expected impact of approximately $2 million, which will be included in the
first half year results. The second half result is expected to benefit from
these Project Strive initiatives, cost savings and other proactive measures
being undertaken.
The competitive intensity and pricing pressures from the second half of the
last financial year have continued. Initiatives to improve product margins
are starting to have a positive impact and market share has remained
relatively stable. Market activity levels have been softer, particularly in
the vertical construction and stainless steel markets, albeit more recently
there has been improvements in sales and tender activity levels. The trading
conditions in the first few months of the financial year have had an impact
on both sales and credit quality with an increase in debt write-offs and
provisioning expected to impact earnings by approximately $2 million in the
first half of the year.
Given the challenging trading conditions, the Board and Management are
continuing to review the business operating model and remain focused on
delivering improved earnings and value to shareholders. An update will be
provided with the half year results in February 2020, and accounting carrying
values will be reassessed at that time.
Steel & Tube Chief Executive Officer Mark Malpass, commented "We have had a
challenging winter, although improvements we have made to customer service
and cost structure, coupled together with recent signs of activity
improvement, are expected to lead to improved performance in the second
half."
ENDS
For further information please contact:
Mark Malpass
Steel & Tube CEO
Tel: +64 27 777 0327
Email: mark.malpass@steelandtube.co.nz
Greg Smith
Steel & Tube CFO
Tel: +64 21 755 803
Email: greg.smith@steelandtube.co.nz
For media assistance, please contact: Jackie Ellis, +64 27 246 2505,
jackie@ellisandco.co.nz
End CA:00344397 For:STU Type:MKTUPDTE Time:2019-11-18 08:30:37
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